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Landlords Affected in Tough Economic Times |
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By Marv Steier, President TVS Tenant Verification Service Inc. Tough economic times affect every consumer that includes tenants and it has become quite evident recently with the global financial meltdown that many consumers/tenants have overspent and incurred more debt than they are able to handle financially. So when consumers default on their financial obligation who suffers? Credit card companies, financial institutions and landlords? Yes landlords. More and more consumers, who are tenants, will leave landlords stuck with unpaid rental fees and damaged rental property where they are unable to meet the terms of their lease agreement because of heavy debt load and unemployment, many tenants become angry and frustrated and trash the rental unit. Where this scenario arises the tenant(s) may just decide that it is easier to hire a midnight mover and forego the lease agreement and the last few months rent as there is little or no consequence for doing so. No this is nothing new as it has been happening for years, it is evident however that rental defaults are rising and are becoming more common occurrence in these new tough economic times. Tenants use landlords as a revolving line of credit because it is easy to do, there is no consequence, and many tenants in today’s unstable financial environment feel that they have no other choice. The major credit reporting agencies do not report tenant pay habits and a court award or an arbitration award means nothing in most instances as it is a worthless piece of paper that is more often than not, unenforceable. Landlords reporting tenant pay habits to a credit reporting agency is a viable solution to maintaining a profitable rental business and reducing income loss. The risk of extending a lease to a high risk tenant that has stiffed another landlord is very real and landlords need to take additional measures to protect their business. Advising the prospective tenant prior to signing a lease that monthly pay habits are reported to a credit reporting agency and that there is a consequence for late rent payment and/or leaving a landlord stuck with unpaid rent is a significant deterrent. One of the premier tenant screening services in North America, TVS Tenant Verification Service Inc. provides the residential rental industry with a repository for reporting pay habits that stops high risk tenants from using landlords as a revolving line of credit and benefits good tenants that make rent payments in a timely manner. Landlords and good tenants benefit, high risk tenants that use landlords as a revolving line of credit will soon come to the realization that there is no such thing as free rent. |
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