Protecting Landlords from Tricky Tenants

The majority of tenants are honest and reliable but beware of the tricks some will employ to cheat your clients … as Trade Reference Australia* Principal, Gai Williams, explains.

Protecting Landlords from Tricky Tenants

The majority of tenants are honest and reliable but beware of the tricks some will employ to cheat your clients … as Trade Reference Australia* Principal, Gai Williams, explains.

Rent defaulters come in all shapes and sizes but there are certain things they can’t escape. We all have an identity. And even if we assume aliases or change our name by deed poll or when we get married, the number on your drivers’ license and at Centrelink doesn’t change and stays with us.

So rule number one; always ask to see a tenant’s driver’s license or Centrelink card when they apply for a lease. They are the best form of ID when drawing up a lease. And new names (or aliases) of the license or cardholder can be recorded so a defaulter won’t avoid detection.

A passport is a good form of photo ID but the driver’s license or Centrelink Card are better because people can lose their passport and apply for another (under another name) and be issued with a new passport number.

A case in point: a prospective tenant, whom we shall call Frank, recently returned to an agency which had listed him a rent defaulter more than ten years before. On this occasion, Frank used a new name and passport rather than his driver’s license. Frank was impeccably groomed, drove a smart car and gave the appearance that he had the means to rent high-end properties in Sydney Harbour front suburbs.

But Frank continued his old ways of not paying rent and was subsequently listed again as a defaulter under his new name and passport details. Frank then decided to conduct a public search, found he had been listed as a defaulter and that he owed tens of thousands of dollars which had to pay back in order to secure a new tenancy.

But should Frank try to lodge another tenancy application and contemplate defaulting on his rent in future, he’ll find that his new name has been linked with his real or previous name and agencies will be on their guard.

An interesting footnote to this case is that, at the time the above events were happening, two property managers were walking down the street when they spotted Frank and said they both knew him but by different names. So they weren’t surprised when they read a few months later that Frank (and his aliases) was sent to jail for owing one of the major banks millions of dollars.

The moral of the story is be vigilant in checking the identity and background of those you choose to allow to occupy your clients’ properties, no matter how convincing or confident they may be.

An example of just how crafty some defaulters are can be gauged by the lengths they will go to avoid detection.

A property manager at an agency found that the applicant’s name, date of birth and mobile phone number matched those of a listed defaulter and the driver’s license number almost matched except that it ended with a double “eight” rather than a double “three”.

A quick check revealed the following: The leasing agency hadn’t actually viewed the license original but had lodged the application on the basis of a faxed copy of the license. And on closer perusal of the faxed driver’s license, it was noted that the “threes” had been carefully altered to look like “eights”.

So the moral of this story is to ask to view the original licence personally rather than have it scanned or faxed to you.

This same vigilance should be applied when checking passports that are offered as ID. Check the nationality of your prospective tenants and make sure that non-Australians have visas that cover the term of their lease. Otherwise you could be fined for assisting an alien if the time has expired or expires whilst they are in your property.

And don’t assume that a defaulting tenant claims they are returning to their country of nationality so it’s not worth worrying about listing them as a defaulter. In some cases, these people have merely moved on to the next local property agent.

On other occasions, listed defaulters have returned to countries such as the UK and New Zealand before moving back to Australia to find that they’ve had to repay significant sums of unpaid rent to clear their name prior to lodging a new tenancy application.

Another defaulter’s trick is to try to obfuscate agency searches by using different Christian names or spellings in applications – a useless exercise if they are brandishing their driver’s license as ID because the license number reveals the truth every time.

And remember: Though databases can be used to chase and initiate legal action against rent defaulters to recover your clients’ funds, prevention is better than a cure. In other words; it is preferable to reject the application of a known defaulter rather than grant a tenancy and then have to chase the rent.

Gai Williams, bought TRA in 1995 after a period as its marketing manager. Gai previously worked as an aerobics instructor in her own fitness business and as a travel tour operator and consultant. TRA is a tenancy database that allows property managers to quickly access and assess their applicant’s records for reliability and suitability for tenancy and service support for client owners.