Is it time to update your lease agreement?
We're already into peak rent season, which is May through August, when more people are looking for a new rental home than any other time of the year.
It's during the busy summer months that, as a property manager, you need to know that your lease agreement is working for you. If you haven't revised your lease agreement in a year or more, now is the time for an update.
Make lease agreement adjustments based on experience
Take a step back and consider whether or not your lease agreement language is working for you as well as your tenants. For instance, your existing agreement may permit tenants to have pets, but if you've found that dog owners aren't cleaning up after their dogs when they do their business in common areas, they're creating maintenance issues and irritating other tenants. This may call for an update to your lease agreement.
Or maybe you've been getting complaints about noise coming from one or more units. Are your noise restrictions too lenient? Now Is the time to change them.
The most current version of your lease agreement needs to address nuisance issues like these in addition to more brazen activities such as moving friends into their unit without authorization or conducting criminal activity on the premises. It's critical to remember that if a property manager or landlord become embroiled in a dispute with a tenant, a lease agreement containing outdated language may cause them legal issues rather than protect them.
Clarify the Rules
A lease is a legally-binding contract that specifies the legal obligations between the landlord and the resident for a specific period of time—typically one year. It prevents the landlord from raising the rent or modifying any terms of the lease before it expires unless terms are included in the lease allowing changes to be made. Since this agreement is a legally binding synopsis of the rules by which your tenants must abide, it needs to present a clear and solid foundation for communicating its terms in clear language that they can understand.
Your lease agreement should clarify the following issues:
Restrictions on the number or type of pets, and the tenant's responsibility for cleaning up after them
Restrictions on the use of the property, such as smoking or alcohol use
Rules regarding noise levels
Rules regarding interactions with neighbors
Guidelines for street or assigned parking
The tenant's insurance obligations
The tenant's obligations regarding care of their unit and garbage removal
Rules specifying what modifications can be made to their units, such as painting walls or hanging art
Advise each tenant that failure to abide by the lease agreement rules will constitute a material breach of the agreement and may be cause for eviction. Stating the rules up front delineates the tenant's and the property manager/landlord's responsibilities, and clarifies under what circumstances either party has legal recourse.
If you intend to make improvements or modifications to the property during the lease period, stipulate a planned rent increase in the original agreement. In general, a landlord cannot increase the rent before the lease expires. Some leases do allow a landlord to raise the rent for certain reasons that should be specified in your lease agreement, such as adding a roommate or acquiring a pet.
Setting the rules and guidelines of a lease agreement also requires establishing clear expectations regarding rent, rent increases, security deposits, and tenant responsibility for property damage.
It's a busy time for property managers. Make sure your lease agreement is up-to-date and that your tenants are fully informed of its terms by move-in day.
RentVest Property Management offers customer-centric property management services to property owners in Atlanta, Dallas, Denver, Hawaii, Houston, Las Vegas, Phoenix, Portland, Tucson, Reno, San Antonio, and Vancouver. To learn more about our full-service property management benefits, visit the RentVest Property Management website.