A tenant who delays moving out – large debt and property damage

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.

Keili, who works in the technology sector, has two rental apartments that she rents out on a long-term basis. In fact, the rental business has always been a source of extra income for her family. However, a wealth of experience and a high level of awareness do not mean that problem tenants do not exist.

Four years ago, the enterprising Keili became a landlord, thanks to her father’s example and encouragement. Today, she has two rental apartments, one of which was previously her own home. Looking at the background of the young woman, we can assume that she will not be limited to just two rental apartments.

‘Working in real estate has always been part of my family. My father laid the foundations for this when he made rental apartments an additional source of income. A few isolated sites have now grown into a sizeable portfolio. The profile of these apartments tends to be small and simple, which always has a market, regardless of living conditions and the economic climate,’ says Keili, explaining her background.

She knows well, both from personal and family experience, that there is a downside to renting – tenants can cause problems. ‘Before I found Rendin, I had an acquaintance as a tenant who was causing problems. Handling that situation turned out to be particularly awkward because I already knew this person,’ Keili explains.

However, she adds that it is important to talk openly about your experiences and situations. ‘They will help to understand much better how problems with renting are solved and how the resulting damage is compensated. I also read various articles written by Rendin, which gave me confidence in the company.’

In this case, Keili’s tenants were a young man and a young woman. Even though the girl was a co-tenant, she was mainly the one who communicated with the landlord.

The first three months went by normally. In the fourth month, the couple missed their rent payment. Keili reacted quickly and gave them a reminder. ‘It then turned out that the girl had moved out of the apartment altogether, which was a surprise to me,’ the landlord says.

The rent payment for December, submitted in January, was not paid, and the young man as the responsible tenant could not be reached. Keili contacted Rendin in February, when the payment was due. ‘I received instructions from the company with a notification template, which is necessary to issue a warning of default and is the basis for the extraordinary termination of the agreement.’

As the situation eventually turned out to be such that the tenant had not paid rent for two consecutive months, the landlord had the right to terminate the agreement by extraordinary notice. The tenant responded by accepting the end of the agreement and agreeing to move out.

The initial promises of the tenant did not materialise. ‘The young man delayed with moving out. Unfortunately, as had happened before, I could not get in touch with him,’ says Keili.

She then contacted the experts of Rendin again. ‘I was advised to set a specific date and time for handing over the property. I informed the tenant thereof. This allowed me to avoid endless discussions with the tenant about when it might be a good time to return the apartment.’

‘One hour before the set deadline, the tenant contacted me – after two months of silence – to say he could not make it to the handover. At the same time, he proposed a new date, which seemed promising,’ says the landlord, but it still seemed like a never-ending process.

Keili was already overjoyed because the tenant was ready to move out. When she got the apartment back, the initial positive feeling faded. It turned out that property damage had occurred.

The landlord describes how there was a gaping hole in the kitchen wall. ‘It was surrounded by mysterious red splashes, which were also on the ceiling, light fittings, curtains, the dining table, and the kitchen cabinets. Allegedly, the tenant threw a candle holder with a red candle into the plaster wall. In addition, there were cat scratch marks on the dining chairs.’

Keili found the tenant to be reasonable. ‘He communicated openly, accepted what had happened, and agreed to pay compensation. In the end, of course, it did not work out that way,’ she admits.

Once the property was back in the landlord’s hands, the assessment of property damage began. ‘In order to submit a claim for damages, the amount of the damage must be known. To find that amount, I took several tenders for repairs,’ Keili explains. In the end, property damage accounted for around 30% of the total damage, so rent and utility arrears clearly dominated.

As feedback, Keili says she was very happy with the claims handling process. ‘I did not know what to expect from it. In fact, I was pleasantly surprised how quickly things were resolved. Communication with the experts of Rendin was quick, and the handling of the matter was very efficient.’

Looking back, Keili thinks that the most difficult part of the whole case was the lack of knowledge and constantly seeking contact with the tenant. ‘And the question in my head: will I ever get my apartment back? Fortunately, everything went well. I do not want to imagine what would have happened if the tenant had not vacated the property voluntarily. I have heard and read that formal eviction is complex and time-consuming process.’

The landlord further observes that, through this case, she understood the necessity of documenting activities. ‘If I had been acting on my own, I would definitely have dragged my feet with them. I received clear instructions and comprehensive information about the dates that were important to me from Rendin – either from the customer service or the legal department. For example, when to send a late payment warning or an extraordinary termination notice,’ explains Keili.

‘Their advice was always personalised, tailored to my situation. I never once had to figure out for myself what to do next and how to do it.’

‘All in all, the resolution of this case progressed much faster than if I would have been on my own,’ the landlord concludes. ‘Rendin provided great emotional support for me.’

The total damage was € 4,400, of which Rendin compensated € 4,100 to the landlord. The landlord was responsible for the remaining € 300.

1. If problems occur, meet the tenant

If something suspicious starts to happen during the tenancy, such as late or overdue payments, I would advise the landlord to react sooner rather than later. For example, arrange a meeting with the tenant and go and visit the rental property. This way, you can talk about problems face to face, while at the same time, you can check the actual condition of the apartment.

This is just a guess in hindsight, but if I had done so, I might have known about the property damage earlier, which would have meant a smaller loss of rental income.

2. Protect yourself with a lease agreement from Rendin

When landlords I know ask me for advice, my first recommendation is to use Rendin. In my case, the amount reimbursed by Rendin was six times the amount of rent. No tenant would pay such a deposit even if it were allowed by law (i.e. the Law of Obligations Act states that the landlord may ask the tenant for a deposit of 1–3 months’ rent).

When problems with leases arise, the amounts involved in the losses easily start to grow. So, the most logical way to save your nerves and your wallet is Rendin.

3. Keep the interior of your rental apartment simple

If the landlord is letting out their former home, I would recommend paying attention to the furnishings that are left there. For example, you might want to take your expensive custom-made sofa to your new home or sell it and replace it with something more modest. It is understandable that there is a limit to the amount of compensation for property damage, which you should take into account.

I can tell you from experience that all sorts of minor problems with the rental property come up every year.

In this situation, there are a few steps for users of Rendin to follow. The first two actions are a prerequisite for the rental agreement to be terminated on an emergency basis, should the need arise.

1. One month’s rent and/or utility bills in arrears

Send a written reminder to the tenant that they have not paid the bill(s) and warn them that if the arrears are more than two months overdue, there are grounds to terminate the rental agreement.

• See the Rendin Document Generator -> Late Payment Warning

2. Two months’ rent and/or utility arrears

In this case, the landlord must send the tenant a written notice stating that the arrears must be paid within the next two weeks or the rental agreement is extraordinarily terminated.

A semi-automated template is available on the Rendin website, which reflects the legal requirements:

• See the Rendin Document Generator -> Notice of Extraordinary Agreement Termination

If the tenant does not pay the arrears and the agreement has become invalid, then the final amount of the loss can be established. The landlord must submit the claim directly to the tenant and set an additional deadline for payment (at least 14 days). If, despite the additional period, the tenant does not pay the outstanding amount, Rendin will initiate a claim for damages: the landlord will be reimbursed and a recourse procedure will be opened against the tenant.

Read more on the topic from Rendin Help Centre.

*The header image is illustrative