Controlling Damages by Tenant

I started thinking about this after reading Kristin’s post about “Fairy Godmothers” and the damages.

What steps do some of you take to control the damages to either the community or units owned by you?

Do you require tenant insurance? Do you automatically include M2M insurance in their rent/lease like many storage facilities now require to protect tenant property? Do you require the tenant to cover the first $X of any repair / service? ie: stopped toilet

If upon move out, the home is damaged beyond ordinary wear & tear, AND beyond the security deposit, do you seek remedies in the courts?

Yes, I understand that screening of tenants can help eliminate some, but not all.

We’ve done this in single family homes, but as far as I know we haven’t yet done this with mobile homes. Institute an air filter replacement program. This should give you a reason to look inside the home each month along with being good for your hvac.

We strongly suggest the tenant gets insurance. I’d also be interested at how others handle this.

We don’t pursue past the security deposit. We assume we’ll never get the money anyways. Blood out of turnip concept.

Not pursuing a debtor in the courts I would consider a mistake. They soon realize how to work the system, but when sued, and judgement is rendered, even if you don’t collect the credit bureaus pick up on this and add it to credit files. This may not help you but it can sure help some other unsuspecting MHC owner.

Plus, don’t forget,you can sell the debt if you don’t want to collect it yourself.

Regardless of the best systems, you’re still going to get bad tenants from time to time. When you get one, the best thing to do is to get them out of your park as quickly and cheaply as possible. That includes literally paying them to leave (cash for keys) where you say “I’m sorry this is not working out for you, so if you leave the home in good condition Saturday I’ll give you $300 to help you get back on your feet”.Sure, I know it seems crazy to pay people who already owe you money, but it will save you thousands in home repair, legal costs, court costs, and loss of rent.

1 Like

Isn’t “Cash for Keys” another way to look at alimony?

IOW… paying someone not to live with you? :smile: :smile:

1 Like

We don’t do rentals, but if we did, we would require physical damage insurance, just as we do with those the captive finance company makes purchase money loans to. Without it, there is too much risk and not just from the tenants, but also mother nature.

We are also very picky about the insurance carriers and what the policies cover and don’t cover, and what limitations go on the payouts.

This is one of the funnier responses I have read in a long time. :smile:

Cash for keys is a common approach to dealing with bad tenants but not our policy. I consider a tenant that has not paid or has done damage to the property to be a criminal. To discourage others from attempting to extort money from us with a cash for keys demand our policy is to pursue these criminals to the max. Once evicted we then file a claim in court.
Our policy is well known throughout the area and all new applicants are informed of our policy. In 8 years we have only had to take this action once. That one incident established our reputation for inflicting maximum retribution on criminals and is a reputation we intend to protect.

In addition we also have a reputation of assisting trustworthy residents in any way possible with payment of rent when they run into unforeseen financial problems.
We reward the good ones and punish the bad ones.
I believe these policies however are only practical with small owners. Anyone having multiple communities would not have the time or resources to deal with residents one on one and would be advised to cut their losses in whatever manner works best. On a individual bases they will suffer greater losses but will be spared the loss of time and expense.