How to Properly Communicate Your Lease To Tenants
Updated August 11th, 2020
One of the most significant failings of small mom-and-pop landlords and sometimes larger property management companies is communication.
Communication is vital to the success of your relationship with a tenant. Many of the issues that arise between tenant and landlord could have been resolved with proper communication.
Communication is vital to the landlord because often, they have more to lose than the tenant. After all, a landlord is giving a tenant control of significant investment for very little skin in the game.
I have found that the best time to set up your communication channel is when you sign the lease with your tenant.
During this time, your tenant is open to hearing what you have to say, and it's usually one of the few times you and your tenant meet, and both parties are amicable and listening. The next time you meet with your tenant, you could be upset because you have to fix a toilet or other frustrating situations.
As a property manager, I have tried many different ways to communicate with my tenants properly. I have found that an honest conversation at the beginning of our leasing agreement is the best way to open communication lines, explain my expectations, and respond to my tenant's concerns.
Here is a quick rundown of how I go through an initial lease signing with my tenant.
Often this is a 45 minute to a 1-hour conversation where we discuss every aspect of the lease. If you don't do this, you can expect to have more conversations throughout the leasing term than probably necessary.
1. I ask that all adult parties living in the property attend the meeting.
I want every adult to understand the rules and what the expectations are. Often, husbands will leave this type of thing to their wife or vice versa, and the one that I meet with will not convey the information that I give them properly, and that will be the beginning of a conflict.
2. I go over my entire lease and explain the legal jargon in easy to understand everyday lingo.
I do this because 99% of the tenants will not read their lease until they have an issue. However, by going over the lease with them, they can bring up any questions when explaining a specific part. This process cuts down on the tenant trying to figure things out later or me having to explain it over the phone at an inconvenient time.
3. I have addendums to my lease which explain specific issues that commonly come up during a lease term.
I found that certain things come up repeatedly when renting a property. These situations need to be explicitly addressed in the lease as an addendum. An addendum is simply a single page that outlines a specific rule or common issue and asks the tenant to agree to your proposed remedy beforehand for that specific issue.
This works well to explain things like what happens when you miss a payment, what fees you will be charged, and when we will file an eviction. You would be amazed at how often this addendum will resolve a problem before getting a phone call to your office.
4. Finally, I give the tenant a chance to get out.
My last interaction with the tenant before we sign the lease documents is to ask them if they are sure they want to get into this property after I've explained all the rules. I honestly say to them that they know better than I do if we will have a problematic or positive relationship. If they feel that they would not be able to follow these rules or you do not want to follow these rules, then it saves both of us a lot of headaches and frustration by canceling this agreement now.
This may not seem like it is necessary, but it lets the tenant know that you are serious about having positive relationships and are willing to let this deal go because of it. So far, I have only had one tenant take me up on that offer, but I figure that one tenant probably did both of us a favor.
Over my career, I have seen this little conversation lead to much better communication between my tenants and I. Better communication leads to less conflict and a better understanding of what both parties expect from each other. What do you do 2 improve the communication between you and your tenants? Leave a comment below; I would love to hear your ideas and what has worked in the past for you.
About the Author: Art Veal has had a 20-year career in real estate investing. He is a serial entrepreneur and founder of alternative tenant screening service LeaseDefend.com. He has invested in multiple types of real estate, including residential, commercial, and private notes.
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