Property owners take on a lot of risk when opening their units to tenants, and one way to protect themselves from potential headaches or damage down the road is to put certain restrictions in place via the lease agreement.
If you find yourself considering potential restrictions to your lease, you are not alone. A question we get quite often from property owners is, “I don’t want my tenant doing “X.” Can I put that in the lease?”
“X” can mean any number of different things owners don’t want their tenants doing. Examples might include putting restrictions on the maximum number of residents per unit, whether or not to allow overnight guests, limits on large gatherings, pets, smoking, noise, or even allowing recreational vehicles to be parked at the property.
The short answer to the question of restrictions is yes. You can typically put those types of items in your lease agreement, but there are a couple considerations you should be aware of before making your final policy determinations.
First, a standard lease is going to include a lot of this language by default.
Smoking is a great example. Our standard lease does not permit smoking at any of the properties we manage, and a lot of newer leases include this language by default.
In addition, most leases are also going to include language related to complying with local regulations and laws. For example, if your rental property is located within a homeowners’ association or a neighborhood that has restrictions on vehicles parked in the driveway, those are all going to be captured by the standard language in the lease. If you have a tenant doing something you don’t like, you can go to your lease and cite the relevant language to them.
Second, while you can put quite a lot of restrictions in your lease agreement, the question you need to ask yourself is what are you going to do when the tenant engages in these behaviors?
Ultimately, unless you are willing to evict the resident over these behaviors, you may have to tolerate some of them to a certain extent.
One strategy for enforcing rules without evicting tenants is to apply fees. This can be a very effective way to dissuade certain types of behavior. For example, if you assign fees such as a $500 fee if the tenant has a large gathering – and you specifically call that fee out in your lease – you can enforce your restrictions without jumping all the way to eviction.
What happens if the tenant doesn’t pay the fee?
Applying fees can be helpful, but what happens if the resident doesn’t pay the fee? Then you might find yourself in a pickle. Are you willing to take them to court and potentially evict them over not paying this fee for something like a one-off large gathering or noise complaint from a neighbor?
Before putting any restrictions in place in your lease, it’s important for you to get clear for yourself on what behavior you deem completely unacceptable and what behavior is maybe tolerable once in a while – and then how you are going to approach this in terms of fees and next steps.
As you prepare your lease agreement, think through these issues and make sure that the items you include in the lease are relevant to your property and that you are clear for yourself about what your escalation steps are going to be.
If you have questions about property management in the greater Columbus, Ohio area, don’t hesitate to reach out to us at RL Property Management.