Who should take the moral responsibility for a bad tenant?

[TMNT]

So id like to get the general consensus of who shoudl take the MORAL responsibilty of a bad tenant, not the legal.

its on the back of a tenant who stopped paying after 2 weeks into a lease. However, playing devils advocate, the agent did say 'we can give them a try' so it obviously wasnt the application from heaven

for me, its not the owners fault unless teh agent said they dont approve or its against their advice

its teh agents fault, for approving a potentially bad one, that being said, nobody has a magic crystal ball, so who knows. Or does it depend on the reason, if they have arrears history , and they stop paying is it the agents fault??? or what happens if they have no arrears history and one of them loses their job, then whose fault is it

 

[D.T.]

Obviously a PM's job is to market the property to the correct audience, receive the applications, background check them and choose one.

However, I think it really depends on the status of the market in that area. If the current cycle dictates that there's millions of tenants, then obviously you can choose the best one. At the other end of the cycle pickings are going to be a little bit slim so have to go with the best option available.

A tenant may be perfect upon application and for the first X weeks/months/years and then turn differently. No one has any control over that and I think its more about how well the PM can handle it when it does happen.

 

[Peter_Tersteeg]

The agent: They interview and sight the tenant, so it's their fault.

The owner: They bought a house that doesn't attract good tenants and they signed off on the tenants at the end of the day.

Neither/Both: Neither the agent or the owner wants a bad tenant. The owner is loosing money, but the agent is putting up with the stress of having to rectify the situation. Stop trying to blame someone and work together to solve the problem.

 

[Jamie M]

Neither/Both: Neither the agent or the owner wants a bad tenant. The owner is loosing money, but the agent is putting up with the stress of having to rectify the situation. Stop trying to blame someone and work together to solve the problem.

Good post.

No PM goes out of their way to place a bad tenant - and unless they've done something out of neglect, I'd just aim to fix the current issue and move on.

Cheers

Jamie

 

[TMNT]

The agent: They interview and sight the tenant, so it's their fault.

The owner: They bought a house that doesn't attract good tenants and they signed off on the tenants at the end of the day.

Neither/Both: Neither the agent or the owner wants a bad tenant. The owner is loosing money, but the agent is putting up with the stress of having to rectify the situation. Stop trying to blame someone and work together to solve the problem.

so according to you as long as the intentions are good. No one needs to take responsibility? !?!?

so everytime a pm stuffs up you should work togehter rather then solve the problem

Im glad im not one of your clietnts, imagine on settlement day for a loan "oops i forgot to submit the application, but lets work together to fix it. Its not my problem as i didnt intend to "

 

[neK]

The agent: They interview and sight the tenant, so it's their fault.

The owner: They bought a house that doesn't attract good tenants and they signed off on the tenants at the end of the day.

Neither/Both: Neither the agent or the owner wants a bad tenant. The owner is loosing money, but the agent is putting up with the stress of having to rectify the situation. Stop trying to blame someone and work together to solve the problem.

I think this summarises it nicely.

 

[Peter_Tersteeg]

so according to you as long as the intentions are good. No one needs to take responsibility? !?!?

so everytime a pm stuffs up you should work togehter rather then solve the problem

Im glad im not one of your clietnts, imagine on settlement day for a loan "oops i forgot to submit the application, but lets work together to fix it. Its not my problem as i didnt intend to "

I'm saying that stuff happens. You're expecting people to get it right 100% of the time which is not possible. I've got some great PMs who have placed tenants that have gone bad, but it's the exception, not the norm.

Let's be fair. There's people out there who know how to exploit the system, put on the right face, say the right things and fool the best of us.

At this point I'd be judging the PM on how competently they deal with the problem. If they continue to mess things up, they you've got reasonable grounds to suggest they're the problem.

When problems occur, I prefer to solve them, rather than assign blame. If my clients are out of pocket (late fees, etc), I'll re-emberse them. If your approach is to immediately assign blame to every problem, I don't want you as a client.

 

[turk]

so according to you as long as the intentions are good. No one needs to take responsibility? !?!?

so everytime a pm stuffs up you should work togehter rather then solve the problem

Im glad im not one of your clietnts, imagine on settlement day for a loan "oops i forgot to submit the application, but lets work together to fix it. Its not my problem as i didnt intend to "

If it's the agents fault for selecting a bad tenant would it not be your fault for selecting a bad agent?

 

[Xenia IM]

I'm saying that stuff happens. You're expecting people to get it right 100% of the time which is not possible. I've got some great PMs who have placed tenants that have gone bad, but it's the exception, not the norm.

Let's be fair. There's people out there who know how to exploit the system, put on the right face, say the right things and fool the best of us.

At this point I'd be judging the PM on how competently they deal with the problem. If they continue to mess things up, they you've got reasonable grounds to suggest they're the problem.

When problems occur, I prefer to solve them, rather than assign blame. If your approach is to immediately assign blame to every problem, I don't want you as a client.

Kudos Peter.

I agree on this business ethic also. If you work with people who want to blame all they will do is look for things to blame and continuously attract things to blame.

.... and they will continue to blame even after it's solved because they derive pleasure from making other people feel bad.

no thanks! from me too - I like to choose the people I work with.

 

[vaughan]

What does "moral responsibility" actually mean?

 

[BayView]

Obviously a PM's job is to market the property to the correct audience, receive the applications, background check them and choose one.

Every time we receive applications from a new tenant; the agent sends them to us via email for our approval..

I think you'll find that the onus will come back on the Landlord these days - I'd wager that most PM's are not going to have a policy whereby the selection of a dud tenant will be their fault.

They will make the LL sign off on any tenant application.

In this world we live in now where noone wants to take responsibility for anything; lest they get sued or worse; this will happen more and more.

 

[TMNT]

What does "moral responsibility" actually mean?

Moral obligation would have been a better term

For example, legally my agent is eligible for reletting the property out after these bad tenants. However as a gesture of good will. They said they will waive all fees, becusse they obviously feel bad about it For ehatever reason, since its only been weeks since they moved in

That to me shows that this sort of bad tenant is not common for them and they are doing their best to fix the problem. As a result i will continue to use them. Obviously if the next tenant does a runner after 3 weeks. Then there is a bigger problem at hand

 

[TMNT]

When problems occur, I prefer to solve them, rather than assign blame. If my clients are out of pocket (late fees, etc), I'll re-emberse them. If your approach is to immediately assign blame to every problem, I don't want you as a client.

if on settlement day you had not even submitted the application, and you were blaming me for finding someone to blame it on, then id report you to the credit ombudsman or whatevr the body is called

You might need to be reminded that as a customer, i am paying for a service. Sure **** happens. And hence i use a professional. The agent gets to talk to the applicant, get a feeling of them, asses them on paper and person. Thats their job. Its not my job. I can only go on their evaluation

Like i said previously. If they are trying to make up for a bad situation. Ill give them another chance without hesitation . But if im getting comments like "i dont want clients like you" , then all hell would break loose

 

[Peter_Tersteeg]

if on settlement day you had not even submitted the application, and you were blaming me for finding someone to blame it on, then id report you to the credit ombudsman or whatevr the body is called

In that example, I think you'd have every right to make a complaint and expect compensation from the broker.

...but this is worlds away from dealing with a bad tenant.

 

[neK]

Moral obligation would have been a better term

For example, legally my agent is eligible for reletting the property out after these bad tenants. However as a gesture of good will. They said they will waive all fees, becusse they obviously feel bad about it For ehatever reason, since its only been weeks since they moved in

That to me shows that this sort of bad tenant is not common for them and they are doing their best to fix the problem. As a result i will continue to use them. Obviously if the next tenant does a runner after 3 weeks. Then there is a bigger problem at hand

Could it be that the area is just crap?
Certain areas do attract worse tenants than others.

Also having a crappy unrenovated property adds to the problem.

 

[TMNT]

Could it be that the area is just crap?
Certain areas do attract worse tenants than others.

Also having a crappy unrenovated property adds to the problem.

yes of course, you cant expect a PM to put in perfect tenants when every tenant in the area is dodgy or every other agent is also having the same problems.

The way I see it, its always "it depends" type situation. so you have to take the other factors into consideration, that being said I personally think 3 weeks into a lease is pretty unacceptable regardless of the area

 

[elsLan]

I think it depends on the case.

Some great tenants go bad- they lose jobs, break up and even suffer mental illness.

If the agent has legitimately done the correct checks and the owner has agreed then the tenants go bad- that's what insurance is for.

If the agent is lazy or just wanted to lease a property then it's their fault.

If the owner was warned or advised against and still put in them in for higher rent or less vacancy then it's their fault.

 

[Scott No Mates]

The only time that you might be able to point a finger would be if the agent had some history with the tenant & still recommended them.

Searches will confirm their history, reference checking their character & bank statements/payslips their financial status.

A crystal ball will reveal the issues that will arise in the future - engage a clairvoyant if you need advice of their future performance.

 

[Bargain Hunter]

Overall responsibilty for the performance of the investment is the landlord however morally it is the tenants responsibilty to pay the rent.

Responsibility of tidying up the mess and placating the landlord sits with the PM.

Taking the time to determine the root cause starts with the landlord.

If it is something they did, didn't do, or choose to accept against their better judgement then they need to make the necessary changes to reduce the risk of it happening again.

If the outcome of this self assessment is that it was something within the PM's sphere (even partially) then a discussion needs to be had to determine how this risk can be managed in the future.

If the landlord is not comfortable with the outcome of the discussions then they can take the business elsewhere.

There is of course the possibility that both the landlord and the PM have done all they can and still ended up with a rubbish tenant. In this case accept and move on.

Regards

Andrew

 

[Xenia IM]

Let me also state that with the correct systems and structures in place, legal forms served on time, correct bonds being lodged, proactive mitigation of losses, and the RIGHT landlords insurance through specialist investment insurers, the risk to the landlord should be very minimal or zero.

There is usually a delay while claims etc are put through and it's always a pain in the rear but usually all financial losses should be recouped.

when investing is treated as a business - follow the system and take emotions out of it - then risk is minimal.

All the blame, shame, analysing, arguing and thousands of little green dots on this forum are not going to make a difference to your bank account unless you are taking action towards what you want.