Podcast 364: How to Prevent Lease Violations

In this week’s episode, Podcast Host, Andrew Schultz, goes over his tips and tricks to ensure that tenants remain in compliance with their lease agreements.

This past year’s rental market has been on both sides of the spectrum; in some areas, rents are being raised, in other areas, rent just isn’t being paid. Here’s our outlook on the current state of the rental market.

Last, but not least, when does one list a tenant-occupied property for rent? Find out in our latest podcast.

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Show Transcription:

Andrew Schultz: (00:00)
Hey everyone. Welcome back to another episode of the Rent Prep for Landlords podcast. This is episode number 364, and I’m your host, Andrew Schultz. On today’s episode, we’re going to be talking about tips for preventing lease violations, the current state of the rental housing market, and when to list a tenant-occupied property for rent, we’ll get to all that right after this.

Voice Over: (00:22)
Welcome to the Rent Prep for Landlords podcast. Now your host Andrew Schultz.

Andrew Schultz: (00:27)
Before we jump into today’s episode, don’t forget to check out the Rent Prep for Landlords Facebook group. It’s a great free resource for you to network with housing providers from around the country. And if you have a question or a situation that you’ve never dealt with before with over 12,500 members, chances are someone in the group has been there before and can lend a helping hand if you haven’t checked that out yet, do it today. Over at facebook.com/groups/rentprep. Don’t forget to mention the podcast when answering the questions. So we know how you found us

Voice Over: (01:00)
Forum quorum, where we scour the internet for ridiculous posts from landlords and tenants.

Andrew Schultz: (01:08)
We have a jam-packed show for you here today. So I want to go ahead and jump right into our first forum quorum. This one comes to us from the Rent Prep for Landlords Facebook group. And it’s kind of one of those topics that everybody has struggled with at one time or another. What are some of the ways that you can avoid playing catch me if you can when it comes to lease violations? And again, this one comes to us via the Rent Prep for Landlords Facebook group. And again, I mentioned that this is one of those problems that everyone’s had to deal with at one time or another. And I think for that exact reason, everybody can relate to this scenario. Um, in my opinion, the best offense here is a good defense and it starts with good tenant screening. Good tenant screening generally means that you’re going to wind up with good tenants, which generally means fewer lease violations.

Andrew Schultz: (01:51)
Is that always true? No, definitely not. People put on false fronts all the time and find their way into rental units and things like that. But it does go a long way. Uh, I know that we harp on it constantly, but that’s because it works like fact of life. If you screen your tenants, you wind up with a better tenant. It’s that simple. So I would go back and I would say that, yeah, it has to start with the tenant screening, making sure that you screen your tenants and have a consistent set of criteria that goes a long way and making sure that you don’t have lease violations simply because of the caliber of people that you’re placing in your apartments. The next thing that I would mention would be that going over the lease with the tenant and ensuring that they actually understand the lease terms can also go a long way in preventing violations of those very same lease terms.

Andrew Schultz: (02:36)
I know it’s a crazy concept, but when people actually read and understand what it is that they’re signing, they’re a lot more likely to actually follow the lease provisions. So if you are already taking the time to do the screening, take the extra little bit of time to walk the tenant through the lease, to ensure that they understand what the lease says and how they are expected to act under the terms and conditions of that. I understand that there’s a huge push to digital. We send our leases out for digital signature. It’s very easy to send it out and get it back as a fully signed PDF file. But unless someone’s actually spending the time to read that lease thoroughly a lot gets lost in translation. Our software actually shows us when someone opened a document and when it was signed, if they spent less than a minute on the lease, they obviously have no idea.

Andrew Schultz: (03:24)
What’s actually contained inside that document. They literally just clicked next, next, next, next, next, until they got to the end and could digitally sign it. And that’s not what we want. We want people to understand what’s actually in the lease. So the other thing that I would mention is that you do have kind of one more chance to really convey the importance of the lease and not violating it. And that would be at the time of moving. So when you meet the tenant for the and inspection and run through the property to do the damage, check, checking, et cetera, it also gives you the opportunity to show the tenant. Anything that they need to know about the property, such as locations at breaker panels or water shutoffs, things of that nature, which by the way, a tenant, knowing where the breaker panel is and knowing where water shutoffs and things like that are and understanding how to use them.

Andrew Schultz: (04:07)
That’s also important, just as important as not violating the lease is knowing how to save the property in the event that there’s a major situation like a flood or something like that. That’s also part of being a good, responsible tenant. Uh, it’s not just not violating the lease. It’s also not causing damage to the property that could have easily been avoided if they just knew a little bit more about how to stop something like that from happening. But even beyond that, it gives you the chance to ask if they have any last-minute questions about the lease before they move in, as well as to spend some time reiterating any particularly important items on the lease. This is kind of your last opportunity to do that before the tenant takes possession of the unit and the situation changes so that you no longer, I don’t want to say no longer have the upper hand, but once the tenant is in the unit, the dynamic obviously shifts.

Andrew Schultz: (04:55)
So all of this sort of boils down to taking your asset, seriously, your tenants going to pick up on the fact that you take your property seriously, or if you’re managing property for somebody else, they’re going to pick up on the fact that you take your client’s property seriously. And if you show that level of respect to both the tenant and to the property, chances are pretty high that you’re going to get that same level of respect from the tenant. And that that tenant is going to respect to the property to hopefully around the same level that you respect the property to. As I mentioned, obviously, once the tenant moves in, it becomes a much more difficult situation. In that point, it’s more about lease violations and discovering those violations and just finding a way to get those resolved, which, I mean, that’s another topic for another day. We could sit here and spend several minutes talking about that, but I think we kind of hit the root of the question here, which is how do you go about preventing tenants from violating the lease, realistically speaking, they’re their own person. They’re going to do what they want to do regardless, but there are a lot of things that you can do kind of at the onset before a lease violation start to occur that I think will help cut down on the overall number of lease violations that you see inside your apartments,

Voice Over: (06:03)
Water cooler wisdom, expert advice from real estate pros.

Andrew Schultz: (06:11)
Our cooler wisdom this week comes to us via the Rent Prep for Landlords Facebook group. This one is on lease renewals. We’ll take a quick look here. I sent my tenant a lease renewal 90 days from the end date of the lease, which is December 1st. It is now less than two months until the lease ends. When should the tenant be getting back to me? And when should I list the property? And again, this one comes to us via the Rent Prep for Landlords Facebook group. So this one starts with a couple of questions. The first question would be what does your state law say? And the second question would be, what does your lease say? So here in New York, the state law for landlords giving notice of lease termination or increasing rent greater than I believe it’s 5% is 30, 60, or 90 days, depending on the length of the tenancy.

Andrew Schultz: (06:56)
So if the tenants live there under a year, it’s 30 days, one to two years at 60 days. And over two years, it’s 90 days notice that you have to provide that tenant if you’re terminating their tenancy, or if you’re increasing their rent more than 5%, the tenant on the other hand still only has to give 30 days notice. So that’s something to keep in mind. We start our lease renewal process at 120 days out so that any of our tenants that have been in place for two-plus years are still getting the appropriate notice. If we opt to non-renew, uh, if we are renewing, we determine what the rent increase will be for the new lease term. And then we communicate that with the tenant. We let them know when their lease is due for renewal. Uh, also what the new rent is going to be.

Andrew Schultz: (07:39)
And when we need to have their response by whether they’re planning on staying or whether they’re planning on vacating, my recommendation is start off by doing this verbally, but I do recommend following it up with some sort of a written confirmation, even if it’s not required in your state so that you can at least show that you did document that communication. If the tenant is not planning on staying and you want to list the property for rent, I’d first want to know what kind of condition of the unit is in. Um, if it’s showable, that’s great. If it’s a disaster, don’t start showing it because you’re just going to burn all of those leads. So people can see around some clutter or some moving boxes or something along along those lines. But people have a lot harder time seeing around garbage odors, um, crazy paint colors, stuff like that.

Andrew Schultz: (08:25)
You’re much better off if you have those types of issues, wait until the tenant has vacated, turn the unit over so that it shows properly, and then start listing the apartment for rent. You’re going to find that you wind up with a much better tenant pool. If you do that, in addition, that’s going to give you the ability to put the best possible product forward, which is going to help you secure the best possible tenant that you can. So that’s just something to keep in mind. Our lease gives the landlord the right to show the apartment during the last 60 days of the lease term by giving four hours notice. And it requires the tenant to keep their place reasonably clean, which I mean, obviously, that’s going to be hit or miss. Um, since they’re still living there, they’re also packing to move. Like also people have very different ideas of what clean is, you know, so what you think might be show condition and what the tenant things might be.

Andrew Schultz: (09:14)
Show condition are very, very drastically different things, or at least they could be very drastically different things. So, you know, double-check make sure that the unit is in good shape before you decide that you’re going to start showing it, make sure that you’re giving your tenants some notice and not just showing up and walking in. Obviously, that’s not legal in most states, and communicate with your tenant. Typically, what we’ll do is we’ll try to pick a couple of times slots with a tenant and run showings, like an open house style so that we’re not interrupting the tenants like 50 times in a week, we would rather set, you know, a one or a two-hour block and put everybody into that one or two-hour block, then sit there and inconvenience the tenant by telling them, well, we need you to be out of the house every day, this week between 5:00 PM and 7:00 PM so that we can shut no, don’t do that to your tenant.

Andrew Schultz: (09:59)
You know, make their life at least a little bit easy. Pick a day in time, a couple of days during the week, or something like that. Maybe you do a lunchtime and then an evening or something so that you could try to capture a couple of different groups of people or whatever, but don’t just show it 75 times in a week. That’s just going to be it. Number one, it’s going to be a waste of time for you, but it’s also a huge interruption to your tenants. So try to be respectful of your tenants’ time and just try to pack everybody into those open house-style showings. That’s going to save you a bulk of time and it’s gonna make your life a lot easier in the long run. One question we always seem to get from landlords is how often should I be painting my rental while we’ve done the research?

Andrew Schultz: (10:36)
And we have your answer. Check out our latest guide on painting rentals over at rentprep.com slash blog today. So that’s pretty much going to wrap things up for this episode of the Rent Prep for Landlords podcast. Thank you all so much for listening. We truly do appreciate it. Our goal with the podcast is to help as many people as possible make educated decisions when it comes to real estate and you can help us to reach our goal. If you heard anything in this week’s episode or any other episode that will help someone, you know, please do us a favor and share it with them. If you’re looking to get in contact with me, I can be reached over at whatsdrewupto.com from there, you’ll find links to everything going on with me over at Own Buffalo, as well as other projects that we’re working on.

Andrew Schultz: (11:16)
We just launched a free investment property deal analyzer, which is available over on that website at whatsdrewupto.com. It’s completely free. There’s no obligation whatsoever. There’s also a companion video to teach you how I analyze deals and how to use that tool. If you’re looking for top-tier tenant screening services, head on over to rentprep.com, there are multiple products to choose from including a tenant-paid option. And if you’re over 50 doors, ask about the enterprise-level programs and pricing. I’ve been an enterprise user of Rent Prep for years now, and it’s definitely changed the way that we screen our tenants. Check that out today, over at rentprep.com. Again, thank you all so much for listening. We’ll be back in two weeks with an all-new episode you won’t want to miss until then. I’m Andrew Schultz with ownbuffalo.com for rent prep.com and we’ll talk to you soon.