Overseeing leases and resolving tenants’ issues are some of the most time-consuming tasks for every landlord. Besides requiring their undivided attention, these issues are also grounds for potential liability troubles. For instance, a minor ambiguity in the way something is worded on a contract could lead to a lawsuit. This is why it’s extremely important that landlords hire property managers to handle tenant-related issues in good faith.
The process usually begins as soon as a prospective tenant sends in an application. Since the landlord decides which applications to approve for a lease, finding the right people is entirely in their hands. So, what are some important factors that property managers should consider before approving new tenants and creating potential liability concerns?
Thorough Background Check
In general, most property managers conduct a background check on those that apply to reside in their complex. This allows them to see if the applicant has outstanding charges or a criminal record. As a general rule of thumb, applications with either of those factors are denied. Background checks, however, only scratch the surface of the research that should be done. In fact, much more insight needs to be gathered.
Another great starting point is to consider credit history. Although these are often connected to the background checks, some property managers don’t think credit checks are as relevant because credit histories seldom connect to a person’s rental history. Nevertheless, reviewing someone’s credit will provide insight into their spending habits. If they have an extremely low score, they’re more likely to become a financial problem for the landlord. If their credit is quite impressive, on the other hand, the landlord may even be willing to negotiate better rates.
Additionally, following up on rental history is very important. When an applicant is attempting to move, they’re obviously vacating their current residence somewhere else. At times, this could showcase a red flag as they might be in the middle of an eviction. Since rental history is likely not updated to show this yet, it’s important for the property managers to dig deeper. They could, for instance, call current landlords and ask for legally-obtainable information. Doing so, however, is only allowed if the applicant explicitly agrees.
Everything Should Be in Writing
It goes without saying that all expectations of tenants should be put in writing. According to Nate Armstrong of Home Invest, failure to put something on paper means it wasn’t mentioned. So, if all tenants must comply with a specific rule, lack of a paper trail translates to a lack of the rule.
The reason it’s so important to have everything in writing goes back to enforceability. As Nate Armstrong of Home Invest mentioned, it’s impossible to prove something occurred without tangible evidence. Similarly, trying to argue that the tenant was told something without their signature on paper is a game of hearsay. Thus, courts will usually dismiss those claims and the property managers may face financial hardship or liability.
Consider, for example, a landlord that doesn’t explicitly state how applicants must give 60-day notices before moving out. This gives them the right to move out at any point without as much as a simple disclosure to the property manager. Of course, they would still be responsible for the rest of the lease terms that were acknowledged and signed.
Proper Way to Evict
Liability problems commonly arise in some of the more extreme situations. Evictions tend to be the last resort for property managers. It’s fair to say that they represent an extreme circumstance where the tenant is forced to leave. Well, there is a series of rules that surround this area as well. For instance, the lack of a proper notice to vacate the property could undermine the entire eviction.
Most states require landlords to give a 3-day eviction notice to their tenants. If they fail to do so, however, the tenant may stay until a judge orders their eviction. Unfortunately, the process to get a judge’s order to evict someone is quite lengthy. Additionally, if there were any legal inconsistencies in the way someone was evicted, the judge would decline the lawsuit entirely. Therefore, it’s crucial to know exactly how to go about removing a tenant from the property in a legally enforceable manner.
A good property manager can help you navigate the laws and processes of approving and managing tenants. Doing your homework before you accept a tenant can save you from a lot of pitfalls down the road. Consider this advice to avoid the headaches that will ensue from accepting a problem tenant.
