Property Management Tips

1) Find a Qualified Attorney

Don’t wait until you have a problem to find a qualified attorney. You will be in a much better situation if you have an attorney review your lease as well as the structure of your business and property holdings before any problems arise.

2) Create a Good System for Tenant Screening

Tenant screening procedures must comply with all local and federal laws including Fair Housing laws. Proper screening helps landlords check that tenants meet financial requirements and do not have a history of evictions. A criminal history check is also a standard tenant screening procedure, but be sure to follow the law in your area regarding which items in a criminal history can cause a tenant to be rejected and which cannot. Always handle all personal information collected from tenants with care.

3) Use a Well-Written Lease

Having a well-written lease that complies with state law, federal regulations, and local ordinances will go a long way to eliminate many problems with tenants. Consult an attorney so you don’t leave out any important clauses, and so you’re not in violation of any laws by using clauses that are illegal. Here are some topics to consider including:

• Is the tenant responsible for small repairs, yard work, snow removal, or specific utilities?
• How much will you require for a security deposit, and do you want to specify it cannot be applied to the last month’s rent?
• Is a renter’s insurance policy required of the tenant?
• What happens if a tenant makes a structural or other change to the property without permission?
• If you allow tenants to paint rooms, will you require they be returned to a specific color at the end of the lease?
• Which jurisdiction will be specified for dispute resolution?
• Should you include a clause for permission to discuss any issues including non-payment of rent with an emergency contact?
• Are tenants allowed to sublease their units or list them on home sharing websites? If you allow this, does your current insurance policy still cover you for any liability or damages?
• Are tenants allowed to have guests stay for more than two weeks without permission?
• Is smoking allowed anywhere on the property?
• Are tenants allowed to store items in hallways or basements such as bikes or other personal items? If so, are there restrictions on types of items that may be stored?
• Are tenants are allowed to display items on their door or in windows, such as signs or school flags?
• What activities are not allowed on the premises? Examples might be not using the dwelling for a business, not causing disruption to other tenants, and not engaging in illegal activities.

4) Keep Leases Up to Date

If a lease expires, your lease could specify that the tenant automatically becomes a month to month tenant, and you may wish to include specific details about this situation in case it occurs. Even if your lease includes this type of clause, it’s still important to keep your leases current instead of letting them expire.

5) Check Empty Properties Regularly for Squatters

Squatters may obtain rights to your property in some jurisdictions by being there for a period of time, especially if it’s commonly known that they’re living there, or if they obtain utilities in their name. Squatters’ rights vary greatly by location, so consult an attorney if you encounter this issue. This can be an extremely expensive and tricky legal issue, so be sure to check your properties regularly to catch any such issues right away.

6) Carefully Follow the Law for Evictions

As a good landlord you may want to try to work with tenants and their payment issues when appropriate, but there could be times when an eviction is necessary. Other than non-payment of rent, there may be many reasons you’re forced to evict a tenant, such as if the lease term has expired and the tenant has not vacated the premises, or if the tenant has violated the lease in some other way.

If a tenant is in violation of their lease, a landlord may send a Notice to Quit to document the lease violation. If the violation can be remedied by the tenant, the notice may give the tenant a reasonable period of time to correct the violation. If the landlord has properly sent notices and this time passes without compliance by the tenant, then the landlord may file eviction paperwork and begin legal eviction procedures.

Evictions require particular procedures to be followed in order to recover possession of the property, and in some cases you may also be able to secure a monetary judgment against the tenant. Document all damages, late payments, or other problems that have lead up to the eviction. Be sure to treat all tenants equally and follow written policies to decide if and when to proceed with an eviction. If you need to evict a tenant, consult an attorney to help with the specific rules and laws to follow in the jurisdiction of your property. For example, if you operate your rental business as a corporation, LLC or other entity, it may be the case in some jurisdictions that you cannot represent yourself in court as a landlord for eviction proceedings and therefore must use legal council.

If a landlord obtains an order of eviction by a judge, the landlord may NOT go to the property and physically remove that tenant or that tenant’s belongings. The court order must be carried out by the proper authorizes in the proper legal manner. Landlords can be sued by tenants if they try to evict the tenant or remove the tenant’s possessions on their own. If there’s no unpaid rent, even after an eviction has occurred, the landlord must send out written notice to the tenant within a specified time frame detailing any damages or deductions from the security deposit, and must return any portion of the security deposit that is not deducted for legitimate reasons. Jurisdictions vary, so check your local laws before you proceed.

7) Good Communication

Make it easy for tenants to contact their property manager or landlord when they have a maintenance problem or incident to report, and always keep a written record of all communications with tenants. If you communicate with your tenants via text, be sure to keep screenshots of your texts. If you communicate with your tenants verbally, make notes immediately after with the time and date. If you use a property manager, ask them to keep records of all tenant communications as well.

8) Address Maintenance Requests, Disputes, and Other Problems Promptly

All reported problems that impact health, safety, structure, or legal issues should be addressed promptly and handled by a qualified professional.

9) Obtain Proper Insurance and Require Tenants to Obtain Rental Insurance

Obtaining sufficient liability insurance is necessary not just to cover your property but also for your real estate business activities. Property insurance for damage or replacement costs is also essential. There are many optional add-ons available with property insurance, so consult a trusted attorney and insurance agent to help guide you through selecting the proper options and balancing your risk versus costs.

Your property insurance typically will not cover your tenants’ possessions inside the dwelling in the event of fire, theft, water damage, or other issues. Because of this you may wish to require a renter’s policy to protect tenants’ possessions. If your tenants request a referral to an insurance broker or insurance company to obtain their policy, it’s best to provide at least three instead of just one so that the tenant can decide which one to select. This helps you avoid being blamed by the tenant if the company they use doesn’t work out well for them.

If you or your tenants list your properties on short-term rental websites, be sure your insurance policy will still cover your property for liability and damages. Often policies that cover short-term rentals are more expensive, but you don’t want to be denied coverage after an incident if your listing is discovered on one of these public websites.

10) Clear Rules and Policies That Apply to All Tenants without Exception

Having clear policies and guidelines for tenant behaviors helps eliminate misunderstandings and makes it easy to document when tenants are violating the building rules.

11) Make Sure the Property is Safe and Secure

Building safety and security is imperative for tenants and to reduce your liability risk. Be sure to properly install carbon monoxide and smoke detectors throughout your properties and document your regular checks of these as well as gas lines, fire suppression systems, and security lighting.

Providing fire extinguishers is a small expense with great benefits to your property and tenants, but be sure to replace them with new ones annually and keep a log of when you last changed them. Consider installing monitored smoke and carbon monoxide detectors and burglar alarm systems.

Regularly inspect your properties for signs of structural issues or other hazards, and keep ice cleared from sidewalks and parking lots in the winter. Properly installed and frequently checked smoke alarms, working door locks, proper handrails, cameras and security lighting in parking lots are just a few of the many items to keep in mind when considering if a property is as safe and secure as possible for tenants.

12) Provide Proper Notice Before Entering the Dwelling

To respect your tenants’ right to privacy, it’s important to always notify them before the landlord, property manager, or other maintenance professional enters their unit. Many states require twenty-four hours notice except in emergency situations. Be sure to consult an attorney so that you comply with your local laws.

If there are pets living in the building, you may want to have your tenants sign an agreement that allows an appropriate person to enter their dwelling to check on the well-being of their pet if you believe the pet has been left for an extended period of time without proper care or requires medical attention. This should only be used when the pet is in true danger. You may also wish to include a clause to limit the amount of time any pets are left alone, caged, or without bathroom breaks.

13) Always Disclose Known Hazards Such as Lead Paint

Disclose any known environmental hazards to tenants immediately when they become known to you, such as lead paint, asbestos, radon or mold, for example. Proper remediation by a licensed professional should be promptly carried out to eliminate any potential dangers to the health and safety of tenants.

14) Screen and Oversee Employees, Maintenance Professionals, and Independent Contractors Working on the Property

Always screen, train, and supervise those working on your properties. You may be liable in many cases if your employees, contractors, or vendors violate Fair Housing Laws, engage in other inappropriate interactions with tenants, steal or damage tenants’ property, or do not properly or safely repair structural, appliance, or other problems in the building or individual units.

15) Keep Detailed Records of All Expenses Related to Each Unit

This will help you prepare your taxes as well as assess which units are making money and which are not so that you can make the best business decisions and plan ahead for any necessary expenditures.