30 Jul 2012
Landlords are warned to be vigilant in vetting tenants as many people battle to keep up with the cost of living and more default on their rent.
The financial stresses that many are experiencing now has led to a growing prevalence in rental delinquency in the areas her company serves, says Sandy Walsh, general manager for Anne Porter Knight Frank’s letting division which covers the Southern Suburbs, Hout Bay and the Atlantic Seaboard.
She says there are many people renting at the moment who are under a great deal of financial stress and as this takes hold, so the number of rental defaulters increases.
“When speaking to our local legal fraternity they have said there is an increase in evictions and, although our company has never had them in the past, we are now having to deal with a few,” says Walsh.
“For obvious reasons we do not want this to happen so remind landlords that when there is a prospective tenant applying to rent a property, we recommend that landlords be vigilant in the vetting of prospective tenants - not just to do the regular credit checks but also to look at the lifestyle choices of the applicants."
Walsh says by looking at their bank statements you can see whether they pay their bills on time, that they are not living above their means and are able to sustain the sort of lifestyle in the unit that they are applying for.
Although it may take longer to find a suitable tenant, she says, it is still better to wait for a financially stable, reliable person than choose someone too quickly because it might cost you in the long term.
It sometimes happens that circumstances do change and landlords often provide relief by allowing tenants to stay on for a couple of months, while wanting to show empathy, but this could lead to trouble because the tenant might stay on indefinitely if this is not remedied.
Eviction processes should never take more than two months, so it is wise to start the legal processes as soon as there are signs of a tenant defaulting. It sometimes happens, says Walsh, that when the legal process has been started, it galvanises the tenant into action and they either make plans to sort out what they owe in rent or they accept that they cannot stay on and move out.
Her advice to all landlords is to go into letting their home with eyes wide open - be absolutely comfortable with the person who will be looking after their investment and ensure they have the financial means to live there. Also, she says, if the tenant does not perform, landlords should have an idea of what will happen and what action they will need to take to remedy the situation.
“While most people will want to be philanthropic and help the tenant through difficult times, the longer you leave a non-paying tenant in place the longer it takes to recoup your money.
Ultimately, it is better to have an experienced agent who has the legal mechanisms in place to keep your investment safe than to go it alone, says Walsh. "An agent can also act on your behalf without having to get personally involved.”
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