When you choose to rent out your property to a tenant, there are many rules and regulations you must be aware of and each are designed to make clear what is expected of the other and to help avoid any problems between the two of you. Landlords have many rights under the law and the majority of these get stated in the rental agreement a tenant must sign before he can gain access to your property.
If you are shopping for a rental, ss a tenant, you also have a firm set of legal rights regarding your renting of someone’s property. These should also be listed in the rental agreement and communicated in discussions with the landlord.
For both parties, the smartest approach is to work with a service like homelet.co.uk that can provide assistance with protecting both parties, insuring the property and contents, and to make sure the expectations of both sides is clear.
Here are some tips about what both parties can do to avoid conflicts with each other, so that the relationship can be healthy and productive.
For commercial rentals, there are typically three types of rental agreements that may be negotiated:
A Gross Rental: The tenant pays a flat monthly amount and the landlord pays for all operating costs for the building. In some cases, the tenant pays for its electricity.
A Net Rental: The tenant pays a base monthly rent, some of the building costs, and a proportionate share of the building taxes. Rental costs increase when the landlord incurs a cost increase.
A Triple Net Rental: The tenant pays the base rental amount plus the landlord’s operating costs including real estate taxes, insurance, and maintenance. Tenants must also pay for repairs.
Triple net rentals are the most popular types of commercial rentals and gross rentals are the most popular types of residential rentals.
Accountability for the Property
For Tenants: Under a triple net rental, the tenant is basically responsible for the property. As a result, the tenant gains most of the control of the property and is able to make small changes to the property come and go as he pleases, and determine during which hours to run the HVAC. With other types of rentals, more control goes to the landlord over how the tenant can operate. Under a gross rental, the landlord is responsible for management and has almost total control over the property.
For Landlords: If you provide a triple net rental you will be relieving yourself of many responsibilities for the property, but you will also forfeit control over what goes on in the property. Make sure you rental to responsible tenants if you provide a triple net rental and you will avoid problems. If you have gross rental tenants, always make sure that they are adhering to the rules of your rental agreement. You also need to pay your property taxes and insurance on time, so you are covered in the case of an accident or a dispute.
Repair and Maintenance
For Tenants: When you are touring the property and before you sign the rental, pay close attention to the age and condition of the property. Old does not mean in disrepair, but older properties must be well kept or there is a good chance that you will have problems. Things like sidewalks, windows, electric gates, elevators and lights that have not been repaired indicate what you can expect from the landlord. Don’t expect it to get any better for you. If you intend to rent, make a note on the contract of any broken or not operating areas in your unit and the building. Also tell the landlord your expectations for maintenance and get this in writing. This can avoid any disputes.
For Landlords: Make sure that you clearly state the condition of your property when you hand it over to tenants. Take pictures of the condition of walls, carpets and windows and time stamp the pictures. Tenants have different ideas what is clean so you need to be specific about your expectations. You have to make an allowance for wear and tear but you can demand that things are not broken or trashed. Be clear about the behavior you expect from them. Explain the rules about where trash should be kept and the penalties for smoking or littering on the property. Discuss what will happen if they break anything in their unit or on the grounds. Being clear at the beginning will avoid conflicts later on. If you have any doubts about a tenant either do not rental to them or only offer a triple net rental.
Neither party should assume the other is purposely trying to cause a problem for the other and nearly all disputes get worked out to the satisfaction of both parties.