Your lease is important...but it is not magic!

[Richard C.]

I've noticed something of a disturbing trend on this forum.  There really seem to be many people who earnestly believe that the language of their lease is always and forever controlling.  "Just do ___x____, it's in the lease!"  "Make sure you have language in your lease that allows you to do ___y___!"

A lease is a contract between two parties.  It does not and can not supersede state laws, municipal ordinances and administrative regulations.

Some of the many extremely problematic examples a forum search will reveal:

"My tenant has gotten a service animal when my lease has a no-pet clause!"  A service animal is not a pet, and if you try enforcing your lease language, your tenant won't need to worry about paying rent.  Onaccounta they're going to own your house.

"My tenant claims they have a medical issue and won't let me review their medical records!"  OK, Dr. Landlord, see how far that gets you.

"My tenant is babysitting kids, and my lease says no business activity!"  Many states prohibit landlords from restricting licensed home day care.

"My tenant refuses to pay for the window broken when her ex-boyfriend threw a rock through it, when me lease says she is responsible for anyone she knows!"  She's not going to be responsible for the criminal actions of a third party unless she was involved, no matter what your lease says.

The examples are nearly endless here.  Really, people need to get out of their heads the notion that your lease can make binding any agreement at all you form with your tenant.  This is NOT TRUE!  Contract terms that are contrary to public policy are void.

Always have a local lawyer review your lease, unless you are using a standard form lease from an organization that has itself had the form reviewed by a lawyer.

[Steve Rozenberg]

Great comments,  I apologize in advance but this definitely struck a chord with me.. so here it goes....

We see so many "Investors" come to us after they have smacked on the hornets nest and have violated laws and peoples rights and the wall is about to crumble on top of them. I always tell new investors when I speak at events or in person... Just because you have the financial ability to buy a home, does not mean you are financially educated to run that property business. 

The problem is most people think that they can buy a home and can sit back on the beach and just let the money flow in. They never take the time to educate themselves on the laws and regulations of such entities as IRS, Fair Housing, Discrimination, Property Code.. Along with a list of many more.. 

When an investor try's to tell us how to screen a resident and what to base our criteria on,from what their uncle in another planet told them to do I explain to them that our job is not just to collect the rent. Our job as a property management company is to make sure they have a profitable business model with policies and procedures and MOST importantly keep them from getting sued. My business partner is the Houston Chapter president of NARPM, we are committed to making sure we are on top of latest laws /regulations and best practices for our clients and fellow investors. This is our busines

As an investor myself who early on made EVERY mistake you can imagine in the single family world and the Multi famliy world, we have taken those mistakes and setbacks and turned them into valuable lessons and make sure non of our clients walk into those same pitfalls we did. This is how we keep a less then 2% eviction rate on over 400 managed homes.

Not saying all owners are like this, we get some very smart people that understand the power of leverage and use of teams like property managers, Lawyers, Agents, Lisc vendors all to make their business model run efficiently. Everyone that is successful has a team and coach, All professional athletes Kobe Bryant, Tiger Woods, Arnold Palmer Etc... have a coach and team to help advise them on proper steps... Do you???

Just remember tenants have been renting probably their whole lives, you have been a landlord for a fraction of that , who do you think knows the law and the way things go better? 

If you are not going to take the time and educate yourself to have a successful business, then the investor says, "Real estate is horrible I would never do it again!!"