“Property Manager’s Obligations During A Lease Term” written by Mike Marko
If you think that what a property manager does is to sit and collect dues, then you’ve probably got it wrong…
Dealing with tenants, collecting payments, monitoring the rental place isn’t just what a good property manager does in a lease term. It also includes crafting a solid ground rule in the place.
One of the most valuable things a property manager is obliged to do to make sure that they get the best tenants. Also, to save themselves from having troubles and future troubles.
That’s why today, it’s best that you know some of the obligation a property manager must do during a lease term. This is to make sure that you will get the job right done and right through.
5 Property Manager Must-Do’s during a Lease Term
Crafting a solid ground rule, or doing your best duty is a powerful move to make yourself a better property manager. That will include giving tenants the best service, before they stay, during their stay and after their stay.
With that said, here are top 5 property manager must-do’s during a lease term.
1. Using the Premises Properly
As a property manager, your number one obligation is to make sure that tenants know how they can use the property. It must be clear to them that property can only be used for residential purposes.
In the lease term, state that it must only be used by those names listed on the lease agreement. Meaning, their visitors and even family members that aren’t on the list can not stay or reside in the property.
Including this on your lease prevents someone from running other business on your premises. It also restricts them from doing or using the property beyond what’s inside the lease term.
2. Subletting the Rental Property
Subletting takes place when an existing tenant leases all part of their premises to a new tenant. Most property managers allow subletting but still, they need to abide by the laws of the rental property— both the original tenant and the new sub-tenant.
As a property manager, you should include a tenant’s subletting of their unit on a longer-term basis. Include in your lease that tenants can only sub-let their premises with your permission.
Basically, if they do this in secrecy you can freely let them out of the property, or take them by the laws.
3. Requesting a Lease Renewal
Renters do appreciate predictability. Basically, they don’t want to play guessing games whether you’re going to increase the rent on year to year basis. Which is why you need to demand your lease for a renewal upfront in the original lease agreement.
However, stating this may include an automatic rent increase after the first year by a certain percentage. Ideally, a 2% to 5% is the standard.
4. Including a Severability Clause
This is one of the most important clauses in a lease. In fact, it’s least of the things that you shouldn’t forget to include.
This clause states that anything that’s found to be illegal, the rest of the contract is still legally binding.
A perfect example would be— Stating in your lease that security deposits will be returned within 60 days of the end of the lease term.
5. Adding a Joint and Several Liability
“Several liability” is often associated with “severability;”. But these are totally different from each other.
Joint and several liability mean that each party to the lease is jointly and individually responsible for fulfilling the lease and terms. This comes very important for those who have multiple tenants residing in one property.
For multiple tenants, state on your lease term that if one tenant defaults on the lease. This provision conditions that the others are responsible for fulfilling all obligations.
An example scenario of this is— three roommates are on the lease with a monthly rent of $2400 monthly, in which three tenants are to split equally into $800 monthly. But if one resident stops paying for the rent, then the other two still have to pay for it in half, which is $1200 in order to prevent the group from being default in the lease.
This is a good way to hold all tenants accountable for paying in the event of one person pulling off his rent or stay.
Final Thoughts on Property Manager’s Obligations During a Lease Term
That’s it for today’s blog post on the property manager’s obligations during a lease term. There’s no denying how being a property manager is one tough task to do. But knowing and understanding your obligations helps you better become a good version of a manager.
Remember that some of the obligations you need to work on are:
- Making sure to remind tenants of their usage on the property.
- Giving certain terms on subletting.
- Demanding for a lease renewal. (can be yearly or every 6 months)
- Not forgetting to include a severability clause.
- Lastly, adding a joint and Several Liability.
Doing all of these obligations should guide you to becoming the best property manager you can ever be.
For more information on obligations during a lease term, just leave it down on the comment section.
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