Are Late Fees Legal?

Although a late fees provision in included in nearly every standard lease agreement, determining whether the fees you charge are legal is anything but standard. Why? 

Because late fees are governed by so many different laws, right down to the municipality, that the parameters may be unclear. 

Most agree on one thing:  Read the rest of this entry »

Posted by Kim Ezzell on 06.05.2008. CLICK to Leave a Comment »

Filed under: AAOA Forum, Forms

What To Do When A Tenant Leaves Early

Learn How This Property Manager Cuts His Losses When a Tenant Cuts Out

Thanks to Robert Machado, CPM, MPM, HomePointe Property Management for this submission:

There are a lot of reasons why a tenant might try to break a lease.  Some may be valid and require the landlord to allow this to happen.  One example is a military transfer.   But, most situations are simply a choice, like a civilian job transfer or promotion, don’t like the neighborhood, school change, and the like.

A landlord must protect themselves in these situations and enforce the lease.  One way to do this is with a clause in the lease so the resident is aware of what will happen ahead of time.  Here is HomePointe’s clause:

Read the rest of this entry »

Posted by Kim Ezzell on 03.31.2008. 1 Comment »

Filed under: AAOA Forum, Forms

How To Make Online Legal Forms Work For You

Online legal forms are

• easy to find,
• easy to access,
• and inexpensive. 

From a prenuptial to a power-of-attorney, sales and closing documents to landlord leases, virtually any form you have heard of, and many you have not, are available online.

But will online forms work for you?

The answer is “yes”, if you know how to use them. Read the rest of this entry »

Posted by Kim Ezzell on 03.10.2008. CLICK to Leave a Comment »

Filed under: AAOA Forum, Forms

What Every Landlord Needs to Know About Tenant Incentive Clauses

Wayne Gathright offers this follow-up to his popular series How to Create a Solid Lease Agreement:

More Tenant Incentive Clauses:  Make Your Lease Agreement a Tenant Satisfaction Agreement 

Besides covering the basic lease conditions and provisions, you can also turn your lease into a valuable marketing tool for your business while at the same time providing extra satisfaction for your tenants. You can develop tenant loyalty that will result in longer relationships, on-time payments, better care for your property, assistance with marketing, and possibly an eventual sale to your tenant.  

Read the rest of this entry »

Posted by Kim Ezzell on 03.05.2008. 1 Comment »

Filed under: AAOA Forum, Forms

IS YOUR LEASE APPLICATION FALLING SHORT?

Find Out If You Are Making These Common Mistakes

Like a house built on a strong foundation, your rental application can make or break:

• Your ability to effectively screen your prospective tenant.
• The likelihood you’ll collect your rent.
• Your chances for recovery if you have to turn the tenant over for collection.

Is Your Lease Application Up to Par?

Compare yours to this checklist to see if you are leaving anything out:

Read the rest of this entry »

Posted by Kim Ezzell on 02.27.2008. 3 Comments »

Filed under: AAOA Forum, Collections, Credit Screening, Forms

HOW TO CREATE A SOLID LEASE AGREEMENT: Part Four of Four

HOW TO CREATE A SOLID LEASE AGREEMENT:  Part Four of Four

By Wayne Gathright

Part One, Make Your Lease a Tenant Satisfaction Agreement

Part Two, The Basic Lease Agreement

Part Three, Build Tenant Incentive Clauses into Your Lease Agreement

Important Clauses To Add To Your Lease Agreement 

While the basic lease provisions are important, most of the time, a basic lease agreement is not enough.

In addition to incentive clauses, there are many other important clauses that landlords often tend to neglect, yet these can be invaluable if there is ever a dispute. 

Here are some examples of clauses that can be added to your lease agreement:

Parking.  Spell out how many vehicles (cars, boats, motorcycles, etc.) you will allow to be parked at the residence? Where?

Residential Use.  Can the tenants run a business? What kind?

Garage Sales/Auctions. Will you permit these? How often?

Notification of Change of Status.  Require that the tenant update you on changes, for instance, employment.

Subletting.  Is it allowed? How many new residents? Notification

Co-signers.  Should you add another responsible party as a guarantor?

Partial Payment of Rent.  What will happen if you receive only part payment?

Returned Check Fee.  How are you going to handle returned checks?

Bankruptcy.  What if your tenant files for bankruptcy?

Lease Violations.  What are your rights? What are the tenant’s rights?

Tenant’s Absence. What if the tenant disappears?  Can you get into the rental?

Furniture Lien.  Can the tenant’s possessions be takes?

Increase in late fees.  Can you charge additional late fees if the tenant is often late?

Judgment collection. Who pays?

Utility bills. What if the tenant defaults?

Emergency repairs.  What if you have to cut off the water for repairs?

Problem neighbors. How do you handle complaints?

Disasters.  What if you can’t fulfill your landlord obligations because of a disaster?

Illegal activity.  Make sure you can take action against drug use, explosives, firearms, etc.

Quiet Enjoyment.  You should insure that the tenant cannot intrude on other people’s rights.

Smoking.  Make sure your rules are clear.

Pets. How many pets? What additional deposit? What about additional cleaning costs?

Yard Upkeep. Make sure your property looks neat and is safe.

Health and Safety Codes. Be sure your tenant doesn’t violate these.

I hope these ideas make you think about how important your tenant lease can be.  With the right rental agreement design, you can create a lease that will protect your property, promote timely rent receipt, motivate your tenants, and protect your legal rights as a landlords.

Wayne Gathright is president of WG Software, Inc., developers of the Tenant File Property Management Software.  He has over 30 years experience in consulting and software development for real estate.  Mr. Gathright also markets a product for easy creation of leases called The Lease Designer, that allows the user to select from several prewritten leases, choose from over 200 prewritten rental clauses, and add house rules templates to the lease. A user can write their own leases and clauses, modify the existing templates, or import leases from other programs.

American Apartment Owners Association offers discounts on products and services related to your commercial housing investment, including tenant debt collection, tenant background checks, insurance and financing.  Find out more at www.joinaaoa.org.

To subscribe to our blog, click here.   

Posted by Kim Ezzell on 01.26.2008. 5 Comments »

Filed under: AAOA Forum, Forms

HOW TO CREATE A SOLID LEASE AGREEMENT: Part Three of Four

HOW TO CREATE A SOLID LEASE AGREEMENT: Part Three of Four

By Wayne Gathright

Part One, Make Your Lease a Tenant Satisfaction Agreement

Part Two, The Basic Lease Agreement

BUILD TENANT INCENTIVE CLAUSES INTO YOUR LEASE AGREEMENT

Apart from the basic provisions, you can build incentives into your lease agreement to reward a good tenant. In return, you can turn your tenant lease into a valuable marketing tool for your business, while at the same time providing extra satisfaction for your tenants.

Here are a few ideas:

• Award special benefits to your tenants the longer they stay.  At each tenant lease anniversary, provide a financial or other type of award, provided they are on time with all of their rent payments.
• Provide incentives for your tenants to recommend you to other prospective tenants.
• Provide an incentive for your tenants to eventually own the house they currently rent, provided they remain in good standing as a tenant.
•  Encourage your tenants to make upgrades to your property if they have the skills.  You can provide materials and they can provide valuable labor.

Check back tomorrow for Part Four, Added Clauses.

Wayne Gathright is president of WG Software, Inc., developers of the Tenant File Property Management Software.  He has over 30 years experience in consulting and software development for real estate.  Mr. Gathright also markets a product for easy creation of leases called The Lease Designer, that allows the user to select from several prewritten leases, choose from over 200 prewritten rental clauses, and add house rules templates to the lease. A user can write their own leases and clauses, modify the existing templates, or import leases from other programs.

American Apartment Owners Association offers discounts on products and services related to your commercial housing investment, including tenant debt collection, tenant background checks, insurance and financing.  Find out more at www.joinaaoa.org.

To subscribe to our blog, click here.   

Posted by Kim Ezzell on 01.25.2008. CLICK to Leave a Comment »

Filed under: AAOA Forum, Forms

HOW TO CREATE A SOLID LEASE AGREEMENT: Part Two of Four

HOW TO CREATE A SOLID LEASE AGREEMENT:  Part Two of Four

By Wayne Gathright

Part One, How to Create a Solid Lease Agreement

DRAFTING THE BASIC LEASE AGREEMENT

1.  Parties.  Include the full names of ALL prospective tenants - these will be the only ones held accountable if there is a dispute. 

• Be sure to include both names of a married or unmarried couple. 
• Remember, if one tenant skips, you should be able to hold any other party on the lease responsible for the rent. 
• Also, if any one tenant violates the terms of the lease, you should be able to terminate the lease.

2.  Rent provisions. Spell out more than just the rent amount. Include:

• The day rent is due
• How it should be paid - by mail, in person, online, direct deposit.
• List acceptable forms of payment - personal checks only, money orders, credit cards.
• Any charges if a check should bounce.
• When rent is considered late, and any late fees that the tenant is responsible for. 

Be sure to include whether you are going to apply any late fees prior to applying money received towards the actual rent.

3. Occupancy Restrictions  Make sure you specify who can live at the residence.  This would normally be only the parties named on the the lease and any of their minor children.  This gives you the right to evict any other people who might move in later, such as relatives or friends, plus it protects you if the tenant tries to sublet the rental without your permission.

4.  Security deposit.  Be specific.  Many legal hassles develop out of this part of the lease, so make sure you spell out:

• The amount of the security deposit,
• Conditions for the return of the deposit,
• Acceptable deductions, and
• When it will be returned.

Be sure to include how the deposit can be used by either party, such as deductions for cleaning costs, additional costs for pets, damage costs and other fees.  Make sure to spell out that the deposit cannot be applied to rent payments.

5.  Term.  Specify the lease term.  If the lease runs for one year, outline whether it reverts to a month-to-month after that, and the number of days notice you will need to renew the lease, if it is renewable.  If the lease self-renews, be sure to specify the number of days notice that either you or the tenant must give in order to move out.

6.  Repairs and Maintenance.  Clearly outline the obligation of both the tenant and yourself regarding repairs and maintenance of the unit.

• Your tenant will probably want to make alterations such as painting, running wires, hanging pictures, installing alarm systems, so make sure your permission is required first. 
• You should require that the tenant keep the property clean and let you know if anything needs your attention right away. 
• Make sure that you define who owns an improvement- usually a fixture improvement to the wall or ceilings becomes the property of the owner unless the property is restored to its original condition.

7. Rights to Enter the Premises.  To be sure that you do not get charged with illegal entry or privacy violations, be sure that you spell out the rights you may have to enter the premises.  Normally, the landlord cannot enter without the tenant’s permission, but you should have the right to:

• inspect the property
• show prospective buyers
• make repairs
• provide maintenance

with proper tenant notification and during acceptable hours, unless in case of emergency.  You might want to include the right to show the property to prospective tenants after notice of termination is given, again with proper notice to the current tenants.

8. Attorneys Fees.  In case of a dispute, you must outline in the lease which party pays attorneys fees and costs. Many standard leases make the tenant responsible for paying to enforce the lease provisions, but your state laws may not permit that, but rather requiring that the losing party in the lawsuit pay the fees.

Check back tomorrow for Part Three, Incentive Clauses.

Wayne Gathright is president of WG Software, Inc., developers of the Tenant File Property Management Software.  He has over 30 years experience in consulting and software development for real estate.  Mr. Gathright also markets a product for easy creation of leases called The Lease Designer, that allows the user to select from several prewritten leases, choose from over 200 prewritten rental clauses, and add house rules templates to the lease. A user can write their own leases and clauses, modify the existing templates, or import leases from other programs.

American Apartment Owners Association offers discounts on products and services related to your commercial housing investment, including tenant debt collection, tenant background checks, insurance and financing.  Find out more at www.joinaaoa.org.

To subscribe to our blog, click here.   

Posted by Kim Ezzell on 01.24.2008. 3 Comments »

Filed under: AAOA Forum, Forms

HOW TO CREATE A SOLID LEASE AGREEMENT: Part One of Four

HOW TO CREATE A SOLID LEASE AGREEMENT: Part One of Four

by Wayne Gathright, developer of Tenant File Property Management Software and The Lease Designer Program

Make Your Lease a “Tenant Satisfaction Agreement”

Every landlord struggles to write a lease that is airtight and covers every situation that might arise.  “Landlords should strive to make it more — to make it a ‘tenant satisfaction agreement’, says real estate software consultant and developer Wayne Gathright.  “The smart property manager crafts a lease that includes incentives and concepts that can turn average residents into productive, marketing, money-making partners.”

These ’satisfaction clauses’ can be added to the basic lease to create a good relationship right from the start. 

In this four part series, you will learn tips for creating your own lease.  Here are some important considerations before we get started:

• Even if you create your own lease, you should still take it to a local real estate attorney for a final review before using it. 


• You might want to start with a standard prewritten lease, and then modify or add to it as needed. 


• Make sure you understand your local and state laws.


• Keep your writing plain and simple.

Part Two: The Basic Lease

Part Three: Tenant Incentive Clauses

Part Four: Nuts and Bolts Provisions

Wayne Gathright is president of WG Software, Inc., developers of the Tenant File Property Management Software.  He has over 30 years experience in consulting and software development for real estate.  Mr. Gathright also markets a product for easy creation of leases called The Lease Designer, that allows the user to select from several prewritten leases, choose from over 200 prewritten rental clauses, and add house rules templates to the lease. A user can write their own leases and clauses, modify the existing templates, or import leases from other programs.

American Apartment Owners Association offers discounts on products and services related to your commercial housing investment, including tenant debt collection, tenant background checks, insurance and financing.  Find out more at www.joinaaoa.org.

To subscribe to our blog, click here.   

Posted by Kim Ezzell on 01.23.2008. 6 Comments »

Filed under: AAOA Forum, Forms

AFFORDABLE PROPERTY MANAGEMENT SOFTWARE

AFFORDABLE PROPERTY MANAGEMENT SOFTWARE: NOW EVERY LANDLORD CAN HAVE THE RIGHT TOOLS

WG Software, Inc., has been providing its Tenant File Property Management Software for over 12 years to more than 15,000 property managers.  President Wayne Gathright credits the success of Tenant File to his company’s direct focus on the needs of property managers, supplying both the personal support and the features they want. 

Why Develop a Property Management Software?

Tenant File software grew from the need for an affordable, easy to use management software.  “Actually,” Wayne says, “it grew out of the frustration of a particular property manager, one of Tenant File’s co-developers, who owned and managed multiple properties, but was unimpressed with the current software.” At the time, there were only about three property management software programs available, and only one of those was affordable.

The Trouble with Property Management Software

Most property management software was hard to use, and expensive. Heavy marketing efforts were passed on to the customers.  In addition, these companies required the customers to purchase costly updates, even if they were happy with their existing system.  This  problem brought management software out of reach for the owner with a few properties. How could you justify the cost?

Affordable Property Management Software

By focusing on an easy-to-use and efficient system, eliminating high-pressure sales and expensive trade show marketing, Tenant File became a property management software that makes sense for every manager, regardless of the number of units.  “We streamlined our sales department because we can sell through referrals, Internet sites and industry reviews.  We spend our money on talented programmers that make sure everything runs smoothly, and on a our well-trained customer support group, although most users understand the software right away from the documentation and built-in help file.” 

Direct deposit and on-line rent payment will soon be available on Tenant File. 

For more information regarding Tenant File, visit http://www.tenantfile.com/.  Check back for more information on the features of Tenant File Property Management Software.

American Apartment Owners Association offers discounts on products and services related to your commercial housing investment, including tenant debt collection, tenant background checks, insurance and financing.  Find out more at www.joinaaoa.org.

CD series, Real Estate Investment Secrets, twelve exclusive interviews with industry experts that will supercharge your ability to locate the best investment properties and manage or sell them for maximum profit. 

Posted by Kim Ezzell on 11.30.2007. CLICK to Leave a Comment »

Filed under: AAOA Forum, Forms