Leasing FAQs 1. The big one: Fair Housing Yep, this one is huge. Not just state or county law here, FEDERAL. So what does it mean? You are required to treat everyone the same. You have the right, by federal law, to discriminate (and we use the word as lightly as possible) by saying no to roommates, pets and smokers without violating any federal laws. Federal law allows you to limit the number of people who are of non-familial status who reside in your property- so you can say yes to 2 roommates but no to 4 at your discretion. You cannot say no to kids but you can limit the number of residents in your property as dictated by county law. Typically this is no more than 2 children or people per bedroom. Some counties also restrict opposite-gender children from residing in the same bedroom once they are past a certain age. It is vitally important if you are going to restrict the number of people who reside in your property that you know exactly what the county or governing laws of your area are. You have the right to evaluate pets on an individual basis, meaning you can say yes to the Chihuahua and no to the bull mastiff. Your association may also have regulations about number, size and type or breed of pet. You can ask for an additional pet deposit which can be totally refundable, non-refundable or partially refundable at your discretion and must be clearly defined in the lease. You may not say no to service animals in keeping with the Americans with Disabilities Act.
2. What about screening tenants? HN maintains a relationship with a 3rd party firm who screens our tenant applicants. We run a full credit and criminal history on all applicants and verify income/employment and past rental or mortgage history. In the case of a relocating international who does not have American credit to verify, a letter of employment/salary from their company will be provided. A copy of the credit report is given to the owner and a copy is kept in our locked leasing department files for safety and as dictated by the reporting company. Whether you accept or decline a tenant applicant, you should shred their confidential information once the transaction is complete.
3. What about HOA/Condo association restrictions on leasing? In the current real estate market, many, many people are electing to lease their property until the market improves. If leasing is an option for you, fantastic. However, please consult with your association to determine if you have the right to rent. A letter of permission (leasing permit) must be attached to any listing agreement and lease as verification. Your financial liability could be enormous if you try and slip a tenant in. Trust us, the neighbors will know and be more than happy to rat you out if you have misbehaved. Harry Norman, Realtors requires that a copy of the leasing permit or written authorization be attached to both the lease agreement and the lease.
4. What about mortgage payments? NEVER plan for this month’s rent to cover this month’s mortgage payment. You will make yourself crazy and endanger your standing with the mortgage holder if the rent is late, lost in the mail or doesn’t get paid. If you plan to use your rent to cover your mortgage payment, plan to use last month’s rent to cover this month’s mortgage.
5. What about the utilities? Unless otherwise included in the association fee or paid for by the landlord, the tenant pays all the utilities and is required to have all tenant-paid utilities in their name on the day the lease begins.
6. What about the association dues? The owner is required to pay association dues.
7. What about the security deposit? The security deposit is designed to make a landlord or owner whole at the end of the lease in the event of any damages or default on the part of the tenant. Although not law, it is a common practice in the Atlanta area for the security deposit to equal one month’s rent. Our rental market simply does not support larger deposits unless there are extremely unusual circumstances with either the tenant or the property. Georgia law requires that the security deposit be collected after the completion of the move-in inspection, which is typically performed on the day the lease begins. Under law, the security deposit must be disbursed within 30 days of the expiration of the lease and during those 30 days, the landlord has strict deadlines about his responsibilities to the deposit and the tenant.
8. What about repairs? Georgia law requires the Owner/Landlord keep everything in good and working order, although sometimes exceptions are made for items that could be defined as not necessary for a tenant’s regular use and enjoyment of a property -- a hot tub, for example. Under this scenario, a tenant has the right to use the hot tub during the lease, but the landlord is not obligated to make repairs or replace it if it breaks, this must be outlined by special stipulation in the lease. This is totally different from items like the stove or the HVAC. These items must be delivered and maintained in good working order. Could you do without yours? Repairs must also be made in a timely fashion, which means as quickly as possible given the availability of the appropriate repair professional. Response to any repair should be immediate -- letting your tenant know their request has been received and that you are in the process of scheduling the repair maintains goodwill between you and your tenant. Tenants should be reminded that they are to provide access to the property for either you or the repair person. Under no circumstances should a tenant be responsible for any repairs. If you allow this, you have no recourse if the repair is made badly or causes more damage to the property. Tenants should also not be allowed to make repairs and then deduct that expense from the rent. If you do not want to have to deal with calls from the tenant, you may want to consider property management.
9. What about an emergency? What constitutes an “emergency” is a very gray area between landlords and tenants. If it is 110 degrees outside and the only AC is not working, you have an emergency. If it is below 55 ° and the only furnace is not working, you have an emergency. No water, no power, no gas = emergency. If there is a broken commode but 2 others work - not an emergency. Also remember that anything that could damage your property (or your tenant) is an emergency.
10. What about the yard and the pool? Yard care and pool maintenance are often negotiable items in a lease. If you have a particular standard of maintenance for your yard or pool, include upkeep in the rent and remove any tenant responsibility. If you do not want to pay for yard and/or pool upkeep, be very specific about the tenants’ responsibility to see to them and remember that some things, like drought and water restrictions, are beyond the control of the tenant and cannot be blamed on the tenant at the end of the lease term.
11. What about insurance? You will be required to change your insurance to insure the structure of your property. Please consult with you insurance agent as to how this will affect your premiums. Tenants are required to have renter’s insurance to insure their contents only.
12. What about leaving furniture or belongings? Please remember that even the very best tenant may not treat your belongings with the love and care that you would. Are you prepared for that particular outcome? The very best tenant also may not be interested in housing your belongings, either, which could nix the deal. Finally, your insurance company should be notified to determine appropriate coverage for items left behind.
13. What about those move-in/move-out inspections? Huh? We perform a move-in inspection on the property the day the lease begins. At that time, we collect the security deposit and deliver the keys to the tenant. The “movein” is a 5-page instrument documenting the condition of the property the day it is delivered to the tenant and becomes the tenant’s responsibility. You get a copy and the tenant gets a copy. The same report should be used to document the condition of the property when the tenant moves out. The lease is very clear on a landlord’s obligations to the security deposit and the steps towards disbursing it. Mind them carefully.
14. What about notice? Notice has an entire paragraph in the lease. Official notice is in writing. It is not verbal. It is official when it is delivered (in writing) to the persons and addresses defined in the lease. Official notice should be used to a) terminate the lease, b) gain access to the property or, c) notify a tenant of a default, for example. Email can constitute written notice if agreed upon by both parties (real estate is still trying to catch up to the electronic age).
15. What about right of access? You do not have the right to stalk your tenants. Once again, the lease is very clear. You can enter the property during reasonable hours and with reasonable NOTICE or without notice in the event of an emergency.
16. What about early termination? Under the lease, neither the landlord nor the tenant has the right to early termination except in the event of a tenant’s activation for military duty (this one is FEDERAL and you can’t avoid it). Unless it is clearly stipulated in the lease or negotiated during the lease term, both parties are obligated for the entire original term of the lease.
17. What about tenant default and eviction? Oh dear. This is the scariest aspect of being a landlord, your tenant does not pay their rent. Once again, refer to your lease. The steps required of a landlord to document a non-payment or other default and then proceed with dispossessory action (eviction) are clear. Properly document the tenant’s default and if it is not corrected within the time frame allowed, call your lawyer.
18. Property management or no? Here’s what you need to know about property management: you hire the management company to “be” you. You pay them to collect rent, see to repairs, deposit and manage the disbursement of the security deposit, and in the worst case scenario, follow through with dispossessory actions (eviction). The property manager collects a monthly fee for such services (typically a percentage of the monthly rent). This management fee does not include costs incurred on your behalf for such repairs, etc. You should receive a monthly statement from your property manager documenting rents collected, fees charged and other expenses to your property. Will your manager call you every time a repair is needed? No. Remember, you have hired them to “be” you. Most good managers will try to reach a landlord for the big stuff, but remember that in an emergency situation, if you are not reachable on the first call, they must proceed to protect you, the landlord and your property.
Disclaimer: These FAQ’s are for your general information only and will not be applicable to every lease situation. They are also not to be used as the final say so in any leasing question, and do not alleviate you in any way from reading and understanding your lease contract. When in doubt, always refer to your lease. Created by C. Garrett 2008/revised 2013