Keeping all your documents in order is crucial so you don’t have to sort through all your paperwork when you need it. Moreover, you should also ensure that you have a backup of all your documents just in case they get lost or destroyed.
Nowadays, it’s easier to keep extra copies of your documents with the availability of cloud software. But having physical copies of these documents is a great way to back them up. Just make sure that they are stored in a safe and secure location where you can easily access them anytime you need to.
Why Rental Property Documents Are Important
Landlords and property managers alike keep a record of all their documents for several reasons:
By keeping a copy of your rental agreement, you can hold all parties involved accountable. This agreement includes the duties and responsibilities of all parties. So, if a tenant violates a provision in the rental agreement, you can easily check back the document as a reference when you need to impose a penalty as a result of the violation.
Your documents will come in handy in case certain issues with your tenants escalate to court hearings. For instance, if you need to evict a tenant legally, you may need all the paperwork that shows proof of the grounds for eviction.
Documents and other records can serve as legal evidence when certain disagreements arise. So, it’s crucial that you keep copies of these papers with you.
Being a landlord means you are running a rental business. If you want to see how your business performs, you should make sure to keep your documents on file. You should keep your lease agreements so you’ll be reminded if it’s time to renew.
Similarly, you should also keep a record of all your receipts for repairs and maintenance, as well as other expenses. So, you can better track your cash flow and overall return on investment.
A consistent document filing system can help keep your business organized, which is an important factor that can affect your success and growth.
Rental Documents That You Need to Keep
As a rental property owner, you need to determine the documents you need to keep and back up. Since there are plenty of documents involved in owning a rental property, you need to identify them using these four categories so you won’t get overwhelmed:
Lease or Rental Agreement
One of the most important rental documents that you need to keep is the rental or lease agreement. Make sure to keep a hard copy while the tenancy is active and retain a copy for the next few years after the lease term ends just in case any issues arise.
It’s also recommended to keep a scanned or soft copy as a backup in case something happens to the hard copy.
Amendments to the Lease
If, during the course of the lease term, there are amendments to the original lease agreement, you need to keep a copy of these amendments that are signed and acknowledged by the tenants. Attach any amendments to the original lease agreement. Keep a scanned digital copy as well that will serve as your backup.
Typically, a property inspection is done before a tenant moves in. The inspection reports should detail the condition of the property, including photos of how the property looked like during the beginning of the tenancy.
Other routine inspections should also be documented properly. After the lease term ends, rental inspection reports will come in handy upon checking the condition of the property to determine whether there is damage that is beyond normal wear and tear.
If you need to send a notice to the tenant, make sure to keep a signed or received copy of them on your file. For example, if tenants missed a rent payment and you sent a notice or reminder, you have to ensure that a copy of this notice is retained.
The same goes for other notices, such as notices to inspect the property, non-renewal notices, and other notices for violating any provision in the lease. These will come in handy in case you need to legally evict a tenant.
Aside from what was mentioned above, you also need to keep copies of the following important documents:
- Receipts for repairs and maintenance
- Emails or other forms of communication with your tenants
- Security deposit receipt
- Lead disclosure
- Tenant’s application form and other requirements
What to Do if Documents Are Lost?
In case you or your tenant lose an important rental document, make sure to reach out to the other party right away to get a copy. For instance, tenants who lose their copy of the lease agreement should be provided with another copy. You should also ask your tenant for a copy of the lease agreement in case you lose yours and you fail to keep a backup.
If both parties lose their copies of the rental agreements, you may agree to write up a new lease. It’s important to note that if you lose a lease, it may be difficult to enforce rules and other provisions stated in the original agreement. To prevent this from happening, make sure to take a digital back up as soon as possible.
Knowing and keeping the documents you need is an important practice for any landlord. This is mainly to keep any agreement between yourself and your tenant clear. But if you have any questions, it’s best to contact a property management company.
At Taylor Street Property Management, we are a full service property management company with the expertise to turn your rental into a lucrative investment. Contact us today for more information!