Investing in Property

Problems with Tenants

Even with the best of intentions, relationships between tenants and landlords may not always run smoothly, with some of the main causes of friction being:

Utilities charges

When doing renovations or repairs, landlords (or tradespeople) may have the gas and electricity temporarily connected and occasionally, forget to have them disconnected when the work is finished. As a nice gesture to the tenant, they may be left connected to save the tenant the connection fee, advising the tenant to have the meter read and to change the billing details. However, what if the tenant 'forgets' to do this and later the landlord receives a bill for the usage?

Utilities are considered to be personal bills and not attached to the property so in cases like this, there is very little that can be done.

The rule then is, never come to an informal agreement with the tenant regarding the payment of utilities. The tenant should establish accounts under his own name.

Telephones

A telephone can be bought and left for the tenant or leased from the provider in the usual arrangement. What happens if the telephone 'vacates the premises' with the tenant? Whose responsibility is it if the phone breaks down and needs repairing or replacing?

It may be easier to define responsibility if the tenant provides his own phone.

Meter box problems

Landlords are advised to have apartments metered separately. This avoids bitter disputes between tenants about who pays what amount.

TV antenna and telephone connections

These days tenants expect that a landlord will provide a TV antenna and a telephone connection point. If the tenant pays to have a telephone line installed it will remain after the tenant vacates - to the benefit of the landlord. Removing a TV antenna is an awkward job so that will probably remain too when the tenant leaves.

Although both these items are for the benefit of the tenant and therefore not strictly the responsibility of the landlord, it is probably wise for a landlord to have both these connections installed. Apart from adding to the capital value of the property and making it a better rental proposition, it will remove all chances of dispute over responsibility and costs.

Property conditions

One of the most common source of disputes between landlords and tenants arises from a landlord's refusal to maintain the property in a livable condition. Some landlords feel that they shouldn't bother about the condition of the property as "a tenant will only wreck it".

Apart from allowing a valuable asset to deteriorate, if the landlord treats the property with disdain he is likely to attract the type of tenant who will be right at home in that environment. The property has to be fit for human habitation or fit to live in.

Security deposits

Refund of the security deposit is the most frequent cause of dispute between landlords and tenants. The security deposit should never be considered as the landlord's money. It is held in trust for the landlord against any future breaches of the tenancy agreement.

Two month's rent is the usual security deposit amount but it can be more for prestigious properties or when it is the landlord's own home. The security deposit amount must be entered on the tenancy agreement and the tenant must be given a receipt.

At the end of the tenancy, if the rent is paid up to date and there are no claims for damage or any breach of the tenancy agreement, the security deposit must be refunded to the tenant.

If the landlord lodges a claim against the rental deposit, the tenant can sign a release of the money or if the tenant refuses to sign, the landlord can seek legal redress.

Tenant's objections

If the tenant does object to the claim of his rental deposit, he may also take legal action himself to recoup the monies.

Many landlord-tenant disputes are resolved by negotiation before a hearing takes place.

In most cases, it is the Real Estate Agent who successfully mediates the dispute and legal action is avoided.

A Real Estate Agent is a professional who can negotiate in a calm and impersonal manner on behalf of his client. Landlords are often too emotionally involved to argue their cases successfully, and as a result tend to win fewer cases than tenants, often because proper leases were not prepared, condition reports were missing, expenses could not be documented, etc.