3 tips for a new landlord

With renting becoming a more attractive option for the mobile generation (and a sometimes necessary one for the owner who can't sell a property), it's important to get the landlord / tenant relationship right. Here are three tips for a new landlord.

1. Don't allow the tenant to perform repairs for reduced rent rate. For several reasons, this is always a bad idea. First, your tenant may not have the necessary skills required to perform a repair. An incorrectly performed repair could put the tenant, the tenant's guest, or yourself at risk. Second, the tenant may choose to avoid a repair. For example, they may choose to put a bucket underneath a slowly leaking pipe rather than deal with the expense of fixing the leak. Third, you may find yourself paying for repairs you did not know about or think were necessary. Fourth, there may be some repairs that the tenant simply cannot afford or may not be responsible for (if the HVAC unit dies or the water heater breaks). Finally, a landlord is by law responsible for some repairs at the premises, period. Trying to contract around this duty is a dangerous game.

Instead, require your tenants to notify you of repair requests in writing and send a qualified professional out to handle any repairs needed. This keeps record of any issue that come up and gives you piece of mind that the job is being performed correctly. Both you and your tenant will ultimately be more satisfied with this option.

2. Always run (at least) a criminal background check. Be aware of who you rent to. If the applicant is a sex offender or has been convicted of violent crimes, you may think twice before handing them the keys. This isn't just for your protection - it's for the protection of those in the surrounding area. Running a background check also helps protect you from potential liability.

Running a credit check can be helpful as well. Make sure you disclose to your applicant that you will be running a credit check on them if you choose to do so. Bad credit may be enough of a reason to turn down an applicant. However, the risk of taking on a tenant with bad credit can be mitigated by requesting a larger security deposit or requesting proof of income.

Finally, some services offer a check on whether your applicant was previously involved in a summary ejectment action. Since this service is relatively new, the information gained should supplement but not replace the other checks.

3. Use a standard NC Lease Agreement. North Carolina has a standard form lease agreement that complies with North Carolina law. Other lease agreements may still be valid, but this particular agreement (called a "Residential Rental Contract") was reviewed by both the Board of Realtors and Board of Law. If you're not sure whether you've got the standard agreement, ask an attorney.

The dangers of using a non-standard lease agreement include (but are not limited to):

  • Failing to address a key provision in the lease agreement. For example, you may forget to include the term of the lease, when rent is due, what the rate of rent is, etc.

  • Including an illegal provision in the lease. North Carolina sets a maximum late fee charge. If your lease agreement exceeds this charge, the provision will not be enforcable. Other examples of illegal provisions include discriminatory provisions or provisions breaching the tenants right to quiet enjoyment.

  • Not including any provisions concerning default of the lease. If you believe your tenant has broken the lease it's much easier to have a contract outlining what does and does not constitute grounds for default.

  • Failure to include every individual who will be living at the premises.

There are of course many more good practices for a landlord to follow. These are just a few to help get you started.

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