Slight Dilemma on Apartment Rental Situation ...

[Timbuk2]

Right. So I moved in with the lady August last year, and put my apartment up for rent.

I had a young Polish couple with baby move in.

They are generally late with the rent, but tend to pay within 10 days past due date.

However, they have not paid May's rent, and are now overdue with June's.

My rental agency look after all rent collection, and forward monies to me after agency fee deducted. I had spoken to my agency late May (and several times since), and apparently they'd followed due procedure with phonecalls, letters and text messages to chase late payment.

The tenants claim they were on holiday, and have had some kind of criminal issue with their bank account, meaning that my rent left their account, but didn't reach the agency.

I took this as an excuse, and didn't believe it.

I instructed the rental agency to issue 2 months notice - which sees tenants through to completion of 12 month contract. Apartment is now up for rent (at slightly higher rent to match rising market etc) ready for new tenants to move in next August.

Just wanted this over and done with, and to get these guys out.

This afternoon, I come home to this email from the lady tenant:

~

Dear Tim

I know from the agency that you still haven't received your money. I am really sorry and I would like to apologize for any problems this situation caused you.
We were on holiday when we paid you rent and at this same time someone cracked into our account. On our bank statement it clearly says that our money has gone but for some reason the money haven't reached your account. I have just spoken to the bank manager and we will try to sort out the issue immediately. We are currently in difficult situation but we will pay you both rents within few days. I know that you are not happy and probably feel disappointed with us, but we are not bad people who are irresponsible and don't care about anything. We never had any problems before with our landlords and always stay in good relations.
We would like to ask if there is any chance that you will change your decision and let us to stay at your property? If you give us a second chance we will not dissapoint you this time and promise to pay you on time. We really like this place.
I look forward to hearing from you soon and once again sorry for all troubles.

With Regards

~

She had left a message on my voicemail too saying the same things, but haven't had a chance yet to speak to her directly.

Now I feel like I overreacted, and my instinct with hindsight is to believe their story.

My feeling is that I will give them a second chance, but with the due increase in rent, and a warning that I won't tolerate continued late payments.

Am I being soft?

[Loki]

I tend to not trust people who weren't reliable before the "big problems". Every time I did it in the past, I later found out that I was lied to.

[Wraith]

You are being soft, but it's difficult not to be after getting something like that. Chances are, it's a BS excuse. If it were me, I'd cave instantly - I can't rule out the possibility that it's legit, even though I know it's probably not.

[Loki]

You are being soft, but it's difficult not to be after getting something like that. Chances are, it's a BS excuse. If it were me, I'd cave instantly - I can't rule out the possibility that it's legit, even though I know it's probably not.

Where's the $10,000 you owe me for not cleaning your garden?

[Unheard Of]

Am I being soft?

Yes. The excuse sounds like BS, and they have not been reliable in the past. Two months notice is sufficient time for them to find alternative accommodation.

[Ominous Gamer]

late every month is bad. its a poor way to manage ones finances and doesn't put much trust in them stopping something like this from happening again. How long did the agency wait till May's rent was requested and declared overly late? When did the renters reply come?

[Aimless]

How difficult would it be to confirm their story?

[Timbuk2]

Yes. The excuse sounds like BS, and they have not been reliable in the past. Two months notice is sufficient time for them to find alternative accommodation.

Starting to feel this way.

The more I think about it, the more holes in their story occur to me. The fact that she reported this bank account break in story to the agency a few weeks back, and she's now telling me in her email that "I have just spoken to bank manager" doesn't ring true.

late every month is bad. its a poor way to manage ones finances and doesn't put much trust in them stopping something like this from happening again. How long did the agency wait till May's rent was requested and declared overly late? When did the renters reply come?

The agency do report to me every time the tenants pay late, with a letter stating they've chased payment. I received a total of 3 letters concerning May's rent, before I spoke to the manager there, seeking advice, then asked them to serve notice and re-advertise the place. My impression is they're on the ball and pretty quick to chase.

How difficult would it be to confirm their story?

This is what I'd like to do, but there isn't any easy way to do so.

Meh.

Tenants are thoroughly vetted, with bank account statements and references, before they're accepted. Really didn't think I'd have issues.

Oh well, I am insured if they do decide not to pay up.

[Ominous Gamer]

Even if their story is true, it seems like they handled this in a sloppy and delayed manner. Like they were trying to test the limits on your relationship and are only apologizing cause its biting them on the ass.

It is possible they are good people but bad bets.

[Dreadnaught]

I hate real estate situations like this because you just want to believe that people are reasonable. The times I've tried to accomodate, it's usually blown up in my face.

Seems like you should stick to your guns. Hope they don't trash the house. But could also be good for them in some respects; they could be living somewhere that's beyond their means. Not that you're doing them any favors, but clearly the status quo isn't doing anyone favors.

How easy will it be to find a new renter?

[Timbuk2]

I have a feeling they are a little beyond their means. They obviously haven's set up a regular standing order to pay the rent, I know from their jobs that their income isn't salaried, and they wanted £45 off the monthly rent before they accepted.

Finding new tenants shouldn't be an issue, the rental market is good, and summer is a good time for people moving, plus there's two months to find someone.

Decision made I feel. Thanks for the input peeps.

[GGT]

I have a feeling they are a little beyond their means. They obviously haven's set up a regular standing order to pay the rent, I know from their jobs that their income isn't salaried, and they wanted £45 off the monthly rent before they accepted.

Finding new tenants shouldn't be an issue, the rental market is good, and summer is a good time for people moving, plus there's two months to find someone.

Decision made I feel. Thanks for the input peeps.

I'm late to the game...but after reading the whole story I don't think you should jump to conclusions.

1. Why didn't your "agency" require the tenants use automatic bank transfers?
2. What, exactly, are you paying the "agency" for...if they're not managing these things for you?
3. If you have insurance to cover any default, then you don't really have to "worry" about losing monies.
4. There is a possibility they're telling the truth, but aren't very savvy in coordinating their funds electronically.
5. See #2

Asking to shave rent off before a contract is signed can mean they were trying to follow 'advice' that rents can be negotiated. That's not an automatic black mark against them (who wouldn't want to save money every month?)

Given how common and rampant ID theft has become (even for Dread), or that electronic bank transfers between countries can have a weird lag.....it's not unreasonable or exceptional that they may have been victims of some type of criminal fraud, or transactions getting mixed up in the ether. Her letter didn't sound like the typical scammer or deadbeat trying to string you along....

Young couple with a young child...fully "vetted" by your rental agency. You can still keep up your mortgage payments even if they're late, or default (due to insurance). I say give the young family a break and wait a while. In the interim, demand your "agency" do a better job in exchange for their fees, or you'll terminate THEIR services.

[GGT]

Alternatively, you could put the property up for sale, and fully commit to co-habitating with your Lady Love...without keeping your old bachelor pad as an emergency escape exit.

[Flixy]

I'm late to the game...but after reading the whole story I don't think you should jump to conclusions.

1. Why didn't your "agency" require the tenants use automatic bank transfers?
2. What, exactly, are you paying the "agency" for...if they're not managing these things for you?
3. If you have insurance to cover any default, then you don't really have to "worry" about losing monies.
4. There is a possibility they're telling the truth, but aren't very savvy in coordinating their funds electronically.
5. See #2

Asking to shave rent off before a contract is signed can mean they were trying to follow 'advice' that rents can be negotiated. That's not an automatic black mark against them (who wouldn't want to save money every month?)

Given how common and rampant ID theft has become (even for Dread), or that electronic bank transfers between countries can have a weird lag.....it's not unreasonable or exceptional that they may have been victims of some type of criminal fraud, or transactions getting mixed up in the ether. Her letter didn't sound like the typical scammer or deadbeat trying to string you along....

Young couple with a young child...fully "vetted" by your rental agency. You can still keep up your mortgage payments even if they're late, or default (due to insurance). I say give the young family a break and wait a while. In the interim, demand your "agency" do a better job in exchange for their fees, or you'll terminate THEIR services.

1. Can they, even? Never heard of any renting agency that requires that, to be honest - and how could they even tell if I use automatic bank transfer? And those also fail if your balance is too low. You can give the agency the power to simply deduct the money from yoru bank account, I guess, but I can see several reasons why you wouldn't want that (besides not having the money). Also, if your balance is too low, the money still won't be transferred.
2. From the opening post, they seem to do administration, and are also doing the (tedious) follow up on the late payments. There are procedures, they are doing it. Sounds like they are managing it, he just wonders if he should kick them out when the contract expires or not. That is a decision they cannot make for you.
3. I assume with insurance your money comes very late, as opposed to rent paid on time.
4. It's dodgy that it takes months to fix, though, banks (over here at least) are generally pretty quick to fix things.

[Ominous Gamer]

There are agencies that require automatic withdrawal, or the rent is set at an insane % higher. Not sure if its legal for it to be automatic withdrawal only, but it might as well be. The same for car loans, student loans, mortgages, etc.

[Timbuk2]

I'm late to the game...but after reading the whole story I don't think you should jump to conclusions.

1. Why didn't your "agency" require the tenants use automatic bank transfers?
2. What, exactly, are you paying the "agency" for...if they're not managing these things for you?
3. If you have insurance to cover any default, then you don't really have to "worry" about losing monies.
4. There is a possibility they're telling the truth, but aren't very savvy in coordinating their funds electronically.

1. Can they, even? Never heard of any renting agency that requires that, to be honest - and how could they even tell if I use automatic bank transfer? And those also fail if your balance is too low. You can give the agency the power to simply deduct the money from yoru bank account, I guess, but I can see several reasons why you wouldn't want that (besides not having the money). Also, if your balance is too low, the money still won't be transferred.
2. From the opening post, they seem to do administration, and are also doing the (tedious) follow up on the late payments. There are procedures, they are doing it. Sounds like they are managing it, he just wonders if he should kick them out when the contract expires or not. That is a decision they cannot make for you.
3. I assume with insurance your money comes very late, as opposed to rent paid on time.
4. It's dodgy that it takes months to fix, though, banks (over here at least) are generally pretty quick to fix things.

1. In my experience, rental agencies generally ask tenants to set up a standing order to make the payment on a regular basis. I've not heard of it being a requirement, nor have I heard of Direct Debits for this purpose.
2. Yes, administration of payments and follow up on late payments. They also manage advertising for new/replacement tenants, property viewings, reference checks and vetting service, inventory, etc etc- Issues with the apartment itself, such as broken washing machine or leaky tap f'rinstance, I manage.
3. Haven't really checked small print of insurance for non-payment of rent, but for sure there will be an excess for me to pay, plus the possibility of higher premiums. Plus the feckin hassle of it. Takes time innit.

[ImAnOgre]

A couple of years ago my job switched from finance to credit card fraud. I love it btw, and it has taught me a lot.

I've found that many fraudsters have found that sympathy and sob stories will usually work to get them out of scrapes. That being said, yes identity theft is huge, but hijacked wire transfers and ACH transfers are not common. From this ladies email she is showing you proof that money left her account??? If it was an ACH transfer you. An easily find out if your bank, or the rental companys bank rejected the payment. Just ask them, show them the wire transfer receipt ... They have a paper trail and can tell you if it went through.

Gut instinct on this though is that it is bad... Especially with their previous track record. Past performance is usually indicative of future results.

[GGT]

Ogre re-appears! Nice to see you again!

Regarding automatic bank transfers/debits....no idea why rental contracts can't require them like any other financial obligation. Health insurance premiums comes to mind.

[Timbuk2]

Gut instinct on this though is that it is bad... Especially with their previous track record. Past performance is usually indicative of future results.

Can't disagree really.

Much as I'd like to think the tenants would change and become reliable - they do seem genuine and pleasant (see below) - I'm not convinced that they will become more reliable, nor that they can actually afford the place.

Regarding automatic bank transfers/debits....no idea why rental contracts can't require them like any other financial obligation. Health insurance premiums comes to mind.

A standing order is an automatic bank transfer. The difference being though that it is initiated and maintained by the payer, not the payee. It isn't (currently) in my contract though.

~

Had a phone conversation with the tenant yesterday, and another one with the agency manager.

Tenant was very apologetic about the situation, said her bank has organised a return of her money this week and all is sorted, and she is able to pay both last and this month's rent by tomorrow (friday). The reason for continued late payments is because she has not been working due to her having the baby, and her husband's (chef) company has struggled in the recession, but they're fine now, apparently. I told her I appreciated her situation, and would let her know my decision today once I'd spoken to the agency manager. She was fully understanding of my situation when I explained it - I have my own financial commitments that have to be met etc, and I need reliability from tenants.

Agency manager informed me that the tenants have kept my apartment well and is very clean. She also let me know that I have had quite a few viewings now that the property is back on the market, and that so far there are two other couples interested in the apartment at the higher advertised rent.

I'll let the tenant know today that I am sticking to their two month notice served, and will take on new tenants. I really think after speaking to the tenants that my place is beyond their means, and should look for more affordable accomodation, particularly now that the rent is going up.

I will also instruct the agency to instruct the new tenants that I require a standing order for the monthly rent.

[GGT]

Glad things are working out for you, Tim. Still wondering about that elephant in the room, though. Why hang onto a rental property that comes with headaches?

[Loki]

Because he makes money on it? The alternative would be selling and putting the money into a savings account that will net him 0.5% in interest...

[GGT]

No, you dufus. The "elephant" is Tim's commitment to his lady love. The apartment is the distraction.

[Loki]

Your ability to bring in completely irrelevant information and tie it into elaborate stories that need to be commented on and analysed by you never ceases to amaze me.

[Timbuk2]

Elephant in the room ... ? This discussion isn't really about my love life and future intentions toward my partner here Gee ...

As Loki indicated, it's an investment. London property will always rise in value (often dramatically) in the medium/long term, if not the short.

Rent covers current mortgage on the property plus agency fees/insurance costs. New higher rent will net a small profit.

It's a no-brainer, financially.

And we both benefit, financially - we split my rent as we both have mortgages to pay. My other half is happy.

If she'd moved into mine, she'd have rented out hers, and we'd split that rental income. Hers is a larger 2-bed, mines a 1, so that was the primary reason we chose hers. Don't think there are elephants, just a bit of pragmatism.

[GGT]

I guess you missed my earlier post, eh?

Alternatively, you could put the property up for sale, and fully commit to co-habitating with your Lady Love...without keeping your old bachelor pad as an emergency escape exit.

[Flixy]

Yeah, or you could wait until the market is better and rent it out in the meantime What is your problem?

[GGT]

Whose problem? What? Tim works in the financial industry, and isn't ignorant or naive about these things. His OP had an emotional component, which struck me as inconsistent with his professional savvy, or how he'd portrayed the purpose of his home rental---and co-habitating at his partner's home . Apologies if I was wrong about underlying emotional "elephants". I might have super-imposed that apartment as Tim's pre-marital property with the demise of the relationship, and made connections that weren't really there.

[Loki]

How is any of this your business or relevant to this thread?

[GGT]

How is any of this your business or relevant to this thread?

Tim has shared enough of his "personal" business over time that I didn't feel out of line sharing my personal comment. It's 'relevant' to this thread because property is often related to emotions...and underlying relationships.

[Timbuk2]

Indeed, I've certainly shared the ups and downs of my personal life on this and the previous forum.

Here tho Gee, I think you may be reading too much into things, or as you said back up there, making connections that weren't really there. There really isn't anything beyond financial/pragmatic reasons behind our accomodation arrangements.

~

Have let my tenant know my decision, and that, hopefully, is that.