“Until the contract is signed, nothing is real.” Glenn Danzig

Samuel Goldwyn once said that an oral contract isn’t worth the paper it’s written on and yet here we are in a society where many things that should include a contract do not. When you rent to a new tenant, that tenant has expectations of you as a landlord. You also have expectations, but when there is no contract, they may vary from your original intent, either because of misunderstanding or dishonesty. The recollection of people has a tendency to change, selectively. The best plan is not to put yourself in such a position in the first place.

GET THE CORRECT FORM Your apartment association will, in most cases, furnish forms for rental agreements, addendums, notices and all other relevant documents. These are the latest forms reflecting any new laws or changes in existing laws. If you are not sure about the form you are using, you can and should have it reviewed by your real estate attorney before having your tenants sign. An error here could land you in court or cost you substantial dollars.

SECURITY DEPOSITS AND RENT PAYMENTS Do you have a clear understanding of how and when rents should be paid? Are you using ZELLE or PAYPAL? All this should be agreed upon in writing. The new tenant might be expecting you to personally collect cash every month. Is your security deposit being collected in payments over two or more months? Although this is a practice we don’t recommend, if you opt for this kind of agreement, it needs to be agreed to in writing.

CLAUSES Make sure you have a clause (if not a separate form) for things such as pet policy and subletting, as well as other activities. You apartment association most likely has a form to address these issues, but don’t hesitate to get your real estate attorney involved if you are unclear on anything. If you are unclear, your tenant will most likely be as well, much better to make sure you are on the same page before they move in.

FUTURE CHANGES What if things change in the future? A new law? Some changes to the building resulting in a change in landlord and tenants responsibilities? This can usually be handled with an addendum. Whether it will be 30 days or longer can change as well. Always consult with your apartment association and your real estate attorney before you send the notices. Be sure to follow the procedure of posting and mailing the notice to the tenant, as improper notice can cause you to lose in court, even if your claim in reasonable.

As a real estate broker, I do not give legal or accounting advice, rather I direct clients to the proper professionals. So let me end this by suggesting that you make sure your contract is correct, consult your attorney to make sure everything is included and get all your agreements in writing.

“At the end of the day, everyone is responsible for their own contracts. Nobody forced us to sign them. Mats Hummels

 

What we at PRS PROPERTIES CAN DO. We can help you with a rent survey for your building, before you sign a rental contract or lease, comparing similar properties just to make sure that your asking price is comparable to your competition. We can recommend experienced licensed contractors who can perform any repairs or installations you may need. We can also look at your building for changes that might allow you to get a higher value in order to create value without huge expenses for your building. We can help you to get the maximum value for your property, should you decide to sell, or the maximum return if you are planning to keep your building.

We always have many investors who are looking for “as-is” properties and are willing to purchase with low rents, a moratorium or even with a problem tenant in place. We have put together numerous transactions over the years which involve properties that are not listed for sale. Many investors are in 1031 exchanges and need to identify a replacement property before their 45 day identification period runs out.

Should you decide to put your property on the market, we will put together an aggressive, targeted and professional campaign to get your property sold fast. We have been doing this for over 40 years, and we will use all the tools available to bring you the most dollars at closing. If you are thinking of selling or are just curious about the value of your property, don’t hesitate to give us a call.