Tenants disappeared during the night

Buying, Selling, Building, Tax issues, anything regarding real estate or properties in Chile.
Forum rules
NO DISCUSSION OF SPECIFIC REAL ESTATE AGENTS BY NAME, LINK, OR RECOMMENDATION ANYWHERE ON THE CHILE FORUM.
lmkwia
Posts: 4
Joined: Sat May 05, 2018 5:16 pm

Tenants disappeared during the night

Post by lmkwia » Sat Jan 05, 2019 9:08 am

Hello. I am writing this post because I have a few concerns regarding my apartment I am renting out. It would be very appreciated if any of you could give me some suggestions.

In mid-November, we got an email from the building administration saying that my tenant had not paid his gastos comunes for months. We immediately contacted the tenant and he said the building fees were miscalculated.

In early December, he left the building during the night without notifying us or the building administration in advance (according to the contract, he was supposed to notifiy us 60 days before his departure), of course without paying his fees, electricity etc. When we contacted him as the rent didn't arrive on time in mid-December, he said he left the apartment because the apartment was inhabitable due to its vicious conditions and he demanded his deposit back. The keys were left in the post box. The apartment was dirty but there were no serious damages except broken door knobs.

His deposit was 510k, while the unpaid gastos comunes + electricity etc. until November was 1230k. The monthly cost for the apartment is around 680K (Rent: 520000 + Gastos: 160000). We were lucky that we found a new tenant from February, but this leaves us with an unoccupied apartment for two months.

As I see it, he owes us 720k or 2080k (if he bears the expenses for two extra months).

1. Is there something we can do about this guy? His aval was his wife and she also disappeared together. I have his work info from 2017. But I am not sure if he still works there.

2. According to the contract we can publish his unpaid debt for public knowledge. Does that mean we can report him to DICOM? If so, what is the process?

3. Do I need any paper from a notary regarding the termination of the contract? For now we only have his email from mid-December.

Any suggetions and recommendations are welcome.

User avatar
admin
Site Admin
Posts: 19326
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Tenants disappered during the night

Post by admin » Sat Jan 05, 2019 9:49 am

that is all very specific to your situation and without looking at the that contract, can not give you any specific advice. so this very general.

yea, you could probably go after them, if you can find them, for damages and such; but, it will probably cost more than they owe.

there is a bad renter database now in santiago for exactly this reason. DICOM has been very limited in recent years to very specific financial uses, due to past abuses. so they created the renter database. can not recall the name right now.

overall though, you got off pretty easy as renters go. you might want to just suck up the loss and call it a day.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

mem
Rank: Chile Forum Citizen
Posts: 702
Joined: Tue Nov 24, 2015 11:18 am

Re: Tenants disappered during the night

Post by mem » Sat Jan 05, 2019 12:11 pm

Tale as old as time. One of the biggest reason why renting out houses or apartments has so much risk. Then add to that the chile x factor.

For higher end rentals, like the 600k to 1k + range most of the landlords I know wont even rent to Chileans, gringos only with no shame. Which where I live, most chileans aren't interested in pay more than a couple/few hundred thousand anyway. Presumably this is because the locals dont treat the rental well long term or they tend to bail on the lease like you experienced.

Heck I even experienced a Chilean landlord that left over a million pesos in water and electric Bill's (over a year in arrears) on a rental house we took to the point that the utility came to the house warning that within 3 hours they would turn everything off! So we had to pay a lump sum immediatley because the landlords didn't "have the money". It was a nightmare dealing with them.
I don't mean to generalise and to be fair the well traveled and high class chileans are as reliable and trustworthy as anyone else. You just gotta filter out the riffraff both in terms of tenants and landlords.

as was said most people just chalk it up to a cost of doing business with riffraff. You could try hiring a lawyer just to contact them with some sabre rattling legalese to try to get them to make some sort of restitution.
In terms of prevention you could try asking for more of a deposit next time. Like a first, last, and deposit. Or asking that the lease be paid in 3 or 4 month lump sums. Of course this will only work will well off tenants, which are lower risk anyway.

User avatar
admin
Site Admin
Posts: 19326
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Tenants disappered during the night

Post by admin » Sat Jan 05, 2019 1:50 pm

told this story before i believe, but worth a repeat. it is a good one.

friends of ours got into financial trouble with a bunch of consumer loan / credit card debt. The collectors for the stores were circling to sieze all the stuff in their apartment. so they ran away in the middle of the night.

they moved in to a new apartment. the next day a collector shows up at their door to sieze their stuff.

after a few mins of talking to the guy they discover he is not there for their stuff. the previous tenents of their new apartment had also run away in the middle of the night.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

User avatar
admin
Site Admin
Posts: 19326
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Tenants disappered during the night

Post by admin » Sat Jan 05, 2019 1:53 pm

yea increased deposits. credit checks. references from previous land lord.

they blink at any of those requirments move on.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

mem
Rank: Chile Forum Citizen
Posts: 702
Joined: Tue Nov 24, 2015 11:18 am

Re: Tenants disappered during the night

Post by mem » Sat Jan 05, 2019 2:53 pm

admin wrote:
Sat Jan 05, 2019 1:53 pm
yea increased deposits. credit checks. references from previous land lord.

they blink at any of those requirments move on.
Yup, especially in the larger and lower/mid end of the market. It is why it is so risky to try deal in rental investment/income.

Outside of Santiago, I can look at the ano corridos in our area on economicos or mercato libre and there are literally none that I would actually be willing to move my family too. Because most of the available market are what passes for typical chilean houses. Small, not well built, not well located, surrounded by human density, etc. If I figure all of those houses are good enough for me, then sure, I will just keep passing until I find a good mark of a landlord. If the house you are trying to rent is a dime dozen the tenants lookin at it are going to be dime a dozen riffraff.

In my 4 year experience, It is so rare to find a reasonably priced ano corrido that doesnt suffer from the above limitations, I will do whatever is necessary to get that house, because the supply of houses I see as acceptable, safe, and valuable are in such short supply.

Julito
Rank: Chile Forum Citizen
Posts: 286
Joined: Sun Apr 19, 2015 5:39 pm
Location: Villarrica

Re: Tenants disappered during the night

Post by Julito » Sat Jan 05, 2019 5:18 pm

You could also check if "Landlords Insurance" is available in Chile to cover yourself into the future. If so read the policy closely for its exclusions and see if it's worth the expense, usually a smallish percentage of the rent.

User avatar
fraggle092
Rank: Chile Forum Citizen
Posts: 1809
Joined: Fri Mar 28, 2008 6:35 pm
Location: In Chile

Re: Tenants disappered during the night

Post by fraggle092 » Sat Jan 05, 2019 10:07 pm

Our last renters not only skipped, leaving us with the utility bills, they generated $2.000.000 worth of dirt and damage, or rather that's what it cost to fix the place, including washing and scraping all the walls and ceilings with a bleach solution to kill off the abundant black mould and dirt they left, prior to a complete repaint.

Since then, we have had debt recovery guys at the door several times, as those tenants used our address to get stuff on the never-never. I invite then in, explain the situation and tell them they can take anything they want, but there's nothing there anymore because we have left the property completely bare. Since we only bought this house as a buffer zone to keep potentially noisy neighbours at bay, (welcome to Chile urban living!) it can stay that way afaic.

Anyway I decided to go after these people, and hired a recommended lawyer. Of course he wanted cash up front so we paid him another million or so. That was a couple of years ago, and we have heard nothing since, he's left town.

Since then, we have had offers to rent it out as a casa de cita, (vice always pays well) and a tattoo parlour....no thanks. Conclusion, unless you're into professional property management, or are naturally lucky, don't bother.
Bienvenidos a Chaqueteo City.

Après moi, le déluge

lmkwia
Posts: 4
Joined: Sat May 05, 2018 5:16 pm

Re: Tenants disappered during the night

Post by lmkwia » Sat Jan 05, 2019 10:23 pm

Thank you all for sharing your stories and the suggestions.

We always check their credit scores, but increasing the deposit was not very succesful so far. Checking with old landlords seems to be a really good idea and I will do this next time. I am not sure if the insurance is worth it, but I am going to get a quotation first.

I am also going to visit one of equifax offices and check if there is anything I can do about my old tenant and aval. An agent gave me this webpage - arrendatarioperfecto
(I guess I cannot post a link here). Taking legal actions seems to be more expensive and complicated. I probably won't go that far. Thanks a lot again for your advice.

For now, I am mostly interested in buying and renting out small apartments in mid to lower end market as its ROI seems to be the best. In my short experience (two years) in the Chilean rental market, renting out an apartment above 500k/month took much longer with the higher cost for unoccupancy.

paladin
Rank: Chile Forum Citizen
Posts: 507
Joined: Tue Dec 28, 2010 3:32 pm

Re: Tenants disappeared during the night

Post by paladin » Sun Jan 06, 2019 6:04 pm

Problems with tenants is just something that you have to accept as an owner. All businesses involve risks of one kind or another. Every time a company sells to another on credit, it takes the risk of not getting paid. If you are averse to risks, you should put your money in a bank, where in the long run, you are guaranteed to lose, as if you’re lucky, the interest received may just cover inflation and no more. When you own an apartment and rent it out, your apartment should at a minimum retain its inflation adjusted value, and the rent gives you a bit of income on top.
I’m also invested in apartment rentals, and even though I take all the precautions before accepting a tenant, I also make sure I keep in touch with them regularly on a friendly basis, and also check that the GC , utilities etc are paid up to date.
I looked into the insurances available, and once I read the details found it really would be a waste of time and money.

Britkid
Rank: Chile Forum Citizen
Posts: 1962
Joined: Wed Dec 05, 2012 6:59 pm
Location: Talagante area, Chile
Contact:

Re: Tenants disappeared during the night

Post by Britkid » Mon Jan 07, 2019 11:40 am

One place I rented here in Chile the owner was not interested in any paperwork. She wanted to know where my parents-in-law lived, go to the house, and meet them and talk to them about me which we did in fact arrange.

jamie_m
Rank: Chile Forum Citizen
Posts: 703
Joined: Sun Jan 06, 2013 8:52 pm
Location: Santiago

Re: Tenants disappeared during the night

Post by jamie_m » Mon Jan 07, 2019 4:55 pm

What if you make the tenant name a guarantor on the contract? Can you go after that person if the tenant does a runner? It might make them think twice about running if they have named a family member.

Post Reply