How to Successfully Review and Clarify Lease Agreements with New Tenants

Leasing out a property to tenants is a business agreement.  This means you are allowing others to lease your property for a determined price and length of time. The lease conditions are extremely important and equivalent to a business arrangement and must be taken as such. There are many who rent out properties, but few who understand the importance of personally going over the lease, slowly and carefully, with the would be tenant(s). Let’s assume that your lease may allow for only two tenants. But your tenants overlook it and in about a couple of months, invite additional friends or relatives over to live at your property. This will mean a higher use of your property resources which may not have been agree upon.

A perfect way to avoid a similar situation is to go through every line of the lease document thoroughly and make sure that there is complete transparency between lessor and lessee.

Let us now go through the things to keep in mind while reviewing a lease with a new tenant:

1. Allow ample time for the new tenant to read and understand the lease terms on their own. This will allow them to relax during the meeting and to not feel rushed. Accordingly, they will be more involved and invested in the meeting with you, making it a pleasant experience for both parties.

2. Bring the lease agreement with you to the meeting, as without it, the discussion holds no value whatsoever. Your tenants don’t know you and there is no reason why they should take you at face value. Besides, if you miss an important clause, which you are bound to, you could end up with an angry tenant down the line.

3. A lease agreement may be easy to comprehend for you and you may have gone through a number of them. But for your new tenant, who may have only seen your lease once or twice, this can become a complicated situation. You need to be patient and go through every line with them and allow them to question you on the terms and conditions. However, here the customer/tenant might not even be interested in reviewing terms and conditions. In that case, you should proactively ask them to question you on the lease. This will not only give your tenant(s) a confidence in you but also make sure that every single condition of the agreement is crystal clear to them.

4. Concentrate and emphasize on the most critical points of the agreement. Make it perfectly evident to your client that you mean business and want them to be on the same page as you. Things like the length of the agreement are important and should be communicated thoroughly and clearly. A tenant is also a customer, paying you for the services rendered in your property. Therefore, if he or she looks bewildered or unhappy, probe them further for clarification. Make sure not to leave any stone unturned while discussing the agreement.

5. The creation of the agreement that you create for your lease is solely up to you. Consequently, the responsibility to clarify the same to a potential tenant is on your shoulders as well. There may very well be a number of unusual terms/clauses on your lease agreement which may be confusing or strange to the tenant. Here, you must understand the necessity and thoroughly explain why a particular clause was necessary to be included.

6. It is important for you to maintain an air of friendliness mixed with professionalism when you are dealing with tenants. This will keep the discussion concise and comprehensive without your tenant feeling uncomfortable or rushed. Friendliness ensures that your tenant(s) can feel relaxed and take their time to ask questions and clarify any doubts. Professionalism ensures that you don’t speak out of context, or say anything inappropriate or slang. Your tenant(s) should respect and trust you as it will lead to a working business relationship between you and them.

Any lease agreement is full of regulations and conditions, and for any tenant, these are new. As their future landlord, they need to see you as someone responsible and trustworthy. It needs to be established that the agreement is entirely legal and justified; the terms perfectly clear to them. After all, we all look for honesty and transparency when signing any contract.