Connecticut law goes a long way in protecting residential tenants. Some say that the law puts landlords at an unfair disadvantage. You, the residential landlord, must actively seek to protect your investment. There are many steps you can take to level the playing field, thus saving you time and money.
Here are some things to keep in mind:
BEFORE YOU START LOOKING FOR A TENANT:
● Make sure that the premises comply with general health and safety rules – the smoke detectors work, there are adequate exits, etc. Also, make sure that the utilities function (there is sufficient heat, running water, hot water, and electricity), and that there are no problems of infestation, mold, and the like.
● Make sure that the utilities are individually metered. If the tenant’s meter is also feeding other tenants or common areas, then you are setting yourself up for big problems. There are many horror stories of tenants not paying rent while the landlords are stuck paying the tenants' utility bills. Think that’s absurd? Well, it absolutely is absurd, but it does happen.
WHEN YOU ARE LOOKING FOR TENANTS:
● Have your prospective tenants complete and sign an application form that, at a minimum, asks for: (1) identification information, such as full name, date of birth, and social security number for each person who will be living in the premises, (2) place of employment, (3) current residence and current landlord, and (4) release for background/credit check. There are several ways to get background/credit checks on-line for a fee. You can have your applicants pay for the background/credit check. Also, get a photocopy of the drivers licenses of all adults.
ENTERING INTO A LEASE:
● Written Lease: Having a good written lease can go a long way to protecting your interests. Don’t rely on a form you purchased at the local office supply store or got off the internet. Many of the terms of the lease must be state specific. Read the lease carefully to make sure that it has provisions such as: maximum security deposit allowed by law (see Securty Deposits below), late fees, charges for bounced checks, holdover provision, court costs and attorneys' fees, etc. This is not an exhaustive or detailed list. Santoro Law Office, LLC can provide you with custom leases designed to meet your specific needs.
● Lead-Based Paint Disclosures: Federal law requires that owners of most residential units built before 1978 give tenants certain disclosures regarding the presence of lead-based paint. Generally speaking, the disclosure must include whether the presence of lead-based paint is known, and any records regarding the presence of lead-based paint. Also, the landlord must give the tenant the pamphlet “Protect Your Family from Lead in Your Home,” which can be down-loaded from the EPA and HUD websites.
● Condition of the Premises: Often times, when litigation involves damages to the premises, tenants claim that (1) the tenant didn’t cause any damages, and/or (2) any damages at the premises were there prior to the tenant’s occupancy. The issue becomes one of who has the best proof. The burden of proving physical damages and the value of the repair is on the landlord, so oral testimony alone is not likely to be enough. Take photographs of the entire premises before your tenant takes possession.Document who took the photographs, when they were taken, and what each photograph shows. When you are executing the lease with the tenant, do a walk-through of the premises and take accurate notes on the condition of each portion, room by room. Both you and the tenant then sign the list and attach it to the lease as an exhibit. The combination of your testimony, the photographs, and the signed exhibit to the lease can be powerful evidence in court.
● Security Deposits: Connecticut has specific rules regarding a landlord’s use of a security deposit. If the tenant is under 62 yrs old, then the maximum security deposit is an amount equal to two months’ rent. If the tenant is 62 or older, then the maximum is an amount equal to one month’s rent. Although you may have heard the term since you were a child, avoid saying “first, last, and security deposit” – it only confuses things later on. You must place the security deposit in an escrow account at your bank. Talk to your branch manager about how to set up such an account. With limited exceptions, you must give the tenant interest on the security deposit. You cannot use the security deposit until after the tenant has moved out. Once the tenant has moved out you have thirty days to determine how much is owed to you, and to mail the remainder (along with the interest on the entire security deposit) to the tenant with a written explanation of the amount retained. Only then is the money yours. This is only a general description of the technical rules regarding security deposits. If you don’t think you know all the rules, then do your research or contact Santoro Law Office, LLC to schedule a consultation.
RECORDS, RECORDS, RECORDS:
● Accurate, organized, and consistent records will help you save time and money. Log each rental payment by date received, amount paid, and tenant's running balance. It’s a good idea to keep a copy of each check you receive. When a tenant pays cash you must give the tenant a written receipt; keep a copy of the receipt or write the information on the stub if you have a receipt book. Mail all notices and communications to your tenant by certified mail. Keep a copy of each notice along with the receipt and the return card from the certified mailing. When you are designing your record-keeping system, keep in mind that the records are not only for your information purposes and taxes, but also for trial evidence (before a judge will dispossess a tenant for nonpayment of rent, you will have to prove that the tenant actually didn’t pay rent).
● If you remember only one thing, then remember this: Treat your endeavor like a business, not like a hobby or a charity. Don’t let tenants get behind on rent. Even with a security deposit equal to two months’ rent and starting the eviction process immediately after the statutory grace period, it’s likely that the security deposit will be used up in uncollected rent and eviction costs. Also, you’ll be out further money if you later find that the tenant damaged the premises. Enforce late fees so that tenants know you are keeping tabs. In short, your obligation is to be fair (as opposed to kind), so be fair to yourself and protect your investment.
Santoro Law Office, LLC is proud to fight for landlord rights. Contact us to learn more about how we can help protect your investment in residential real estate.