Landlords must organize their rental documents. Having a good record-keeping system is essential since you want to avoid the stress of losing important rental documents. This post will cover the important records landlords need to have records of!
Reasons Landlord Documents Are Important
Here are some reasons why you need to safe keep critical rental document files:
It Makes the Parties to the Contract Accountable
If a copy of a lease exists, it can create accountability for the landlord and tenant. It reduces conflicts since things are outlined in black and white in written form. All the existing terms and conditions of the rental agreement are expected to be specifically and clearly discussed in the contract.
Should the landlord or renter need to clarify a property policy, they can quickly refer to the lease agreement. Therefore, having a backup of the agreement on file is vital.
It Can Be Legally Accepted as Supporting Evidence
The court will ask for signed documents when a hearing is conducted. The lease is acceptable proof that an agreement existed between the landlord and tenant. If a resident files a case against you, you can bring the lease and other rental documents to the lawyers for review. They can check the legitimacy of the signatures and go over the terms and conditions.
Accounting Becomes Hassle-Free
Available rental documents let you keep track of your business expenses. They make it easier to check the due dates and when the rent payments were actually made. You also want to track the total security deposit you’re holding especially if it’s in an interest-bearing account. Finally, you should also have copies of the property repair invoices.
Having records of your in and out-going finances helps to reduce overwhelm when tax season arrives. You would know which tax benefits can be deducted given that you have copies of the receipts of all operational expenses. When the tenancy ends, you can also calculate how much of the security deposit is due to be refunded since you have copies of all the repair invoices.
It Creates a Streamlined System
Landlords have a great number of things to do on any given day. If their rental records aren’t organized, it can lead to a waste of time looking for vital receipts and other critical rental paperwork. To ensure your rental system is efficient, you need to keep your rental documents in perfect order.
Critical Rental Documents Landlords Must Keep
It helps landlords to have an organized system when storing their rental documents. Initially, you may feel that the backlogs are exhausting to deal with but later on, you’ll be thankful for getting all your rental paperwork organized.
If rental records are stored safely, a lot of problems can be avoided. Below are vital rental documents landlords should properly keep:
Leases or rental agreements must be kept safe. With a physical and digital copy available, you won’t need to stress if renters lose theirs. Even if a resident has moved out of your property, it’s smart to continue to hold onto a digital lease copy.
Over the length of the tenancy, original conditions can be changed. That’s why amendments must be safely kept and attached to the original lease contract. It makes it easier to refer to in case of confusion. Make it a point to have a digital record of the amendments so you can check them quickly and remain updated with new clauses, terms, and conditions.
Landlords need to keep the property inspection report for proof during security deposit refunds or disputes. During a walk-through inspection, documentation is collected and this must also be safely stored for future reference.
For example, if new property damage outside wear and tear appears, you can deduct the repair costs from the tenant’s security deposit. But if you don’t have a copy of the documents, it can lead to potential disputes. Having access to reports keeps you informed about the state of the property through the different tenancy phases.
Landlords are required to provide their renters with certain disclosures. It’s best to keep records of the following disclosures upon issuing them to tenants:
- Security Deposit Receipt – This document is important since it keeps the renters informed about where their security deposit funds are stored and if it’s kept in an interest-bearing account. Some states don’t require landlords to issue this but this is an excellent practice to do.
- Lead Disclosure Form – Some properties built before 1978 show potential lead paint risk. This can lead to health issues so property owners are required to give the tenants a lead disclosure form.
Documents From Tenants
You’ll also need to keep records of things provided to you by tenants. Typically, landlords ask for the following documents from the rental candidates:
- Rental application
- Authorized consent for background checking
- Reference letter
- Proof of renter’s insurance (optional)
- Pay stubs or W-2s
What To Do If Rental Paperwork is Lost
It’s not unlikely for lease agreements to get misplaced. If this happens, landlords can easily provide the renters with a new lease copy for a reference guide to the property policies and rental procedures.
But what if both the landlord and tenant lose their copies? It’s recommended to create a new lease when this situation occurs. Having a copy of all the details of the agreement is a necessity to know what terms are covered. It also makes enforcement of the policies easier.
In this instance, working with a trusted property management company or local legal expert is recommended to ensure that landlord-tenant and leasing laws and followed.
Keeping detailed records of rental documents helps reduce stress and instance of conflict. But it can take time to develop a system if you are a self-managing landlord.
If you’re seeking a trusted property manager to take care of organizing your rental paperwork and keeping your property in outstanding condition, contact Realty Management Associates, Inc. today!