3 Reasons Why You Should Put Everything in Writing in Your Rental Business

Posted in Blog  
  on Dec 21, 2015

It’s easy for both new and experienced landlords to make the mistake of operating in a casual manner, where word of mouth and handshake agreements are all you need. Indeed, you’ve probably even heard that building the sort of relationships where you can trust and be trusted is the best way to become a good businessperson.
But even the best relationships can go sour, and nothing causes discord like money does. While handshake agreements can be fine when circumstances are good, you need written agreements to protect yourself for the inevitable times when they go bad. Here are three reasons why.

1. Verbal Agreements are Meaningless
While many states have laws giving some degree of legal weight to verbal agreements, they often don’t hold up in court. And if you’re in a state that doesn’t recognize verbal agreements, you’re flat out of luck.
The problem with verbal agreements is that, if you do ever end up in court, it instantly becomes a “he said, they said” situation. If you have nothing to back up your claims beyond your story of how things happened, then you have nothing to rely on when it’s time to convince a judge that your assertions should stand.

2. There’s No Verification Without Documentation
When it comes to the courtroom or arbitrator’s office, the only currency that truly matters is written documentation. The only way to avoid “he said, they said” scenarios is when you have a clearly written record of how circumstances arose, what was agreed to, and how that agreement was violated.
Most importantly, that documentation needs to cover any and every event that may lead to financial consequences. It may be tempting to simply say “okay” when your tenants ask to repaint their apartment, or do some minor construction, but that would be a mistake. What if they paint with a type of paint that damages the walls, or requires professional assistance to strip when you want to re-paint? What if they put the structure at risk during their “minor” construction?
If any scenario arises where a seemingly tiny thing ends up costing you money, you don’t want to risk having to pay for it out-of-pocket. The only way to avoid that risk is to be able to show a judge or arbitrator that you clearly defined the terms for a given situation, and have written acknowledgment of those terms from your tenant or other relevant party.

3. Your Rights Rely on Documentation
In many states, your rights as a landlord extend only as far as you asserted them in the lease and other documentation. You may not think tenants need to be told that they’re responsible for damaging your property, but the boilerplate liability clauses exist in most leases for a reason.
To fully protect your rights, you need to assert them in clear text, and have the other party’s signature on the document acknowledging the terms of those rights. If the worst case happens and you need to take a tenant or other party to court, you’ll have a difficult time convincing a judge that your rights were violated if they hadn’t been properly established to begin with.
Ultimately, when it comes to your landlord business, you need to operate with one single, straightforward rule: put everything in writing, every time.



The Landlord Tenant Board: What it is and When it is Needed

Many times, there are issues between a landlord and a tenant that need to be resolved but are failed to do so, because both parties have gone too far with their actions, and have retaliated in the... More

How to Create a Residential Lease Agreement

Where there is a landlord, there will also be a tenant, and it is no surprise that these two parties can only work together once there is some sort of agreement, contract or a binding deal in place.... More

The Best Sites for Rental and Lease Agreement Templates

Many landlords find it difficult to write and draft a lease agreement. Since every State has its own general template, it can also be difficult to make sure your lease agreement meets all the criteria... More

5 Landlord Forms that Every Landlord Should Have

When it comes to being a landlord, one should know that it is not for the unprepared individual. This should be clear that being a landlord does not simply mean that you will be taking the rent and... More

Landlord Obligations: The Responsibilities of a Landlord

Becoming a landlord is a major deal and no one can simply get up and think, “well, yes I think I should be a landlord and rent out my flat.” If you are thinking that you would like to be a landlord,... More

The Best Landlord Associations for Landlords to Join

If you’re a landlord and want to manage your business in a better way, you should endeavor to get in touch with those industry experts who have the experience and the skills to help you do it. This is... More

The Best Landlord Forums

Landlords and aspiring landlords, do not become as such, without guidance and advice. There is a lot that goes into being a landlord nowadays; in fact, there is so much to learn that it often confuses... More

The Biggest Landlord Problems and How to Fix Them

Renting out an apartment or a house can become a constant revenue source for landlords, but at the same time, it gives rise to several problems. It is a fact that high standards, a strict lease... More

Landlord Tenant Disputes

If you are currently thinking of becoming a landlord only because it helps you have a constant stream of income, you should think twice. It’s not that you should not consider offering your property... More

Unpaid Rent

When you talk about the most common disputes arising between landlords and tenants, nonpayment of rent has to be there in the list. People rent their properties to earn money, and when a tenant... More