Proper paperwork is the cornerstone of a seamless real estate investment experience. It reflects your professionalism and allows you to maintain a thorough record of your observations and transactions at different stages of the leasing process. It also helps you track and access the documents whenever needed to protect your investment property against any false claims and legal problems, thus enabling you to maintain your reputation as a landlord.
Here are some of the crucial documents you must have to protect yourself and your Santa Rosa investment property.
Lease Agreement Of Your Santa Rosa Property
The lease agreement plays the most significant role in protecting your property. It describes all the terms related to using the unit, the rent price, the amount of security deposit, and the early termination clause, among other things. Here are a few types of lease agreements that you might want to consider while renting a property.
Residential Lease Agreement
Residential lease agreements are for the homeowners renting out their residential properties. If the deal isn’t detailed enough, it can put your unit at financial and legal risks. Therefore, you must ensure that your lease is clear, explicit, and includes all essential details, such as:
- Personal information of landlords and tenants, including but not limited to contact numbers, addresses, signatures, the number of tenants living in the unit, and the duration of their stay
- Property-related information, such as the property’s age, the number of rooms, yards, baths, and pieces of furniture, artifacts, among other items.
- Important Clauses, such as:
- The lease duration
- Terms related to the rent and security deposit
- Automatic lease renewal
- The eviction clause
- The early termination clause
- Pet policy
- The smoking policy
- Guest policy
- Important disclosures
- Maintenance obligations
- Damage liabilities
Some terms, like the tenant’s maintenance responsibilities and rent obligations, are essential to keep the property in good condition and secure a stable cash flow.
The Co-Signer Agreement
A co-signer is typically a tenant’s relative who can be held responsible in case the tenant fails to pay the rent if they co-sign the lease.
For instance, consider your applicant is a student who does not have a suitable credit score or a long rental history since they’re renting a home for the first time. In this scenario, it can be challenging for you to evaluate their credibility. How would you then protect your property while being fair with the renting process?
In such cases, if you think that the candidate can still qualify as a good tenant, you can have a trusted person like their parents or caretaker who has income stability sign the lease as a co-signer. The agreement will thus protect your investment by holding the co-signer responsible for any due rental payments down the line.
Landlord Disclosures And Addendums
As a rental property owner in Santa Rosa, CA, you’ll need to add some important disclosures in the lease to protect your investment and keep tenants informed about certain crucial information.
Lead can be hazardous to residents’ health, especially children and pregnant women. You must, therefore, disclose if your property has lead-based paint to the renters before they move in. Add an addendum that states the risks of using a property with lead-based paint and the safety measures.
Any prior property damages
You must disclose any property damages like cracked countertops or a broken cabinet door as it can cause bodily injury to the tenants. Also, the tenants are not held liable for these prior damages.
If there are bed bugs in the property, you must provide renters with any information related to their biology, behavior, and reported problems of bed bugs infestations.
Molds can be a health hazard, and you must disclose their presence to the tenants. You must also add an addendum that has a consumer handbook drafted by the State Department of Health Services that details the hazards of mold.
Registered sexual offender database
California’s Megan’s Law mandates that renters need to know if there are any sex offenders living nearby who can be a potential threat to their children.
Deaths that have occurred in the home
If there have been any deaths in the property in the last three years, before offering the rental property to a new renter, you must inform them about the same.
How Can Disclosures Protect Your Santa Rosa Property?
These disclosures are to inform the tenants about any hidden aspects, keep them safe, and ensure that they sign the lease only after knowing about the possible hazards. If you fail to mention any of the applicable disclosures in the lease, you will have to pay hefty legal penalties.
Since it may not be possible to mention all the details entailing the disclosures, you need to provide them in the form of addendums to support the agreement. Addendums give the tenants a detailed overview of their safety measures to protect themselves and the property. These include the pet addendum, lead-based paint addendum, bed bug addendum, and so on.
Notices are a legitimate way to inform or warn tenants about your next steps. In addition, they protect you and your property from any false and illegal claims.
Notice To Entry
You must send your tenants 24 hours prior notice before entering the rental so that you don’t intrude on their privacy by showing up unexpectedly.
Rent Increase Notice
You must provide renters with at least 30 days-notice informing them about the rental increase, or you will not receive the increased rent till it’s 30 days from the day the notice was sent.
Transfer Of Management Notice
If you are transferring the management, you must give the tenants a detailed notice explaining the same. It will give them clarity, and they will reach out to the assigned property manager for any concerns.
Rent Due Notice
The late rent and the pay-or-quit notices are essential to prove that you haven’t received the payments and have followed the proper eviction procedure. These notices can safeguard you from legal problems in a small claims court and save you a fortune.
Lease Renewal or Non-Renewal Notices
If you wish to renew the lease, you must send the lease renewal notice at least 60 days before it expires. If, however, the tenants want to discontinue, you can start looking for new renters much sooner. If you want to terminate the lease, send them a non-renewal notice and a move-out date 60 days prior to the termination. The notice will act as strong evidence, showing that you had given them enough time to find new accommodation and move out.
Rental Application Forms and Screening Documentation
The cases of false discriminatory claims are major problems that landlords face. Therefore, we suggest our clients save copies of all the screened application forms at least for the next two years from the date of screening. If one of the past applicants claims that you have been discriminatory towards them, you will need their screening documents to show why they did not fit in the criteria and to prove that your process was anti-discriminatory.
Apart from the tenants’ application forms, screening documents can include the reports related to proof of income, rental background, credit score, and criminal background. Missing out on any of these can lead to you renting to a financially unstable tenant who might break the lease and cause a potential threat to you, the property, or the neighbors.
As a responsible landlord, you must carry certain checklists to ensure that your Santa Rosa property is habitable and in good condition at all times.
It is essential to examine the unit right before the tenant’s move-in. Create an extensive checklist that covers detailed remarks and add pictures to make it thoroughgoing. It will help you prove any tenant-caused damages when they move out.
Routine Inspections Checklist
We recommend you take a copy of the move-in checklist every time you go for an inspection to better note the changes. Create a detailed inspection report based on your observations and any other noticeable damages. It will help identify property damages and get maintenance tasks done on priority.
Carry a move-out inspection checklist that lets you assess the damages beyond the regular wear and tear. If they are caused due to the tenant’s negligence, you can deduct the necessary amount for replacements or repairs from their security deposits. Also, remember to maintain the invoices of such repairs.
If you’ve purchased the property on mortgage, you’ll need to keep certain related documents handy, such as:
- Promissory note
- Purchase agreement
- Home inspection report
- Closing disclosure
- Seller disclosure
- Title insurance document
- Buyer’s agent agreement
These documents have crucial details like the loan amount, the approval date, the parties involved, details of the property, the cause of the loan, and the interest rate. Without these, you won’t be able to do any significant reconstruction or sell your Santa Rosa property.
You must refer to the insurance documents whenever you need to check if any of your property damages are covered under your insurance policy. The insurance contract will give you information about the specific coverage limits, the form of reimbursement, the time till you can get the compensation. Therefore, it is crucial to hold the insurance agreement as it is proof that your insurer will cover you for the damages or liabilities mentioned in the policy.
It is not always an easy task to manage all the paperwork independently. Consider hiring a property manager who can effectively handle all the paperwork for you. Work with the most reliable property managers in Santa Rosa, Redwood Residential Property Management. We have been helping landlords maintain systematic and detailed paperwork for their investment properties, providing them with a hassle-free property management experience.
For more information, contact us at Redwood Residential Property Management.