A private investigator who chases up losses for landlords has warned bad tenancy debt will grow as more people rent and the economy gets tighter.
Now in semi-retirement, Barry, who asked not to have his surname used, has been working with landlords for the past 25 years to recoup money after tenants have either skipped town or trashed rentals - “Stolen heat pumps, stoves, hot water cylinders, walls kicked in, doors kicked in, broken windows, old cars, rubbish - you’d be surprised.”
Barry said tenancy debt was “a national sport” for some bad apples.
“They go into a place where they’ve got no intention of paying and they go from one place to another racking up huge debt. And it’s not uncommon these days to find people running up debt of $10,000.”
“Not all tenants are like this, don’t get me wrong,” Barry says. “But the ones that I am having to deal with are all like this. They know their rights and exactly how to play the game.
“They know they are protected by the law and can virtually stay in there for 90 days without paying, and the landlord can do nothing about it. They effectively are squatters and it’s going to take you several hearings in court before you can get an eviction notice to throw them out. And that’s just the reality of it.”
Barry said landlords needed to be vigilant when securing tenants so as not to be caught out.
To-Dos and a Warning Sign to protect yourself from unwanted tenants
- Mandatory credit check. This is the basic first hurdle and will show if there is any bad debt connected to the prospective tenant. You have to get permission first to do this. Some landlords also ask for the last three months of bank statements for proof of salary or where rent is coming from but must be agreed upon with the person/s first.
- Make sure that every person that is going to be living in the property is on the tenancy agreement.
Barry says he has seen cases where someone moves in and then the next minute there’s someone else moving in there like a boyfriend or relatives. Then one night the original tenant moves out, and the other person or people are living in the place but are not on the tenancy agreement and stop paying.
- Don’t be rushed.
The oldest trick in the book that Barry sees used a lot is when people just simply have to have a place by Friday.
“Because they’ve been thrown out of their other place that’s been sold from underneath them, and they didn’t know and they didn’t understand, and hurry, hurry, rush, rush, and can we please have this place.” Insist on doing the due diligence before allowing anyone to move in, he says.
- Previous landlord references.
If you can’t find someone to say good things about someone, there may be a reason for that.
Documentation key to damage recuperation
Barry recommended all damage be documented on a regular basis.
“If they don’t go and look at the property every three months or maybe even sooner if they think there is a problem, and duly record the damage, and record that they’ve noted it to the tenant that what they’ve done is not acceptable, then the courts may consider that the damage is not intentional, but just something that happened, and the landlord can’t get the money back.”
Over his time in the industry, he’s also seen property management agents not always do those regular checks, “and the landlord then foots the bill”.
“If you choose the property management route, it’s important to keep in regular contact to ensure the agent is doing what they are paid to do and are doing it properly.”