Having a rental property of your own is considered one of the highly recommended investments nowadays. It refers to a personal or commercial property purchased by an investor or landlord occupied by tenants on a specific rental agreement. This business allows you to achieve long-term financial stability. It is a great source of continuous passive income. It allows you to earn extra money and increase your savings for your future retirement.
All businesses face risks; therefore, all businessmen should be aware of it before starting a venture. As the property owner, it is your responsibility to know the important rules and regulations of renting out your property. You should be knowledgeable about the legal documentation of rental business, rules and regulations of tenancy, and your duties as the landlord. A qualified Frisco landlord attorney can help you understand the process.
Before you start searching for qualified tenants, you need to decide on the payment terms and agreement. You may choose to offer either a monthly payment of rental fees or a long-term lease agreement. If you opt for the monthly rental agreement, it will be renewed automatically from month to month. The monthly rental agreement provides flexibility within a shorter period. In case there will be any amendments to the rental provisions, such as termination of contract or any adjustments in the amount of rent payment, the tenant or the landlord should give at least a notice period of one month before its implementation.
On the other hand, leases usually cover a longer period which is at least one year or above. It promotes stability for both parties involved. Your tenant should sign a residential lease contract that states their voluntary agreement to live and pay the rent during the full period of the lease. At the same time, the landlord should also give an assurance that there will be no changes in rental price within the duration of the lease.
Both options shall be supported by a rent contract that will protect the rights of both the landlord and tenant. The agreement should state the important information of the parties involved, the number of tenants, or whether assignment or subletting will be permitted.
As the landlord, you are responsible to look for trustworthy occupants with stable income and good credit scores. You need to carefully choose individuals who are willing to comply with the rental agreement or rental lease terms and conditions. The tenants should fill out a rental application form containing all the basic information, personal details, credit check, and financial records for reference of the landlord. It is essential to verify the identity of the tenant with the help of the local court or public records. You need to make sure that your chosen tenant does not have any history of eviction and any relevant criminal records. During the selection process, the landlord should keep in mind that there are federal anti-discrimination laws that prohibit an individual to discriminate against a person based on nationality, race, origin, color, religion, sex, disability, familial status, or age.
The landlord and tenant should mutually agree in signing a written rental contract that states the rights and responsibilities of each party. Local and state laws on property rental may vary depending on where you reside, therefore it is advisable to consult a competent Frisco landlord attorney to ensure compliance. One of the duties of the landlord is to provide the tenant rights to have a “livable and habitable” residence. You need to ensure that you have the basic needs and utilities for human occupancy including running water, electricity, furnishings, pest-free accommodation, and secured door locks and windows. The occupant should feel safe and comfortable living in your place. In most jurisdictions, the tenant has the right to withhold the rental payment if these conditions are not met. Also, the landlord may be charged with a fine for failing to cure housing code violations of this nature.
You will be considered liable if the tenant will have any injury or accident due to dangerous and poor conditions of your property. Moreover, one of the tenant rights includes “quiet enjoyment”, meaning the landlord should give the tenant a 24-hour notice period before entering the premises for any repair work or visitation.
Generally, the provisions of your rental or lease agreement should identify the duration and validity of the tenancy period. For both agreements, there should be a mandatory 30 day- grace period before the landlord or the tenant decides to make amendments in the current rental terms including rent increase or to terminate the contract permanently. If the tenant decides to move out permanently and has left the property in good condition without any property damage, the landlord must return the refundable security deposit that he had collected. If not, then the tenant may file a small claims court action against you.
Tenants are expected to follow the tenant laws and obligations of their rental lease agreement. Failure to do so may lead to forced eviction. The most common violations of tenants include damaging of property, failure to pay the rent, engaging in any criminal act, or disturbing other tenants. If a tenant does not want to leave voluntarily, most of the states encourage the landlord to file an eviction lawsuit for law enforcement officers to oversee the eviction process. Even if the landlord wins a monetary judgment against the tenant, there is a possibility that you will need to pursue a collections action at the latter part to receive the award money from the court.
A property owner must be knowledgeable about the landlord and tenant laws. A legal lease or rental agreement serves as a binding contract between the landlord and the tenant. It is important to write all the rules, policies, and responsibilities for living in a rental property as a guide to avoid any misunderstanding and conflict. If you are not familiar with the landlord-tenant laws, do not hesitate to consult with our experienced Frisco landlord lawyers at Girling Law, PLLC. We are ready to help you succeed in your property rental business.