The laws surrounding the lease agreement, also known as the rental agreement, are what make up a state’s landlord tenant laws and pro-landlord states are those with laws favorable to landlords.
In an ideal world oil would mix with water, pigs could fly, and landlords and residents would coexist in peace and harmony. However, we don’t live in a perfect world, so lease agreements (rental agreements) are really important.
Rental agreements and lease agreements are very similar, but not technically the same. In legal terms, a lease agreement governs longer fixed-term contracts (typically one year or longer). Whereas a rental agreement refers to shorter month-to-month contracts. For the purposes of this article, I will use them interchangeably.
What is a Lease/Rental Agreement?
A lease agreement is a contract between the landlord and tenant. They give the tenant the right to occupy the premises under certain conditions. At a minimum, a lease agreement will include things like:
- Names of the parties involved
- Address of the property
- Term of the lease
- Amount of rent for that term
- Due date for rent and terms of late fees
- The amount of the security deposit
- Tenant’s responsibilities
- Owner’s responsibilities
- Rules surrounding pets and guests
Once the contract is signed, the tenant moves in and everything is hunky-dory. At least that is what you want to happen. Never forget that tenants pay your mortgage and tenants put food on your table. Treat them well, respect their right to privacy, address their concerns quickly, provide them with a clean, comfortable place to live, and honor your word by abiding by the rental agreement.
If you do those things, it will go a long way toward minimizing your tenant problems. Despite that, from time to time even the best landlords have problem tenants.
Dealing with a problem tenant begins with a notice. In some way, they have violated the rental agreement and you need to get them back in line or out the door. While the process tends to be similar whether you’ve invested in one of the pro-landlord states or not, it’s faster and easier in those states with landlord tenant-friendly laws.
It all starts with an eviction notice. The three notices at your disposal are:
- Notice to Pay or Quit
- Notice to Cure or Quit
- Unconditional Quit Notice
Notice to Pay
When the tenant doesn’t pay rent, they’ve violated the lease agreement. This notice informs them that they are in violation and have a certain number of days to pay up or you will terminate the lease.
Notice to Cure
In this scenario, the tenant has paid his or her rent but has violated the lease agreement in some other way. Maybe they added unapproved roommates, pets, or damaged your property; whatever the violation, you are giving them notice to make it right within a prescribed time period or you will terminate the lease.
Unconditional Quit Notice
Unfortunately, some tenants just have to go. Perhaps they’ve participated in illegal activity on the property or have made themselves a nuisance by repeatedly violating rules. This notice tells them that you are terminating the lease and rehabilitation of their behavior won’t fix it.
The Eviction Process
If your tenant doesn’t pay or cure in the prescribed time period or if you’ve served him or her with an unconditional quit notice and they refuse to move out, then the next step is to file for eviction.
Eviction is a formal process that goes through the courts. Once you’ve filed your eviction papers with them, a court date for a hearing will be set. If the landlord wins in court, a date will be set by which the tenant must vacate the premises. If they don’t leave, then an authorized authority, typically the sheriff, can remove them.
In general, this is how the process works. Given that rental law falls to the states and local governments, you may find variations to this process as well as the use of different terms. Ultimately, like with most legal processes, there are no winners when it comes to eviction. It can be time-consuming and expensive to complete the process.
Investing in multifamily apartments in landlord-friendly states tends to expedite the process while minimizing the costs. Some states that are well known for favorable landlord tenant laws are:
Investors in tenant-friendly states run into obstacles that extend the eviction timeframe and add increased costs for landlords. It’s typical to see onerous legal restrictions in these states that apply not only to the eviction process but also to the terms of the lease agreement. Some states that are well known for their unfavorable landlord tenants laws are:
- New York
Don’t Be A Landlord, Be An Investor
Being a landlord means managing tenants, toilets, and 2:00 a.m. phone calls. One of the responsibilities of a landlord is evicting tenants. You can minimize that unpleasant process by being a fair and excellent landlord. However, even excellent landlords aren’t immune to problem tenants.
Therefore it is important to have sound lease agreements and rental agreements in place. Landlord tenant laws shouldn’t be the only consideration when choosing which state to invest in; however, it is important to your investment success to strongly consider investing in a pro-landlord state.
An easier way to handle these issues is to skip being a landlord altogether. Instead, you can invest in real estate with a professional team in landlord-friendly states that know all about landlord best practices and will handle the lease agreements, rental agreements, and eviction processes for you.