One of the biggest areas of need for attorneys in real estate is in landlord-tenant relationships. When one person rents their property to another person, there are many different ways disputes can arise. A lot of disputes that arise are fairly basic. Luckily, that means the possibility of disputes arising can be eliminated or greatly reduced by doing a few simple things. These tips apply equally to both commercial and residential property.
First, a landlord should always investigate a potential tenant before agreeing to lease property to a tenant. For residential property, this includes getting approval from the potential tenant to conduct a background check and a credit history check. A criminal history or a bad credit history are red flags. You should also ask for personal references and contact those references. For commercial property, an investigation would include reviewing a company’s financial statements. If the company is a small company, also ask to inspect the individual owners’ personal financial statements and/or tax returns. Shaky finances are a red flag. These days, a simple internet search for potential tenants can reveal a lot too. This would include a review of tenants’ social media pages. You would be surprised what can be learned about someone from the internet. Doing an investigation into potential tenants can help landlords avoid renting to tenants that have a high risk of causing problems down the road.
Next, and this may seem obvious, but having a written lease agreement is NECESSARY. You would be surprised how many landlords turn over their property to someone else without any agreement in writing. This is legally dangerous. Without a written lease, disputes become harder to resolve. It also becomes more costly to evict a tenant if necessary. But it is not enough to just get anything on paper. The rental agreement needs to include specific terms. Particularly, the rental agreement should specify in as much detail as possible what the landlord is responsible for and what the tenant is responsible. It should also describe the ways in which the tenant could breach the lease and result in an eviction. An experienced real estate attorney can help draft an appropriate lease agreement.
Doing these simple tasks can help any landlord avoid some of the more basic problems that can arise with tenants.
Disclaimer: This article and blog are intended to inform the reader of general legal principles applicable to the subject area. They are not intended to provide legal advice regarding specific problems or circumstances. Readers should consult with competent counsel with regard to specific situations.
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