When it comes to owning and managing residential rental properties, landlords must tread carefully. Tenants enjoy many protections under state landlord/tenant laws and local ordinances, and landlords who fail to comply strictly with their statutory and regulatory obligations risk exposure to hefty fines or costly litigation.

As discussed in Success as a Landlord – Recordkeeping, accurate and complete records help an owner prevent small misunderstandings with tenants and government authorities from becoming full-blown disputes and buttress the owner’s position when conflicts do arise. For these reasons, landlords will find it beneficial to commit to writing their transactions with tenants and to keep these writings in up-to-date files.

Leases, Landlord Rules, and Tenant Files

Landlords should have applications for completion by those who are interested in renting units from them. Once the landlord selects a tenant, a written lease should be provided for signature by both parties. The lease sets out the terms and conditions of the rental and is the basis for any proceedings against the tenant, should the need arise.

To promote the cleanliness and safety of their rental properties, landlords can establish reasonable rules for their tenants to follow. These rules can cover matters such as when trash and recyclables must be placed on the curb for pick up, what time loud music must be turned down, and the need to keep the front door locked at all times. The rules can be incorporated in the written lease or copies of them can be given to the tenants listed on the leases.

Looking up the history of a rental unit or of a past or present tenant is also made easy if the landlord keeps a file on each unit and each tenant. This type of information comes in handy in legal proceedings against a tenant or when a landlord must deal with government authorities with regard to a tenant or the condition of a unit.

Rent Collection, Tenant Notices, and Vacating Tenants

These are some other ways in which accurate records help a landlord:

Rent collection. In a dispute about rent, the person with the better records is usually victorious. Therefore, a smart landlord keeps a record of when each tenant paid rent and whether the payment was late or on time.

Notices to Tenants. When a tenant is in breach of the lease, the landlord should be prepared with a system that involves warning the tenant in writing (but not e-mail, which may not satisfy a court) of the breach and of the amount of time that the tenant has to correct the situation. If the tenant fails to meet that deadline, it is a good idea to send out a second notice marked as such. If the tenant still fails to comply, the landlord can initiate a court action against the tenant (depending on state laws).

Confirming unit condition. Before a tenant moves out, the landlord must arrange for a final walk-through of the unit. This gives the landlord and the tenant the opportunity to compare the current condition of the unit with photographs, a checklist, or other method used to document the condition of the unit when the tenancy began. This can help support the landlord’s demand for all or a portion of the security deposit to cover the expense of repairs.

Enjoying the Role of Landlord

Having a system in place for handling questions or problems that arise is a fundamental way in which landlords develop confidence in their ability to manage their properties. If necessary, landlords can seek guidance from their attorneys. Landlord associations are also good sources for up-to-date forms, education, and connecting with those more experienced in managing rentals and tenants.

With fewer conflicts and increased confidence in the ability to handle whatever happens, investors in residential rental property will have less anxiety and may even come to enjoy the role of landlord.