Have you ever purchased a rental property subject that was tenant-occupied?
Even if you did not inherit someone else’s lease agreement, if you standard lease is extensive, or if you have used multiple leases, it’s possible you will find that what you thought was there, isn’t.
Before you know it, you are threatening to evict a tenant for behavior that isn’t prohibited in your lease, or for failing to pay rent on the first of the month, when the lease provides a seven day grace period.
Don’t be caught by surprise while dealing with problem tenants. Make sure your leasing forms give you the power you need to run a profitable rental business.
If you are thinking about purchasing a property subject to a lease, or if it’s been awhile since you read your lease, take a few minutes to review some key provisions before you speak with problem tenants:
Is there a long grace period for late rent? Some leases provide as much as 5 days leeway before you can get tough. Does the lease provide a late fee that seems high for the average. If so, it’s likely not enforceable.
Do you have to serve notice of a default before you can boot a bad tenant? The lease may add extra time before you can serve eviction papers. Violate those timelines, and you may have to start over again with your eviction case.
On what grounds can you evict the tenant? Can you move on it after a criminal arrest, or suspicion, or do you have to wait for a conviction? What if the tenant smokes pot? Starts a band? Steals the neighbor’s parking space? While you can’t possibly list every contingency, your lease must be drafted well enough to cover lots of different possibilities.
Does the lease renew automatically? While that provision is prohibited in some states, it’s still common in standard leases. This clause can work against you when you are trying to run the clock on a bad tenant.
Do tenants have to notify you if they get a pet? A roommate? Sublet the apartment? Are you required to consider it?
Is there a guarantor on the lease? Do you have the person’s signature and contact information?
While you probably can’t tweak the lease until the term runs, at least you will know what you are up against when dealing with problems.
Rental forms define the relationship you will have with your tenants, so it’s worth the extra time to make sure you have what you need to be successful.
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