Real Estate

Feudal Landlords

Quite some time ago I posted on the temperament of a landlord and how some people just aren’t cut out for it.  My focus on that post were people who walked away from disagreements or would always give in, and how real estate investing would eat them alive.  In another post, small-scale landlords, I touched on people who think “I’m just renting out a small space, I’m not REALLY a landlord” (and how wrong they are).  Another personality (briefly touched on in the previous posts) that will cause problems in real estate investing is the feudal landlord.

I’m a free market kind of guy, and I’m sympathetic when individuals invoke their rights with regard to their personal property, including land.  As Mr. Burns illustrates on The Simpsons, there are *SOME* limits to this:

Department of Labor Officer: This power plant violates every labor law in the book. We found a missing soccer team from Brazil working in the reactor core!
Mr. Burns: That plane crashed on my property!

Unfortunately, renting property seems to bring out similar feelings from some individuals.  The best parody of this I ever read was a Craigslist post for a rental in Vancouver (I love it!).  The fact that Krystal’s commenters either believed the post, or questioned whether it’s a joke or not, shows how badly some landlords are behaving (for the record: this is CLEARLY a joke).

Some real estate authors recommend abandoning the title “landlord” as inherently feudal, and calling yourself the property owner or property manager (which I find a little misleading, it seems like you’re trying to imply you’re NOT the landlord if you call yourself the manager).

To provide a brief overview of my intended usage of feudalism, I am referring to the idea that a feudal relationship exists when someone owns land, and allows another usage of it in exchange for a set of obligations.  Historically, this existed when the monarch owned all land in the country, then gave usage of large areas to aristocratic vassals (they would be responsible to pay taxes to the monarch, fight for her in times of war, etc).  These vassals could then parcel out the land they controlled to their own vassals (who would have their own obligations in exchange for the usage of the land), all the way down to peasants who would work the land.

Interestingly, often landlords who take the feudal perspective on things, view themselves as monarchs, not as someone existing at a certain level in the hierarchy with responsibilities to those “above” them in addition to obligations due them from those “below”.  Despite “ownership” of land, such obligations do, in fact, exist.  You are typically required to pay property taxes, which is a financial responsibility imposed by the municipality the property is part of.  Owners of property are subject to the laws of the country (and province or state) they exist in, and can’t arbitrarily invent their own laws.  “A man’s home is his castle” makes a nice saying, but the law doesn’t support this.

A feudal perspective is, of course, the wrong view of the landlord / tenant relationship in the modern age.  Just because someone is renting, it doesn’t mean they have to dip their head, call the landlord “m’lord” and do whatever is demanded from them.  I also don’t think the owner is required to adopt a “the customer is always right” and give tenants whatever they want.  A landlord / tenant relationship is a legal  agreement, like any other, where each side should have their rights and responsibilities spelled out and both parties should only enter into the agreement if they’re comfortable with it.  In most places there is a default agreement (in Ontario it’s the Residential Tenancies Act) which covers both parties and which they both MUST make themselves aware of.

The consequence of adopting a feudal attitude for the landlord are all negative.  This will antagonize the tenants in a major way, and chances are they will become sticklers for the landlord to follow all relevant laws and be far less flexible or accommodating.  Turn over will increase, as tenants will be less likely to stay beyond their lease.  Both of these will probably lead to a less profitable real estate venture.

9 replies on “Feudal Landlords”

You are so right. As a former small property owner, I realized I was not cut out to be a landlord when I agreed (dont laugh) to refund partial rent to a tenant who left before month end. Moments after agreeing, I knew my future as a landlord was over. It still took a few years to dispose of my (sole proprietor) properties. Now it’s only LP’s with professional management.

I hate the term “landlord” because it has so many negative connotations. My business card says “Owner”.

@Matt: I also gave a tenant a partial rent refund once. To me it was worth it. She always paid (though not on time) but she was very high maintenance. Part way through her tenancy she broke up with her boyfriend and then became very needy. She called us constantly and started making unreasonable demands (a $3000 “environmentally friendly” front door that she’d found in a magazine is one example). I think she was lonely. She also got a large dog (pets are not grounds to terminate the tenancy in Ontario) that was becoming a noise nuisance to the neighbours. I would have had to go through a lot of paperwork and possibly a tribunal to evict her because of the dog.

When she told me she was considering moving into a rental property her uncle owned, I offered her the partial reimbursement if she could be out by the end of the week and the property was spotless (it was). I was able to rent it for the 1st of the following month, so it was worth it to us. I don’t think I have a weak personality, I think it was a good business move at the time to reclaim my property, have it cleaned and find a more suitable tenant.

Matt & Dana: It’s a tough thing to handle. I agree with you Dana that I’m willing to pay to get rid of a bad tenant (and if I can pay the tenant directly, that’s probably the most efficient way to do it). I had a similar situation to Matt where I was talking to a potential tenant, and offered them either an air conditioner or a slight reduction on the monthly rent. Of course, she said “can we have both the AC and the rent reduction?” For some bizarre reason I said yes, and immediately afterwards my brain screamed at me that I’d be having big problems if I dealt with tenants this way (luckily their rental history had big problems and I didn’t rent to them). I resolved to be tougher in the future (although going with a PM firm would have been another solution).

Mike: Yes, m’lord! 😉

I think with the tenant laws in Ontario, it is difficult to be a real feudal landlord – there are so many laws that protect the tenant, often tot he detriment of the landlords bottom line. But it is also not in the property owner’s best interest to act in a feudal manner (for reasons laid out in this article). Where I think the problems lie is when you have a property manager who acts feudal (probably unbeknownst to the actual owner).

Man, what a great idea! I’m writing the whole “m’lord” thing into my next contract.

Certainly expectations of both tenant and lord are of critical importance. I think as lords, we have to remind ourselves that ‘losing’ a tenant because you are reluctant to do everything they want may not be entirely a bad thing. If you’ve budgeted accordingly to accept vacant months, things should be ok. Of course it sorta hurts me inside when my rental unit is bleeding money and empty though.

You lmpw what I hate is when they take advantage of a situation. I have a neighbor who is very noisy.I get headaches and earaches a lot. If I want to be transferred I will be paying $711 a month for a ONE bedroom aprtment. It is not fair to pay that much.I guess I am moving again. What I don’t understand are why apartments no longer try to keep their old tennants or even try to have a heart for people.
We are going through a recession right now.Supposedly the cost of lving has gone down? How is this possible when a one bedroom apartment used to be $550 last year and now it is around $700 in missouri!

Leave a Reply

Your email address will not be published. Required fields are marked *