Here are some tips for both Landlords and Tenants. These are good tips for any state, except were noted as Massachusetts Only.
Top 10 Lease Tips for Landlords or Lessors
Landlords Need to Know
- Know your lease! You can get copies of standard lease forms everywhere. But have you read it? Do you know your rights and obligations? Make sure you do.
- Make sure the Term works. Most leases are for a year. But they don't have to be. If you have a tenant moving in December, and if December is a crummy month to have leave because it's so hard to get someone else, short the lease or lengthen it a few months to get the roll-over closer to peak time. Less vacancy is better for you. Similarly, don't have all three leases in your three unit building run out at the same time - you could create a situation where you're not getting any income.
- Collect as much deposits as you can under your state law. In Massachusetts, you can collect first month, last month, and one month as security deposit. There are LOTS of rules around keeping track of, paying interest on, and collecting all of them, so see #1 and I recommend discussing with an attorney some basic elements to protect yourself. The reason you should collect all those deposits? Better tenants have the cash -up front. Further, tenants are much better behaved with that deposit in escrow.
- I recommend putting together fee addendum for common damages. When you need to collect a deposit, it's a lot easier if you say "I told you so" right up front. Items like "re-painting a wall: $100" and "nail-hole replacement: $25" will help explain to the tenant what costs what, and, more importantly, will protect you in court. Nothing like having a signature on a disclosure document!
- Be clear about late fees. Also a good item in the addendum. Be wary, Mass state law is tricky on this issue, I bet other states are as well.
- Never sign a lease until you've qualified the tenant to your satisfaction. You can't un-sign it.
- Never take a nickle until you've qualified the tenant to your satisfaction. Holding a deposit could be construed as an implied promise to rent, because that's what it is. In addition, if you take advance deposits, you should have paperwork that indicates what it is for, and under what conditions the deposit may be refunded.
- This is obvious, but, Qualify your tenants. Call their last landlord, their boss, validate their work e-mails and phone numbers, run their credit, and it can't hurt to do criminal checks in some cases. Most tenants who are good have no issues with any of this. I'm not saying not to rent to people with bad credit either - credit is just one part of a persons ability to pay rent. Examine the whole tenant.
- Make sure you have a list of everyone who is living there, and all their ages. Make sure they are aware they can not make changes without your consent.
- Don't violate the lead paint law. That's a good way to get someone hurt and lose YOUR house.
Top 10 Lease Tips for Tenants or Lessee
- Know your lease! Read your lease and all addendums.
- Learn the law! You had to learn the rules of the road before you got your license, you should do the same about landlord / tenant relationship. Most tenants I talk to know very little about their rights, and that puts them at a disadvantage.
- A lease is a contract - and you have to perform your end of it. That means paying on time, and taking care of the property. It's not yours, it's someone else's property. If you don't treat it that way, you're going to be on the wrong end of an expensive stick.
- Don't be a "vigilante" tenant. Two wrongs don't make a right. If you have a complaint, there are ways in every state to keep your landlord on the straight and narrow. Damaging the property or withholding rent is usually a good way to get yourself in trouble, and create problems, not solve them.
- Understand the pet policy, especially if you have one. Pets are commonly sources of income for landlords, so be aware of that.
- Get heating bills and other utility bills. Some units look cheap - till you try to heat or cool them! Then they end up being expensive. Make sure you have a good idea what your unit will really cost.
- Complete privacy is not an option. It's not your house, so you need to know the landlord will come by from time to time to check out his property - and check up on you.
- Report problems promptly, and do so in writing as well. E-mail is a great way to make sure that you have a paper trail of complaints.
- Watch for hidden fees - if there are fees spelled out in the lease, they may not be able to charge you fees for infractions later. Especially important when renting out condos.
- Be Upfront: If you're going to have trouble making payments, talk to your landlord. Waiting for him to call you and ask about rent is a good way to get yourself an eviction notice and some open hostility.
Do Good Things Today!
*All information is posted in good faith and is assumed to be reliable, but may rely on third party information sources.