If you haven’t given much thought to the documents you keep—and those you discard—you risk being unable to defend your position in a dispute or pursue the tenant to collect damages in the event that becomes necessary.

Although the documents can vary depending on the property type, jurisdiction and other circumstances, these seven basics should be in every landlord’s property file.

1. Lease and Addendums
The lease is obvious. You should always have a lease, even if the tenant is a family member or friend, and that lease, as well as the property file, should be kept for at least one year after the termination of the rental agreement. In addition, keep on file any addendum, such as a pet addendum that outlines your expectations regarding pet ownership at the property.

Stacy Brown, franchise support manager for Real Property Management, recommends also making sure that there is a written record of who is responsible for what, whether it’s specified in the lease, in an addendum, or in a separate written document.

“A lot of first-time home renters, even those who have rented an apartment before, don’t know what to expect,” she says. “Some think everything will be taken care of for them, and then, you get a first-time landlord who doesn’t know exactly what his responsibilities are. There can be misunderstandings.”

Specify who cuts the grass, who replaces the light bulbs and who takes care of the mouse in the basement. Brown also suggests keeping a copy of all documentation presented to the tenant at move-in, including a copy of the local municipality and homeowners’ association rules, so you can refer to them as needed.

2. Application
You should also keep the tenant’s rental application on file, for two reasons. First, if the tenant disappears owing you money, the application can provide information, such as his Social Security number or employer’s phone number, that could help you track him down for payment.

But, it can also be an essential resource in the event of an emergency.

“Heaven forbid that something awful happens, but if it does, you want to know whether everyone made it out, whether pets need to be rescued, and who to call,” Brown says.

It’s not uncommon to get more than one application for a property, either because you rejected prior applicants or they changed their mind on the property. Should you save those?

Brown says no. Although property management companies are required by law to keep all applications on file, an individual landlord puts himself at risk by holding on to “a goldmine for an identity thief,” according to Brown. She recommends shredding the application as soon as you reject the tenant.

The American Bar Association, however, recommends keeping the applications for all prospective tenants on file, so you can show that you have a consist, nondiscriminatory screening process in place should you ever have to defend against a Fair Housing lawsuit. If you decide to keep these applications, store them securely.

3. Inspection records
Any documentation obtained during a walkthrough or inspection needs to be kept on file to establish the condition of the property at that time. When the tenant moves in, complete a walkthrough, going from room to room, preferably with a checklist, and note any damage. File the original, signed by both you and the tenant, and provide him or her with a copy. Do the same if you conduct six-month or periodic inspections.

Then, when the tenant moves out, you have a reference point to determine whether any damage was done during his or her occupancy. As you go through that final walkthrough, again, make note of the condition of the property, and keep this document in your file, too.

Aaron Marshall with Keyrenter Property Management encourages landlords to also take photos and video to supplement any written documentation and to file those. Images of the condition before move-in and at move-out leave little room for dispute.

“It should be a slam dunk issue,” Marshall says.

4. Payment Records
Did the tenant pay? When did he or she pay? These issues can be important during disputes, and without documentation, you don’t have a way to back up your position. Maintaining this information is crucial, says Liz Fulghum with EAC Properties in Nashville.

Although you probably won’t have a written copy in the file, you should have some method of tracking payments. Without it, Fulghum points out, it’s easy to let a few weeks, or a few months, slip by before you notice the tenant hasn’t paid, especially if you’re managing multiple properties.

She recommends using an online system because they allow you to easily track payments, offer automated (often faster) payment options and payment reminders.

“Going online makes it quick and easy to see a property’s history, plus gives added convenience to the tenant,” she says.

5. Warranties and Repair Information
Whether you need to keep warranty and repair documentation for appliances, flooring and other major components can depend on how long you intend to hold onto the property. If you plan to sell within a few years, some property managers argue you don’t need to retain documentation on the new water heater’s installation.

On the other hand, even a new water heater can have something go wrong, and it would definitely be helpful, in that case, to have the documentation. Plus, when you do sell the property, you can show that the water heater is only two years old, and you can provide the new owner with information about it.

If you plan to hold the property long-term, you definitely want to save that information, says Sydney Williams, director of marketing for Alabama Rental Managers, a management company with more than 800 single-family homes in the Birmingham area. She advises documenting any maintenance issues that occur within the home and filing all warranties and repair information.

6. Communications
Any written communication between you and your tenant—including letters, notes sent along with the rent check and emails—need to be filed. This also applies to written communication between you and other parties, such as the neighbor who doesn’t like having a rental next door.

Real estate lawyer David Roberson, who also manages more than 100 properties through Silicon Valley Property Management, takes documenting communications one step further. He restates every conversation with the tenant, vendors and other interested parties in written form, whether a memo, email or letter. (See sample below.)

Not only does he have a written record of the conversation (and does not have to try to remember it three weeks later) but, if the other party doesn’t refute the letter or email he sends, it makes it “virtually impossible to impeach” his position at a later date.

7. Legal Documents
Most landlords realize they need to retain copies of all legal documents such as notices to comply or eviction notices, but what you might not realize is how you file those documents can make a difference, according to Roberson.

Legal documents have a history behind them. That eviction didn’t just come out of the blue—it follows a slew of late payments, an email from the tenant promising to pay and maybe even a bounced check. If you just randomly toss all of the documents related to a property into a file, you may have a difficult time finding what you need when you need it.

Roberson recommends storing documents in a file containing separate folders with labels, such as Leases, Contractors and Communications, and putting the papers in chronological order. This creates a “read-through” of what has happened, allowing your attorney—or anyone else, for that matter—to see precisely how the events unfolded. (It also saves the attorney from having to do this for you, for a fee.)

If you create and maintain a highly organized filing system, when you need to support your position in a legal action, you’ll be able to find the necessary documents, and your attorney will be able to better prepare for depositions, responsive pleadings, opposition briefs, motions and trial briefs.
This can only strengthen your case and increase your chances of prevailing.

About the Author:
Teresa Bitler is an Arizona-based freelance writer. Contact her at teresa@teresabitler.com.


Alabama Rental Managers

Keyrenter Property Management

Real Property Management

Silicon Valley Property Management

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  • Teresa Bitler

    Teresa Bitler is a regular freelance contributor to Think Realty Magazine. Contact her at teresa@teresabitler.com.

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