There are many documents that you need to maintain as a landlord. These documents can protect you in case your tenant decides to sue, or if the Internal Revenue Service (IRS) decides to do an audit on your rental property. Below, we’ve broken down a few of the documents that you should not throw away:
1. Pre-Screening Form
Not all landlords will pre-screen their tenants, but it would be wise to do so if you don’t want to waste your time with tenants that aren’t “worth” pursuing. By pre-qualifying or pre-screening your tenants, you’ll be able to “weed out” those that probably won’t meet your requirements, or those who won’t be able to pay the application fee.
If you do decide to pre-screen your tenants through a property management company, make sure to keep copies of the pre-screening form.
2. Rental Application
The rental application is a form that your potential tenant fills out. It allows you, the property owner, to evaluate whether or not a tenant is trustworthy and capable of making their monthly payments on time.
This is of the most important documents landlords should maintain. Even if you don’t end up renting out your property to an applicant, you shouldn’t throw away their documents. In case someone challenges your choice not to accept an applicant, you can use their documents to show the courts why. Plus, if an applicant claims that they were discriminated against due to their race, color, religion, etc., you can use their rental application to protect yourself.
Do note that if you asked your potential tenant to submit more documents, such as references, proof of income, etc., be sure to keep them on file, too. As a rule of thumb, everything that they give you needs to be kept.
3. Tenant Screening Documents
As you screen your tenants, you will likely ask them to show proof that they can pay their rent, as well as references to show their trustworthiness. You will also likely run a background check to be certain that your tenants are who they say they are. Whatever your tenants give you at this stage, whether it’s a written consent to pull their credit report, you should store it all.
If you partnered with a property management company to screen your tenants, they should be able to store the documents in a safe place for you.
4. Lease Agreement
Don’t throw away the lease agreement (signed, of course). Without the lease agreement, you won’t be able to prove that you and your tenant ever entered into an agreement.
Some property owners believe that when a tenant moves out, they can throw away these documents. However, not only is this against the law in some states (for example, in New York, landlords need to keep the documents for seven years), but it also puts you at risk in case of legal disputes.
Besides, the lease agreement is what outlines you and your tenant’s responsibilities. Without it, you won’t be able to tell your tenant what to do, as you will have no way to prove that they ever agreed to those conditions. For instance, if your tenant fails to clean the property, you can’t evict them due to neglect if you can’t show that they agreed to do so. Along with that, you also won’t be able to collect fees, because there’s no legal document that says you can.
Pro Tip: To draft a fool-proof lease agreement, get the help of a professional property management agent.
5. Rent Payments
Problems tend to arise due to rent payments. When tenants are late on rent for the second time around, the landlord can evict them – that is, if they can prove that this isn’t the first offense. That’s precisely why you need to document your tenants’ rent payments.
Without proper documentation of rent payments, you won’t be able to collect late rent fees. That’s because you won’t be able to show that your tenant truly was late on their rent. Also, if you evict them due to the nonpayment of rent, the tenant may claim that they were wrongly evicted. Again, rent payment documents can protect you in case of legal disputes.
6. Tenant Communication
Every time you communicate with your tenant, whether it’s via text, email, etc., you have to retain “traces” of your interaction. This can come in the form of emails, screenshots, call logs, and more. It’s important to retain communications in case your tenant claims that they were never informed of, say, entry to the property.
Let’s say that your tenant texted you to report a faulty AC unit. You texted back and asked your South Florida property management company to go and check it out, and they do get it fixed. However, your tenant still sues you and claims that you ignored their complaint. The good news is that you were able to save your text messages, so you’re able to show the court that you did address your tenant’s complaints promptly.
7. Move-in and Move-out Checklists
Move-in checklists are important as they’re what you will compare your property to upon move-out. As a landlord, you can collect a fee from your tenant to pay for the costs of repairs, if you find that they damaged the property. You can also subtract the costs for repairs from their security deposit. However, to do either of these, you will need to prove that the condition upon move-out is not the same as the condition upon move-in.
It would be unlawful to charge the costs of repairs to your tenant if you can’t prove that they were the ones that caused the damage. Do note, however, that damage needs to be beyond wear and tear – if it’s regular damage (e.g., scuff marks on the floor), you can’t charge it to your tenant.
These are only a few of the documents you need to safe-keep. A property management company will be able to guide you as to the state-specific documents you need to retain by law. To make sure you don’t throw away essential documents, partner with the experts at Luxury Property Care today. Our role is to aid landlords such as yourself in managing their residential rental properties through all of the steps.