The effect is that honest people find it difficult to rent an apartment because abusers run rampant and the system protects them. In some European countries you need to prove you have stable job and get recommendation from the previous landlord to even be in the consideration and then you basically have to go for an interview. It's a ridiculous and humiliating process which wouldn't exist if landlords could throw out abusers without much hassle.
In France it can take years to evict people who stop paying rent. So now 90% of all rental contracts have an insurance for non-payments included in the contract.
A few bad apples forced every other tenant to pay more in rent just because politicians decided that squatters had more rights than the owners. And god have mercy on your soul if you decide to take back what is yours when you get tired of waiting for the justice system to do it's job. If you do, you'll be the one the cops will come for, not the squatters.
> now 90% of all rental contracts have an insurance for non-payments included in the contract.
Then what happens in practice is that the owner will contract an insurance policy via the real estate agency that manages the rental property. As a result of this, in the end if the insurance company deems you to be too high risk, then they won't insure you and the owner will not take the risk to rent his dwelling without it even if they like you and want you to live in their rental.
So what we have is a de-facto rental market that is controlled by a few insurance companies who decide the fate of the tenants. The owner, the real estate agency don't really have much power in terms of decision.
For the owner it makes things easier, they don't really have to think too much. Their rent is guaranteed by the insurance company and for the real estate agency, they can always turn down "undesirable" tenants by claiming that the insurance company rejected their application.
The tenants most of the time have no idea about this stuff.
As you put it, it is a hidden tax on the tenants because the price of the insurance is now baked in the rent that is paid by everyone, good tenants or bad tenants alike. When I was working in RE 11 years ago, the insurance cost something like 2 to 3% of the monthly rent and then another 5 to 7% got paid to the real estate agency managing the rental.
Today, I reckon, after all the inflation from the past few years, most likely 15% of the rent is gone before the owner sees a dime each month. As you can imagine this is not a very good incentive to put your apartment on the market. And that is not even touching on the various rent control policies that have been rolled out in the last few years in certain cities which have exacerbated the rental crisis.
There is no reason either should take 6 months+ to litigate (real world example). I even had an email from the tenant stating they would start paying again if we would reduce the rent.
No damage, no question about the facts, just someone who knew that worst case scenario is 6 months free housing for them, simply because that’s how long paperwork apparently takes.
End result? I’m even more selective to who I rent out to, and the costs are borne by innocent people who just don’t happen to have sufficient history.
They’d much rather pass on the cost of higher rental insurance, or failing that an income tax hike.
But anyway, generally speaking, I think they benefit on average more from a slow and inefficient judicial system. The occasional 6+ month eviction battle is a rare negative outcome that comparatively few landlords have to deal with.
> The courts should be speedy at forcing landlords to rectify problems just as the courts should be speedy at forcing out squatters.