When you receive a tenancy application for a property, what are you looking for? Reasons why this applicant should be accepted as a tenant or reasons why you should not accept the application?
It’s an interesting conundrum and one that most property managers don’t even consider.
When you look at most tenancy application forms, they provide details of the applicant’s current and former places of residence; current and former employment details; personal and business references; plus additional information regarding the number of occupants, children, pets, vehicle details, banking information, income, etc. etc.
As far as tenancy history, in a previous life we could run a tenancy database check to find out the good, the bad and the ugly but in Victoria today, we can only find out the bad and the ugly and even then, with extremely limited information.
Where does that leave us?
We can telephone the former agent or private landlord but with the former, getting a timely response is problematical as it appears, property managers today don’t believe providing a tenancy reference is a matter of importance, certainly not to them. Over recent months when our team have been attempting to obtain a reference from a former managing agent, it has often taken three or more telephone calls to actually speak to someone who can provide one and then, it’s normally followed by “I’ve only been here for 3 weeks and the former property manager made no notes on the system. There was a VCAT Hearing but the tenant got their bond back.”
What help is that?
Private landlords are worse! On several recent applications, the ‘private landlord’ turned out to be Cousin Louie or their best friend Jake. You’re not in a position to qualify the private landlord with a telephone call; or to find out if they actually own the property for which the reference is given.
What help is that?
Employment references can provide some comfort if they reveal a steady record but as the vast majority of tenants being Gen Y, do not tend to stay in one place very long…onward and upward…and their employment references can be quite deceiving. Does an applicant not remaining in the same workplace for any length of time mean that they may not be a good tenant? A Baby Boomer property manager may think so but there’s not too many of them around anymore.
And what use are personal references? Auntie Flo says, “Mary-Lou always kept her room tidy,” while Uncle Jack says, “Brian is a great husband and good with the kids.” I’ve never had a ‘dud’ personal reference so I may be taking a rather hard line here.
If tenancy, employment and personal references are of little value, what do you rely on? Gut-feeling! Appearances are extremely deceiving as my most diabolical tenant turned up at the open driving a new Porsche, wearing an Armani suit and my best looked as though he had just returned from the Council Dump.
I am positive that the time has now come when all tenants should be seeking a written tenancy reference from their agents as this is the only way they can prove their bona fides. At least, with that written information in hand you stand a far better chance of defending a negligence claim from a disgruntled landlord when the tenant has shot through leaving the property as though it should be in Sendai following the Tsunami and the garden like a moon-scape as a result of the 2 Rottweilers that were housed there.
Which brings me back to the original question – why an applicant should be accepted as a tenant or why you should reject an application.
There is a rider to this question as well. If a property has been vacant for some time and the owner rings on a daily basis to see if it has been leased, are you tempted to put in anyone who has a pulse? Or would you rather leave it vacant and continue to dream up excuses for its current state? Not much of a choice.
With over 40 years managing residential rental properties, I always believed that over 95% of my tenants have caused little grief and going on that theory, a similar percentage of tenancy applications should be viewed as positive with all effort put into finding out why you should lease the property to the applicant.
But what do we do about the remaining 5%?
That’s simply the joy of property management.
Are you a tenant? Have you ever had trouble either providing references or had trouble with a comment you were not expecting?
Are you a landlord or property manager? Where do you source your references from and how much credit would you give a personal reference. What needs to change for this process to improve?