The term “absentee landlord” describes the situation where a person with the ultimate ownership of land—and this may be an actual person, a corporate entity, or even the state itself—does not personally use the land but instead extracts payment for its use by another. In one sense most landlords are “absent” in that the land is let for a rent to another person who enjoys physical possession and use of it, but an “absentee landlord” is a more pejorative description. It is meant to signify a landowner whose only interest in the land is to extract its economic value and who pays little or no regard to the state of the land or the welfare—economic, social, or political—of the person who is paying the rent. Such landlords are “absent” both in the sense that they have little or no social, emotional, or physical attachment to the land, and also because in many cases they are physically distant from the land, preferring either to regard the land as if it were merely an entry on a profit and loss account or, in some cases, to appoint a more local agent who will manage the land for the landlord on a purely commercial basis.
Historically absentee landlords have generated both social and economic problems on a grand scale, especially when the absenteeism is allied with external domination of the local territory. The Protestant owners of lands in Catholic Ireland in the seventeenth century and the mainly English absentee landowners of Prince Edward Island, Canada, in the eighteenth century are well-known examples of how absentee ownership can go hand in hand with “colonial” dominance, but this is not merely an historical problem. Absentee owners of Scottish Highland sporting estates; anonymous state control of land in less developed countries; corporate investors (e.g., pension funds) in city center business districts; absentee owners of Midwestern agribusinesses in the United States; and absent landlords of low-quality, deteriorating residential properties in most of our major cities are just a few examples from the twenty-first century.
Absentee landlords are perceived to be a threat to the economic and social viability of communities. By extracting value from the land (rent) but not spending or reinvesting in the local community, absentee landlords produce an outward flow of economic capital. They drain the local community. When accompanied by a constant turnover of short-term tenants, the social capital of a community is diminished and all of those community activities that depend on the interest and commitment of stable residents are lost. Given that absentee landlords may regard the land as merely another form of economic asset, rather than as a social and economic resource for the community in which the land is situated, many absentee landlords observe only the bare minimum of standards in relation to the land and the buildings on it. Properties owned by absentee landlords often are in a poor state of repair and building and zoning controls are either ignored or observed to the minimum standard permitted. An effective local management team can prevent some of the worse excesses, but the geographically absent landlord may be slow to respond to requests from the tenants or the local authorities. In many cases such landlords will simply sidestep calls for repairs or renovations and attempt to avoid local taxation.
Absentee landlords also generate numerous legal problems. Enforcing obligations in letting arrangments, serving of notices for the enforcement of tenants’ rights, and ensuring observance of public rights affecting the property (for example public access routes and rights of way) are common problems. In extreme cases in countries without a systematic register or record of land ownership, it may be difficult to identify who actually is the ultimate owner and this can lead to problems of squatting as well as making the land economically stagnant.
The economic and social cost of absentee landlords can be considerable and many countries or localities have attempted to impose regulatory or legal requirements either in order to curb absenteeism or to remove its harmful effects. These have included public access to land registers in order to identify absent owners, tax incentives for owners who maintain an economic presence in the local community and penal local taxes for those draining the local economy, enhanced procedures for the recovery of land for local landlords when faced with defaulting tenants, compulsory enfranchisement (sale of the land to the tenant) on long leases, and the enhancement of enforcement powers for violators of building codes.
Martin J. Dixon