Should old acquaintance be forgot, and never brought to mind?
Chicago landlords embark on 2012 facing a fresh set of laws and with a new opportunity to turn over a new leaf. There is never a “bad” time to begin to comply with the many landlord tenant laws that plague landlords, but the New Year is as good a time as any. With that in mind, here are the top five New Year’s Resolutions for landlords.
5. Properly screen tenants. A credit report is a start. Alone, it is not enough. Its a tough world out there. Many tenants in the market suffer from deflated credit scores as a result of short sales or mortgage foreclosures. Smart landlords will go the distance. Obtain a criminal background check and past eviction check. Check references. Ask to see pay stubs and tax returns. Remember, before a landlord accepts a new tenant, the landlord has all the leverage. Once the landlord turns keys and possession over to a lessee, the tenant holds all the cards. It is easier to keep a tenant out than to remove a tenant after the tenant is in.
4. Stay up to date on the law. The laws affecting landlords and tenants and real estate in general change with astounding speed. New laws are passed, old ones are amended, court procedures change, and new cases are decided. Reading this blog is a good start. Following our twitter feed is another. Landlords should keep informed. Rental real estate is a business and should be treated like a business. The days of big money from passive income and big gains in equity from price appreciation are gone. Smart landlords will seek ways to cut down their exposure and being up to date on the law is one such way.
3. Act promptly. Good landlords confront problems head on. Nothing good can come from putting one’s head in the sand. Bad tenants rarely straighten out without “help” from the landlord. In 2012, if a tenant is late with rent, serve them a notice. If a tenant is complaining about the condition of the property, stop by the unit and get the repair made. Resolve to act fast. Small fires are easier to put out than blazing infernos.
2. Update your leases. A lease is the rulebook for a tenancy. Federal, State and local laws limit what can be included in a lease and compel a landlord to provide certain disclosures. There are lots of leases on the market. Some are good. Many are bad. Most are not tailored to a landlord’s particular needs. Landlords should have their leases reviewed regularly to make sure they are in compliance with the latest laws and also to make sure that the lease terms are providing protection to the landlord where there is room to be protected. We regularly review and draft leases for clients. The New Year is a great time for a tune up.
1. Comply with the CRLTO. I spend much of my day discussing landlord tenant issues with clients and potential clients. So few landlords get it right. I won’t say it is “easy” to comply. It takes some thinking. However, it is also not all that hard to comply. Smart landlords will get their rental practices in line with the law. Disclose the name of your bank on the face of the lease, get a proper procedure for depositing security deposits, give receipts, provide all necessary disclosures, work out a system for timely deposit return, and enact procedures for move-in and move out. Tenants, on the whole, are not out to make trouble for landlords. However, a tenant who gets behind in rent will have no problem taking advantage of a landlord’s mistakes. Lots of tenants make out that way. Don’t be one of the landlords who gets taken to the cleaners based on CRLTO violations.
2012 is a fresh start. Start it off right and get that rental property in order. Happy New Year!