CURBING RENT DEFAULT BY TENANTS.
The purpose of most real estate investors is for optimum returns, these returns may come either as regular income streams, or a lump sum; depending on whether the subject property is put for letting or it's sold outrightly. In order to achieve this aim of an investor in real property, an adequate tenant selection process should be in place as well as property/facility management for such an investment to achieve long, lasting optimum return for the investor.

According to Wikipedia, Property management is the operation, control and oversight of real estate as used in its most broad terms. The word Management indicates a need to be cared for, monitored and accountability given to its useful life and condition. This is more akin to the role of management in any business and that implies a property manager should be someone academically trained to carry out those services which includes selection of tenants, acceptance of rent, responding to and addressing maintenance issues, advertising vacancies for letting, reviewing rent as at when due and representing the landlord before courts of competent jurisdiction in ejecting defaulting tenants, amongst other services.

However, some real estate investors sees these services as no big deal and what they can handle by themselves. True, it might be possible if the property is not multi tenanted or the landlord lives within the premise. But as a smart real estate investor, its advisable to engage the service of a property management firm to avoid challenges generally faced by "can do it" landlords/investors when it comes to discharging these property management duties.

One of these many problems is tenants’ inability to pay their subsequent rents, this is known as Rent Default. Default occurs when a tenant does not pay the rent specified in the tenancy agreement. The default can also pertain to other breaks in the terms of the agreement (for example, by adopting a dog when pets are not allowed and clearly stated in the agreement). However, failure to pay rent is the most frequently committed breach by tenants and is the most common cause of eviction or landlord/tenant feud.

It is important however to state that the success of investing in rental properties is determined partly by tenants' attributes. The cases of indiscriminate destruction of properties, breach of covenant and rental default are common in varied degrees and that's the more reason an investor in real estate needs a competent property manager.

The property manager usually has the responsibility for leasing real estate in accordance to the terms of management contract, but his duties does not stop at that as he cannot avoid inconsistencies in the relationship or default from either of the actors i.e. the landlord and tenant, which are a common occurrence in the renting process. Moreso, such differences could be avoided if parties become aware of the rights and responsibilities ensued to them under the agreement. This coupled with being open and having clear understanding of each other’s objectives for the long and short terms can remove uncertainty, build confidence and trust, and in the main prevent conflict.

It is an established fact that developing and maintaining good working relationships between property owner and tenant is one of the responsibilities and priorities of a property manager, this being crucial to successful achievement of the aspirations and objectives of all parties. Consequently, understanding the relationship between the property owner and tenant is germane to successful management of real estate without which the stakeholders may not derive maximum benefits from their investments, and so as a real investor it's good to weigh and reason along with your property manager rather than enforcing instructions.

Rent default simply means inability of tenant or occupier of a property not being able to pay rent especially as at when due. This problem has remained worrisome to property owners and the causes could be owing to temporary loss of income by the tenant, economic recession, arbitrary rent increase, litigation etc. Sometime rent default could result into initiating litigation with tenants which could take more time than expected. Although litigation at times is considered a separate function, set aside for trained attorneys, there may be a situation the property manager will have to step in and therefore ensure you engage a good property manager that is current with applicable municipal laws, state laws and practices pertaining to landlord/tenant. Basically, the purpose of property management is to secure for a property owner maximum and continuous positive net return on his investment over the life of such property and to maintain the physical aspects of the property for optimum efficiency and economy and so every property investor needs a manager!!

Essentially, the primary functions of property management are in threefold, namely, to achieve the objectives of the property owners, generate sufficient income for the owners, and preserve or increase the value of the investment property. Towards this end, the professional services rendered by property managers are, rent collection and remittance; selection of tenants; property maintenance; marketing of vacant accommodation; administration of estate personnel and services; administration (maintenance) of estate records; routine management inspection and correspondence; enforcement of lease covenants; and any other function as reasonably expected of a property manager or as stipulated in the management agreement between the parties (the property manager and the client). Investing money in property has become very popular nowadays, it can be sold in the future in suitable time and can bring profit to its landlord in the present, but the problem springs up in the management of the property.



Now let's look at who is a difficult tenant? A tenant who by his/her acts, actions and general conduct makes the landlord or the property manager work much more difficult than what it would have been under ideal circumstances. We might also add that this tenant will generally be the black sheep among his co-tenants. He does not co-operate with other tenant such as contributing to the weekly or monthly refuse disposal charges, He does not abide by the terms of a tenancy agreement, and instead, he enjoys doing those things that negates the covenants contained therein. He pays his rent in arrears without the courtesy of an apology, he is the one that will convert his apartment to other use without consulting the landlord or his managing agent and without having any taught of the effect of such actions having any thought of the effect of such actions on his co-tenants, he does not consult the landlord before subletting or assigning his interest in the demised property.

A difficult tenant will not carry out any of the repair habit trusted upon him by the terms of tenancy agreement, he will usually have a large bill on water rate and electricity unsettled and will usually ignore the landlord or the managing agents quit notice.

To avoid problems of getting difficult tenants and the associated negative consequences, every landlord or managing agent should ensure the following:

* Ensure duly executed tenancy agreement exists between landlord and tenant and all terms and conditions governing the tenancy clearly stated in plain and understandable language by both the landlord and tenant(s). Some landlords do not take this serious until the tenant starts proofing difficult or their is litigation.

* Careful tenant selection, it is advisable to make it a tradition to run background check on any intending tenant such as reason for moving out of his/her current apartment. You may as well collect contact details of his/her present landlord, salary range per annum, current place of employment, how long he's been employed by the company, if self employed how long the business has been in operation and So on so as to be able to have an idea of his/her capability to continue paying rent as at when due.

* Spirited efforts should be made by property owners to accord managing agents a free hand in the handling of the affairs of their properties particularly in the screening and selection of tenants such, freedom will enables the agent put their professional acumen and wealth of experience to bear, in the handling of the caretakers task of selecting responsible and valuable tenants that will enhance the realization of the landlords investment objectives and not the other way round.

* It should be made a condition that if the landlord want to increase the rent of the property at least six months’ notice must be given to the tenants to avoid conflicts that could lead to prolonged litigation.

* The landlords should be advised to endorse the maintenance of a floating account for the funding of minor repairs maintenance and payment requirement as at when required.

In summation, if all that were suggested and recommended above are employed in method of rent recovery and treatment of difficult tenants adequately, it will then go a long way in solving long lasting problems militating against methods and approach, there is no doubt that application of these suggested solutions and methods, but ever increasing challenges in future.

Meanwhile, if you find this write up useful and would love to read more relevant topics, you may join our Facebook group tagged "Principles and Practices of Real Estate Investing". The aim of this group is to provide members with free advisory service on real estate/land matters, proffer solutions to challenges faced by real estate investors, chunk out useful information about processes of buying properties without having issues, land documentation and to introduce profitable real investment opportunities. Should you wish to join the group, click on the below link https://www./963016777388030/

Finally, we provide the following services and here to serve you right with integrity and utmost professionalism:
1. Property Management
2. Perfection of Title Documents such as processing of
C of O, Governor's Consent etc.
3. Title Search
4. Development permit
5. Valuation for various purposes.

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Thank you

Please, I want to verify this.

In a situation, a tenant needs to terminate its rent immediately due to relocation without notifying the landlord in 3months advance as the Law says and still have 5months rent left.

1. How many months refund is he due for from the Landlord or is he entitled to the full 5-month rent left.
2. ANy law backing the above answer.

Thanks in advance