The Tenant Package for Safety and Profit

If you owned a service business with employees, you’d be at severe risk if you were operating without an employee manual. Specific policies and procedures protect you from employee errors, but if they err anyway, you have proof of your instructions to protect you in case of a lawsuit.
If you’re a landlord, you’re not in an employee situation in most cases. However, your tenants can actually be a bigger risk factor than employees. From property damage to security deposit disputes and liability issues, you should be taking action to protect yourself. Sure, everybody has a lease agreement, but if that’s all you have you should be doing more. The plan is to set expectations upfront to manage your tenant relationships.
The setting of expectations starts very early in the relationship, from the first meeting with the tenants. Let’s go through the documents a thorough landlord would want to pull together into a tenant package:
• Application: You can find these online or at some office supply stores, and should make sure that it’s legal and doesn’t ask any discriminatory questions.
• Residential Lease: This is a comprehensive lease agreement that spells out all of the duties and obligations of both parties. When rent is due, how much, penalties for late rent, property damage, security deposit rules, and much more. This one should be blessed by your attorney for more security.
• Security Deposit Agreement: This can be a part of the lease agreement as already mentioned. However, to really get the attention of your tenants and another set of signatures, a separate form spelling out security deposit rules is better.
• Pet Addendum: Another item you can address in the lease, but better separately, as only pet owners will have an interest, and this way you’ll get another set of signatures to extra deposit and damage agreements.
• Lead Base Paint Disclosure: Homes built before 1978 could have lead base paint, and the EPA has strict rules about disclosure, and heavy fines if you don’t do it right. This includes an EPA form and a Safety Booklet you must give the tenants and get their signatures indicating they received it. This item is out of order, because it should be done before any lease agreement is signed.
• Move-In/ Move-Out Inspection: Taking a camera with you, do a thorough walk-through of the property with the tenants before move-in. Take photos to document conditions. Do this again at move-out with the same form so that it’s clear to everyone what is different or what has been damaged.
• Security and Safety Devices: Another separate form should be signed acknowledging that smoke and carbon monoxide detectors are functional, as well as any alarm systems with instructions.
• Tenant Move-out Survey: To help you improve your property and marketing, ask your tenants to fill in a survey with what they liked and more important, what they didn’t like.
The more you can control the expectations of your tenants, the less likely you’ll end up with problems. How does your document list compare?