What to include in a new lease (Chicago)?

Question

Hi everyone! I have some questions about leases.

We bought a 3 unit last year; they were all rented out and did not have to deal with leases. Now, one of the units is up for renewal. I do not want to renew the unit to the current tenant because she is SUPER NEEDY.

What clauses do you all add in your leases? The leases that the previous owner used are very basic with no added clauses. Because of this, my experience with the needy tenant has been horrible.

Some examples of what we have gone through this year with her:

1. Exterminator - She was not happy with the one we used and asked multiple time to get a different one because according to her the chemicals were not aggressive enough to kill the ants, spiders, and millipedes. She then demanded that we caulk the baseboards because the ants from coming from the baseboard.

2. Laundry- Each unit has a in unit laundry. The laundry machine broke and I am currently replacing it. According to the technician it is due to overuse/misuse. When I stated this to the needy tenant she said that she had complained about this to the previous owner but it was never replaced.

3. Fridge- She claims the fridge does not cool her food properly. I sent someone to take a look and according to him it is fine, but she keeps insisting on getting it replaced.

4. Windows- She wants me to change the window screens because there are holes in them. I probably will do that once she is out but should she not have complained about this when she rented the unit?

These are just a few examples of what I have had to deal with.

I want to address the following in the lease and would appreciate any clauses you all have used in your leases:

1. After a walk thorough- how long do you give tenants to ask for repairs?

2. What do you all do about fixes? Do you have the tenant pay a certain amount whenever they request a fix?

3. Exterminator

I know what I have listed is not a complete list and I probably have overlooked many aspects. Any other items you add to your lease to reduce any confusion later?

Thank you all for reading this post.

Jonathan Klemm · Answer

@Daniel Meyer - It sounds to me like you inherited some tough tenants.  I think @Crystal Smith brought up a good point about using the CAR lease.

There are always going to be things that come up.....I try to take the approach of treating my tenants like clients (in my mind they are) and take care of the majority of the little things they ask for.  I think going forward you'll put a higher emphasis on screening tenants and probably not have the same issues that you inherited.

John Warren · Answer

@Daniel Meyer I don't think your lease can really protect you from this. Some tenants are very particular and will make more requests than other tenants. The opposite is also true and some tenants will literally never complain even if health and safety maintenance issues are occurring. Dealing with the different personalities is part of being a good land lord. Most of the issues this tenant is bringing up are simple. You can easily fix holes in screens. You can also have your maintenance guy go turn the temperature all the way down in the fridge or do that yourself. The laundry machine one sounds tough, but there is going to be wear and tear. Try to view all of this from the 10,000 feet view.

When you do screen for new tenants, there are some obvious red flags that you start to pick up after you do this. I have leased up hundreds of units now as I do all my own leasing still, and I look for tenants who pick out every little thing in the unit and try to avoid those ones. I also look out for tenants who are moving because their current land lord "doesn't maintain the building", etc. These aren't things you put on a screening form, but you want to avoid the complainers if at all possible.

Aaron Zimmerman · Answer

One thing that I heard from a fellow investor is to have a pre-screening google form. Within the google form, all it asks is for your email. It weeds out quite a few applicants this way as well.

Other than that, you might want to require them to have renter's insurance and show you as an additional insured. Further, you may want to include that you'll get the unit professionally cleaned and/or have some additional rules and regulations of the building.

Crystal Smith · Answer

When doing business in Chicago property we utilize the Chicago Association of Realtors (CAR) lease. Why? It's written by lawyers and constantly updated to be compliant with the latest in Residential Landlord Tenant Ordinance. Just about every clause/situation you can imagine is covered in the lease. And I don't have to hire an attorney to keep up with the changes in law because the association does. The lease is available for anyone to use.

Tom Casey · Answer

@Daniel Meyer I am not a landlord yet, but Brandon lists some really good ones in his book. I'm listening to it on Audible now and almost done with it. I'd say that most or all of your questions should be answered in the book and I don't think I'd do it justice trying to paraphrase. It's called The Book on Managing Rental Properties by Brandon Turner. Hope it helps my friend!

Daniel Meyer · Answer

@Tom Casey Thank you for this information.  I will look at what you shared.

Are there specific questions you ask when screening for tenants?

Tom Casey · Answer

She sounds like an awful tenant! I'm sure you can't wait to kick her out after the lease expires. I've been reading Brandon Turner's book on managing rental properties and it makes it very clear that screening tenants well is likely the most important thing that you'll do as a landlord. Something that I think is super helpful that's included with the book is a bunch of documents that Brandon and others use for landlording. You can get the PDFs here: https://www.biggerpockets.com/...

As far as the maintenance, you should make it clear in the lease that if damage or wear and tear is determined to be due to misuse or overuse that it is the tenant's responsibility to pay for maintenance and/or replacement of hardware/fixtures. Obviously, for this tenant you have to go off the old lease which is likely inadequate. But I think that if you check out those documents included with that book and also give it a read if you haven't already, it should give you some good tools for dealing with these kind of tenants in the future.

Good luck with everything!

Tom Casey | Real Estate Agent

East Lincoln Park & Gold Coast Office

@properties