To All Long-Time Landlords concerning Your Rental Contract?

Question

All Long-time Landlords.....when writing your rental contract is there ONE thing that you have found you would advise new Landlords to ALWAYS include on their rental contract which is commonly overlooked. We have a 7 page contract we are requiring our tenants to read and sign, but feel that a veteran landlord would read it and say we were missing some vital item that we have never even thought about. We have what amounts to the "basics" but I don't want something to come back on me later and bite me in the butt....if you know what I mean. So, what would be the ONE thing you would ALWAYS include in your rental contract no matter what.

Answer 1

I would say you are doing everything wrong. A 7-page contract is not good. Anything that complicated is going to be filled with loopholes. My policy always has been the lease cannot be more than 2 sheets of legal paper, with one additional addendum that covers things like smoking, pets and the like.

I always suggest new landlords do two things before they ever rent out there property.

1) Go to the bookstore and get 1-2 good books on landlording - there are scores of them. These will give you good, basic systems to landlord - including screening tenants, handling deposits, setting rental prices - setting policies and what to do when you have problem tenants. They will normally al;so have some good generic leases - but don't use them.

2) Spend a couple hundred dollars to go see a good, local real estate attorney. They can give you all the information on local and state laws and responsibilities for tenants and landlords. They can either modify a generic lease for your use or point you to a good one that fits your situation.

You are putting a valuable property worth thousands of dollars into the legal and physical control of a stranger. Do it wrong, and it can be bad. Do it right, and it is very good. Fortunately if you take the steps I suggest, you will know everything you need and have a good lease to use.

Answer 2

The best piece of advice I can offer as a long-time landlord (now out of the biz) is to have your attorney review it!

Each state has it's own laws that govern the landlord-tenant relationship. Some states are pretty much "anything goes" while others inject significant protections for either the landlord, the tenant, or sometimes both. A poorly written lease can get you into major legal trouble VERY quickly and if you're unlucky enough to get a savvy tenant who knows the law you could find yourself in a painful and expensive predicament. FYI, that "first $100" clause as recommended by another poster is illegal in many states! And even if it isn't illegal, most tenants will just let things slide until the repair bill is likely to exceed $100 -- often by a LOT -- before they contact you. Been there, done that!

Without reading your proposed contract it would not be possible for me to comment on anything that is in it or might be missing from it.

The other tactic that I STRONGLY recommend is that you hire a professional property manager and let him or her worry about the property for you. They typically charge 15% of gross rents received but a good property manager is worth his weight in GOLD.

First off, the leases they use have been fully vetted by their attorney, AND are reviewed periodically for changes in the law. Then they have access to discount priced craftsmen to handle repairs, often at lower prices than you could do it yourself. The biggest benefit of a professional property manager is that they take the worry out of the details for you. The first time that a water heater takes a dirt nap on Christmas Eve (and it's not "if" but "when!") you'll be damn glad that you have a property manager who can get a plumber out that night to replace it!

In some states, such as AZ, you are required to have a local representative for your tenant to contact in case of problems. If you're an absentee landlord in AZ a property manager is effectively mandatory unless you have an EXTREMELY dependable friend or family member who is willing to be "on call" 24x7x365. Even if the property was next door (and it has been a couple of times) I always hired a property manager to handle things. The peace of mind is worth EVERY penny you pay him or her.

Answer 3

Do you have a clause that states the Tenant is responsible for the first $100 of any repairs? This prevents your tenant from nickeling and diming you to death with constant calls like I need burner rings on the stove or the washer doesn't work because they clogged the drain with underwire bra wires or change (it's happened)

If they are required to pay the first $100 then you'll hear from them less. As long of course as you keep everything in good working order. Best thing for you to do is carry a service contract on all your appliances with a warranty company that will come out and repair anything in the house, A/C, appliances, electrical, heating etc, usually they charge a $50 visit and the cost of repairs etc are free, that way your tenant pays the $50.

It will save a lot of headaches in the long run.

Answer 4

I was a landlord for 14 yrs. and I always put a no smoking clause in the lease. It was a 2 family house and I didn't feel comfortable with someone smoking in the house. I also put in a clause that an air conditioner was allowed as long as it was an energy efficient model. I paid all the utilities and one tenant had an old clunker of an AC unit that cost me plenty. Also, I wrote that no pets were allowed and no additional tenants were allowed without written consent from the landlord. We had only a one page lease I found on a shareware program and then I added the additional terms. It worked just fine for us.

Answer 5

Personally I just use the standard form supplied by my states real estate board. There are a BUNCH of laws, which vary by state, on what you can and can not ask. Since I can't be sure I am up to date I just use the standard form, that way I know I am not breaking any laws.

One thing to be sure of, get their SSN and verify it against their credit report. If you have to evict and collect later (garnish their wages) you will need that number.