Why do landlords have to pay for tenant damage? Have you ever wondered why this is the case in many areas around the world? I know I spent a lot of time reading landlord horror stories before I got into real estate investing.

I mean as all small landlords know the rental business is a low margin high expense business and everyone outside of the business thinks you are flush with cash. As the saying goes you can’t eat equity.

Fortunately in my years as a landlord I have been pretty lucky with tenants.

That being said here are some of the things my clean up projects have entailed:

Cleaning up a grow op, replaced a sink ripped off the wall, replaced kitchen cabinets that were ripped off the wall, fixed drywall due to a sword puncturing the ceiling, pet damage (yes lots, including fumigation due to fleas), cleaned an abandoned unit after the couple (who were normal when they moved in) that turned to drugs and left one day on a Bonnie & Clyde style armed robbery spree – they left behind wonderful things like used needles, cigarette butts everywhere, used condoms, rotten food, clothes, and furniture. I have also cleaned up countless bags of garbage, and miscellaneous furniture.

In the early years I looked to the local residential tenancy board, police, City councilors and anyone who would listen. Unfortunately in my area it is not seen as a crime. You can peruse cases through tenancy and small claims court, however, you are unlikely to ever receive a penny and the odds of the tenant charged criminally are pretty slim. What ends up happening is you spend time, money and frustration leading to hopefully winning a judgement against an irresponsible broke person, who has no way or intention of paying, and stacks your judgement with the others.

I do find it interesting that if a person walked into a business or invaded a home and caused the kind of damage I have seen over the years, they would likely be charged criminally. Is it possible that the system will change?

This does not include financial damage. In many of situations listed above, we lost revenue in the form of rent (which we will never see).

I am not sure if the system will change, but I can share the actions I have taken to limit the problem, by limiting the risk.

Tenant screening – landlords are provided guidelines on how they can screen tenants. I cannot speak for all areas (check your local residential tenancy guidelines) but in our area we cannot violate human rights, however, a landlord can screen for past landlord references, character references, credit standing, financial standing, proof of ability to pay, cannot judge on source of income, but can ask for verification, and has to make sense, criminal record checks etc. Make sure your screening process is fair, consistent, and documented. Make sure to get and copy ID from your potential tenant.

Credit checks are definitely a must. It is not just about the credit score, but also the story. You will find inconsistencies in your potential tenants story if they are not being truthful about places they have lived. It is also less likely a person with good credit will want to get bad credit by trashing and leaving your place. This is where a judgement or threat of a judgement can be good leverage to make sure damage is paid for, or not caused in the first place. A person with good credit might want to buy a house, car, business or something that requires a loan. The judgement will need to get paid before that happens. It may even cause a problem with future employers, and insurance rates.

Will housing organizations or groups that find housing for section 8, Welfare, social assistance tenants pay for damage from tenants they place?

The short answer is no. I also want to note that many will tell you that they will pay the rent directly to you, however, if the tenant chooses to move, they are not always required to tell you. This means the money might stop coming in at anytime. You as the landlord are required to screen the tenant, just as you would any other tenant.

Property maintenance checks: A good practice can be consistent drive-by of your rental properties. Check for suspicious activity, damage, garbage piling up, broken screens or blinds. You can also set up a maintenance schedule with your tenants when they move it. Perhaps every 6 months. Just a simple walk through. Setting the expectation upfront can put your tenants mind at ease, they will also take comfort in the fact that you will handle any maintenance items right away. You will be able to notice behaviors that may cause damage either intentionally or not.

The tenant landlord relationship needs to be a good fit. The property needs to be a good fit for the tenant. If you create a win win living arrangement, your tenants will stay longer, pay rent on time, and provide a solid business relationship based on trust and respect. This will not eliminate damage, but it will minimize it.

Will it ever be considered criminal to rip off a landlord?

Financial fraud and vandalism are already criminal acts, unfortunately it can be tough to prove intent. We also would not want to get to a point in society where we have debtors prisons (like in the past).

So, I am not sure if it will ever be considered as criminal as stealing a chocolate bar at a convenience store, or mugging a person (although it can cause way more financial and mental damage than these crimes), but there is hope. Social media is shedding more light on fraudulent and destructive tenants. This is allowing more landlords to talk about it and look at criminal action based on fraud and vandalism. This is leading to insurance companies having to payout claims. When insurance companies payout claims and can name a person responsible for the claim, they sometimes pursue legal action. Especially on the smaller claims. Insurance companies usually have a legal team do the required paperwork, so it is no big deal if they do not get 100% of their money back.

Could this be a deterrent for folks that are “professional tenants” or the type of people that damage units? I would argue as the vacancy levels drop, and the quality and expense of apartment units increases, more landlords with be focused on screening, and make it very difficult for these type of people to find a decent place to live.

Criminal convictions are rare, however, they do happen. Check out these articles:

Tenant Convicted of Criminal Property Damage

Serial Rent Dodger Sentenced to 2 Years in Prison

Bad Tenants Must Pay or Go To Jail

Let’s sum it up

If you are a landlord you will very likely encounter tenants that cause property damage and skip out on rent. You can absolutely do everything in your power and legal rights to chase the money. The challenge is, that the time and energy you spend chasing money that you will likely never collect might not be worth it. The reality is, you will often have to bite your tongue, chalk it up to the cost of doing business, get your rental back on the market, diligently screen your tenants and move on.

For more great stories on how to manage your property, buy our book.

until next time,

Design your landlord experience,

Michael P Currie

Landlord by Design