On one hand, if you allow pets you’ll likely have far more interested potential tenants. On the other hand, you might have to deal with additional damages when your tenants move out.

Whatever you decide as far as pets go is entirely up to you…that is, until emotional support animals enter the picture.

There are a lot of mixed feelings and varied reactions to emotional support animals, so it’s important to know the facts, the laws, and your rights as a landlord. Let’s go over this issue now…

What Are Emotional Support Animals?

Emotional support animals (ESA) are companion animals that provide support to a person with a disability.

They are not service animals nor are they therapy animals (those are different).

ESA’s offer recognized benefits to those with:

• severe anxiety
• depression
• PTSD
• agoraphobia
• other mental health conditions

Animals, dogs in particular, have been used in therapy and to provide support for many years, although emotional support animals are a fairly new category of support animal.

Research in this area has produced mixed results. Animals in general have been shown to lower blood pressure and increase the abundance of feel-good hormones, and some evidence suggests that PTSD symptoms can be significantly reduced with a support animal. One study in particular, conducted by American Humane, revealed that therapy dogs can relieve anxiety surrounding cancer and cancer treatment in children suffering from the disease.

Saying that animals make people happy is a lot easier than quantifying the data according to the accepted standards in psychology, though. It’s notoriously difficult to pinpoint which animals are helpful, what quality or aspect is providing the benefits, and whether or not the person with the ESA really is receiving the benefits directly from the animal or if other factors are involved. And this difficulty to quantify leads to our next topic, accusations fake support animals…

Fake Emotional Support Animals

Because it’s difficult to accumulate hard evidence, the laws can be vague surrounding emotional support animals. This vagueness can lead to people taking advantage and pretending their pet is an emotional support animal when it’s not. This is terrible because it hurts those with disabilities who really need the ESA designation for their animal.

So there is this growing issue surrounding fake support animals, but that should not encourage you to believe that everyone who claims their animal is an ESA is lying. Most are genuine.

Many people follow the proper steps and are upfront with their landlords, so don’t let a few rule breakers give you a skewed view of those whose lives truly are changed with the help of an ESA.

What the Fair Housing Act Says About ESA

All that being said, opinions are irrelevant when it comes to the laws laid out by the Fair Housing Act.

As discussed in many posts on this blog, the Fair Housing Act protects against discrimination due to race, color, national origin, religion, gender, familial status, and disability. Emotional support animals fall under the disability category, as their intention is to assist those with mental disabilities.

According to the Fair Housing Act, landlords “cannot refuse to make reasonable accommodations in rules, policies, practices, or services when such accommodations may be necessary to afford a person with a disability the equal opportunity to use and enjoy a dwelling.”

Essentially, what this means is that as long as it does not cause unreasonable burden on you as the landlord, you can’t refuse to allow an emotional support animal, no matter what your policy on pets is. 

How does a tenant qualify for an ESA?

Now, this doesn’t mean that a potential tenant can declare that they have an emotional support animal and be done with it. Since the Fair Housing Act discrimination policy covers those with disabilities, the potential tenant applicant will first have to qualify. In order to qualify, they will need to prove:

1. That they have a physical or mental disability that impairs one or more major aspects of their life;
2. That they have a record of possessing this disability, or
3. That they are regarded as having this disability.

So, someone who is in perfect health in every way, shape, and form and cannot prove that they have any type of disability would not qualify.

Additionally, they must be able to show that their emotional support animal is, in fact, necessary to help them live with their disability in the dwelling. The animal has to have a demonstrated purpose that proves their owner cannot “use or enjoy” the home without their ESA.

What Your Rights Are As a Landlord

All of this might seem a little unfair to landlords, but remember that the law does leave room for you and your rights. Keep in mind that the wording in the Fair Housing Act specifies reasonable accommodation, meaning if it causes a significant financial burden or affects your property in any overt way, you have the right to refuse.

Examples of Reasonable vs Unreasonable Accommodation for ESA’s

For example, if you have a no pets policy simply because you don’t want animals in your rental home, making an exception for a single dog or cat is a reasonable accommodation that you should allow. I just had to do this last month on one of my “no pet” rentals. At first I was annoyed, but then I realized that it’s just a dog, and the dog may really help this person have a better life.

What would not be reasonable? If a potential tenant wants to bring in a miniature horse (which have been known to be used as emotional support animals) and your rental property is in a suburban neighborhood. I think we can all agree that keeping a horse in a home without proper horse facilities would be unreasonable.

What would be an unreasonable financial burden? An example would be if your insurance policy specifies that rates will be raised if a certain breed of animal lives in the dwelling (think Pit Bull or other dangerous dog). This is an unreasonable expense, and as long as you can prove that your rate would go up due solely to the presence of the ESA, you can deny the tenant.

ESA’s Should Not Disrupt Other Tenants

If you have already leased your rental home to a tenant with an emotional support animal, and that animal has been disruptive to other tenants or caused harm to anyone, you can evict the tenant. Emotional support animals cannot bother other tenants. It is not a reasonable accommodation to ask your other tenants to put up with disruptive or frightening behavior.

Types of Housing that can Refuse Emotional Support Animals

There are also rules set in place for certain types of housing that can refuse emotional support animals. The first type is a multi-unit building (of four units or less) with one unit occupied by you, the owner. The other is a single family home that you are renting on your own, without the use of an agent, if you own 3 or less single family homes (this rule doesn’t apply if you own more than three single family homes).

ESA Letter as Proof of Need

Additionally, there are some things you can ask for to verify if the tenant has the proper documentation. The first is an ESA letter. These letters can only be written by:

• Psychologists
• Psychiatrists
• Licensed counselors
• Licensed therapists
• Nurses
• Physicians
• Social Workers

This letter demonstrates that the tenant has seen a professional about their condition, and that professional has determined that an emotional support animal is necessary to help them in their daily lives specifically due to a mental illness.

Now, there have been cases where tenants have provided fake ESA letters, but there are ways to distinguish the real deal from something fabricated. Some tips to verify the legitimacy of an ESA letter include:

• Verify the license number of the mental health professional who provided the letter.
• Ensure the professional is licensed in the same state where the dwelling is located
• Look at the date of issuance as well as the expiration date (ESA letters expire one year after issuance)
• Check if the letter specifically states the name of the ESA and what services they provide, as well as how those services relate to the tenant’s disability

Landlord Cannot Contact the Mental Health Provider or Question the Disability

Keep in mind that you’re not allowed to contact the mental health professional directly or ask the tenant direct questions about their disability or accuse them of lying. You also cannot ask for proof that their animal has been trained or certified, as there is no certification or training process for emotional support animals. If you have concerns, be tactful about addressing them.

If the ESA is Legit, and not Unreasonable, Go with it

If you’ve verified the legitimacy of the ESA letter and don’t have a case for any unreasonable accommodations, you cannot legally turn the tenant away. You also cannot tack on additional fees, such as a pet deposit or higher rent. They must be treated like any other tenant, as is the spirit behind equal housing opportunities.

People with ESA’s are just trying to make the most of their lives

Getting an applicant with an Emotional Support Animal for your rental property can be tricky and a little unnerving. But remember the Fair Housing Act exists to help those who are at risk of being unfairly treated, and you must abide by it.

So sure, getting an ESA applicant might cause a little hassle to you, especially if you were adamant about a “no pets” policy.

But just remember that people with emotional support animals are not trying to take advantage of you or pull the wool over your eyes. They’re just trying to make the most of their lives, as are we all.

The post What Landlords Need to Know about Emotional Support Animals appeared first on Landlord Guidance.

DOWNLOAD FREE LANDLORD CORONAVIRUS REPORT (Click Here)

Multi-unit Properties with Common Areas Should Immediately Be Cleaned

If you own an apartment complex, your first priority should be to clean common areas. Access doors used by everyone, stairways, handrails, gyms, and lounge area should all be sanitized. Contact cleaners in your local area to see who is equipped and available, as demand for cleaning services has skyrocketed. They don’t need any special cleaners or equipment; CDC guidelines recommend using bleach and at least 70% alcohol solutions to disinfect. A list of disinfectants that meet the EPA’s standards for use against COVID-19 can be found here.

Soap and water can also be used on surfaces like couches, carpets, and window coverings. It’s also a good idea to install hand sanitizer stations in common areas or even outside the building.

If you own a commercial building, you will need to extend the cleaning to areas like bathrooms and meeting areas. You might think it’s the tenant’s responsibility to keep these areas cleaned, but in situations like this if you can do something to help prevent the risk of spread, it’s advisable to do so.

Get In Touch with Your Tenants

The most important thing you can do, after cleaning, is keep open communication channels with your tenants. Whether you own complexes or one single-family home, your tenants are likely experiencing the same enormous changes you are and are struggling to adjust. Reach out and let them know you’re taking the virus seriously, you’re disinfecting common areas if applicable, and that you’ll keep in contact to ensure they’re getting the support they need. Make sure they’re aware of the CDC guidelines and are doing everything they can to keep themselves and others safe.

This is especially important for owners of multi-unit properties. One sick tenant can lead to an outbreak, so it’s vital to have a plan in place. Your first step should be to encourage tenants to stay informed and turn to local news for updates. Send them the CDC’s guidelines on how to stay safe, which can be found here. You don’t want to induce panic or anxiety, but the more people follow the recommendations, the faster we can get a handle on the virus. You’re not just doing your tenants a favor, you’re doing the community a service by spreading information instead of germs.

If someone does get sick and you own a multi-unit property, preserve their anonymity while still keeping other tenants informed of the situation. Get those cleaners in there and encourage everyone to monitor themselves for symptoms and seek medical attention if necessary. Most cases are mild, but that doesn’t mean the threat of an outbreak shouldn’t be taken seriously.

Keep in mind that through all of this, you still have to respect your tenants’ rights. You can’t discriminate against them if they’re sick, you must give proper contact if you want to come in and clean, and you need to protect their privacy if they do become ill.

Limit Contact and Encourage Tenants to Stay Indoors

If your usual routine involves collecting rent in person, it’s time to come up with a new plan. You can have them leave rent payments in their mailboxes, on their doors, or ask them to send payments through the mail straight to you. This will really come down to personal choice, but whatever you decide the goal is to limit contact as much as possible.

You might also have to reschedule things like inspections or walkthroughs. If you absolutely have to have in-person meetings with tenants, maintain six feet of distance at all times. You both might feel a little awkward, but it’s a small price to pay to stay safe. You can also wear masks for added protection, just in case either one of you is not showing symptoms but has still been in contact with the virus.

While you’re limiting contact, remind your tenants that if they can do the same, they should. Even if you’re disinfecting common areas, encourage tenants to stay within their own units. For single-family properties, let your tenants know what steps you’re taking and how those steps might affect them (such as no-contact rent collection and social distancing during inspections).

Be Prepared for Difficult Economic Times

Perhaps the biggest change looming on the horizon is rental payments. Businesses big and small are closing their doors, and those that aren’t equipped to offer work from home options have been forced to layoff thousands. Unemployment applications have skyrocketed, and states are struggling to catch up to and meet demands. Even those who are lucky enough to be able to work from home might see reductions in the hours they can work or pay cuts.

In short, the recession we’ve all feared is looming overhead thanks to COVID-19. Entire countries are shut down, and that has a ripple effect that everyone feels.

The biggest expense for most people is rent, and while it’s easy to cut back on a lot of unnecessary expenses when times get tough, the one place that can’t be neglected is housing. Tenants who are experiencing financial difficulties due to COVID-19 are, in some states and cities, under unique protections. Around 90 cities have stopped shutting off water to those who can’t pay their bill, and some have even banned evictions related to COVID-19 financial constraints. Many cities are taking their own specific steps, so definitely check with your local government for city-specific information.

As a landlord, you might feel that some of the new rules are a bit unfair, but remember that for most people, it’s out of their hands. If you’re concerned about what a lack of rental income will mean for your own financial situation, reach out to other landlords or your local housing authorities to find out if there are resources specifically for landlords. Some states or counties have disaster relief funds that can help both tenants and landlords, and since a state of emergency has been declared these funds are available for use. Your local government should have more information.

Stay Informed

It might be depressing to watch the news every day and see the number of cases climbing, but it’s necessary to know what’s going on to protect yourself. So little is known about COVID-19 that every day, new information is coming to light. States are responding as best they can, and resources are popping up everywhere that are intended to help those who are struggling. It’s tempting to panic or let anxiety rule your actions, but now more than ever is the time to have a clear head.

It’s tempting to fall into an “every man for himself” mindset, but remember that being a landlord is a full time gig. Even during a national emergency, you still need to be there for your tenants. Whether the extent of your role is simply reminding them to stay inside or personally sanitizing every surface of your buildings, don’t forget that your actions will affect many others. When life gets back to normal, your response during this time will say a lot to your tenants. Think carefully about what message you want to send.

The post How Landlords Should Prepare for Coronavirus/COVID-19 appeared first on Landlord Guidance.

And how you can avoid making the same mistakes!

If only we had the ability to see into the future and prepare for things we couldn’t anticipate under ordinary circumstances. But life doesn’t give us this loophole, and instead we have to do our best to roll with the punches and adapt to every situation.

There is a silver lining, of course. Experience offers wisdom, and those who are more experienced than we are often pass down the knowledge they have gained. So let’s learn from their mistakes!

Being a landlord is challenging, but it’s also incredibly rewarding (and not just in a monetary sense). To get started on the path to success, here are five things experienced landlords wish they’d done differently, and how you can learn from their mistakes:

1. ALWAYS Screen Your Tenants

Even if it’s a friend of a friend. This isn’t about mistrust; it’s about covering all your bases. If you had a friend who you knew never returned things they borrowed, how likely would you be to loan them something of yours? It’s the same concept, but in real estate the stakes are even higher. It’s an unfortunate truth, but you can’t rely on instinct alone or your belief in the goodness of others when you’re renting out your property. Instead, you have to look at the data and draw your conclusions from there. 

There are a few common practices when you’re screening tenants. These include:

• Using a Good Rental Application Form
• Asking about employment both past and current
• Verifying income
• Looking at previous rental experience
• Inquiring about evictions and/or late rent payments
• Running a background and credit check
• Optional: contact previous landlord(s) and employer(s)

Not every landlord will feel the need to go through all of these points, but if you want to have the most informed picture of your tenants and any possible hiccups that could occur down the road, each one is necessary. It might be more work in the beginning, but if you find out something that you only would have known through a thorough screening process, you’ll save yourself a lot of headache and expense in the future. 
If you’re not sure where to start with tenant screening, visit our tenant screening partner Avail here.

2. Make Sure You’re Prepared for Vacancies

As optimistic as you might feel, you should always be prepared to have vacancies. When you’re first renting out your property you’ll have a vacancy period of course, but many more can happen and they’re not always planned out. Unexpected move-outs, little to no notice, and evictions can all lead to longer periods of vacancy that you aren’t ready to deal with. 

Unless, of course, you prepare beforehand.

During a vacancy, not only will you not have rental income, you will also be responsible for utilities and upkeep if you weren’t already. See if you can find out the average vacancy rate for your area to get an idea of the potential yearly cost. This is part of budgeting for a rental property; if you can’t afford vacancies, this form of investment might be too high risk. 

To prepare for vacancies, set aside a separate savings account that acts as your emergency fund specifically for rental-related issues. You should already have this for general repairs and such, but keep enough in there for at least a three month vacancy. 

You can also look at things you’re doing that might extend the vacancy period, such as not including adequate pictures in online listings or charging too much. It’s all well and good to hold out for the right tenants, but if you’re charging way more than other landlords in your area, you’ll end up losing more than you could potentially make.

3. Read the Fine Print, Even if You Wrote the Rental Agreement

No matter what type of contract you’re signing, ALWAYS read the fine print. There is almost a 100% guarantee that something in there could come back to bite you. This applies to rental agreements as well, even if you’re the one who drew it up. If you have an issue with a tenant and they exploit a loophole you didn’t realize was there, you’re going to wish you had paid more attention. 

This is especially common when you find a template online to create your rental agreement from. Depending on the source, there might be a lot of legal jargon that you’re not sure you understand, or provisions you think will never be applicable to your situation. If you’re not sure what it means, do not include it. 

Reading the fine print also has an opposite point you should consider too; don’t let your agreement be too sparse. A one page rental agreement that says, “You’ll use this property and in exchange you’ll pay me this much in rent” is not a well thought-out document. At the very least, your rental agreement should cover:

• The agreed upon rental amount
• Late fees and on which date the fees will be applied
• Total move-in costs and how much of that is refundable
• Conditions for which the refund is applicable (what kind of damage will result in deposits being withheld, how the value will be assessed, etc.)
• A severability clause
• Rules regarding pets
• Rules regarding visitors and overnight guests

There are so many more important points to include, so do your research. We have an entire article devoted to lease agreements that you can check out for more information.

4. Don’t Rule Out a Property Manager

To make the most profit, you will probably decide against a property manager or property management company, at least early on. Many new landlords go into the process confident that they can handle a single rental property with ease, but sometimes it can turn into more of a day job than a side project. When this happens, don’t dig your heels in and refuse to even consider a property manager. 

There are factors to consider when deciding if one is actually necessary or just a convenience, and everyone will come to a different conclusion based on their situation. You might not mind a little stress and have more free time than other landlords to devote to your rental(s). Or, you might be a mess of anxiety and nerves desperately wishing you had never entered into real estate. 

If you fall into the latter category, a property manager might be exactly what you need to make real estate fun again. You will have to meet with a few property managers to find the right fit, and you want to ensure that the people you choose will represent you well and take care of your tenants just as you would. Many potential renters shy away from homes that are managed by companies because there are so many nightmare stories out there. If you choose the right company, however, you can potentially keep tenants for longer because their problems will be dealt with right away. 

So, if it can save you time, money, and mental health, a property manager can be a smart choice.

5. Rentals Are Businesses

There are a lot of activities that make good hobbies: reading, knitting, making model airplanes, etc. Owning rental properties is not one of those activities. If you want a side project that doesn’t take up much time and never leads to surprises, real estate is not the game you want to be in. When you commit to becoming a landlord, you’re essentially starting a business. 

This means you need to be keeping track of profit and loss, evaluating to determine how you can increase profit, and managing your customer service end (whether you’re customer service or a property manager is). If you treat it as a hobby, you will quickly be overwhelmed by all the details and could potentially lose a lot of money if you don’t work to find and keep tenants. Sure, you’ve probably heard stories about landlords who put in 10 or so hours upfront to get their property ready and find good tenants, then after that it was pretty much hands off other than minor repairs. These are the lucky cases, and they’re not all that common. 

As a landlord, you’re in charge of three areas: tenants, the property, and your finances. Each of these pieces can take up a lot of your attention, but they require balance. Don’t focus so much on finances that you lose tenants due to ridiculous costs, and don’t try so hard to please your tenants that your finances take a hit. Decide how much to put into each area to maximize benefits in all three, and you’ll have a successful business that brings in the money for years to come.

You can also take advantage of Online Property Management Software tools such as Landlord Studio, which helps you keep track of finances, set reminders for specific properties, and even screen tenants. 
Entering into the real estate realm is like stepping into a foreign country without a guidebook. You don’t know where to go, and you probably don’t even speak the language. In both cases, others are your greatest resource. By listening to advice and following the tips of those that are more experienced, you can continue on, confident that what you seek is right around the corner.

The post Top 5 Things Experienced Landlords Wish They’d Done Differently appeared first on Landlord Guidance.

Making the decision to put your property up for rent is nerve-wracking and exciting. While visions of dollar bills might be dancing in your head, the reality is that you have some work to put in before you can begin to think about profits.

You might think that you can simply snap a few photos and put your listing on a real estate site, but going this route skips so many important steps that will come back to haunt you later on.

Every piece of property, whether for sale or for rent, needs to be prepared before it hits the market. Some landlords call this a “Make Ready.” Not only will it ensure you cover all your bases to keep yourself, as the landlord, protected, you’ll also have an opportunity to increase your revenue by attracting the right tenants.

Here’s a look at the steps you need to take to get your property ready to rent out and start your journey as a landlord on the right foot.

Do a Walkthrough

Before you do anything else, walk around your entire property, inside and out, and try to see it through the eyes of a potential tenant. What features might they love, and what can they do without? Are there any safety hazards to consider, or areas that might not be suitable for children? Also make note of anything you might want to take out, such as furniture or equipment. If you wouldn’t want someone using it or breaking it, it should go elsewhere.

Use the walkthrough as an opportunity to write down repairs and things that need to be cleaned. Examine everything, from bathroom light bulbs to the stove and even heating/cooling systems. Everything should be in working order when your tenants move in. Also be sure to keep in mind legalities and things that you’re obligated to include, such as smoke and carbon monoxide detectors.

You can find information on your state’s specific requirements in this area here. The walkthrough gives you a chance to mentally prepare and visualize all that you need to do, so take your time and be thorough.

Make All Repairs, Major and Minor

After your walkthrough, take your list of repairs and get to it. Don’t overlook anything, because your tenants won’t. It might seem obvious that the washer and dryer will need to be in working order, but you might not realize that a leaky faucet or broken window screen can affect quality of living and thus the happiness of your tenants.

Think about how you would feel moving into a rental in such a condition. This not only comes down to tenant happiness, but also general home maintenance. Never forget that you own this property. It is yours to take care of, and every repair you make is a preventative measure.

Some things to ensure you check and repair if necessary include:

• All appliances, including the washer and dryer, stove, dishwasher, garbage disposal, etc.
• Light bulbs in every room as well as outdoor lights
• Leaky faucets
• Poorly draining showers
• Broken cabinets and doors
• Torn window screens
• Walkway trip hazards

Clean, Clean, and then Clean Again

Most rental agreements include a provision stating that the dwelling must be left in the condition it was found. This means that if you let your tenants move into a pigsty, they are under no obligation to leave it in any better shape.

If you want to make a good impression, attract quality tenants, and be left with little to no mess when someone moves out, you need to invest the time and/or money to thoroughly clean it. You can either take the time to do this yourself or hire professional cleaners.

If your rental has carpets, definitely get them deep cleaned, particularly if someone else lived in it recently. This is not only an aesthetics factor, but a health and safety one as well. If your future tenants have young children who are crawling all over the floor, they’ll feel at ease knowing it has been cleaned.

If you’re taking care of the cleaning on your own, don’t neglect the hidden corners and hard-to-reach places such as:

• The tops of fans
• Inside kitchen and bathroom drawers
• Underneath the sink
• In the corners of closets

All of these places can attract dust, mold, and all forms of debris. Speaking of mold, if you encounter any, it absolutely must be cleaned as it is a safety hazard. Black mold in particular is dangerous, so contact a professional if you feel the issue is beyond your control (if you’re not sure how to identify black mold, check out this resource). Mold can be a sign of water damage and leaks as well, and those types of repairs should not be put off.

Curb Appeal Applies to Rentals, Too

The inside has been repaired, cleaned, and is now ready to be rented out. Right? Not just yet! Many landlords fail to take into account a very important concept in all real estate deals: curb appeal.

Your tenants might not be the owners, but that doesn’t mean they won’t take pride in where they live. If the property looks run-down, outdated, or unsafe, prospective tenants will be less likely to bother viewing the interior because they will expect the same level of neglect.

In addition, a property that doesn’t look like it has been well taken care of can indicate to a tenant that the landlord is lax about repairs and maintenance, and no one wants to land in that kind of rental situation.

You don’t have to do a full-on remodel, but at the very least get the exterior cleaned or slap on a fresh coat of paint, spruce up the landscaping, add in a fence if you’re on a busy street, and make the house look and feel welcoming.

Make Sure You Keep Your Lender and Insurance Informed

The final step before you start looking for tenants is ensuring you’ve followed all the procedures required by your mortgage lender and your insurance company. There may be information in your mortgage contract about rental properties, so check there first if you’re unsure. In any case, you may need to notify your lender in case they have stipulations regarding renting out a property you still owe on. You definitely don’t want to be dealing with lender issues after you’ve found the perfect tenants.

After you’ve gotten approval from your lender (if necessary), you absolutely must look into insurance options. Being a landlord comes with a lot of risk and responsibility, and the proper insurance can help offset the cost of any mishaps.

Landlord insurance is similar to your typical homeowners insurance and will cover things like fires and hailstorms. However, it also protects against landlord-specific situations such as loss of rental income and increased injury liability. These are things that would not be covered under your ordinary homeowners insurance policy. For more information on landlord insurance, talk to your current insurance provider or take a look here.

At the end of the day, preparing your property for rent is all about seeing things from the perspective of a tenant. Everything you do has the goal of attracting the right tenant and/or keeping them living in your property for the foreseeable future.

It might cost you some money upfront to prepare, and it’ll definitely take some time, but once you find a quality, long-term tenant, you won’t regret it one little bit.

The post How to Prepare Your Property for Rent appeared first on Landlord Guidance.

So you’re looking for a Free Rental Agreement from TREC, huh? I did the exact same thing just a few months ago. I’m so used to the wonderful Free One to Four Family Residential Contract from TREC, and I surely thought our friends at TREC would give us a Free Texas Residential Lease as well. So… In this article I want to:

1. Show you some Free Lease Agreements, including the Free TREC Lease Agreements (which probably won’t work for you – sorry).
2. Explain to you what TREC is and it’s purpose
3. Go over the Free TREC Rental Agreement for Texas Landlords in case this is indeed what you’re here for

Free Rental Lease Agreements, Including TREC Residential Agreement

Below are some Free Leases that work for Texas. As I will explain below, the TREC leases are not Standard Residential Leases. They are unique leases for special situations where the Buyer of a Residential property will occupy the property for no more than 90 days prior to closing on the purchase contract, or where the Seller will stay in the property that they just sold for no more than 90 days. Therefore the TREC Leases will not work for a normal Landlord-Tenant Lease Situation, unfortunately. Below are the 2 TREC Leases, and some Standard Rental Agreements that might work for you: 1. TREC Buyers Temporary Residential Lease 2. TREC Sellers Temporary Residential Lease 3. Lone Star College Lease (Standard Lease) 4. Free Texas Rental Agreement from eForms (Click Here) 5. Free Standard Lease Agreements from Landlord Guidance (our site):

What is TREC anyway?

TREC stands for Texas Real Estate Commission. TREC is the Texas agency, based in Austin, that governs real estate practices in the great State of Texas. The Commission is made up of nine members who are appointed by the Texas Governor and are approved by the Texas Senate. Six of the members are licensed Real Estate Brokers and three of them are members of the public who are not.

TREC does the following tasks:

• Enforces Real Estate Laws and Regulations
• Issues Real Estate Licenses
• Renews Real Estate Licenses

As part of these Tasks, TREC promulgates a bunch of Free Real Estate Forms on it’s website (but not Standard Residential Leases – boo hoo).

TREC also serves as the state’s regulatory agency for:

• Real Estate Brokers and Agents
• Inspectors
• Appraisers
• Education Providers for Real Estate and Inspection Courses
• Residential Service Companies
• Timeshare Developers
• Easement (Right-of-Way) Agents

In my opinion, excessive regulation in general is bad, but some regulation of the real estate industry is indeed necessary, as there are lots of opportunities for bad actors to take advantage of naive consumers. So I’m glad TREC does what they do, I just wish they would give us a a few more free forms!

About the TREC Buyers Temporary Residential Lease

Sometimes a Buyer of a property will move into the property prior to closing (finalizing the sale). In this situation, usually the Seller will want to be paid for the time the Buyer is living there. They don’t get to live there for free, unless that’s negotiated as part of the agreement. So to solve the problem, the Buyer will sign a temporary lease will the seller, effectively becoming a renter (Tenant), and the Seller will effectively become a Landlord. To facilitate this situation, TREC came out with their Temporary Lease. This is a unique kind of lease that is for no more than 90 days. It should not be used as a regular Residential Lease, as it was not made for that and is lacking important provisions that a standard lease would have. If you are in this situation, and you need this kind of temporary lease, then make sure you have your lawyer or licensed realtor go over the details. It is a little trickier than doing a normal lease, because it’s being done as part of the sale of a property. They are tied together and need to be done correctly.

About the TREC Sellers Temporary Residential Lease

What if your are selling your house, and the closing date is in a week, but your new home won’t be ready for 2 more months?! Will you live on the streets? In a hotel? With your mother-in-law? I’d prefer the streets to this last option, but there is a better solution. Negotiate with the buyer to let you stay in the home. How? Sign a TREC Sellers Temporary Residential Lease. Signing this lease will turn you, the seller, into a lowly renter. Just kidding. We’re all renters at some point in life. You will become a Tenant in your own home (it’s not really your home any more), renting the house from the new owner for those 2 months. The new owner becomes the Landlord and collects rent from you. Like the situation above, this is a unique and temporary situation, and is for no more than 90 days after closing of the purchase contract. As I mentioned above, even thought you can get a Free TREC form to facilitate this situation, please do it with your Realtor or Lawyer. It’s tied in with the sale of a property, and everything needs to “jive” together. You don’t want problems when it comes to buying, selling and renting.

Final Thoughts about TREC Residential Rental Lease Agreement Forms

1. TREC does not “promulgate” or make a Free Standard Rental Lease Agreement for us to use.
2. TREC does however promulgate a TREC Buyers Temporary Residential Lease and a TREC Sellers Temporary Residential Lease
3. TREC licenses and regulates the real estate industry in Texas
4. There are other Free Leases available in Texas. You can Create a Free Residential Lease Here using the eForms form builder.

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For many people, their pets are their children, yet it is increasingly difficult to find places that allow pets in a rental property. As a landlord, one of the decisions you will have to make is whether you should allow pets in your rental. Before you shout out a resolute “no,” there are actually several ways that renting to tenants with pets can benefit you. Don’t believe it? Read on, and become a believer.

Get a Free Lease Pet Addendum Here

#1 Pet rent, fees, and deposits can more than cover the cost of potential damage.

If your tenant has a pet, you can charge pet rent. Rent per pet can vary anywhere from $10 to $100 a month depending on the size and breed of the animal. In addition to pet rent, landlords are entitled to a non-refundable pet fee as well as a pet deposit. So besides the typical security deposit, you have the pet fee, pet deposit, and pet rent to cover the cost of any damages.

Even if the pets in your rental property do a little damage, you will likely have more than enough money stashed away from all these pet fees to make the repairs. Just be sure to check the laws in your state because some states don’t allow you to use security deposit funds to cover pet damages if you’ve also charged your tenants a pet deposit.

#2 Pet owners are likely to be long-term tenants.

If you’re renting to tenants with pets, chances are that they will prefer a longer tenancy. Why? It’s kind of difficult to find a place that allows pets in a rental property. Once your pet-owning renter settles in, it’s likely that they will want to stay put for a while. For a landlord, that means lowered vacancy rates and fewer expenses that you incur before a new tenant moves in, like cleaning carpets or painting walls.

#3 Being a pet-friendly rental means you’ll have more applicants.

68 percent of Americans own pets, yet it’s not too common to stumble upon a pet-friendly rental. By allowing pets in a rental property, you open up your customer base exponentially. Now, if you’re in a city with a shortage of rental properties, you don’t need more applicants, but if you’re in a small town with lots of rental vacancies, it might behoove you to rent to tenants with pets.

#4 Protect your property from unauthorized pets.

Even if you have a strict no-pet policy, you are bound to have a rebellious tenant or two who bring their pet anyway. By allowing pets in a rental property under certain conditions and guidelines outlined in the lease and pet policy, you reduce the likelihood of unauthorized pets.

By being a pet-friendly rental, you will have the financial safeguards in place (i.e. pet deposit, pet fees, pet rent) to repair any pet-related damages. Furthermore, if a tenant has money on the line (i.e. refundable pet deposit), they are more apt to ensure that their pet does not damage the property. However, if you’re not pet-friendly and a tenant’s unauthorized pet causes damage, you only have the security deposit to work with to make any repairs.

#5 Pet owners tend to be more responsible.

Though not true in all instances, pet owners tend to be more responsible than non-pet owners. I mean, they’ve willingly chosen to take on the responsibility of caring for an animal that can’t fend for itself. With a responsible tenant occupying your property, you probably won’t have to worry about late rent and noise complaints (besides maybe the occasional bark).

#6 Pet owners are happier than non-pet owners.

Everyone likes a happy person, and numerous studies have found that pet owners are happier than non-pet owners. As a landlord, it’s far easier to do business with a happy, laid back, friendly person than an angry, anxious, and nervous grump. Happy people are happy tenants, and happy tenants make for a happy landlord.

Many landlords are skeptical about allowing pets in a rental property, and the skepticism is totally understandable. Pets can damage your rental property. Sometimes they smell, and even the friendliest pup barks on occasion. Nevertheless, from a business standpoint, becoming a pet-friendly rental might be a wise move for many landlords. Think it over.

Author’s Bio:
Darlene Mase lives in Newnan, Georgia with her husband and daughter. She is a stay-at-home mom and works as a freelance writer for Zumper.com and other popular sites. During her free time, Darlene enjoys traveling, hiking, camping, cycling, gardening, caving, kayaking, or anything else outdoors.

The post 6 Reasons You Should Allow Pets in Your Rental Property appeared first on Landlord Guidance.

Nowadays, renters go beyond the aesthetics when talking about the words “attractive” and “rental property”. First, the property should be pleasant-looking. There is also a consideration of the location being convenient to work and/or school. Renters also look at the rates.

But the wisest decision of them all is affected by the security the property provides. To be honest, you can never blame tenants as over the past decades, incidents of burglary were on the rise.

With you owning rental properties that are ready to be occupied, how do you make it as attractive to renters? Consider installing home security systems. And what home security devices should you look into? Read on below:

Smart Locks

A secured door is your primary defense against burglars. But incorporate it with a smart lock, you have an advanced protection for your home.

A smart lock works just like your traditional lock and key. The difference, however, is that smart locks are more convenient.

Lost or forgotten keys will no longer pose as a problem. Duplication of keys is no longer a need as there is no physical key in the first place.

Smart locks make it possible for occupants to access the property through smartphones or any gadget that is compatible. Access can be granted remotely by the landlord or by sending renters their access codes.

Whether occupancy is for short-term or not, landlords no longer have to worry about regularly changing locks. Not only is a smart lock secure, but it is also cost-efficient.

Smart Lighting

A vacant property is always a good target not only for interested tenants but also for burglars.

As opposed to the usual belief, crimes do not happen just because those who commit them were just in the mood for it. A large percentage of crimes are meticulously planned before they are executed. This is the same with burglaries where criminals study the property prior to the break-in.

As a property owner, the worry peaks at times when nobody’s home. Installing smart lighting makes landlords worry less. This is because smart lighting can be programmed into making criminals believe somebody is home even when nobody is.

Occupants can orchestrate when lights can be turned off and when it can be turned on. In most cases,
lighting can also be controlled remotely using a smartphone or any gadget that’s connected to the system.
The development of smart lighting is far from over. In fact, recent models have the capacity to connect with the doorbell and have the lights turned on as soon as somebody rings it, giving an impression of a homeowner having been awakened.

Security Cameras

This is probably the most common of all security devices. Having a security camera installed inside and outside the rented area makes you capable of monitoring the ins and outs of the property. Technology has also made it possible for you to do the monitoring remotely through the use of a computer or a smartphone.

You may also be wondering if it is within your legal rights as a landlord to install security cameras at the property. The answer is yes, it is legal. It is just a matter of which part of the house the cameras are installed.

You should understand that tenants also require privacy and so cameras should never be placed inside the bedroom, toilet/bath, and similar places.

It would also be helpful if you make your tenants aware of the devices inside the property. For sure, they would understand your reasons knowing that these were installed for their own sake.

Motion Sensors

Ever heard of a passive infrared motion sensor? This is the kind of sensor that is becoming popular these days. To simplify how this works, a sensor, when programmed, will be able to detect movement within the property when there should not be. This would be extremely useful at times when nobody’s home.

A common disadvantage of motion sensors, however, is the possibility of false alarms especially for households with pets. Make sure that when choosing the best motion sensor in the market, go for the one that’s pet-proof.

Smoke and CO2 Detectors

Aside from burglars, there are still a number of threats a tenant must face. Fires and carbon monoxide poisoning, for example.

According to the CDC, there are about 400 deaths related to carbon monoxide poisoning. NFPA also reported that in the previous year alone, there were about 3,400 fatalities related to fire cases.

While most would be content with the traditional fire alarms, these are only useful when one is at home during the fire. Home security companies, however, have taken measures to a whole new level.

The latest models of smoke and CO2 alarms notify occupants remotely in cases of dense smoke inside the house, which can only be caused by a fire; or in instances when there is a high level of CO2.

Alfred Security App

While this may be an app and not exactly a device, this can be extremely useful in cases when you want to save on costs. You can make use of an old phone, something you no longer use but is still working. All you need is to download and install the Alfred Security App (for free).

Having it on your phone will make it possible for it to serve as your security camera at home. It can now be connected to the smartphone you are currently using for remote monitoring purposes.

There may be connectivity and coverage issues but the app can be useful for a small property and for those who intend to save on monthly payments.

C-Slide Webcam Cover

For just about $6, this can be a very good addition to your property’s security devices. Some of us may not put so much importance to it but it is easier than believed for another person to access a computer’s camera, take photos and videos of those invading your tenant’s privacy.

Your renters would be glad to have this easily slide into their computer’s camera to cover the lens when not in use; thereby protecting their privacy and giving them peace of mind.

Video Intercom

We’re all pretty sure everybody’s been told not to open the door to strangers. Doing so is never a good idea. In fact, even raising the curtain or peeking through the window just to find out who rang the doorbell is a bad decision. We all know a lot of characters in movies fell victim to villains just by doing this.

On another note, let’s all admit it. We could also sometimes be lazy enough to get out of bed just to check who is outside.

With the video intercom, these concerns are all addressed. The system enables your renters to see who rang the bell. Some systems even allow a two-way conversation with whoever is outside.

Flood Alarm

Is your property in an area likely to be flooded? You can do away with worries about damages caused by flood and water leaks by having this flood alarm device. It can easily be installed in places that are prone to leaks or floods.

How it works is that once water hits the device, an alarm is set off. You would be able to monitor your property, with or without any occupant. And once the alarm is triggered and you are notified, you would be able to do something about it before it causes more damage.

Security Alarms

No matter how sophisticated your security system is, nothing could be better than having an alarm that makes the loudest noise possible. Imagine a burglar just about planning to loot your property. As soon as the invader opens the door, an alarm is sounded; loud enough for everyone to wake up.

When having an alarm, however, make sure to regularly check and deactivate when not needed.

In summary, you as a landlord only want the best for your tenants and for your property. You may do away with some of these devices but you can also opt for maximum security and get everything that you need.

At the end of the day, you are responsible, as much as the tenants are, for the safety of their lives and the preservation of your property.

The post 10 Best Security Devices Landlords Must Invest For Their Properties’ Protection appeared first on Landlord Guidance.

Minimizing Your Risks From the Start

It is always best to take the least amount of risk whenever possible, especially when money is involved. Unless you are limiting your potential renting pool to friends and family, you will be dealing with total strangers. That means that you are trusting people you know very little about with your investment.

• Never rent to anyone (even family members) without looking at background information, perusing financial and employment history, and getting references. This is called “tenant screening” and experienced landlords will tell you to do it well.
• Check the references, including checking to see if these people are who they claim to be. A tenant can give a name to his new landlord claiming that the person was a former landlord. The person in question could be a friend of the tenant, not his former landlord, with no real former landlords vouching for the tenant.
• Constant job changes and frequent moves can be a red flag that someone is a problem tenant and may disappear without warning.
• Spell out everything in the rental agreement, making sure that everything is as clear as possible. In the initial interview, bring up anything that you feel could be a problem.
• Do not rent to anyone who seems to be rude or dismissive of you or who otherwise makes you feel uncomfortable.
• Make sure that the tenants know what to do if there is a problem, including a flood or fire. Ensure that there are smoke detectors and fire extinguishers in the unit and that the tenants know how to use them. Give them as many contact numbers for you as you can, and instruct them to call you in the event of a problem. Make sure that they know to call 911 in the event of an emergency.

Ignoring Your “No Pets” Policy

Despite your best efforts and a clearly written “no pets” policy in the rental contract, you suspect that your current tenants might be hiding something. Hopefully you’ve taken steps to minimize your risks during this situation and can proceed with your clearly laid out plan.

• Ask them directly in the interview if they have pets. If they do not say no right away or are acting evasive, it can be a red flag that they plan to sneak one in eventually.
• Be careful about “bending” your own rules. Some people will take advantage of this.
• Make sure your “no pets” policy is clearly noted in your lease agreement and that any violation of the policy will be considered a breach of contract. Clearly lay out how proceedings would go if a pet were found on the property whether that is issuing a warning, collecting a fine, or beginning eviction proceedings.
• Before they sign the lease, let the tenant know that you plan on performing quarterly maintenance checks on the property to make sure things like smoke alarms are working properly and HVAC filters are replaced. If they know you will be in their space this frequently, they will be less likely to attempt to hide a pet.
• If an unauthorized pet is brought to your attention, be direct and handle the situation professionally. Refer to your lease agreement and proceed with the consequences that you laid out.

Tenants Who Destroy Property

An agitated tenant who is angry about being evicted can turn that frustration toward your property. They can get destructive by doing things like tearing up carpet, punching holes in walls, or damaging appliances.

• If you suspect a tenant is destroying property, the first thing to do is to remain calm. You do not want to jump to conclusions and address the tenant when you are worked up if there is actually nothing to be upset about.
• Give the tenant 24-hour notice that you will be inspecting the property.
• Carefully document any damage that you see.
• If there is damage noted, then reference your lease agreement for how to proceed or if the tenant is particularly problematic, then consult a lawyer.

Tenants With Financial Problems

While you will see financial and employment records for the tenant, it might not rule out potential problems down the road. A tenant going through a tough time might be forgoing other obligations to keep paying his rent on time such as avoiding utility payments. While that sounds beneficial to you, that can lead to additional problems, including frozen pipes and flooded basements.

• If utilities are not included in the rent, make sure that the tenants are paying their bills on time.
• It is easier to offer a break in the winter months so that tenants can pay their heating bills than to deal with a flooded basement after the pipes have frozen and burst. If you come to the property and find tenants walking around with coats and gloves on inside, it is time to get an idea of what is going on.
• Be aware that not paying utility bills can also mean increased use of space heaters, candles, and other possible fire hazards.
• Make sure to clearly spell out the consequences for not paying utilities that keep the property functioning properly in the lease. That way you have precedent to reference if the tenant cannot keep up with their payments and you need to begin the eviction process.

Tenants With Legal Problems

Background checks might not reveal everything. Your new tenant with the sterling background may just hook up with the local drug dealer and begin engaging in some illegal activity on your property.

• Simple legal problems like illegal parking and noise ordinance violations can usually be dealt with by phone.
• Suspected illegal activity like running drugs can be more problematic. Some drugs carry additional risks, including environmental hazards and an increased risk of explosion and fire.
• If this tenant is hostile when asked to leave, you may need to involve lawyers and legal eviction proceedings. Collect all evidence that you can to support your case against the tenant.
• Be sure to state the consequences of such activities in the lease agreement that gets signed prior to the tenant moving in.

The lease agreement is such an important part of protecting yourself and your property as a landlord. In this document that the tenant signs, clearly note what activities you will not tolerate from your tenants and how penalties for those violations will be administered. This will be your best friend should any tenant situation turn sour.

The post Nightmare Tenant Scenarios and How to Handle Them appeared first on Landlord Guidance.

By the time you must evict your tenant, your relationship with that tenant is already at an all-time low. Remember that people in a bad situation may act irrationally, angrily, and sometimes violently. That is why it is imperative to take precautions during the eviction process to keep yourself safe from unnecessary harm and confrontation. Below are some helpful tips.

Tip #1. Avoid Non-essential Communication

Your tenant will frequently blame you, the landlord, for an eviction, so you want to avoid non-essential communication while the eviction is taking place.

You are not required to respond to every pointless contact from a tenant you are evicting. If they are contacting you to resolve the eviction issue, or for a real safety issue (not one they made up to mitigate the eviction), then you must respond professionally. Otherwise, do not get drawn into pointless conversations.

You also might want to tell your tenant, “From this point forward, let’s only communicate in writing.” This will slow down the pointless chatter and keep the communication to the most important topic.

Tip #2. Don’t Confront the Tenant In Person

Additionally, emotions run high throughout the eviction process, so avoid confronting the tenant in person once the eviction process begins. It can be very awkward and dangerous standing in front of the person you are evicting.

One time I was in a dispute over late rent with a middle-aged female tenant. She came to my office to pay the rent in person. In my office, she pulled up her shirt halfway, grabbed a big chunk of flesh on her belly, and told me she has cancer “right here.” I guess she wanted some sympathy, but it was weird and gross.

Again, the best practice is to communicate in writing. That way you document everything that is said. Communicating in writing will also force both parties to be more civil, which is very important when you may be leading up to a court case where a judge will see all your communication.

Tip #3. Do Not be Emotional

Also, try not to be emotional at all. An eviction is just business. Following the advice above will help you avoid emotions. But also make sure your written communication is not emotional.

I don’t do it anymore, but I remember getting into emotional shouting matches with tenants on the phone. Now I realize how pointless that was.

I called one tenant because the neighbors told me the police were at her house constantly. She began yelling at me that she had a right to call the police as much as she wanted. It didn’t occur to me that she was the one calling the police. Apparently she was calling them because she was in a physically abusive relationship. But regardless, things got heated, and I argued back that it’s my house, yada yada yada, probably creating some liability for myself, and essentially accomplishing nothing.

Tip #4. Speak Respectfully to your Tenant

Remember to speak to your tenants as you wish to be spoken to, with respect. Even if they are yelling and cursing, you need to be the bigger person and set the tone. Your tenants are real people with real lives and real problems, and they deserve to be treated with dignity. And treating them with dignity will reduce the chance of them acting violently.

When people are facing money problems, they will make the dumbest sounding arguments to you. You have got to resist the temptation to call them out on it. Don’t call the tenant an idiot for thinking it’s okay to work on a motorcycle in the living room. And obviously DO NOT EVER delve into racist, sexist, or bigoted remarks. It’s wrong, and you will get sued.

Just stay respectful and polite, and let the eviction notice do the talking. This will help keep you safe.

Tip #5. Do NOT be Present When Your Tenant Moves Out

As you may know, the last step in the eviction process is having the tenant removed from the premises (unless they leave voluntarily). A court appointed Bailiff or Sheriff will complete this step for you. A few states require you to be present, but it is best if you are not present.

Just imagine you standing there watching and commenting while the just-evicted tenants are moving all their stuff out in disgrace. You are definitely the “bad guy” in this situation, and no matter how “right” you are, you look like a jerk. A jerk who deserves to have something thrown at them. Stay safe and do not be there if at all possible.

Recap of Eviction Safety Tips:

1. Avoid Non-Essential Communication
2. Avoid Confronting the Tenant in Person
3. Do not be Emotional
4. Speak Respectfully to your Tenant
5. Do not be present while the Tenant is moving out

I wish you good luck as you go through the eviction process. Make sure you stay safe, and play by the rules. That way you will be successful, while still preserving your tenant’s dignity and your own!

The post 5 Tips to Stay Safe During the Eviction Process appeared first on Landlord Guidance.

A pay or quit notice is a form used to demand the rent payment that is overdue and payable. Your tenant has broken their signed lease or rental agreement that set the time at which rent is due. The pay or quit notice legally informs the tenant that you are about to begin eviction proceedings against him if the default is not corrected within a set number of days.

Usually receiving a pay or quit notice, also be called a “Notice to Pay Rent or Quit,” is enough to convince a late tenant into paying the rent if he is able to or quit the premises. Your tenant may call you immediately and promise to make payment arrangements to bring their rent current. Although it is great getting such a call, make sure they sign a Promise to Pay form agreeing to any terms you allow until the rent is paid up to date. Make sure they understand that if they default on the Promise to Pay, eviction will start immediately.

When to Use a Pay or Quit Notice

The best way to handle a delinquent tenant is to contact the tenant and to get them to pay their back rent. However, a non-compliant tenant often does not answer their door or phone, nor will they respond to text or phone messages. In this case, the pay or quit notice provides the landlord recourse to obtain the amount in arrears.

In order to help you understand when to use a pay or quit notice, we present two scenarios for your consideration.

Scenario #1 – Notice prompts tenant get current

A young couple was excited to move into their first home – a modest apartment in a family-friendly complex. Within a year, they had a child. A year later, the husband lost his job, one for which he had trained specifically. The area where they lived had few jobs in his field. However, both of them had family locally and wanted to remain where they were. The husband took temp jobs and did everything he could to continue providing for his family, which now included two young children. When Christmas came, he did not want to skimp on presents and overspent. Then his wife became ill and was hospitalized for three days. With no health insurance, large medical bills became a source of worry. The couple did not want their credit to be ruined, so they concentrated on paying their credit card and medical bills. Additionally, they kept the utilities paid. However, there just wasn’t enough for rent. It was late one month, then the next it was even later.

The property owner knew the tenants had fallen on hard time. They were responsive when he contacted them, explained why they were late, and assured him things were getting better and they would be caught up soon. The property owner decided he would wait and give them some time to catch up, but after three months when they missed rent completely, he issued a pay or quit notice. The couple borrowed from family, sold out-grown children clothes, and scraped up the money to become current on their rent. Shortly after, the husband got a permanent job and got back on track with timely payment.

Scenario #2 – Notice prompts tenant to vacate

A landlord had a tenant in one of his rental properties who was not paying rent. When contacted, the tenant at first made excuses, then became angry and defensive, and finally stopped responding at all. The landlord delayed taking action, but after the tenant was four months in arrears, he issued a pay or quit notice. Unfortunately, the tenant decided to quit is residence and the landlord lost four months of rent. Additionally, the tenant left the property with severe damage and moved out of state to avoid further contact with the landlord.

Scenario #3 – Notice prevent future defaults

An experienced property owner required his managers always to contact renters late or delinquent on their rent. As a result, seldom did a tenant actually miss a month’s rent. When they did, they immediately received a visit or phone call to set up how the rent would be brought current. Additionally, if the tenant was non-cooperative or the manager felt that payment was not forthcoming, the tenant received a pay or quit notice. As time went on, the need to do so decreased as tenants knew timely payment was expected.

Most often, tenants will pay when they receive a pay or quit notice. However, if they don’t your notice becomes the first step in a court action. Therefore, it is important your notice is legally correct. Judges often scrutinize the notice carefully. Errors can mean the loss of an eviction lawsuit and the landlord may end up paying the tenant’s attorney and court fees. Since you never know the response of a tenant and what action may follow, always make sure all notices are prepared and served correctly.

Contents of a Pay-or-Quit Notice

Although you should contact your local housing authority to obtain details about required contents of the pay or quit notice, as well as the procedures required to deliver the notice, the following general guidelines will help you get started:

• Write the title for your pay or quit notice across the top of the letter. In some states, the number of days you are giving is part of the title. For example, you may need to title the document “Three-Day Notice to Pay Rent or Quit.”
• If not included in the title, the number of days for the notice must be specified. This can be three days (most common) or more, depending on your decision and your state’s laws.
• Include the names of each of the tenants.
• Specify the address of the rental property.
• State the amount of rent the tenant owes you listed by due date and rent amount for each missed payment with the total amount owed at the end of the list.
• State clearly that if the tenant does not pay, he must move out of the rental property and forfeit his lease.
• Include a written demand that the tenant pay the full stated amount within a certain number of days as determined by your state’s laws.
• Include payment details: the mailing address if you are allowing payment by check, the address to which the tenant can deliver the money, or the need for a certified check or money order.
• Include a signature and date your pay-or-quit notice.

You cannot include other owed amounts, such as late charges, unpaid utilities, and reimbursement for damages. Additionally, you may not be able to include all the rent owed if some is older than one year ago.

Some Perceived Problems with Pay or Quit Notices

You may wish to avoid handing out pay or quit notices. However, the landlord who does so when necessary often finds a reputation of not putting up with late rent payments is desirable. If your tenants know you will take action when rent gets behind, they are much more likely to prioritize making their rent payment before paying other bills or spending their money foolishly.

Many landlords conclude that a pay or quit notice will lead to a court battle for eviction. However, the notice is a tool to get the tenant’s rent, not to evict them. Remember that your tenant probably wants to avoid the expense and inconvenience of a move. The fact is, the majority of tenants who receive a pay or quit notice do pay up within the number of days allowed.

How to Deliver the Pay or Quit Notice

Now that you understand the worst thing a landlord can do is not take immediate action, the question may arise, “How do I deliver the pay or quit notice?”

At the bottom of your Pay or Quit Notice, there is usually a space for Proof of Service information. Sign and date the notice and have it ready, leaving blank the method used. The reason for doing so is to allow you to use whatever method is most appropriate.

There are a number of methods for serving a notice to quit or pay rent.

Mail the Notice

Probably the simplest method, send the notice to your tenant by registered mail with a return receipt so that you have proof your tenant received the notice.

Personally Serve the Tenant

The landlord can deliver the notice or have the property manager, if there is one, do so. If the notice has led to tension with the tenant, this method may not be desirable.

Substitute Service and Mailing

Sometimes the tenant is not available for personal service. In this case, you may serve anyone of “suitable age” at the property. To be safe, make sure the person you serve is at least 18 years of age. After you have served the notice, follow up by mailing a copy to the tenant(s).

Post and Mail

If you cannot find the tenant or a substitute to serve the notice to, you may use “service by posting.” You affix the notice to the front door of the residence and mail a copy to the tenant’s residence.

Hire a Professional Server

If you choose to hire a server, find one with a record of timely serving notices and providing proofs of service.

Now that you know the methods of serving the pay or quit notice, which one should you use? The method you choose to use is dependent upon the situation and your personal preference. If your relationship with your tenant has become antagonistic, personally serving the notice may not be advisable. However, if you decide to serve the notice in person, the tenant is not available, but an adult “friend” of the tenant answers the door, substitute service and mailing will work. Property owners with multiple complexes or stand-alone rental units may find the services of a professional well worth the expense. Additionally, many property owners and managers prefer posting and mailing as they find it scares and embarrasses tenants into paying what is owed. Remember, to have your pay or quit notice signed and ready for you to specify the method of service used when you decide which method is best or actually deliver or post the notice.

The purpose of a pay or quit notice is to compel a tenant to pay back rent. The notice gives the tenant a certain number of days to either pay the rent he owes you or to move out. Once you have presented the notice, if your tenant does not pay you, you can begin the eviction process.

Remember, the worst decision you can make is to ignore late or unpaid rent. Timely communication about the problem and how it can be resolved is imperative and will frequently prevent the need for a pay or quit notice. If you do it correctly, a pay or quit notice is not that difficult.

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