The dream of owning real estate is most people’s desire; and once that dream is realised, the feeling of fulfilment is almost inescapable.

Thoughts of real estate investment naturally embraces the property owner in a bid to ensure financial security. However, property owners will quickly realise that owning real estate can be financially burdensome and as such, renting is an obvious option to improve the property owner’s financial health. Therefore, when tenants fail to pay rent as per the lease contract, a property owner’s investment planning will be in jeopardy.

When a tenant fails to pay rent under a lease contract, a landlord would typically ask:

1. How quickly can I obtain possession of my property?

2. When will I recover outstanding monies owed?

All landlord and tenant issues are governed by the Rent Restriction Act, The Judicature (Resident Magistrate) Act and The Law Reform (Landlord and Tenants) Act. The parish courts and the Rent Board are governing bodies that help disputing landlords and tenants to resolve issues.

SERVICE OF NOTICE TO QUIT

For the court to recognise any claim before it the landlord must serve one month’s notice in writing to the tenant.

It is important to note that if you indicate only failure to pay rent as a reason when giving notice; and the tenant pays the outstanding sums outlined in the said notice before the notice period expires, the notice will be void and the tenant can continue to occupy the premises. However, if other reasons are stated in the notice, the tenant will still be required to vacate the premises even on paying the outstanding sum.

JUSTICE DELAYED IS JUSTICE DENIED

A recent study revealed that more than 80 per cent of landlords are owed at least two months’ rent before the matter is brought before the court. Once the claim is filed in the parish court, the court takes approximately two weeks before the summons is prepared. Dates given are usually between 30 to 45 days from the date the claim is filed. While we are aware of the lengthy case list a parish court judge has to hear daily, we cannot ignore the fact that the landlord may be experiencing the following problems while he is waiting to be heard:

a. The tenant continues to default on rent and possibly payments for other utilities, more importantly, National Water Commission (“NWC”) bill;

b. The inability to fulfil financial obligations as they fall due, such as mortgage and living expenses; and

c. In some cases, the tenant might be destroying the landlord’s property.

In cases where a tenant appears before a parish court judge and acknowledges owing rent but states that he or she is having difficulty locating a suitable dwelling, the judge automatically grants that tenant two months to vacate the property. This often creates more financial hardship for the landlord, since typically the tenant will continue to default. After judgement has been granted in the landlord’s favour, the tenant may apply for an extension of time to remain in the property as long as the application is made two weeks before the expiration date to vacate.

DEFAULT JUDGEMENT

Where default judgement is granted an order, the landlord will be required to make an application for the bailiff to remove the tenant from the premises. This application can only be made where the tenant fails to move. This process is at a cost to the landlord in that he/she will be required to pay a fee per room to remove the items from the premises.

DISAGREEMENT BETWEEN LANDLORD AND TENANT

Where there is a disagreement between the landlord and tenant on material facts, a trial date is usually set and the dates given can range between four to eight months owing to the case backlog and extensive court list.

OUTSTANDING NWC BILLS

The court will not allow a landlord to make a claim for outstanding water unless the landlord settles the outstanding bill with NWC. Water is considered a part of land ownership and because of this legal principle, the landlord will be required to settle the outstanding bill with the NWC before making a claim for the outstanding sums.

If a landlord is unable to settle these sums with the utility company, he or she will not be allowed to make that claim against the tenant. The landlord will then be registered as a delinquent customer with the NWC, thereby affecting his or her credit ratings.

JUDGEMENT

A landlord should not necessarily feel a sense of immediate relief when judgement is received for outstanding rent. Where the tenant fails to honour a judgement, the landlord will have to file an application in court to enforce the judgement against the tenant. This process can be lengthy and time-consuming and may still result in the landlord recovering nothing from the tenant where:

a. the tenant has no asset in value, and

b. the landlord is unable to locate the tenant after he or she has vacated the premises.

Therefore, it is very likely that a landlord could exhaust the entire legal process and still walk away without recovering outstanding rent, attorney’s fees, outstanding utilities and bailiff fees.

SELF-HELP REMEDIES

The Law Reform (Landlord and Tenants) Act prohibits a landlord from holding a tenant’s belongings for outstanding rent. It is also illegal for a landlord to disconnect water and light connections without a court order when the tenant is in occupation and also to disturb a tenant’s quiet enjoyment of the property.

The legal legislative framework for the recovery of possession greatly favours the tenant and is in need of reform in order to create an equitable balance between landlord and tenant. However, until such a review is conducted, property owners must ensure that they perform proper due diligence when renting their property. A property owner should consider:

a. obtaining the services of a reputable real estate company to select a proper tenant (this option will attract a commission of the first month’s rent plus General Consumption Tax); or

b. taking the time to conduct proper interview processing, asking all necessary questions, request proper documentation, such as identification, name of two family members along with their addresses, taxpayer registration number, last two or three months pay slips, employer’s letter, name of two references, one being a Justice of Peace.

c. making all the necessary referral calls and checking the addresses that the prospective tenant provides.

d. if the prospective tenant is a company, conduct a company search, ask for a certificate of good standing, three months’ bank statement if the company is incorporated for more than one year as for income tax filing.

Where utilities are registered in the property owner’s name, the property owner must check to ensure that the tenant is making the payments each month to reduce possible accumulation.

Property owners must ensure that they visit the rented property at least three times per year. A landlord must make an appointment with the tenant to obtain a convenient date and time for visits. This can be placed in the lease agreement or the landlord can rely on the Rent Restriction Act, which provides that the tenant must permit the landlord, or his agents, at all reasonable times to enter upon, and inspect, the premises and the state and condition of every part thereof and carry out necessary repairs.

Venice Williams-Gordon is an attorney-at-law. She can be contacted at vwilliams@ lswlegal.com.