When taking over management of occupied units, a property manager is taking on the current rental agreement that the tenants contracted with either a previous owner or property manager. Each rental agreement can be unique with regard to fees, policies and individual clauses, which can result in a property manager enforcing multiple rentals agreements across different properties at the same time. It takes time to review each rental agreement in detail and to note specific items such as late fees and deposit-release time frames. Therefore, having a procedure in place for signing tenants onto the new property manager's rental agreement is beneficial to tenants and owners, because property managers are experts on the workings of their own rental agreements. Placing all tenants on the property manager's lease provides for effective management for the property owners and consistent service for tenants.
When tenants are inherited, chances are that they were placed in the rental unit based upon different qualifying criteria; therefore, they may not be the best fit with the new property management. Allowing inherited tenants to renew for a shorter term -- with the stipulation that they sign onto the new rental agreement -- can serve as a trial run for both the tenant and the property manager. The tenant’s performance at the property (payments, upkeep, compliance, etc.) can then be based on the new rental agreement, so the standards are clear and set and can assist the new property manager in determining if the tenant should be able to renew again. Offering different options for a renewal, such as different rent amounts for different term lengths or even incentives, can encourage a tenant to sign the new rental agreement, especially if he or she is hesitant of changing to a new management company but does not want to move.
The procedure for attaining a lease agreement with inherited tenants can begin as soon as you retain management of an occupied unit, if the tenant is on a month-to-month rental agreement or if the rental agreement is set to expire. It is wise to perform inspections of the units and to discuss the results with the property owner prior to offering any renewal options. That way, any possible lease violations can be avoided or corrected prior to locking in the tenant for an extended term. At the beginning of management, have an open dialogue with the property owner so that expectations for rents and term lengths can be established. The property manager can then proceed to renew multiple inherited tenants efficiently, especially in larger complexes. For rental agreements that are still in a term period, set the procedure to work those tenants in with any other renewal procedures you have.
Consistency is key in effective property management, so having inherited tenant renewal procedures in place can streamline the whole renewal process. Having all tenants on the same rental agreement is beneficial to the owner and tenants because you are able to address any issues as they arise, and not have to determine or interpret what the previous rental agreement states.
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