Continued from Part 1
2) Not Having (and Keeping) a Written Lease in Place
This one seems like a no-brainer, but there is a lot more to avoiding this pitfall than meets the eye. Every landlord should execute a written lease with their tenant before the tenant moves into the unit. This lease should contain terms that give protection to the landlord (I will address some specific provisions below) and offer both parties certainty of the rental term. Many landlords understand that once the term of a written lease expires, the landlord and tenant are free to continue the terms of the lease on a periodic basis according to when rent is paid (FS §83.04). Most of the time, this means month-to-month.
What many landlords don’t understand is that they are giving up some level of certainty when accepting this “default” arrangement. If your tenant pays rent on time and maintains the property adequately, the landlord should renew the written lease for another term. If he or she is a problem tenant, the landlord should terminate the lease (by giving the requisite notice under FS §83.57). Allowing the tenant to proceed on a month-to-month basis means that a landlord may be entitled to a lot smaller sum of damages in the event the tenant breaks the lease, and tenant’s notice of termination given 15 days before the end of the period means that the landlord will be stuck finding a new tenant on short notice, potentially leaving the property vacant in the mean time, which means the landlord is losing out on rental income.
3) Not Making Sure Your Lease Contains Favorable Terms
Often times it is easier to use a form lease downloaded off the internet or given to you by a realtor. However, having a lease that contains provisions the landlord wants and needs for the management of their property is simply better business. These provisions include late fees for payment of rent a certain number of days after it’s due, notice requirements for when the tenant plans to renew or terminate the lease, and perhaps one of the most often neglected provisions: making it clear in the lease that the security deposit may be used to reimburse the landlord for tenant’s failure to pay rent. Having these provisions means generating more income and minimizing uncertainty.
4) Improper Record-Keeping
One of the most difficult hurdles to overcome when landlords ask me to make a claim on a tenant’s security deposit or defend a tenant’s withholding of rent for failure to maintain the premises is proof to the court that repairs were made. Whenever a landlord makes repairs to a rental unit, they should always keep invoices and receipts from the vendors making them. If the repairs are done by landlords themselves, make sure receipts from the purchase of materials are kept. Good record-keeping creates a paper trail that can be introduced as evidence should a dispute arise, and it’s good business to write off such expenses per the counsel of your CPA.
5) Failure to Consult an Attorney Before It’s Too Late
The management of rental property and adherence to the law in your landlord-tenant relationships is an area of commerce that is highly time-sensitive. If the proper notice is not given for certain stages in the rental relationship, landlords could end up waiving or minimizing the protection of their rights afforded by Florida law. If there is ever a question as to how to proceed to accomplish the goals of your landlord-tenant relationship, consult a real estate attorney immediately. The cost of professional help is often well worth the expense when it means avoiding forfeiture of your legal rights.
Renting real estate is not a commercial activity reserved for only the most sophisticated of business people. However, there are many pitfalls along the way that can be avoided with the assistance of professional help. Consult your local real estate attorney to make sure you’re maximizing the productivity of your rental property.