What’s the most important form used in the management of residential property? The tenant application form!
How an application from any prospective tenant is handled, is extremely important and can dictate how the management of the property will proceed for the term of that tenancy period. This is a lesson I’ve learnt the hard way over many years. Get this right and everything else flows from there. Get it wrong and problems can follow. For example, if there is not enough work done in relation to carefully checking a tenant’s financial capacity to pay their rent, there is every chance that tenant could fall behind with their rent payments in the future.
Having said that, I know that life can sometimes take over and people do lose their jobs or a relationship can break down and this can impact quite seriously on their financial position. So it does happen that tenants can sometimes fall into arrears. But generally speaking, the application form and how it is processed will normally indicate the quality of the person, their financial capacity and their previous rental history – which are all things that must be considered for every application received.
At Investors Direct Property Management (IDPM), we have a 100 point checklist that must be completed by us for every applicant on every property. These days most banks ask for a 100 points to confirm a customer’s identity etc., and that could be just to open a savings account with a minimal deposit. So why wouldn’t a Property Manager use this same criteria when anyone applies for a property which could be worth half a million dollars or more? It can be hard in some cases to get 100 points of identification, but there is always a way and it’s so important that the extra time and effort it takes, is well worth the trouble.
Previous rental references are necessary to ascertain how the prospective tenant has handled themselves in other rental properties. Have they always paid their rent on time? Did they maintain the property in a neat and clean condition? Were any complaints received about their behaviour? Were any formal Notices served? Was their bond refunded?
I.D.P.M. pays to be a member of the Tenancy Information Centre of Australia (T.I.C.A.), which is a database of defaulting tenants. This type of checking process is vital in today’s world. People are much more mobile and transient than they were perhaps 20 years ago, so Property Managers must be able to check the backgrounds of tenants who may have come from outside their town or State. My understanding is that T.I.C.A. has the largest database in Australia plus they’re also in New Zealand, which is just as important. People do move between Australia and New Zealand and T.I.C.A. is a great way of checking rental history outside our own country.
For a lot of reasons, it’s also important that we have personal/professional references for every tenant, plus an emergency contact such as a next of kin. If things start going awry, we need as many contact points as possible and I can explain why! Recently a tenant who was normally on time with rent payment, fell into arrears. We couldn’t make contact with either tenant, so we checked their application form. One of the tenants had provided her mother’s name and contact details as the emergency contact – so I was able to call her mother to find out what was going on. The tenant made contact with us, explained that her partner had lost his job and they were finding things difficult at that time. We discussed the whole thing and the tenant was told we would still need to serve the required Notice, but if they made payment within that required time frame, the Notice would be void. If they didn’t pay the rent, we would proceed to VCAT. The tenants subsequently paid the outstanding amount and hopefully will remain up to date. But if we didn’t have all those details on the application form, perhaps we’d still be trying to make contact with the tenants!
Everything starts with the application form. It must be comprehensive, it must be detailed and it must be processed properly. Near enough is just not good enough for us.
As I said at the start, it’s the most important form in the Property Management business. We use it to make sure we can do a better job of looking after our clients’ properties.