Unpaid rent can pose a significant challenge for landlords across the country as it not only affects cash flow but can also lead to legal and financial complications. Slovin & Associates, a top landlord law firm headquartered in Ohio, works closely with landlords to help effectively mitigate most land ownership challenges. With decades of experience in this space, Slovin & Associates recommends focusing on these three key areas to help prevent losses due to unpaid rent.
1. Comprehensive Tenant Screening
The foundation landlords should look to build starts with thorough tenant screening. The first and simplest idea, tenant screening is paramount to ensuring that you are meeting every legal obligation before your tenant takes possession of their space.
To ensure that you are renting to reliable tenants who are more likely to meet their rent obligations, consider complete lease applications, name verification, and studying the potential tenants leasing history.
Complete Rental Lease Applications
Property managers or leasing agents should ensure that lease applications are fully filled out with no unanswered questions. This step helps in assessing a tenant’s background and financial stability accurately. There is a reason almost every application asks for emergency contacts, place of employment, banking institution, names of others living in the apartment, and more. These answers can be crucial to locating the tenant after they move out, or even after they stop paying rent.
As unfortunate as it is to turn down rental applications, it is important to take a firm stand with applicants unwilling to fill out employment or contact information fully.
Name Verification for Renters
It may seem like a small detail, but verifying that the names on the application match the lease is crucial. This simple step helps prevent identity discrepancies and ensures that you are renting to the right individuals. Simple checks, like spelling differences on how the tenant signs his or her name, can make all the difference.
Research Tenant Leasing History
Today, verifying a prospective tenant’s leasing history is easier than ever. Take advantage of online resources to check a tenant’s rental history, which can provide valuable insights into their past behavior as renters. If there are worries about a potential tenant, it is also helpful to make a phone call to their previous landlord. Many are legally allowed to speak with you after a set of release language is worked into tenants leaving their properties.
2. Clear Rental or Lease Agreements
A well-drafted rental or lease agreement is a landlord’s best defense against unpaid rent disputes. Ensure your lease agreement is clear, comprehensive, and legally sound by using specific rent terms and ensuring all additional rules are also signed.
Clearly define the rent amount, due date, and acceptable payment methods in the rental/lease agreement. State any late payment penalties and grace periods for rent payments. If your property has specific rules or regulations that aren’t covered in the lease, have tenants sign an acknowledgement that they have received and read these additional rules. This helps prevent misunderstandings and ensures tenants are aware of their responsibilities.
For example, if a tenant is evicted for noise complaints and that rule isn’t stipulated specifically in the lease, having the backup rules document signed saves you from any legal trouble.
3. Communication and Documentation
Open communication with tenants is essential. In the event of unpaid rent, effective communication can help resolve issues before they escalate. The most important aspect of communication is an accurate and rich record of all tenant communications. Keep detailed records of all interactions with tenants, especially those related to unpaid rent. This documentation can be invaluable if legal action becomes necessary.
Even before legal action may become a necessity, having access to all communications ensures that if there is any confusion or untrue statements being made, your representations can easily and quickly remedy the situation.
Follow These Steps and Continue Learning
Mitigating losses from unpaid rent involves proactive measures such as the ones listed above. By following these strategies, landlords can significantly reduce the risk of unpaid rent and protect their investments. Additionally, it’s essential to stay informed about Ohio’s landlord-tenant laws and seek legal advice when needed to ensure compliance and protect your interests as a landlord.
If you or your team have any questions about more best practices in Ohio or its surrounding states, please reach out to Slovin & Associates or visit our website.
About Slovin & Associates
Slovin & Associates, Co., LPA aims to achieve the highest rating for creditors’ rights law firms in Ohio, Kentucky, and Indiana by obtaining expeditious and cost-efficient results in a professional and low-maintenance environment for our clients in the fields of collections, commercial and consumer litigation, bankruptcy, leasing and landlord-tenant law, and Fair Debt consulting.