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The Most Overlooked Part of a Rental Agreement or Lease
Every experienced landlord has a good rental agreement or lease with all of their favorite protective clauses. But most landlords forget the most important protection of all: the other stuff you give to your new tenant or resident along with the lease.
Just look at the above picture of a local pharmacy. They’re selling nails. Your new resident will walk in and buy those to hang pictures. If you have plaster or sheetrock walls, that’s bad news for you. The nail is going to rip out a chunk or a gash, especially if what they hang is too heavy. Just below the nails are sticky hooks. Those can be just as bad.
That’s why I give my residents wall anchors. I say, “Go ahead and drill a hole, then tap this anchor in. If you need me to come drill the holes for you, just mark out where you want your pictures and I’ll come in to drill them for you.” During the lease, pictures stay secure. At the end of the lease, the anchors pop out and the holes are quickly spackled or mudded over. Savings: $30 per patch.
Other things you should give a new resident:
- A bedbug brochure: Show them a picture of a bedbug with some information about how they act and what the warning signs are. Make it clear that bedbugs affect clean people so there’s no shame. Tell the resident that they should notify you immediately if they suspect bedbugs so that you can call an exterminator. In a building with apartments above and below, you can save $6,000 by not having to treat the neighbors, as well.
- Move-out and cleaning fees: This itemizes the costs of leaving things dirty upon move-out. Not only is this required before a security deposit can be withheld, but also it motivates people to clean for you. Savings from not having a professional come in to clean the apartment: $300.
- Trash brochure: Tell the resident how they get rid of their trash, where they can buy the right bags, and how they can save money and/or help the environment by recycling. Clean apartments don’t attract mice or cockroaches, which if you need to exterminate, might cost you $1,000.
- Fuel assistance and insurance forms: Tell your new resident how they might qualify for a government subsidy for heating. Also, tell them how cheap renter’s insurance is in case anything gets stolen. More money for them means more assurance to you that the rent will be paid in full and on time. Savings: from $0 to one month’s rent, depending on what kind of bad luck your resident has.
- Tell them it’ll be all right: Everyone at some point runs tight on cash. Tell them you won’t be upset as long as they let you know in advance that they’re going to be late paying rent in any given month. Savings from avoiding “where’s the rent?” worries: priceless.
What else do you tell your new residents? Leave your thoughts in the comments below!
Landlord Forms: A Checklist for your Lease or Rental Agreement
If you have rental property in Massachusetts, here’s a quick way you can check the health and currency of your rental forms. You should have:
- A primary agreement (be it a “lease” or a “tenancy-at-will”), that specifies
- Which space is being rented
- To whom
- How much
- Who pays for utilities (you can’t charge for water unless you have separate meters!)
- Who fixes stuff
- Whether subletting is allowed (I recommend not)
- And if you like your agreement, comment below to tell others where to get a copy
- A summary of everything attached to the primary agreement (all of the “addenda”), which includes everything below:
- An addendum with your custom terms
- Do you keep keys to the apartment? If so, under which conditions may you enter?
- Is parking allowed?
- Are pets allowed? Remember, you can’t charge pet fees or take a pet security deposit.
- Is smoking allowed? Yes, you can prohibit smoking on your property.
- Who replaces smoke detector batteries?
- Are judgments for legal expenses capped?
- Who pays for lock-outs?
- No smoking addendum
- You shouldn’t be held responsible for health effects if someone smokes on your no-smoking property.
- Insect infestation addendum
- Landlords must pay for extermination, but tenants must comply with extermination procedures.
- CORI authorization
- Otherwise you can’t check criminal history.
- Mold addendum
- Tenants must keep the place free of moisture and report any problems immediately.
- Move-out and cleaning fees
- This is required if you think you might withhold from a security deposit.
- Lead disclosure forms and copy of lead report
- You can’t have kids under six years old living in an apartment with lead paint unless the hazards have been brought under interim control or eliminated.
- Bank signature form (w9 signature card, not just w9) for security deposit account
- Security deposits must be held under the tenant’s social security number.
- Utility companies sheet
- As a courtesy, tell your tenants where to go to start gas and electric service.
- Bedbug notice
- Warn your tenants against picking up used mattresses or other furniture off the street.
- Trash sheet, including number for bulk item removal
- Help your property stay clean by encouraging tenants to take advantage of free recycling and affordable bulk waste pick-up, if your city has these programs.
- Tell them which day is their trash day and where to put their trash.
- A condition of move-in
- You need this if you ever have to show a judge or other third party that the apartment was in good shape when the tenants moved in.
- Fuel assistance form
- Many, many tenants qualify for fuel assistance. If they get on fuel assistance, a world of benefits may open up to you, including new refrigerators, insulation, and furnaces. Plus, any money you can save your tenant increases the affordability of your property.
Did I miss anything? Add your comments below!