Big headache: what to do with a debtor or missing tenant?

Lia Siht, Head of Legal at Rendin, presents a few problematic cases to illustrate and explains how and how quickly these situations were resolved

Renting related issues often arise out of the blue and without proper support and preparation, the consequences can be very costly. Check out how Rendin can make renting safer.

"Landlords often worry whether the tenant will pay the last month's rent and utilities after moving out. This is what happened in this case as well. After the end of the lease, the tenant owed the owner slightly over €900 for rent and utility payments. The landlord approached us with his concern, and we advised him to send the tenant a warning regarding the payment delay," describes Lia Siht.

"To help, we assisted the landlord in drafting a legally compliant notice of the obligations, informing the tenant of a two-week deadline to settle the debts. In addition, we emphasized in the warning what the next steps would be if the debts were not paid. By the deadline, the landlord confirmed to us that the tenant had paid their debt, and the situation was resolved within two weeks," explains Siht.

"There is also a clear lesson in this case. Often, active communication and the involvement of a third party are enough to resolve issues. People are often more diligent in settling their debts when they are made aware of specific deadlines and the consequences of ignoring them," says the lawyer.

"The second case is somewhat more complex. The tenant unexpectedly informed the landlord that they had moved out of the apartment and left the keys in the mailbox. However, the proper notice period for terminating a termless agreement is three months. To end the agreement with a shorter notice period, both parties must agree. In this case, the landlord did not agree, as he wanted to find a new tenant before the current tenant's departure," explains Siht.

"We advised the landlord to initiate a formal termination of the agreement and to start searching for a new tenant immediately so that both parties could end the existing lease as soon as possible. Since the tenant also had unpaid rent and utility payments for the current month, we asked the landlord to send a reminder to the tenant regarding these unpaid bills," she recounts.

"Unfortunately, the landlord was unable to find a new tenant for the rental property quickly, so the agreement ended after three months. This meant that the tenant was responsible to the landlord for the entire three-month period and had to pay rent and utility costs for that time. The landlord sent invoices to the tenant each month, but the tenant did not pay any of them," clarifies Siht.

"After the agreement ended, the landlord sent the tenant a final demand for payment with a two-week deadline. The total arrears for three months' rent and utility costs amounted to €1,930. Since the tenant did not settle the demands by the specified date, we took over the case and reimbursed the landlord for the debt. It took us less than 24 hours from taking over the claim to making the reimbursement," explains the legal expert.

"For the owner, the story that had dragged on for three months found a happy ending in June, but Rendin's legal department is still handling the case. Since the tenant did not settle the arrears on time and was uncooperative, we had to take legal action to recover the money," she adds.

"Without Rendin, the landlord would have likely faced a significant financial loss. Taking a debtor-tenant to court involves substantial costs and is a long, stressful process. While the court may order the tenant to pay the owed amount, unfortunately, this does not guarantee that the person will start paying or that the bailiff will be able to collect the demanded sums," says Siht.

"In the third case, the agreement ended properly and the tenant had not yet paid the last month's rent and utilities. However, unpaid bills played a very small role in this case. Namely, upon returning to the apartment, the landlord discovered that the apartment was not in proper condition and needed additional cleaning and repairs," says Siht.

"Instead of a clean and orderly apartment, the landlord was faced with a complete mess. The entire apartment required professional cleaning, and the owner found several broken items and defects in the interior design. There was extensive water damage on the living room floor, which required replacing the entire floor of the room. To top it off, the tenants had left household trash and a large bag of used diapers on the balcony," describes Rendin's legal expert.

"The landlord contacted us, and we asked them to document all the defects precisely and determine the amount of the damage claim. For this purpose, the landlord obtained several quotes for repair and cleaning work and looked for replacements for the broken items in stores. After compiling the necessary evidence, it was determined that the total amount of the damages was €2,350," says Siht.

"Constant communication with the parties involved and the tenant's willingness to cooperate fortunately led to the tenant paying the landlord immediately for the rent and utility arrears. Rendin covered the remaining amount for the landlord and established a repayment plan with the tenant over six months. It took us exactly 15 days from the termination of the lease to clarify the situation and compensate the landlord for the damages," she reveals.

"Every issue that arises in rental situations is somewhat unique and requires active intervention and investigation of the circumstances. This is also the most time-consuming process in our legal department's work, and actually, the parties involved can contribute significantly to speeding it up," says Siht.

"In the case of problems or damages, you should inform us as soon as possible and provide detailed information along with any necessary documents, photos, and written exchanges with the tenant. This creates a sufficient evidentiary basis and allows us to find a legally appropriate solution as quickly as possible," she explains.

"Our first step is always to limit the further increase of damages and help the parties terminate the lease as quickly as possible. Once the tenant has moved out, we can start assessing the extent of the damages and arranging for compensation," describes Siht.

Siht adds that if a tenant is struggling to maintain the rental property, they should immediately inform the landlord. "As a next step, the parties should work together to quickly find a new tenant for the property and terminate the existing agreement before debts arise or increase even more," recommends Siht.

"In cases of debts or financial loss, the landlord can turn to Rendin for compensation if the tenant is unable to settle the claims after the agreement ends. If the tenant is cooperative, we are willing to offer an extension on the payment deadline or the option to pay off the debt interest-free over a longer period," says Rendin's legal expert.