Archive for March, 2012
Tenant Breaking Their Lease
Life happens and Tenants break their leases for many reasons . . . they can’t pay any longer and are skipping out or something as innocent as getting a great deal on a short sale and just learning that they have to close in 2 weeks . . . YIKES!! Either way, you have to know the Tenant’s and your responsibilities when this happens.
As you probably already know, the Tenant has the responsibility for the rent through the end of the term of the lease as stated in their lease agreement . . . and to leave all the utilities on and pay for them until the property is re-leased (if you used our lease form). You, as the Landlord, if you want to be able to collect any rent through the end of their lease term, must immediately and diligently market the property for lease again. Be careful not to market the property at a higher rent amount than the previous Tenant paid or you may have difficulty in collecting money for lost rent in court if . . . you “Jacked the Price up” which is how a judge may see it. You will only be entitled to the lost rent between the time your previous Tenant vacated or last paid rent and the beginning of a new lease with your new Tenant . . . no double dipping!
One other very important detail, as soon as the Tenant vacates the property, do an “Estimated” final accounting of their security deposit . . . or Move Out Statement. Of course you won’t know all the final numbers when you prepare this and that is why it is called an “estimated” statement. But, in this statement, you are going to assume that you will not find another Tenant for the property before the end of the lease term. You will also estimate the costs of any repairs over and above “normal wear and tear” the Tenant may have caused. This will show a worse case scenario. Send the statement out within 21 calendar days (in the State of California) of the Tenant moving out with a check for any amounts left over from the funds (typically security deposit) you are holding for the Tenant.
Within 21 days (calendar) of all the repairs having been completed and either the end of the lease term has come or your new Tenant has moved into the property, you will need to do what I call a “True-Up” Move out statement. This will show all of the actual costs to your Tenant, giving them credit for any time of their lease that the new Tenant will be in the property (you can’t double dip on rent) and cut a check for any differences. Oh yeah, be sure to include copies of receipts for all work performed that you are charging the Tenant for.
The subject of Tenants breaking their lease along with many other property management challenges are covered extensively in the new Property Management Training Program; Manage to Make Money . . . . the Real Estate Series. This new series has been developed around the book: Manage to make Money . . . Your Guide to Profitably Managing Rental Properties (available for California, Oklahoma, Kansas or Missouri) written by Pat and Kris Larkin who are seasoned real estate professionals and specialists in the area of Property Management.
To visit their website and see the full spectrum of Rental Property resources; Books, E-Books, Documents, Forms, Form Letters for nearly every occasion, Checklists, Videos more money saving tips and tools . . . and the list goes on and on, go to: ManageToMakeMoney.com
For a short video on this subject CLICK HERE
Thank you for reading!
Pat and Kris Larkin
What do you do when need to access your rental property but are unable to coordinate schedules with your Tenants? There are times when you need to get into your property to make repairs, show it to prospective Tenants, show it to prospective buyers or just to inspect the property and you can’t get a hold of your Tenants. We suggest that you go by the property and post it with a “24 Hour Notice of Entry” This is a legal document which tells the Tenant that in approximately 24 hours, you will be coming into the property to; and then you state your purpose.
Now you have to be judicious with the use of the 24 hour notice and not use it every week to go into your property. Your Tenant is entitled to the quiet use and enjoyment of the property. If you are using the notice to have repairs done… always accompany your workmen into the property. Also, it is a best practice that if/when you enter a Tenant’s property, that you have someone accompany you. In our our litigious world, this is for your own protection. It is also a good idea to try to contact your Tenant “one more time” before you enter the property. Also, document all the attempts you made to reach them or access the property.
You will be amazed at how when your Tenant receives their 24 Hour notice, they are miraculously available to meet you there!
In conclusion If you can’t reach your Tenant for access to the property, post a 24-Hour Notice of Entry, document all attempts to communicate with them and be sure that you accompany your workers when you/they go in.
To view a short video on this same subject CLICK HERE
For our 24 Hour Notice of Entry form or more down-to-earth tips on how to effectively manage your rental property, visit our web site at: ManageToMakeMoney.com.
Thank you for reading!
Pat & Kris
When my wife, Kris and I were traveling and staying with some friends, we walked into the room they had prepared for us and on the lamp was an antique looking sign which read: “Our guest bring us great joy… some when they arrive… and others when they leave!” I felt that way about our Tenants… sometimes, it’s the waiting for the joy at the end!
We are all challenging people to live with… some more than most! We categorize our challenging Tenants into three primary categories: 1.) Students 2.) Entitled Tenants and 3.) Those Tenants who upset the neighbors around them. In a way, they all have similar attributes… they want to live their lives… any way they choose… regardless of how disruptive they may be to others around them. Many of these Tenants “bully” their way through life… pushing their way through. Our tip for dealing with all types of challenging Tenants is to show respect to them, but also show your resolve. Be assertive in requiring that they go by the same rules that most others on the planet go by. We have developed what we call a “No” letter and it very respectfully says something to the effect of “Thank you for your concern about (whatever the concern is). However, this is not a situation in which we will be able to meet your expectations at this time.” (then state whatever clause in the lease which applies). Another option, if they are disturbing the neighbors or causing damage to the property is to threaten them with a notice to comply with their lease or move. There is a very strong chance that your Tenants won’t like either response. But with your resolve… you will get this challenging situation under control.
To view a short video on this same subject, please CLICK HERE
If this tip has been helpful to you, please visit our website at: ManageToMakeMoney.com where you can find our “No” Letter and many more tools, tips and techniques for managing your rental property profitably.
Many people don’t know that if you fail to return your Tenant’s security deposit within the time frame allotted by your particular state . . . there can be some very serious consequences. As an example, let’s assume that your state mandates that you are to return your Tenant’s security deposit to them within 21 days (3 weeks). In many states, if you fail to return the deposit within that time frame then first, you will lose the right to charge the Tenant for anything! It doesn’t matter if your Tenant owes you for three months of rent, late charges and they tore up your property . . . by returning the money late . . . you waive your right to charge the Tenant for anything at all. But wait . . . there’s more! Also, in many states if you miss the deadline, your Tenant is entitled to TWO TIMES the amount of security deposit. Translation: if the Tenant paid a $2,000 security deposit and you miss the return date, you could have to pay them $4,000 AND not be able to charge them for any back rent or late fees owed or for repairing any damage they may have done to your property! So be sure to check the specific laws in your state. A good place to start is to google “tenant landlord laws (insert your state’s name)”
This tip is part of the scores of information contained in our Property Management Training Program; Manage to Make Money . . . . the Real Estate Series. This new series has been developed around our book: Manage to make Money . . . Your Guide to Profitably Managing Rental Properties 2nd Edition.
To view a short video about returning security deposits click on this link.
To visit our website and see our large selection of books, e-books, downloadable forms and documents, videos and tips go to: www.ManageToMakeMoney.com
Thank you for Reading!