Your lease is designed to protect you as a property owner as well as your tenants by thoroughly addressing the rules, policies, and procedures for living in a rental property. Within the lease, you should delineate who is responsible for what, and the terms for each of those responsibilities, including any fees.
As a legally binding document, the lease agreement also gives you leverage if you ever need to enforce any of the policies.
What to know about fees and leases in Ohio
For property managers and landlords with real estate in Ohio, there is a fair amount of freedom in how you construct your leases and what types of fees you can charge residents per that lease.
Naturally, this isn’t a very popular topic with residents (after all, who wants to pay extra fees?).
As a landlord, we don’t really want to charge our residents fees either, but what we’ve found is that fees can be a useful tool, especially when applied in these instances:
- To dissuade certain types of behavior – Things like playing loud music all night, leaving dog waste in the yard, creating disturbances by smoking in the unit, or harassing neighbors – these are all examples of behavior that landlords and fellow tenants simply don’t want to deal with.
To prevent the behavior, you can call out these types of behaviors in your lease and assign a fee to each of them – not because you’re hoping to get rich from them, but purely as a way to dissuade someone from engaging in that type of behavior. Most of these examples may not be something you are going to evict a tenant for, but by assessing fees for them, you will hopefully be able to put a stop to that activity.
- To compensate the landlord or property manager for activities that go above and beyond their normal duties – Say you have a tenant who wants to add their partner to the lease or swap out a roommate. Because this is probably not something you agreed to do as part of the initial lease agreement, it would be considered more of a favor to the resident and it’s going to require some work on your end.
It will require you to screen the applicant, prepare an addendum to the lease, send it out, get signatures, update records, etc. All of this requires extra time and effort to manage, so we believe it’s fair to assess a fee when going above and beyond what you have to do as part of the agreement.
What other fees can you charge?
In addition to the above examples, other fees you might charge include late fees if rent is not paid on time. When doing so, be sure to also spell out the order in which those rent payments and fees are applied.
Another common fee for multi-family units is charging a lease signing administrative fee. Also very commonly added to a lease is an application fee, which helps reimburse you for the cost of tenant screening and your time to do that. You may include other fees as well, such as a monthly service fee to cover the maintenance of common areas.
Additionally, some property managers are offering a master renter’s insurance policy. We do that here at RL Property Management. The tenant is automatically enrolled in a benefits package that includes coverage for their personal belongings through renter’s insurance. The renter’s insurance policy also covers liability in case the tenant was to accidentally damage the property.
When developing your lease agreements, take some time to consider and apply a cohesive approach to how you deal with fees, and make sure you’re consistent with how you enforce them.
For questions about what to include in your lease agreements, get in touch with our team at RL Property Management. We’ve been managing property professionally in the greater Columbus area for nearly a decade and are here to help you.