Becoming a landlord is not always a simple task. There are plenty of tricks that a person will learn along the way to help them out. However, there are also loads of issues that they will uncover, and most of them, cannot be solved in the same fashion. One thing that can turn into a huge problem is collections and fees. Hence, this advice will help do-it-yourselfers and make their journey into becoming a landlord a little easier.
A Lease Is A Legal, Binding Document
Landlords must do their best to dot all of the I's and cross all of the T's in the lease. If something terrible transpires and has to be settled in court, this document will be thoroughly examined. When things are mislabeled or out of sorts, the proceedings are likely to go in the tenant's favor. For example, funds that are not going to be returned to the occupant should receive the label of non-refundable fees. The last thing the property owner wants is to have to pay back a bunch of money that they shouldn't have to, so do your homework to avoid such instances.
Accepting Money Before Signing A Lease Could Turn Into A Headache
It is not an uncommon practice for landlords to accept money from potential tenants before they sign a lease agreement. This is often a way for the probable renter to get the property owner to hold the place for them. In many cases, the prospective lessee fails to go through with the deal though. In turn, they expect to get their money back. However, not all landlords return the funds due to the process being a waste of their time.
Legally, if the property owner does not want to return the money, he or she can not call it a deposit. Rather, another term such as holding fee needs to be used. Once again, failing to label things correctly could land you in the middle of a lawsuit. So, be sure to do everything right and avoid the hassles altogether. It can prove to be a good idea to have a sit down with a lawyer or real estate professional to hash out details like these before drawing up your contracts.
Be Precise And Clear With Anything And Everything
Make it a point to lay out where all of the money goes. The lease needs to include the order in which payments are applied. For instance, the document needs to say that the funds are first used to pay for items such as unpaid fees, utility bills, and other expenses before going toward the rent. Then, a tenant can't say they paid the correct amount when they owed the landlord for previous charges. Plus, if the matter makes it into a court of law, having everything laid out in such a way has you covered. Otherwise, a judge may rule against you in the case, which in turn, will leave you with out-of-pocket costs.