Protecting Your Tenants: How Far Should You Go?
Renting out your property can be a good source of income. Aside from the steady cash flow, having someone to occupy your vacant house can help make sure it’s protected against vandalism and other possible security threats. Because tenants can keep your property safe, it’s only fair that you assure their safety as well. Keep in mind, however, that although protecting your tenant’s rights is important, you also need to consider yourself and your property.
Here are some ideas that you can use in securing your tenant’s rights without sacrificing your own:
● Create a Written Agreement
Before you allow a tenant to move in, make sure that he understands all your provisions. Discuss them openly and ask if he has questions regarding the contract. The agreement should include important details such as the cost of monthly rent, the amount he needs to deposit and the duration of the tenancy. Responsibilities regarding security and maintenance should also be included. There must also be an agreement with regards to cleanliness and schedule of repair.
Although it is your right to impose rules, you should also be flexible enough to understand your tenant’s concerns. If he has a reasonable point, you can modify your provisions. However, if you can’t find any reason to agree, you have the right to deny. The contract has to be agreed upon and signed by both landlord and tenant. It should be in written form to avoid disputes in the future.
● Advice Tenant to Avail Insurance
Not all tenants are aware of the importance of getting tenant insurance. Because tenants are generally not covered by your home insurance, it can help if your tenant can avail his own. This type of insurance is typically not costly but it can be enough to protect his personal possessions in case a fire, flood or other disaster happens in his home. Some insurance are more comprehensive in that they cover accidental damages done by guests or if your tenant caused any damages to your rental unit.
● Prioritize your Tenant’s Security
The first thing a tenant will look for in a rental home is its level of security. This makes it important that you prioritize security as well. If your property does not have an existing home monitoring system, you can ask your tenant on what type of home security system he prefers. Aside from the type of system, you should also openly discuss with your tenant the terms and conditions of having a security system. This includes giving you access codes and the acceptable times you can enter the property without his consent. There should also be an understanding of who should pay for repairs and charges for false alarms.
There are several security systems for homes which you and your tenant can choose from. One of your best options is to use a portable system. If your tenant agrees to pay for it, he can take the system with him when he transfers to another home. If you decide to pay for it, your tenant must return the system at the end of the tenancy period. You can add this term to your written contract.
● Protect your Tenant’s Security Deposit
Security deposit refers to the specific amount of money a tenant pays his landlord before he actually moves in. This type of deposit protects the landlord in case the tenant fails to pay his rental fees or cause damages to the rental property. As a landlord, it is your responsibility to make sure your tenant’s security deposit is safe. In general, the law holds you responsible for your tenant’s security deposit.
Each state has its own policy regarding security deposit. It will be helpful if you can familiarize yourself with your own state law. In general, however, you are required to invest your tenant’s security deposit in a separate bank account. You should disclose to your tenant which bank you have deposited his money and how much interest it will earn. At the end of the tenancy period, you need to assess the status of your property and determine if there are any damages. Taking pictures and completing an assessment checklist before and after the tenancy period can help you get a better idea on how much deduction you need to make. In case there are no extra expenses and damages, you should return your tenant’s security deposit in full, together with any interest it has gained.
Communication is important in establishing any type of relationship. The same is true with landlords and tenants. Aside from being open about your concerns with your tenants, you should also know how to understand their different communication needs and be flexible in meeting them. Without constant interaction, it’s relatively easy to make your tenants feel either intruded or neglected.