Off-the-Shelf Rental Agreements -A Landlord’s Perspective
Landlords often either use standard, store-bought rental agreements or simply copy a contract from another landlord. Sure, it’s significantly cheaper than using a lawyer, but it’s also penny-wise and pound-foolish.
Below is the true story of one of my clients. Let’s call him Daniel. He wasn’t originally my client of course; he became mine when he became too embroiled in the Landlord-Situation-From-Hell to extricate himself without some professional help. I have changed some of the facts of the case and replaced them with facts from similar cases. Daniel is not alone with these problems. He could start an international support group of disgruntled landlords with similar stories as this is a very big problem that happens to many landlords.
Daniel owned a beautiful house which he rented out to a family. Let’s call them “the family”. He used a simple rental agreement that he had used many times in the past and which had always served him well.
At some point during the lease, the family refused to allow Daniel to enter the house. They claimed that there were items which needed fixing, yet they refused to allow Daniel access to make the necessary repairs.
They family began arbitrarily deducting amounts from the rent with the excuse that they had needed to make the repairs by themselves. This was in breach of the lease agreement.
Daniel never knew how much rent he would receive each month because the family was constantly deducting various amounts at their own discretion without giving Daniel any voice at all. There was no opportunity for him to do the repairs himself, or to have any say in the kind of repair made, the price of those repairs, or even whether those repairs were necessary in the first place.
Daniel never received any receipts for repairs and it was often unclear to him whether or not the deductions were, in fact, for damage that the family had caused rather than regular wear and tear.
After some months, Daniel asked the family to allow entry to an assessor who needed to evaluate the house for insurance purposes. The family once again refused entry and stopped giving Daniel any mail addressed to him that arrived at the house.
The situation was fast becoming untenable. The straw that finally broke Daniel’s back, so to speak, was the family’s move to install certain equipment around the house, the cost of which, following their usual pattern, they deducted from the rent. Once again, this was an expenditure that had not been discussed and was not authorized by Daniel and he learned of this from the neighbors.
Daniel was now seriously concerned about the condition of the house, which he has not been allowed to enter for months. He came to me to see what he could do about his unbearable tenants under the terms of the contract he signed with them.
Unfortunately for Daniel, there are several clauses in the standard, off-the-shelf contract he used which are very problematic. There are also several omissions.
Due to the lax contract, the family was able to take possession of the house without giving Daniel any form of security and he did not require post-dated checks as the form of payment. This is what allowed the family to make arbitrary deductions from the rent rather than request that he agree to and arrange for the repairs himself.
Daniel recently sent the family a notice requiring them to vacate the house due to breach of contract. They of course refused to do so.
While Daniel did not consult a lawyer when he made the rental agreement, the family did.
There are no provisions in the lease giving Daniel the right to shut off utilities or physically move the family out of the house. There is no clause stopping the family from obtaining an injunction to prevent him from shutting off their utilities.
The only recourse left for Daniel is to apply to the courts for an eviction notice. This means hiring a lawyer, paying court costs and legal fees and waiting months for the outcome. In the meantime the family remains in the house.
Bad though Daniel’s situation undoubtedly is, it could be worse. At least his tenant continues to pay some rent. In other similar situations, tenants have used the property for purposes other than those set out in the lease agreement, have damaged the property, and have stopped paying rent altogether.
And so to the moral of the story: Consult with an attorney and make sure that the lease agreement safeguards you, as the landlord. Your property is a valuable asset; don’t just put it in the hands of a stranger without proper protection.