For Owners

How to protect your rental property from freeloaders

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October 2021

Being cautious is always a good idea. When it comes to freeloading tenants, however, this is easier said than done: How do you read the mind of a prospective tenant before he or she signs? And how do you minimise the damage once you realise you have a freeloader on your hands? Find out right here how to save time, money and trouble, and let us tell you what to do when push comes to shove.

Recognising freeloaders in time

For an effective protection against fraudsters, you need more than your personal impression. You need a thorough screening of tenant leads, because freeloading tenants make an active effort to hide their income situation.

Part of the effort is to run a credit check by requesting a credit rating from the German Credit Protection Agency SCHUFA or from the Creditreform credit rating agency. A poor credit rating will point to a potential collection loss right away. For the majority of freeloading tenants, a credit check will return negative track records – such as payment order proceedings, bills not paid or paid late, and debt.

Another thing worth checking is a tenant lead’s current place of residence. Because freeloading tenants rarely have one. Getting in touch with the previous landlord cannot hurt either. If a prospective tenant refuses to name his or her previous landlord, you have every reason to be on your guard. Asking an applicant to provide all of the relevant details in a questionnaire is therefore a sensible approach. You should bear in mind: Whenever the details returned in response to your request for information are patchy or are not provided promptly you should be careful.

What happens when it has happened nonetheless?

What if you rented your apartment to a seemingly trustworthy tenant and suddenly the rent stops coming? If a tenant misses at least two monthly rent payments, you have the right to terminate without notice. So far, so good. But freeloading tenants are known for their tenacity and for staying even after their lease has been terminated.

In this case, the only thing you can do is to claim possession. Yet up to twelve months may pass before a court rules on your case. You will therefore sustain serious financial damages, and not just because of your collection loss. Forced evictions involving a bailiff, locksmith and removal service will cost the landlord approximately 3,000 euros. Although the landlord may, in theory, charge these costs to the defaulting tenant, freeloaders tend to be destitute and unable to pay. Common practice in Berlin and elsewhere is therefore to simply change the lock of the apartment.

What happens next?

Since freeloaders are irresponsible housekeepers and rarely take good care of their homes, they will often leave apartments in a desolate state – run-down, trashed, and damaged. So, the next question that presents itself is how best to restore such an apartment to a lettable state. Sadly, this will often require costly refurbishment work.

Although there are online databases listing potential freeloaders, they are operating in a legal grey area. After all, the German Data Protection Regulation (GDPR) prohibits the collection and disclosure of personal data to third parties without a person’s consent. Moreover, there is reason to question the reliability of such registers.

To protect yourself actively against freeloading tenants, the main thing to do is ultimately to screen your tenant leads carefully. Finally worth noting is that there are insurance policies to protect you against collection losses and legal fees that freeloaders cause you.

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