While there aren’t any definitive signs, there are some signs that a potential tenant may become a non-paying tenant. Accordingly, we recommend proper vetting and diligence.
Some signs that a prospective tenant may become a non-paying tenant include the below signs.
Poor Payment Record
The prospective tenant has a poor payment record based on interactions with previous landlords. You can approach various credit bureaus for credit reports in respect of the prospective tenant. You can also get a landlord-specific report from TPN (https://mrisoftware.tpn.co.za/) and this report should detail the payment record of the prospective tenant.
A potential red flag is when the prospective tenant has made late payments or missed payments altogether and hence a credit report, or a tenant report from TPN, is crucial in vetting your prospective tenant.
Employment Status
A prospective tenant that is currently unemployed, on probation, self-employed or relying on a third party to pay for rent is a risk not to be taken lightly. Accordingly, it is a good idea to have a tenant who is employed in a stable job.
Some self-employed tenants experience cash flow issues and may default on paying rent, and in fact, this is a source of many evictions that we attend to. Even prospective tenants employed by their own companies may experience this, and hence it is a risk to be considered before proceeding to place the tenant in the property.
Difficult Personalities
Another issue is that some prospective tenants may be difficult to deal with and develop a sense of entitlement to having a certain state of affairs operate in a particular manner. Accordingly, we recommend that you meet the prospective tenant to get to know the prospective tenant to try and ascertain if the tenant might become difficult later on.
Key signs include:
- Demands that the property be in a very specific state (such as: wall colours; new cupboards when the existing cupboards are acceptable; new tiling when there is no damage to the existing tiles; new light fittings when the existing fittings are in a good and working condition; unreasonable security measures; etc).
- Refusing to sign credit check consent forms.
- Refusing to let you contact their previous landlords.
- Refusing to provide payslips.
- Demanding unnecessary changes to the lease agreement.
- Insisting that there is no need for a written lease agreement.
Changing Relationships
While it may sound unfair, a fair number of breakups result in evictions needing to be carried out by the landlord because it often happens that a relationship ends and the one partner is left in the property. The remaining partner may have difficulty in affording the rent and other obligations.
The question to be asked is: can each tenant pay the rent and still afford household necessities? Often, it later occurs that the partners cannot individually afford the rent and this results in rental defaults.
Affordability
The prospective tenant claims to have the necessary funds to afford the property, but when you look closely at the usual income and expenses of the prospective tenant in question, it transpires that the prospective tenant cannot afford the rent in the long term.
Another tell-tale sign is that the tenant lives beyond their means by having a fancy car but not earning enough to afford the car.
Property Hopping
Some non-paying tenants tend to move from property to property in an attempt to escape the arrear rent that the prospective tenant has racked up, and hence, a prospective tenant who seems to be hopping from rental property to rental property may be a sign that the prospective tenant is unable to pay rent in full and on time.
The above should not be accepted as legal advice, and you are advised to seek legal advice.
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