PropertyManagementMaven: Tenants RARELY understand that actually occupying the property is NOT a part of the lease terms!!

Tenants RARELY understand that actually occupying the property is NOT a part of the lease terms!!

Interestingly enough, actually occupying a residential rental property is usually not one of the lease requirements.  To paraphrase The Eagles...."They can check-out any time they want, but they can never leave" (their lease until the termination)

This is usually the RUDE AWAKENING when residents purchase their "dream home" during an unexpired lease term....YES, they can leave their rented property and move into their new home, and YES, they need to keep the utilities on in their name, maintain the yard as the lease requires, maintain their renter's insurance and periodically check the property for leaks, etc.

Likewise, when they re-locate during the term of their lease, they are still required to maintain the property, utilities and are responsible for anything that happens at the property while no one is living there so renter's insurance is a MUST.

The practical procedure is for the residents to keep the utilities on and have their bills/mail forwarded to them, to maintain their renter's insurance, and hire a professional yard service to maintain the yard.....OR, they can hire the PROPERTY MANAGER who is attempting to re-rent the property on their behalf to maintain the yard, make sure the grass is cut AND pay the bills when they are presented.  A little more time consuming for the property manager so there should be compensation.  This service is over and above the service paid for by the owner's mgmt fee and property managers should have a % fee on these bills in their lease OR charge by the hour on a quarter hour basis.  I charge $160 per hour and bill in 15 min increments.  Once this is explained to residents, they realize that their relocation is more costly than just paying their rent while the property is vacant.

 Wallace S. Gibson, CPM * GIBSON MANAGEMENT GROUP, Ltd.

LandlordWhisperer

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Comment balloon 4 commentsWallace S. Gibson, CPM • June 29 2009 02:58PM

Comments

Wallace, that is a good way of explaining it. At lease signing I remind them several times that a lease is a legal contract. We cannot hold them prisoner, of course. Nor do we expect them to miss on on a super home purchase opportunity.I remind them that LandLord judgements do not help their reputation or credit rating.

Some owners will agree to a two month rent kill fee.

Posted by M. Suzi Woods (Gravenstuk), Suzi Woods, Prior Independent REBroker in MS (NOW Sharing the life and spice of the GC one day at a time) over 8 years ago

Suzi - when residents want to buy a home mid-lease, I suggest they have their realtor find replacement residents through the end of their lease....this usually works.

Posted by Wallace S. Gibson, CPM, LandlordWhisperer (Gibson Management Group, Ltd.) over 8 years ago

Another great blog, Wallace!  I haven't yet run into this situation, but it seems like you have your bases covered with building in the additional fees on the lease.  We don't currently have anything like this in our lease (which is attorney-prepared, by the way), so I'll have to inquire about this.

Posted by Eric Boyd, FL Licensed Real Estate Broker / Property Manager (Step One Realty, LLC, 904-469-6335) about 8 years ago

Eric * don't assume all property management income is mgmt and leasing fees.  I get $400 to re-write a lease if tenants find their own replacement tenant, 20% service charge on monies taken from security deposits for cleaning and repairs; 18% interest on judgements, $100 notice fee for pay or quit PER adult applicant AND $250 fee to file a SATISFACTION of JUDGEMENT if/when a judgement debtor pays off a judgement.....

Posted by Wallace S. Gibson, CPM, LandlordWhisperer (Gibson Management Group, Ltd.) about 8 years ago

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