Secure greater protection with a comprehensive tenancy agreement
All landlords will agree that you can never guarantee a good tenant. A tenant may come with great references and clean credit, but these steps we take in the tenant selection process are all about risk reduction and not risk elimination. A tenant may look great on paper and be fantastic for a few months, but then overnight they become the worst tenant you ever had. More often than not these circumstances occur when the tenant has had a change of circumstances in their life. Landlords and property managers must take steps to protect their investment and one of the best ways to do this is to have multiple tenants on an agreement. If you have more than one tenant on an agreement then tenants become joint and severally liable for all obligations under that tenancy. This means that if one tenant is unable to pay a debt you can chase the other tenant for the entire debt.
A comprehensive tenancy application form must require specific details including how many occupants will live in the property. The maximum number of occupants should then be recorded in the tenancy agreement based on the number of occupants on the application form. This stops tenants moving in additional people after a tenancy has been granted, and if they do exceed the number of occupants then this is a breach of the agreement and the landlord can take action. If a tenant applies for your property and they state that four people will live there then you should request applications from all other occupants over the age of 18. The more tenants you have on an agreement then the greater protection you have in collecting any debts incurred. Application forms should also request information such as car registration details and next of kin. These details are helpful should debts be sent to debt collectors as the more information collection agencies have to work with, the greater the chance of collecting a debt.
Next time you process a tenancy application secure yourself greater protection and have as many residents on the agreement as possible.
You can read other recent blogs including Negotiating Tenancies, The Tenant Selection Process, The Art of the Rent Review, A Landlord's Preparation for Winter, Smoke Alarms in Rental Properties, Reduce Moisture—Reduce Vacancies and Low Maintenance Gardens in Rental Properties.
Simon Allen | Allen Realty Ltd
REINZ Residential Property Manager of the Year 2011
February 2011
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