Property Management: How Important is Documentation?

Ever pay a bill twice because you forgot to record the payment?  Or come to tax time and couldn’t find that donation receipt from last summer?   There is no substitute for good documentation and accurate record keeping. 

Tracking monthly rent payments is just part of property management.  At renewal time, the Landlord will want to know if their tenant has always paid rent on time.  Did a rent payment ever return for insufficient funds?  How many days late was the tenant in paying rent?

What about other documentation.  It has been said the faintest ink is better than the strongest memory. 

Let’s take that a step further - if you can photograph it, do so.  There are apps for your smart phone that will date stamp a photo.  Why?  Date stamped photos are hard to refute when it comes to tenant damage.

You’ll want to advise your client to document condition of their property prior to the tenant’s move in.  Is the mailbox rusty?  Refrigerator clean?  All light bulbs working?  Take photos of what’s good and what’s not.  A good property manager will take 200+ photos of a property to document move in condition.  This level of detail is key if a tenant damages the property and your client expects to use their security deposit to make repairs.

At move out, it’s time to document condition again.  Photograph and write down observations.  What has changed?

Other things to document - Does the lease list all the occupants of the house?  How many pets there are?  How many vehicles should be on site?  Checking the property against good records can reveal lease violations such as “guests” that have moved in, unauthorized pets, or extra vehicles.  Your client will want to agree with their tenant about what is allowed and document violations.

The Professional Property Manager should use good documentation and accurate record keeping to protect your client and their asset.  Look for one that already has the systems in place to create and utilize good documentation and record keeping.

Guest contributor Marye Davenport, Property Management Director 3G Properties

 

Leasing & Property Management Series - Money Matters

Money matters.  Before preparing a lease for signature, you’ll want to have a conversation with your client about money.  You want to have clear communication in the written lease about when, where and in what form payments should be made and what fees will be charged for late or returned payments.

First, determine what forms of payment your client will accept.  Accepting cash payments for rent and providing a receipt is required, unless the lease specifically states that rent must be paid in another form.  If the tenant’s payment is returned, will your client pass on to their tenant the bank’s fee?  Fees for returned payments must be addressed in the written lease.

Security deposits and pet deposits must be held in a separate bank account for your client’s tenant.  Deposits are refundable at the end of a lease with an accounting made of any damages deposit funds were used to mitigate with receipts provided.  Your client must not comingle tenant deposits with personal funds under any circumstance.

Your client may choose to charge a cleaning fee or pet fee instead of a pet deposit.  Fees are not refundable and no accounting is required at move out, but they must be specifically stated in the written lease.

Decide when rent becomes late.  Texas Property Code says you must give 1 full day after the due date before you can begin charging late fees.  Many Landlords allow their tenants to be late with rent for a few days.  Late fees cannot be charged at all if they are not specifically addressed in a written lease.

State in the lease where the tenant should pay rent.  Some Landlords visit their properties each month to collect rent in person.  Others prefer their tenant mail the rent payment to their home or a P.O. Box.  Either way is acceptable, but must be addressed in the written lease.

A Professional Property Manager can handle money matters for your client.  The Property Manager collects all funds, protecting your client’s income and their privacy.  Property Managers have the training to prepare a lease that protects your client’s income through adherence to Property Code and best practices regarding the money matters of the lease.

Guest contributor Marye Davenport, Property Management Director 3G Properties