When rental property becomes uninhabitable and the tenant no longer has full use and possession of a rental property, that tenant can claim Constructive Eviction to relieve the obligation to pay rent to the landlord. The tenant must serve the landlord with a written notice of the construction eviction, and provide the landlord with a reasonable period of time to correct the situation. If the defects are not corrected within that reasonable period of time, the tenant then may be able to leave the property without being responsible for payment of rent otherwise due under the lease. In most cases, the tenant must physically move out of the property, and then sue for damages, etc.

There are some additional questions to ask commercial property tenants, and some additional information to request.

Questions to Ask

Who is the actual tenant, what is the business, and who will be guaranteeing payment on the lease? In other words, is there an individual who will guarantee payment, or will it be the legal business entity? Who are the customers of this business? If this is a new business, you might want to see a copy of the business plan to see what history there is, ownership and management resumes, and operating budget (where is the rent coming from?). If this is an established business, you should request some financial information to show income for the last few years. And if the lease is guaranteed by an individual, ask for evidence of their financial ability to pay as well.

Professional Assistance

Another great way to manage your properties is with the assistance of a good background screening service that can provide background and financial information on your potential tenants.

Once you have attracted renters to your property, your job as a landlord is not finished. You have a responsibility to maintain residential rental property, and to repair any problems that occur. Most state laws have at least an implied warranty of habitability. That means that not only will the property be habitable when you rent it, but you must keep it in that condition during the term of the lease. Habitability is usually defined in your local building code, often as the minimum standard for safe, decent, and sanitary housing suitable for the purposes of a residence. Further, it is your responsibility to meet all local building codes in rental property.

Many landlords will require the Move In Checklist as a part of the process, just like signing the lease. But as a tenant, you should be glad because it protects you as well. Taking the time to complete such a checklist carefully will eliminate misunderstandings when you move out. Carefully noting any damage to the property will mean that you won’t be held responsible for it when you leave. It’s also important to note any personal property (furniture, window coverings, and appliances) included in the property, so that you aren’t liable for the disappearance of something that was never there! Be sure that the list is signed by both you and the landlord, and get a copy with all signatures for your file.

Waiting for your tenants to tell you when something is wrong can end up costing you more than if you performed an annual inspection and took care of anything you find at that time. By checking for (and repairing) things such as leaking windows and pipes, you can prevent more costly repairs like dry rot and mold. Tenants are also likely going to care more about how things look, like wanting new paint. Since you must change batteries in smoke alarms (and perhaps fire extinguishers) annually, it’s a great time to do your own inspection at that time. You’ll also have the bonus that tenants will know you are involved with the property, and they are more likely to take greater care with how the treat your property, and whether they can get away with moving in a roommate or a pet.

It’s not only acceptable to charge a fee to those who want to rent your property, there are several reasons why it’s a good idea.

Reasons for Application Fees

Probably the most obvious reason is that is pays for your time and expense to screen applicants. Also, it will reduce the number of unqualified applicants you get. Most will not bother to apply if they know you are going to check credit and they are unlikely to qualify. It will, in addition, let all tenants know that you are serious about the business of managing your rental (even if you have only one).

Guidelines for Fees

Even though you are entitled and should charge the fee, there are some guidelines for doing so. It should be a reasonable fee to cover costs (in many states it is against the law to be profiting from these fees). You must inform the applicants what kind of check you will do and inform them of their rights regarding the information you gather. If you use a screening service, you must inform them of the name of that company.  You should also become familiar with the Fair Credit Reporting Act and other laws affecting credit reporting (a good screening service can provide assistance with that information). The fees themselves may only be charged if you actually have (or will have in a short period of time) a unit available to rent, and if you actually do screen the tenant.

Reduce the possible of late or non-payment of rents and disputed deposits with effective tenant screening. Visit E-Renter USA for tenant screening and background check services.

When you are making decisions about which tenant to accept into your property, you will of course want to phone landlords for references. Be sure not to check with only the current landlord, however. If this tenant has been a problem, the current landlord may give them a glowing recommendation just to move them out of their building and into yours! Be sure to check previous landlords if possible. You may get a very different story about what kind of tenant they are.

If you use a background or credit check as part of your tenant screening process (and you should!), you also need to supply those tenants who do not qualify to rent your property with a letter declining their application. That letter needs to let them know that you obtained information from a Consumer Reporting Agency (and list the name, address, and telephone of that agency). It also needs to advise them that they have a right to request a copy of their consumer report, free of charge, from that agency within 60 days of the date of the letter. They further need to be notified they have the right to dispute the accuracy or completeness of any item on their report.

You are probably expecting to be able to cover your payments for the property, and perhaps have enough left over to provide some income. Be sure you have considered all your expenses before you make your final decision. Each property may require a different mortgage payment, as well as have a different rental rate you can get.

Additional Costs to Consider

However, that isn’t the only consideration. It’s also important to know the rest of the expenses that will be involved with each property you are considering. In addition to mortgage payments, you’ll have taxes and insurance which can be quite different for each property. There’s also routine maintenance, which for some properties might include landscaping, or be more costly because of the age or condition of the property. Other considerations are the likely length of time a property would remain vacant between renters, which depends on location, type of property, and other factors. Of course, you should also budget for unexpected emergencies for all properties.

Fair Housing Laws

In addition to these financial considerations, be sure you become familiar with laws regarding Fair Housing, and with the best practices for attracting and keeping good tenants, and what to do if you should have to evict. Once you have all the facts, you can make an informed decision. An experienced background screening company can also assist you with compliance with all credit reporting laws when you screen your tenants. For information visit E-Renter USA.

If a problem does arise, don’t jump too quickly to calling your attorney. Talk with your tenant, be sure you both understand the problem and propose a solution. Be willing to compromise a little; it can be far cheaper than hiring an attorney!