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Setting Rules for Your Tenants

Savvy landlords set and enforce clear rules for their tenants, but tenant rules and policies are not a “one size fits all” proposition. What do you need to consider when establishing rules and regulations for your tenants?

By Jacquelyn Lynn

Whether you own one rental property or hundreds, whether they are single-family homes or multi-unit buildings, your rental agreement should include a clear list of the rules and regulations by which you expect your tenants to abide, as well as the consequences for failure to do so. The rules need to be reasonable, appropriate for the property (for example, you don't need rules for pools or playgrounds if you don't have them), and specific enough to protect your interests.

Whether you own one rental property or hundreds, whether they are single-family homes or multi-unit buildings, your rental agreement should include a clear list of the rules and regulations by which you expect your tenants to abide, as well as the consequences for failure to do so. The rules need to be reasonable, appropriate for the property (for example, you don't need rules for pools or playgrounds if you don't have them), and specific enough to protect your interests.

Here are the general areas your rules and regulations should cover and some suggested policies:

• Maintenance. Tenants are responsible for letting you know on a timely basis when they have a maintenance need. Encourage common sense. A drippy faucet can wait until normal business hours, but a pipe bursting in the middle of the night requires immediate action. Typically, apartment dwellers do not perform any of their own maintenance; however, it's not uncommon for single-family home renters to handle small maintenance items themselves. Be specific about what you expect from your tenants in this area, including what expenses you will reimburse.

• Lawn care. If you have a multi-unit building, the landlord typically takes care of landscaping. But for single-family homes and some townhouse units, tenants may be responsible for lawn care. Your tenants need to know what is required of them in this area.

• Vehicles. For multi-unit buildings, you need parking policies. You may want to designate specific spaces for each tenant and spaces for visitors. A good rule of thumb is to allot one reserved space per bedroom. Stipulate what types of vehicles are allowed (typically cars, light trucks, and motorcycles) and what types are not allowed (such as motor homes, heavy-duty trucks, other commercial vehicles, or any unregistered vehicle such as scooters or ATVs).

Restrict what sort of maintenance can be performed on vehicles while they are parked on your premises. For example, you may allow interior cleaning; adding of fluids such as oil, antifreeze, and windshield washer fluid; tire changing; and replacement of small parts such as light bulbs and fuses. You may restrict exterior washing to a designated area or not allow it at all. Prohibit maintenance that could result in environmental or property damage, such as oil changes.

For single-family properties, you may want to limit the number of cars that can be regularly parked overnight, and restrict parking to concrete surfaces only, thus protecting the lawn. If the property is in a city or municipality, your rules should indicate that the tenant must comply with any local laws regarding parking.

• Pets. Clearly state whether or not you will allow pets, and if so, the kinds that are acceptable. In addition to dogs and cats, remember to address small caged animals (hamsters, gerbils, other rodents, reptiles, and birds), fish, and non-traditional pets and livestock. Set policies for noise, cleaning up pet waste, and flea and tick control.

• Guests. State that tenants are responsible for the conduct of their guests, and if any guest violates your rules, the tenant will be held responsible and the guest may be banned from the property.

• Overnight visitors. To prevent having unauthorized residents permanently move in with your screened tenants, establish a policy that anyone staying overnight in the unit for more than a designated time (perhaps a maximum of one week) must be added to the lease, subject to your standard screening process.

• Common areas. Set rules for use of common areas, such as recreational facilities, laundry rooms, parking lots, storage units, and service areas. Your rules should include hours of accessibility, permitted and prohibited activities, and clean-up requirements. Consider whether you will allow common areas to be used for private functions that would prevent other residents from using the facility at that time. For example, will you allow a playground to be reserved exclusively for a child's party, or will you require that during the party other residents still be allowed to use the playground?

• Locks and keys. Do not permit the installation of additional locks on residential units. Do not allow tenants to duplicate keys. To safeguard against tenants duplicating keys use key blanks marked "do not duplicate." Tenants should come to you for additional keys. Charging a fee to cover the cost of lost keys is reasonable.

• General conduct. Ban any threatening or criminal activity, public intoxication, and any other conduct that would put other tenants or the property at risk. Set reasonable restrictions on noise, such as forbidding noise above a normal conversational level after 9:00 PM and before 8:00 AM.

• Fire safety. Prohibit tampering with smoke detectors, and do not allow tenants to use non-electric space heaters or any device that requires an open flame, other than a gas stove you have installed or candles in safe holders. Tenants should not use cooking stoves as room heaters.

• Trash collection. Be clear on when and how household refuse is to be disposed of and whether or not you will offer recycling collection. If you have a dumpster, the company that provides it will set policies for its use. If tenants are responsible for getting their trash to the curb, be clear on when and how this must be done. Some cities require the use of specific containers, such as particular types of cans or bags.

In addition to setting rules, you should also establish penalties for violating those rules, such as fees, fines, and possibly eviction. Be reasonable—an after-hours use of the laundry room by an otherwise exemplary tenant would merit a simple reminder of the policy, but criminal activity could result in immediate eviction.

After you develop an appropriate set of rules, have them reviewed by a real estate attorney. Provide all prospective tenants with a copy of the rules with your rental application. Have them initial each page of the rules and sign an acknowledgement that they have received and read the rules and agree to abide by them.

Clear, reasonable rules that are consistently and uniformly enforced will increase the appeal of your properties, reduce your tenant turnover, and make your life as a landlord much easier.

Jacquelyn Lynn (www.jacquelynlynn.com) is a business writer, speaker, and author of "The Entrepreneur's Almanac".

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