Landlord-Tenant Disputes: The No. 1 Way to Keep the Peace, Enforce the Lease

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One of the least pleasant things about being a property manager is dealing with angry tenants. Most tenants are good people, but the few who aren’t can make your life miserable if you don’t know how to defuse the situation.

Furthermore, sometimes you will actually be the one who has screwed up. It happens. Most of the time, however, it’s just the circumstance. When things don’t go right, people get upset. And oftentimes—be it a lost job, a major maintenance issue, or a job transfer that makes them want to get out of a lease—these things happen.

The key in such situations is to avoid the standard antagonistic confrontations tenants and landlords have together by working with the tenant to find the best possible solution.

The “Enemies” List

The goal of these discussions is to find the best possible solution for the tenant given their circumstances. Now, “the best possible solution” is not necessarily what the tenant wants. You may need to nudge them to move out with “cash for keys,” pay a transfer fee, or something else to that effect.

The best possible solution is one that falls in line with your lease, policies, and rules. (And if you don’t have policies and are just winging it, you should change that as soon as possible!)

There is always an enemy in any given situation, but that enemy should never be the property manager. Indeed, right now, the coronavirus and economic shutdown make for a good “enemy” to highlight. But in general, there are four:

1. The Lease
2. The Law
3. The Past
4. Policies/The Owner

The Lease

Of course, you can’t just routinely let tenants out of paying their rent because… well, you need to collect rent to make it in the landlording business. However, it’s easier to explain to them how the lease mandates such things.

“Given what the lease says, the options we have would be as follows…” is a good line to use. Note the word “we.”

This is one major reason that we sit down with each tenant in person (or over a Zoom call if that’s not possible) to go over each clause in the lease in detail before we sign it and before they can move in. This process usually takes an hour, but it’s worth it. It makes it much easier to reference the terms of the lease if there is ever a dispute over things like late fees, deposit dispositions, maintenance requests, upgrade requests, lease cancellations, pets, adding or removing someone from the lease, evictions, etc.

Related: I’ll Never Evict a Tenant—Here’s Why

The Law

Fair Housing laws don’t allow you to treat one tenant differently than another. Now sure, you can make changes over time (like dropping the rent price on a unit that’s on the market) or between different properties (for example, having different screening criteria for two different apartment buildings), but you can’t just drop late fees for one group of tenants without doing it for others unless there is a specific and non-discriminatory reason you did so.

So if, for example, a tenant asks for you to arbitrarily drop a late fee or drop a late fee over a small maintenance item or something like that, you can always reference Fair Housing.

For large maintenance issues, especially if the tenant had their life significantly impacted or had to leave the property, you should grant a concession, of course. I recommend making this a policy rather than putting it in the lease.

The Past

“What’s done is done,” as they say. Oftentimes, the past or just the current situation is the enemy. That’s certainly true with the coronavirus and current economic shutdown that is going on.

It could also be true of a major maintenance item that came up. Even if it was fixed promptly, many tenants may be upset by it.

Or it could be true of a tenant losing their job. The situation sucks. The situation is thereby the enemy.

But you are not the situation, and you are not at fault for the situation. So, make the situation the enemy. Then ask what the best solution possible is for the tenant, given this situation.

Related: 4 Practical Ways to Increase Tenant Happiness (& Quality)

Policies/The Owner

This is similar to using the lease as the enemy but may extend to policies outside the lease. For example, it may be company policy not to do non-urgent maintenance requests on the weekends.

This could also include blaming the owner. Now, if you are the owner and the property manager, this is probably not a good approach, as it’s rather dishonest. But if you are managing for someone else, then you can always say something to the effect of, “Unfortunately, the owner will not allow that,” and thereby cast the owner as the enemy.

Conclusion

By making a third party the enemy, you and the tenant can work together toward a successful outcome without getting at each other’s throats. My brother Phillip has mastered this approach and even once famously persuaded an upset tenant who wanted to sue us to ask us if we had anything else to rent by the end of the conversation.

This approach works and is a critical skill for property managers to learn, especially if they want to remain sane. Watch the video above for more tips on handling landlord-tenant disputes.

What are some of your best strategies for resolving tenant disputes?

Share your tips in the comments below.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.