What can you do when tenants don’t move in?
You’ve shown your property to dozens of potential tenants; one couple stood out as “the ones.” You’ve done your due diligence, completed the application and screening process, everything looks great, you accept them, and set a move-in date.
The day of the move-in comes, and they ghost you. What can you do?
If your tenants don’t move in, you have a few options.
1. When tenants fill in the application, you can ask for a deposit of anywhere from ½ to a full month’s rent to secure the property. If they agree, have them complete a form that specifies the terms. For example, if they cancel before or on the move-in date, the terms can stipulate that they forfeit 100% of their deposit. Have them sign and date the agreement, keep the original, and give them a copy. This procedure weeds out anyone who isn’t serious about moving.
2. Reach out to your tenants and try to understand the reason for the delay or cancellation. Sometimes unforeseen emergencies happen.
3. If the tenants have signed a lease agreement and paid the first month’s rent and/or security deposit, and don’t move in, you can enforce the terms of the agreement and collect any penalties for breaking the lease or costs you will incur for re-renting.
Remember that legislation varies between provinces, and you should always check your provincial Residential Tenancies Act (RTA) to ensure you’re within your legal boundaries. Or contact your helpful municipal landlord/tenant associations, such as Alberta Residential Landlord Association (ARLA).
4. If your tenants haven’t given you a deposit, or signed a lease, chalk it up to learning tuition and focus on putting your plan in place to guarantee it won’t happen again. If there is no lease, no deposit, and they don’t move in, there is no documentation to enforce a lease or payments.
In my experience, luckily, this hasn’t happened often, but it there have been a handful of times the tenant seemed completely gung-ho about moving in only to drop off the planet without a trace. In one instance, the tenant signed the lease and had a change of heart on the move-in day, which left me red-faced, at a loss for valuable marketing time, and scrambling to find a tenant for the landlord who was already in a cash crunch.
After that incident, I decided to let tenants know I would continue showing the property until I had the lease, rent, and security deposit.
When I accept tenants, I send a congratulation email and identify the next steps (i.e., lease, pet lease, tenants’ insurance, a date for the move-in inspection report, etc.) and all the required dates for completing them. I’ve started sending leases through DocuSign since some of my properties are remote, and tenants don’t have access to scanners and printers. DocuSign allows you to set the signing order and notifies you where you are in the process. I love it.
A word of caution, if both you and your tenants sign the lease and they haven’t paid, you’ve got yourself a tenant! Legally, they can move in, and you’ll have to go through eviction to get them to move out. Please do not sign the lease until they have given you payment and completed the necessary documentation.
Parting words of wisdom, always let tenants know you’ll keep the ads running and you don’t release keys until you receive the first month’s rent plus the security deposit.
Do you have a disappearing tenant story you’d like to share? I’d love to hear about it.
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