SiIlly question - please help!! - Landlord Forum thread 348885

SiIlly question - please help!! by Sahara (NJ) on October 22, 2016 @23:39

I have a situation where a tenant family wants to sign up for a 3 year lease.
Can anyone share a sample lease (or part of the lease) a 3 (or multi) year lease with a rent increase of x% every year?
Can't find this kind of lease online.

Thanks

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Re: SiIlly question - please help!! by Garry on October 23, 2016 @00:54	[ Reply ]

Do not EVER sign a 3 year lease !! There is nothing you as a LL will gain from it. Commercial leases are signed for 3-15 year terms, but NEVER residential leases. You don't know that T from Adam. If you don't like how they are living, for any reason, you may not be able to get rid of them til the end of the lease. 1 year is plenty long for a residential lease. I own 20 homes I rent out, and have been a LL for 36 years. I used to sign 1 year leases. But starting 8 years ago, ALL my leases are now month to month, starting from day 1. I want the ability to get rid of a T fairly quickly, by giving them a 30 day notice to move, if they are not living the way they should. I currently have 4 tenants that have been with me for 10-19 years. We haven't signed a lease together for years. Your Ts can sign a 1 year lease, and keep signing them a year at a time, and be there for 10 years if they wish. Just don't let those $$$ signs cloud your common sense. Even with built-in rent increases each year, you as a LL lose too much control over a T when you sign a long lease. Besides, if something happens in that T's life that they need to break their lease, your "peace of paper" you signed is not going to stop them from not paying rent, or moving out. And very likely your state LL/T laws say you must MITIGATE damages if they move out early. That means you must try to rerent the place asap if the T moves out at, say, 20 months into your 3 year lease. You would not be able to let the property set vacant for the remaining 16 months and expect a judge to award you rent money for those 16 months from your former T.

Re: SiIlly question - please help!! by Katiekate (New York) on October 23, 2016 @04:34	[ Reply ]

I agree. Do not sign a lease for 3 years. Even a one year lease presents difficulties. especially in the beginning, having the ability to get rid of a problem tenant by just sending a 30 day notice terminating the tenancy is an excellent tool you would not have if you have a lease. You do not want to rely on the court to help you get rid of a problem. The courts are OK if they don't pay rent, but for any other problem it can be very expensive and you could very well still not get the tenant out, The 30 day notice is quick and doesn't use the courts.

Re: SiIlly question - please help!!

Re: SiIlly question - please help!! by Micah on October 23, 2016 @11:00	[ Reply ]

I agree with these two. Not to mention that it doesn't protect the LL at all. No judge will hold a 3 year lease as valid if the tenant wants to vacate early. All it does is lock you into a rental price long term.

Re: SiIly question - please help!! by Stephen (Washington) on October 23, 2016 @12:27	[ Reply ]

As a LL I would never do that long a lease, especially as I have apartments not houses. But let me provide a little different perspective on this from a tenant's point of view. Many years ago, as a tenant, I signed a 3 year lease on a house. Why? I was military and had just transferred into an area. I did not want to have to move during my 3 year assignment. They did include a clause in the lease that adjusted the rent for any increases in the taxes. And they did use that clause. So, there MIGHT be a situation where the LL could rationalize a long lease. If I ever had houses and was going to do a long lease I would consider adding a clause to cover increases in taxes and insurance and a clause that programmed annual rent increases (using either a percentage or an absolute value for the increases).

Re: SiIly question - please help!!

Re: SiIlly question - please help!! by MrDan on October 23, 2016 @21:22	[ Reply ]

This is not a silly question at all. Many landlords are unaware of marketing multi year leases. Many landlords are reluctant to use a multi year lease, but there are situations where such a lease can be beneficial. Many families with school age children are often drawn to multi year leases. That's so they have the ability to maintain their children in a certain school district. Offering multi year lease can set your rental property apart from other rentals, making it more in demand. Landlords are confused over this issue and conjure up all kinds of 'ifs'. As, it will be harder to get rid of bad tenants. Actually, the same process applies whether the lease is month to month or multi years. It�s not really about the length of a lease but the tenant. Landlords should be more concerned with the quality of the renter than what lease term. Good screening and rental criteria is important in selecting good tenants. Statically, longer lease helps eliminate bad tenants. Landlords are also afraid the tenant will break the lease early, but tenants can break or move out at any time, no matter what the length of lease. There are many reasons provided by law that allows tenants to legally break a lease. Careful screening will negate that possibility. It's long-term tenants where landlords make high returns. Turnovers are expensive, between lost rent, new paint, new carpets, advertising, screening tenants, cost of a vacancy adds up quickly. With the average landlord spending 40+ hours and over $1,000 to find new tenants, the savings of not having a vacancy is something to consider. Most landlords only offer the options of �Pay more� or �leave� at renewal time, but that doesn't have to be the only two options. By offering a third option that attracts good tenants and keeps the rental property occupied. That one option is, to offer a multi-year lease agreement, and have the rent only rise by $X instead of $Y each year. Such an offering could have contingencies requiring on time payments to be made in order for the rent to remain at a certain level during the lease term. Or if on time payments are made, the yearly rent increase will be 3% (or a fixed amount) instead of 5% (or a fixed amount). If the landlord collected the full one and one half security deposit, part of the security deposit could be offered to be returned upon compliance with the lease terms as an incentive. Landlords need to start thinking outside the box in order to be competitive. There are many tenants who are indeed looking for long term leases. Many leases in Europe are often for 3 years or more by law or they are indefinite. An example lease clause might be; 'It is hereby agreed and understood by both parties that, at end of the first year of the tenancy, the tenancy shall be liable for a rental increase of x% or $x. This clause will apply for every subsequent year stayed in the property.' A lawyer would be best to write a lease clause that fits your requirements.

Re: SiIlly question - please help!!

Re: SiIlly question - please help!! by Anonymous on October 25, 2016 @09:22	[ Reply ]

Your best bet is to just sign a one year lease with them. Verbally, you can let them know you will have the property for a long time, and it is always beneficial to have a long term tenancy, for both the landlord and the tenant.