Landlords and property managers have certain responsibilities and rights regarding rental properties, and handling the numerous tasks required can be overwhelming. Landlords have a slew of management duties, including collecting payments, filling vacancies and evicting unfit tenants.
However, being familiar with these important documents during the process can ease the burden and give you legal protection regarding your property and your responsibilities:
Finding a Tenant
Finding the perfect tenant is crucial in successful rental property management. By screening applicants, you can find the best fit for your rental. The application asks the prospective tenant for information relevant to renting (such as employment history and references), which should help you find someone reliable who has the ability to pay on time. The application also includes a provision asking the tenant for permission to run a credit check.
After receiving prospective tenants’ applications and lists of references, you can send a trade reference letter to their references to request information concerning the prospective tenant’s character and reliability. These are typically sent to former landlords to gather information about the applicant’s rental history and suitability as a tenant. This letter can be helpful in cross-referencing the prospective tenant’s claims and making sure the landlord was satisfied with their stay.
Renting Your Property
This is perhaps the most important document when it comes to successfully maintaining and operating a rental property. The rental agreement protects both parties by outlining specific responsibilities and rights, which makes it easier to remedy issues when they occur. The document includes details surrounding rent amounts and due dates, services that will be provided, restrictions on the tenant’s use of the property and more.
The rental agreement is created in the beginning of the rental relationship and can be referred to throughout the duration of the rental. For more tips on what to include in a rental agreement, see Creating a Rental Agreement.
If you are operating a commercial property rental, as opposed to a residential space, this document is more tailored to your specific needs. This commercial rental agreement covers the rights and responsibilities of both the property manager and the tenant, focusing on how the property will be used by the tenant.
A move-in letter is a great way to welcome a new tenant to your rental property. It’s also a great tool to give tenants necessary information, such as how and where to pay rent, late fees and grace periods, contact information for maintenance concerns and other important details they may need while renting your property. This can help foster a good relationship between you and your new tenant.
Ensuring you get paid is a vital part of operating a rental property. Sometimes, if the tenant is very young or has mediocre credit, you may need to rely on a cosigner for a tenant. This agreement guarantees that the cosigner will pay the rent in the event the tenant defaults.
Amending Leases and Rental Issues
Under certain situations, particularly when you own a rental residential property, your tenant may request permission to sublease the property. This document states your approval of the sublease and contains provisions to the original lease, although the tenant is still required to meet the terms of the original lease.
Occasionally, during the term of a rental lease, adjustments may need to be made to the original rental agreement. Rather than verbally agreeing on them, it’s a good idea to get the changes to the Lease Agreement in writing. This may account for a new pet policy, added responsibilities to the tenant, change in a payment grace period or any other factors regarding the rights and responsibilities of the tenant or the landlord. Both parties must agree to the new conditions outlined in the lease modification for it to become effective.
In some instances, during the term of a lease, the landlord may need to adjust the amount of rent. This could be due to increased utility costs, new tenants or numerous other factors. This document notifies the tenant of the changes, including the new payment amount and when the increase will take effect. Before submitting this notice, make sure that your rent increase complies with legal regulations and/or rent-control rules.
Collecting Rent and Ending Leases
Collecting rent is sometimes one of the more difficult procedures for landlords since many landlords feel inclined to be lenient with tenants. However, using documents like this one can help ease the tension when dealing with tenants who have defaulted on their rent. Be sure to charge a late fee and to explain the time period that the tenant has to remedy the situation.
This document sets forth an agreement between the landlord and a tenant who has defaulted on rent. The document states that the tenant will pay the rent that is due as well as future rent payments, and the landlord will not evict the tenant as long as the payments are made. Adjustments can be made in the document to allow for grace periods and payment plans.
This document is required to terminate the rental agreement, which can occur only under certain conditions and can be initiated by either party. A tenant must provide written notice if they will not be renewing their lease at the end of the original lease term. A landlord must also provide written notice if he or she is terminating the lease, which can only occur if the tenant fails to pay rent, damages the property, violates a condition of the lease or is involved in criminal activity.
Another way to protect your property from unfit tenants is with an eviction notice. This is used when a tenant is late on rent or otherwise violates the terms of the lease. The eviction notice gives the tenant time to remedy the violation, pay the late rent or vacate the property. You will also need to file this document with the court system to continue with a legal eviction.
A move-out letter is a great tool for informing tenants of their duties upon vacating the rental property. The letter reminds tenants they need to clean the property and remove all of their belongings. It also instructs them on the process of returning keys and obtaining their security deposit.
While this list is thorough, there may be other documents that you will need to refer to when operating a rental property. For more, consider referring to the essential document packages, Residential Landlord Toolkit or Commercial Real Estate Starter Kit.