The first day of every month (and a few days after that) is very important for all landlords. There are rents to be collected from some tenants, renewal of leases of some tenants to be done, and supervision of units being vacated by some tenants. While you can relax in the coming weeks, this is the time when you need to be alert and cautious. You need to make sure that everything goes off smoothly in a planned manner. Here are some important things that need your attention on the first day of a month.
When tenants overstay their leases
Tenants coming and leaving is a normal process experienced by all landlords every now and then. Vacancy becomes an issue as you lose out on your rental income for some time. But you face a bigger issue when you find that a few of your tenants are living in the premises even after the expiry of their lease terms. If the tenant promised to vacate but he is still there, you need to act as overstaying tenant can cause loss to your business.
Taking possession back from a tenant
This is another important duty that a landlord must perform whenever a tenant leaves the premises at the end of the term of his lease. You need to make sure you have taken back possession from your tenant in a legal manner. Your tenant has the legal possession right once you sing the lease agreement with him. This is the reason why it is illegal to disturb your tenant without giving him proper notice. There is a legal form called Release of Rights of Possession. By signing this form, your tenant legally hands over possession back to you.
Getting compensation for damages
It is the responsibility of the landlord to inspect the property when a tenant is leaving the premises. If he finds any damage to the property, he can deduct the cost of repairs of these damages from the security despoil that the tenant paid in advance. The thing to remember here is to be honest and fair when deducting costs of repair. You should inform the tenant why you are making these deductions. Get signature of the tenant on the security deposit agreement so that there is no dispute in future.
Increasing the monthly rent
First day of a month is also a time when a landlord has to think about increasing the monthly rent of his tenants. If you believe the rent paid by your tenants is not giving any positive cash flow to you as a landlord, you are well within your right to increase the rent. However, you should give proper notice in advance to your tenants in this regard. It is always a good idea to discuss expenses on repairs and maintenance from time to time so that your tenants do not get a shock when you break the news of rent increase.
There is a clause in the lease agreement that says that you cannot raise the rent of a unit during the duration of the term of the lease. You need some excuse and a clause that allows you to increase the rent in between a lease term. However, you are free to renegotiate terms of lease once it has expired. Even tenants know how costs of maintenance of a building are increasing with each passing year and they may be inclined to an increase that doesn’t appear too harsh or steep.
If you are a new landlord, it is a good idea to discuss your agenda on the first day of a month with your attorney in advance.
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