Sometimes you might sense that something at a rental property isn’t quite right. Other times, the warning signs are impossible to ignore.
Either way, spotting potential issues early is crucial – not just for the smooth running of the tenancy, but also because it can help your landlord clients avoid unnecessary stress and protect their investment.
When problems do arise, having the right landlord insurance in place can provide financial support and peace of mind, covering costs like property damage, missed rent, or legal disputes.
Knowing what to watch for means you can act early, help prevent claims where possible, and ensure your clients are supported if a claim does become necessary.
Here are five tenant red flags to keep an eye on…
Red flag 1: Late rent
A one-off late payment may have a perfectly valid reason, like bank glitches or wage delays.
A quick check-in with the tenant or following your agency’s non-payment procedures is usually enough to resolve it.
However, repeated late or partial payments are a warning sign. Watch for tenants who:
- Pay late more than once or twice
- Make partial payments
- Give repeated excuses
- Refuse automatic payments
- Constantly request due date changes or extensions
- Avoid your contact
If late payments turn into arrears, you may need to follow the legal eviction process to regain possession.
Landlords may then claim on their insurance if their policy covers loss of rent due to default, but only after the eviction process is completed.
Remember, insurance may limit the number of weeks covered for lost rent (at EBM RentCover, up to six weeks for default and up to 52 weeks for denial-of-access), so acting promptly is crucial to protect the landlord’s income.
Red flag 2: Property neglect
Tenants must keep the rental reasonably clean and free from hazards, and repair any damage caused by themselves, their children, pets, or guests (whether accidental, intentional, or malicious).
During inspections, watch for signs of property neglect:
- Poor cleanliness
- Evidence of pests or vermin
- Minor damage beyond normal wear and tear
- Major damage (significant unrepaired damage can be grounds for eviction)
- Tenants refusing to acknowledge responsibility for damage noted in the inspection report
- Disputes over who is responsible for repairs
While landlords should expect reasonable wear and tear, any excessive damage is the tenant’s responsibility.
If tenants fail to meet this obligation, landlords may need to claim on their insurance for tenant-related damage. EBM RentCover offers protection for accidental, intentional, malicious, and pet damage.
Red flag 3: Not reporting damage
You have likely encountered tenants who make frequent maintenance requests, but tenants who rarely report issues can pose a bigger risk.
Even minor damage needs to be reported so it can be assessed and repaired.
Some tenants may hesitate to report damage they caused, while others might not report accidental or weather-related damage.
This is why inspections are so important.
Landlords have a legal obligation to keep their property safe and habitable. Unaddressed damage can not only increase liability risk (if someone is injured or property is damaged) but also affect insurance. Landlord insurance policies require that premises are properly maintained and that further loss is prevented. Failing to act can result in claims being reduced or denied.
Red flag 4: Absconding
Sometimes tenants need to end their lease early for reasons like a new job, relationship breakdown, or moving into care.
Ideally, they give notice and pay any penalties, but some leave without warning – gone one day, nowhere to be found the next.
Early warning signs you might notice during inspections include:
- Lack of furniture or personal belongings
- Empty cupboards
- Packing boxes on site
- Services disconnected
Tenants who “do a runner” often leave rent unpaid and fail to fix damage they are responsible for.
Landlords may need to claim on insurance for loss of rent or tenant-related damage.
In some cases, theft may occur, though abandoned tenant goods and cleaning are usually not covered.
Red flag 5: Illegal activities
No agent or landlord wants to lease to a criminal, but sometimes it happens.
You may be alerted by neighbours or police that the property is involved in illegal activity, such as drug manufacture or dealing, brothels, gambling, fighting, or domestic violence.
Careful tenant screening and regular inspections can reduce the risk. Watch for warning signs during applications:
- Incomplete or evasive forms
- Suspicious ID documents
- Frequent relocations
- No references
- Attempts to bypass reference or financial checks[TW1]
- Offers to pay rent in cash or in advance
- Inaccurate or unverifiable salary/employment information
During inspections, watch for indications the property is not being used as a home:
- Refusal to allow inspections
- Aggressive behaviour
- Lack of personal belongings
- Unauthorised modifications
- Unusual smells or discolouration
- Unnecessary equipment on site (e.g. pool chemicals)
- Extensive security or locked-off areas
If you suspect illegal activity, do not confront tenants and call the police.
Damage and unpaid rent are common in such cases.
Whether a landlord can claim on insurance depends on the policy.
EBM RentCover is one of the few providers covering drug lab clean-ups; most insurers exclude damage related to illegal activities.
Being aware of these warning signs can help you protect your rental property and minimise risk.
If you are unsure about your landlords’ coverage or want to understand how EBM RentCover can support you in situations like these, get in touch with our team for guidance – 1800 661 662.
