The Warning Signs of a Bad Landlord

The Warning Signs of a Bad Landlord

Too many property managers and principals believe that all business is good business!

As long as the property has a roof, that’s enough qualification for new management! However, not all business is good business and so we must pick and choose our business carefully before we step into a long term business relationship with the prospective landlord.

When meeting a new landlord (usually during the rental appraisal) we must look out for warning signs that indicate that we could be in for an unsavoury or difficult business relationship with the client.

What could an unhealthy business relationship bring us? Should the landlord not provide us with a quality business arrangement, it can lead to high stress levels, potential burnout, fear, job dissatisfaction and in extreme cases, higher incidences of litigation and all of the problems that this brings!

The warning signs are varied; however, these seem to stand out as a reasonable indicator that turbulence could be ahead! These signs are by no means comprehensive and the presence of a sign may not mean in all cases you can expect problems.

A bad landlord is like a packet of cigarettes in that they can take years off of your life! Let’s keep our eyes open for these signs, use common sense as to the probability of future issues and assess the potential for a rocky business relationship with your prospective landlord client.

Property in Poor Condition

This one is very obvious, especially if the landlord has owned it for a long period of time (long enough to have fixed the problems). A property in poor condition attracts a bad tenant and if you do attract a good tenant, it may only lead to conflict. The potential of litigation is heightened with the risk of injury to the tenant, their visitors and the potential of damage to the tenant’s property.

Let’s not be fooled if the landlord promises that they will get around to repairing the property at some stage. If they have not done it by now they will most probably never do it! A property in poor condition really does reflect the attitude of the owner and attitudes are the hardest part of a person to change!

The Law Suit

If you are aware that the landlord has rented previously with another agent, ask them ‘how did you go with the management?’ If they come out with clear statements like ‘I am going to sue them!’ pay attention! Does the situation warrant a lawsuit? Has the previous property manager’s actions been really negligent or does the owner believe that they should incur no loss or have no risk when it comes to property investment. If a landlord believes that the property manager and the agency should wear all responsibility for any loss, they must be avoided. You may be the next agent to land in court with this owner.

Unreasonable Control

When meeting the prospective landlord, what are their expectations? Do they have unreasonable conditions to be written into the management and tenancy agreement? Do they want to re-write your management agreement with their own adjustments? If a landlord chooses to be left with a management agreement for it to be returned once they ‘have gone over it’, perhaps leave your agency signature off of the agreement until it is returned. The agreement is not contractually bound until both parties have signed it and you still can pull out if your signature has not been added and a copy given to the client.

Very rarely you may have the management agreement returned and rewritten by the landlord with a mass of alterations in the terms and conditions. This is an obvious warning sign that would indicate you could be headed for trouble.

Unreasonable Expectations

If you are about to be managing a property where the landlord and their family are clearly immaculate in their personal habits and especially if they are vacating their own residence which is to be used as a rental property, we must also use caution here!

If their family home or rental property is immaculately maintained we must be asking subtle questions regarding issues like the allowance for reasonable wear and tear. What is their reaction and acceptance to this part of legislation? Do they accept that their property (especially if they will be moving back in the future) will change in time with wear and tear and that this must be legally permitted.

However, if they point out that they expect no marks to the walls, the inside of the oven must have its ‘mirrored finished look’ in 3 years time etc., they may have unrealistic expectations. After educating them on the facts of wear and tear and they are hostile to the suggestion, consider whether or not you should be managing their property. You have a very high chance of conflict during this management should the tenant not be maintaining their property to their expectations, although they are well within the bounds of what is considered reasonable with respect to tenancy legislation.

A Small Percentage

The landlord types we have discussed are definitely a minority and I would approximate about 1-2% of landlords may be in this extreme category. However, extreme landlords are like a storm to a ship and in a short period of time we can suffer bad weather very quickly, receive damage in the form of stress and worry and possibly also suffer financial loss in frivolous payouts. These are the landlord types that we dread and can make coming to work very unpleasant.

Sometimes when taking on landlords we are unsure as to how they will behave and perhaps we could use caution by ensuring that we sign a non-fixed term management agreement. This may allow us the option to pull out of the agreement (within the agreement conditions) should the landlord’s true colours emerge later on.

The bottom line is that we must use common sense when dealing with these potential landlords in making a decision to manage their interests. At the end of the day the job is hard enough, so let’s not make it harder!

Let’s do what we can so that we can enjoy our role in property management.

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Wednesday, 21 March 2018

Essential Survival