Tear – Jerking Tenants

The landlord always gets the shorter end of the stick when dealing with tenants from hell, who sometimes even lock themselves in so you cannot kick them out 

Perhaps the most common habits shown by tenants are late payments and refusal to leave the property even after months of not paying rental. “I rented out my unit to a couple who were expecting, during Chinese New year weekend and they had claimed to have banked in the deposit on Friday after 4pm. To cut the long story short, this couple stayed for a week for free and cost us RM1,400 as well as a proper Chinese New Year celebration,” shares Dexter Lim and Wei Tsung Kam in their book, “Start From 0!”

The tenancy problem sometimes stems from the landlords themselves when they don’t collect rents on time. This may give the tenants the perception that the landlord is lenient on payments, giving room for them to take advantage.

LEGAL ASPECTS

If it happens to you, the best thing you could do is probably issue a legal demand letter to the tenant. Section 7(2) of the Specific Relief Act 1950 specifically requires a landlord to obtain a court order before he can recover possession of the property from a tenant. In any case, where the tenant fails to make rent, there are grounds for eviction. It is important that disputes amongst both parties, whether it is a landlord’s failure to make repairs or a tenant’s failure to pay rent, be recorded in black and white, in case of future litigation. This serves as a reminder to the tenant that rent is due; a warning that eviction proceedings may ensue; and provides documentation for the landlord should the problem persists and ends in court. To tackle this, landlords must use the Common Law System, and Contract Law to settle the dispute. In the case that the tenant fails to pay rent (for more than the agreed duration), the landlord has the rights to claim that the contract was violated. The landlord can then terminate the agreement and issue and eviction notice.

Chris Tan, Managing Partner of Chur Associates said: “In this scenario where the landlord’s intention is to recover possession of the property, an eviction order is the best. This can help the landlord to recover the possession of the property and any outstanding rental as well as double rental for the overstayed period. Comparing an eviction order with a distress order, one has to understand that a distress order does not terminate the tenancy; it only allows the landlord to recover rents payable for a period not exceeding 12 completed months of the tenancy.”

WHAT CAN YOU DO?

In one of her books ‘Smart Property Investors Know the Law’, Elizabeth Siew tells readers that the only way to reclaim possession of the property is through the court of law. If the due date for the tenant is on the 5th of each month, rental is technically considered overdue on the 6th, and one can seek relief from the court under the Distress Act 1951 which allows impounding of the tenant’s assets. However, a Distress Order is only an avenue for recovery of rental. In case you want to terminate the tenancy agreement due wrongful usage of premises etc., an Eviction Order can be used. It is a separate action altogether, in court. If it is a first-time offence, landlords are supposed to serve the tenant a notice stating a breach in tenancy agreement and give them time to rectify the breach.

From an investor’s perspective, Pang Hiok Boon says tenant profiling is important to avoid such pitfalls. “The agents I’ve been working with have been doing a good job as they strictly screen through tenants and carry out their due diligence. The problem with directly dealing with tenants is the tendency to use short cuts and make emotional decisions, which at times leaves you with bad tenants and a million other problems. I’ve learned that you need to be disciplined, especially in collecting monthly rentals, to ensure the tenant doesn’t take advantage of the situation.”