So we bought a duplex that has tenants already living in with a lease agreement until July. They were friends of the old owners so I do not think there were a lot of the normal procedures done when they signed the lease. The lease is current and legal (done by an attorney from our state's Realtor association). There was not however, a move-in/move-out check list. So far they have been great tenants. As we get closer to signing a new lease I am getting nervous that if they decide to not renew it is going to be difficult to fault them for any damages to the property without that checklist. My concern is they have two black labs and I know that the carpet is going to need to be professionally cleaned or replaced (most likely the latter). Hopefully someone on here has similar experiences with this.
So my question is if they do not renew, how would I go about assessing damage and then putting them at fault and using their security deposit?
Or if they do renew, can you do a checklist or build in other things to the lease that will put them at fault (i.e. the carpet must be professionally cleaned and if deemed unusable their security deposit will be responsible for a certain % of replacement costs)
If you just purchased the property, did you not already use the current condition of the units in your negotiates with the seller? That would seem the correct time for you to get compensation for existing issues. If you did, then charging the tenant would be double dipping in my opinion and not ethical. If you didn't, carpet is cheap so it's not likely your most expensive lesson of the year.
That comment and $2.00 should get you a good cup of coffee.
We bought an 8-plex several years back and there were no move-in check lists and in some cases no security deposits or inadequate security deposits. We did an inspection and filled out a "property condition report" at that time with the help of each tenant. We asked the tenants about the condition at move-in and surprisingly most were open and honest about it. We then made an additional note as to what they told us and added it to the report. Tenant signed the report. That is what we used to base our return/keeping of security deposits or charges for damages at move-out. We do periodic inspections and charge for damages as soon as we discover them, so it reduces issues arising at move-out.
Marcia Maynard, Fischer Properties | Podcast Guest on Show #83
Just explain to the tenants you need to update the move in move out list as none were provieed to you. If they are honest great, if not you will need to eat repairs.
There's bound to be some grey areas when you inherit tenants. Even with a move-in checklist, I'd say. For instance: "Condition of carpet: good". Well, one person's "good" is another person's "not-so-good"... And you have no way of knowing if a default in the property WAS actually their fault, or the fault of the previous owner.
I would consider having a little more expense to spruce up the units after inherited tenants go just a cost of doing business
I think an inspection, after closing, with the tenants signing off on the condition is the best you can do to protect yourself. Take pictures, if you can.
Jean Bolger, 33 Zen Lane | http://www.solidrealestateadvice.com
Jean is correct. Using words such as "good" or "fair" is a bad idea. It is much better to have something such as a percentage. Photos, and good ones taken with a real camera, are also very helpful. $125 will get an excellent real camera, such as a Samsung CL-80.
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