After
Lindy's recent post on the ordeals of having a rented out investment property, I thought I'd share my experience too.
I bought a Harfield Village cottage as in investment at the beginning of 2004. I had no retirement or any other investments to speak of, and decided a property was the best thing to put money into. It is in my name and I rent it out and run it as a business. I briefly considered getting a letting agent to manage it, and then decided it was a waste of money as I know what needs to be done, I have a good contract, and any serious problems will still be mine to worry about, and pay for, even if a letting agent is involved. Plus the place is close enough for me to keep an eye on it myself.
So I advertised and surprisingly quickly I found my first tenant. He was a Chinese man, working for a Chinese parastatal company here in SA. He stayed for 27 months, and he was great. I invoiced his company each month and they paid his rent and utility bills directly. Further than that I never really heard from him. We had a bit of a language barrier, but we managed to make ourselves understood so it was fine.
He eventually left and went back to China. He had left the place quite dirty - as he never really cleaned, but other than that I had no problem with him at all. Even though I had a 2-month notice period I allowed him to leave with 2 weeks notice as he forfeited his deposit and left the fridge, washing machine, microwave, double bed, 2x single beds, 72cm TV, curtains and dining table behind for me. So I really couldn't complain about him, or that I had to get the place cleaned thoroughly and replace a piece of carpet. It was a good first experience as a landlord.
Last July I had to find a new tenant which proved to be quite difficult. I kept advertising and taking people to see the place, but they had all sorts of reasons why it wasn't the place for them. It also didn't help that is was now less pristine, and only partially furnished (neither furnished nor unfurnished really) with the bits and pieces that the Chinese man had left.
Finally a lovely Korean couple asked if they could rent the pace for a month in August, because they had 3 nephews coming to try their luck and see if they could make their fortunes in SA. They duly arrived and although they didn't speak a word of English they were very sweet and polite and formal young men. The Korean lady was looking after them and cooking for them etc. They were not sure if they would be staying on longer, but in the end they decided to go back after 5 weeks. So that was a short, but good second experience as a landlord.
Now I had to go through the whole advertising and show-house thing again. It was getting a bit tedious, and I was seriously thinking about getting a letting agent to just take it. I found myself rushing through to the house almost every evening to show it to people, and would eventually ask them to just look at photos and drive past alone and THEN let me know if they really want to look at it. *sighe*
Nearly a month went by with the place standing empty, when the Korean family phoned again one evening and said they were looking for a place for another month. I had lined up a few people to look at the place, so I told them to come past when the other were there, and if no one took it that evening they could have it again.
I arrived at the house and this guy arrived, all body-builder-esque, with his cousin and 'friend'. The tanned and buff guy was all sweet and charming and told me how his cousin and friend had been staying with him and his wife, but they need their own space, so he was renting a place for them. He said all the right things and as a plumber/handyman asked if I would mind if he fixed and improved a few things? (Hell no, go right ahead!) He basically seemed perfect and signed a 6-month lease right there and then, and took the keys so they could start moving in asap.
I had to turn the poor Koreans away who were waiting outside.
The new tenant, didn't move in immediately in the end, because he said they had to go away for a few days, so I agreed to charge them from the start of the next month only, since it was only a week anyway. He paid a 1.5 month deposit and the rent for October and I was just happy to have such a great tenant. He assured me the cousin and friend would be on their best behaviour.
Then one 30 October 2006 he phoned me with a long story about how his cousin’s friend had disappeared and stolen R90 000 worth of money and goods from the house, and had caused a whole family feud etc etc. He said they would therefore not be able to continue with the lease, and did not have the means to continue the rental, so he wanted to give notice.
So I sent an e-mail message to him noting the relevant contract clauses in our rental agreement relating to terminating the lease, and advising him on the procedure should he wish to give notice. I told him that I was sympathetic to his problems and would be prepared to shorten his 2-month notice period to 1-month if I could find a replacement tenant, but that they would need to at least honour their November rental. I immediately booked newspaper advertisements to find a new tenant. I also sent the November invoice to him.
The next day I received another call from him saying that they had now decided to stay after all. Making his story a bit suspicious, but none the less, I was prepared to accept this. In the mean time I still had to cover the cost of the advertising I had placed, and take calls from 20+ prospective tenants telling them the place was no longer available.
He then phoned me and we discussed various maintenance needs at the property including the roof which needed to be cleaned and painted, the kitchen tap mixer which needed replacement and the chimney which was rusted, and a toilet needing servicing. The tenant told me he was able to provide the repairs through his company, and assured me it would be done for as close to cost price as he could manage. I agreed and said he could start with the repairs. He sounded convincing and trustworthy, and the place was looking cleaner and neater since they had moved in. His estimated quote was no more than R9000.
I thought the prices sounded a bit high, but he still seemed to be a nice and trustworthy guy. He kept saying ' Go get another quote if you like' so confidently that I decided to just believe him. Also because I would be able to leave him to get on with it, and would not have to supervise or worry about strangers having access to the property, I was willing to accept that he carry out the work.
The November rent remained unpaid. I contacted him again and he said he wanted to cover the November invoice with the cost of the repairs. While I was not happy with this idea, I decided to accept it, as I was feeling sympathetic about his financial issues after the ‘theft’ incident.
On 29 November 2006 I invoiced for the December rental and sent this to him explicitly stating that he should pay the December rental and that we would settle the repair invoice separately. I also asked him to confirm the final cost of the repairs carried out and reiterated his previous assertion that the costs should amount to around R9000.
The December rent was also not paid.
On 8 December 2006, I received an invoice from him for R12 535! The invoice had no date, company number or VAT registration number and was WAY more than was quoted. I spoke to him and we agreed to meet to discuss this. We met and I was happy that the place was looking clean and well looked after, but was still uncomfortable about the excessive charges on the invoice, but decided it was not really worth arguing over. He mentioned other items needing to be repaired, such as the lounge door which had a crack in the wood, and front security gate (which was now broken) allegedly after an attempted break-in, and the dripping geyser.
I told him that I would review these in January after the holidays, which he agreed to as he said they would be away anyway. I also told him that I would need to receive some rental income before embarking on further expensive improvements though. He acknowledged this, and said if the further repairs were done he'd be happy to sign for a full year. Fair enough.
On The morning of 11 January 2007, I received a call from him, he told me that the property had been burgled and ‘everything taken’. He told me the house was dangerous and not suitable for occupation, and that 'there is a rock in the middle of the room' which had been thrown through the window. Etc etc. After some time I enquired about my belongings, at which time he told me my things are all still there because ‘they are too big to fit through the window’. He said, ‘The microwave was on the floor covered in finger prints, but I put it back’. He cited that the microwave was left as it wouldn’t fit out the window. He then said that my TV was fine as he had kept it at his house, but he had now put it back in the house. Realising that his story was starting to sound suspicious, I asked him why he would pick up the microwave if it was on the floor with finger prints on it. He got defensive and asked if I thought he was lying. I told him I was just trying to establish what had actually happened. I also asked why he thought taking the TV BACK was a good idea if the house was so insecure. He had no answer but just stated that they couldn’t stay as the house could not be lived in it was far too ‘dangerous’.
So I sent him an e-mail and fax again reiterating the procedure to be followed should he wish to terminate his lease. I also followed up with another rental agent as to what the protocol is should a property be broken into while occupied by a tenant, and I was assured that it is not grounds for cancellation of the rental agreement. I made arrangements to meet him to discuss this and inspect the property. He cancelled the appointment when I called to confirm it an hour before and asked to reschedule for the Sunday at 2pm. I agreed to this.
In the mean time I phoned Claremont police station and spoke to a Constable there. He confirmed that Harfield Village did not have any escalated crime incidents in the past few months. He also verified that NO crimes had been reported in that Road at all in the preceding few weeks. Hrm...
When I tried to confirm the Sunday appointment his phone was off. I tried several times and then went to the house anyway. He did not arrive.
I went onto the property (he has left the front gate unlocked). Incidentally the Harfield/Claremont area does have a fair amount of pedestrian/walk-by crime, and each time I visited the house I noticed that the tenant kept the sliding gate open, I warned them several times that it was better to keep it closed and preferably locked to avoid any walk-in access to the property. This advice was never heeded.
Looking around I could see that the tenants had vacated the property. The second bedroom had a hole in the window and a half-brick lying inside on the carpet.
After looking around I contacted the next door neighbour, who has lived in the area for over 3 years. She confirmed that she has not had any incidents of crime recently or in the time she has lived in the house. Furthermore she reported that the tenants were loud and uncouth and used to swear and curse loudly, making a noise late into the night. I also spoke to other neighbours and they strongly suspected that a brothel was being operated there as there were fancy cars coming and going at all hours of the night and young girls hanging around etc. Not to mention all the swearing and shouting.
I kept trying to contact the tenant. If I phoned from my mobile phone he wouldn't answer, so I tired using another phone and got hold of him. He refused to honour his lease, and even though he still had the keys he told me I'd have to 'go after' him to 'get anything out of him' and slammed the phone down and again refused to answer.
So I decided I was not going to take this lying down, and I found the Rental Housing Tribunal, who mediates disputes between Tenants and Landlords and I lodged a complaint. I really didn't want to go the legal route, but this guy is a boorish thug and seems to get his own way by intimidating and threatening people.
I swung into pseudo-legal mode and scribed the most formal and legal-lingo e-mails I could muster. This went on for some time, with him often phoning me to yell at me and then slamming the phone down several times.
He finally paid a small portion of what he owed me, and was refusing to pay more. Part of me wanted to just let him go and be rid of him, but I really didn't want this ass wipe to get away with it, and I refused to be intimidated by him.
I responded with this:
"Thank-you for your payment of xyz received on 30 January 2006. This is acknowledged and received as part payment of your outstanding debt to me, and has been reflected on my records accordingly.
I am unsure how you managed to calculate the figure you have in the document provided - as it makes no sense. (I can only hope that someone with more accounting acumen manages your business finances.)
Please find attached my spreadsheet, detailing exactly which amounts are owing and which have been paid to date. Note that this excludes the early cancellation penalty which I had been willing to waive - and still reflects that you owe a further xyz.
Note further, that this amount is notwithstanding the additional expenses I have incurred repairing damages to the property resulting from your tenancy. To date these amount to R370.00 in locksmith fees, and R420.00 for replacing the window and burglar bars. I will still need to repair and repaint the sliding gate - which I already spent R1800.00 repairing less than 9 months ago - after it was recently knocked off the rails and into the road by a car parked in the driveway, as witnessed by at least 3 of the surrounding neighbours. The lounge door has also sustained further damage under your tenancy. It is clear that undue and extreme force was used on all the locks and doors, the locksmith was astounded at how bent the iron rod inside the lounge door lock was - consistent with rough and careless handling.
Although you claim to have vacated the property before 8 January 2007, you only handed over the keys to the property on the evening of 26 January 2007, this despite several attempts by myself to both contact you and arrange to meet resolve our dealings in a mature and responsible fashion.
Please be assured that I have recorded all our dealings, and since you have declined to settle as per our agreement last week, and have not signed the Termination of Lease Agreement, my Rental Housing Tribunal arbitration case is still proceeding.
I have secured agreement from at least 3 of the neighbours in the road that they are prepared and willing to supply testimony, should it be required, as to the events which took place at the house. As well as their suspicions of what was going on there at night. Furthermore I found evidence of drug use on the premises, on Friday evening, including an ashtray filled with smoked marijuana joints under the bed. I have retained this as evidence should it be required.
Additionally, you were also witnessed by one of the neighbours being apprehended in town by the police several weeks ago, while you were allegedly accosting someone on the street. They are willing to testify to this fact too.
As far as character references go, yours is not looking good.
I have been assured that I have a good case which is worth pursuing, so really it's up to you now.
Either settle your debt as agreed, and we can wipe our hands of each other. Alternately you can take your chances in a legal case.
I would prefer not to have to take the time and hassle that a full legal undertaking will cost us both, but will have no other choice if you insist on changing your mind as to what is agreed, and refusing to reach a mutually agreed settlement in an adult fashion."
I had almost zero intention of actually taking him to court, but he is an uneducated thug, and I was sick of him, and decided to keep pursuing him as a matter of principle.
His intelligent response was:
"Re-phrase from your accusations against me, regarding drug use etc, As i will take a drug test and sue you for defemation of character. You knew very well that my cousins were staying in the house, I cannot be held liable for their actions. I want fingerprints taken on the drugs that you found in the house. Regarding me acousting someone in the road in town, you should get your facts straight as my wife was brutally attacked. Would you like a photo of that? And police record?
My personal life has nothing to do with you or your sources.
I am very shocked that you could stoop to this level regarding our agreement. "
Bwahahaha er ok, whatever, see he clearly has no clue!
My last response was; 'You'll be hearing from my lawyer'
2 days later quietly he paid up in full, and got his wife to e-mail the deposit slip. Yeah! It was a moral victory for me and has hopefully taught him a lesson. Brains can win over brawn.
(Admittedly I had actually started being afraid of being murdered in my sleep, or run off the road etc.)
I placed an ad and immediately found my current tenant who is a sweetheart. She is a single mother of 2. She paid 1.5 months deposit, the remainder of that month AND the next month's rent and has kept thanking me for allowing her to rent my house. After signing the lease I worked out that I knew her from years ago, as she worked in the Pam Golding Letting Department as a PA, when I worked there in the IT Dept, so she knows the lease well ;) So far she seems perfect. Fingers crossed.
Never a dull moment as a landlord!
So far he is strong but very very early.
