Question and Answers for Landlords and Tenants
Question 1
Can you tell me which method of rental marketing is usually the most effective? Even minimal classified advertising in the newspapers has increased greatly in recent years.
Answer 1
The best way to find prospects and the lowest cost way is usually to use “For Rent” signs on the property in locations that are visible to people driving or walking by the property. The fast way to get a prospect that has viewed the property to sign a lease is to offer good value. This includes providing clean, well-maintained, and safe units at or below market rent for the area. This can also give you a better chance to get “good” tenants because those who are financially qualified and have a good rental history do not usually need to live in bad rentals.
However, it is best to concurrently utilize multiple methods such as placing classified ads in local newspapers, posting notices in local public bulletin boards (e.g., those often found in neighborhood markets, laundromats, and other venues), and listing vacancies on rental Web sites.
There is a way to minimize the cost of all advertising methods that are charged by the lines or by the words as well as provide interested persons with a lot more detailed information than is otherwise possible. This is to provide your own Website which provides information on each of your properties and in your paid advertising provide the page Web address that provides details of the vacancy or vacancies being advertised. The Web address should be included on your signs in addition to the phone number, even instead of the phone number, as that will be available on the Web site which will be accessible to most interested persons via their smart phones.
The site can include information regarding qualifying criteria, pet policy, the rules and regulations of any HOA, utilities paid by landlord if any, and how much. Of course, the site can exhibit an essentially unlimited number of photos. Finally, the site can also provide downloadable application forms, a copy of the lease agreement that will be used, and other lease documentation, for example your pet agreement if not contained within the lease agreement.
The annual cost of registering a domain name and paying for its hosting is quite low and your site can provide everything a potential applicant might need to know in order to decide if your rental is a serious prospect for his/her housing. Accordingly, you will be answering fewer inquiries from those who are financially unqualified or for those you will have no interest in after they know the details.
* * * * * *
Question 2
We signed a lease agreement with a new tenant yesterday that is to begin in a week. However, we now think that we made a bad decision. We have heard that our state has a law that allows cancelation of home improvement contract without penalty within a certain number of days after signing and wondered if there is a certain period after signing when either party can cancel the lease. We have not deposited any money and want to tell the prospective tenant that we will not be able to go through with the lease agreement and void her check.
Answer 2
You don’t say which state the rental is located in, but to my knowledge no jurisdiction in the country has a law that allows either a landlord or a tenant to change his mind after a lease is executed by both parties. An exception would be if it could be shown that one or the other parties committed fraud. Some states have laws regarding rescission of a contract within a few days for some types of contracts (e.g., a home improvement contract), however, any consumer protection law that allows cancellation of a contract almost certainly applies to the rights of the consumer, not the merchant, again, except when the consumer committed fraud against the merchant (e.g., providing incorrect information on the application that is material to the landlord’s selection decision).
Landlords should never make “rent”/”not rent” decisions based on gut feelings. Decisions should always be made based on the results of an adequate number of objective screening procedures, including identity verification and credit reports as a bare bones minimum. If possible, screening should also include verification of employment, eviction record checks, contacts with previous landlord(s), and criminal record checks. If you made the decision to rent to the tenant after you performed such screening I don’t understand why you would now have a concern.
You don’t say anything about the length of the lease. If a month-to-month lease you could immediately give a termination notice (30-days-notice in most states) and you would likely find that the tenant would prefer to cancel the lease rather than again move within a month. Whatever the length of the lease, you could still inform them that you will not be renewing the lease in hope that the tenant would agree to cancel.
* * * * * *
Question 3
I own a rental home for which the tenant is about half-way through a one year lease. My sale of the property to an investor is scheduled to close escrow in 2 weeks. A few days ago I notified the tenant of the pending sale, informing her of the name of the buyer and the address where he wishes future rent checks mailed.
Today I received a “Notice to Terminate Lease in 30 days” in the mail which included a note stating that she is terminating her lease because the rental agreement does not address a transfer of ownership and therefore she has the right to break the lease. I passed this information on to the buyer and he says that he will need an adjustment in sale price because of the fact that there will be an unexpected vacancy.
What are my options?
Answer 3
You actually need no options. Change of ownership does not affect a lease agreement in any way unless stated otherwise in the document. The tenant cannot use the sale as an excuse to break the lease or to avoid adhering to all terms of the lease agreement. You should immediately inform her of this fact and warn her that breaking the lease may result in significant financial cost to her in addition to the expense of moving.
* * * * * *