2024 - Agile PMS

Tenant Relations in Property Management Firm

Agile Property Management – as a Property Management company provide Rental Assistance Services and Property Management Services understand the importance of Landlord – Tenant Relationships.

Landlord and Tenant is an association between two individuals where the Landlord rents out his property and allows the tenant to use and occupy the property for a rental fee. The agreement between the tenant and the landlord is referred to as the Lease Agreement / Rental Agreement

A Tenant once told us that Tenants are your customers and boss. To evaluate this comment let us look at the conditions for existence of Landlord Tenant Relationship:

(i) The Landlord is the owner of the property and is to have a title to the property.
(ii) The Tenant admits to the ownership and understands a future interest in the property.
(iii) A Rental Agreement / Lease Agreement is in place with both the Tenant and the Landlord.
(iv) The Landlord agrees to the tenant occupying the property and using it is only the rights to use of property.

Landlord Tenant Relationships are mutual where the Landlord wants his property to be safe and well maintained and the tenant wants attention to his queries and needs. Let us look at the factors that enable maintaining a good relationship between the Landlord and the Tenant.

Property Owners – Understand your Tenant

From the Landlord’s point of view, it is very important to understand to the tenant as a Human Being and to have a transparent and clear communication with the Tenant. The Landlord has to be approachable and have an open line of communication with open lines of communication.

If there is a request concerning the safety and security of the Tenant, he should feel that it will be attended with utmost priority.
A Tenant may make a request for some add ons or alternations to suit his needs. If the request is not aligned with long term plans it is advisable to have a clear cut communication on the same.

If the Landlord plans to increase the rent, the Tenant should be informed well in advance on the increment and the amount to be increased.

The Landlord should ensure the peaceful occupation and enjoyment of the property.

Tenants – Understand your Property Owner and do what is required

From the Tenant’s point of view, it is essential to understand the owner’s point of view and the reason for which the property is rented out. The main reason for the owner to rent out the property is to get rent and maintain the property in good condition.

Pay rent on time and ensure that you maintain the property well and hand it over to the Landlord, in the same condition that it was given to you.
An important part of the maintenance is to do the minor or running expenses from time to time and report the same to the Landlord.

No landlord will appreciate complaints about Tenant from neighbours. Therefore it is essential to maintain good relations and behave well with the neighbours. The tenant has to follow the society / building rules at all times.

The crux of the matter is that it is the Rental Agreement / Lease Agreement that connects the Landlord & the Tenant. The Landlord has agreed to rent out the property to the Tenant and the Tenant has agreed to pay a rent. The Agreement is binding from both sides which highlights the duties of both the parties and what they have to do and what they do not have to do. The relationship between the Landlord and Tenant can be analysed through a contract as to how the property is used between the parties.

Subletting

In simple words subletting means creating a rental agreement / lease agreement, where the tenant rents out all or part of the building to another individual for a particular period. In most cases it is a part of the rented premises and not the entire premises. Renting out the entire space could result in breaching of the lease agreement. The individual to whom the property is rented out is a subtenant.

Subletting can be worked out in two ways

1. The Tenant becomes the Landlord to the subtenant. In such a case – the original tenant is a tenant to the Landlord and has to abide by the rules of the lease agreement. He is a landlord to the subtenant and has to follow the sublease with the subtenant. In such a case, the original tenant is liable for all the actions of the subtenant. In this case the Landlord expects you to pay the rent though you are renting out the property with his permission.

2. The Tenant becomes a cotenant along with the subtenant. In such as case, the original tenant and the subtenant are jointly responsible and in lease with the Landlord

As a Tenant, in most occasions, subletting is done

(i) You want to come back to the same apartment at a later date.

(ii) You are staying with your room mates and at-least one of them is staying behind. This is most common with bachelors accommodation or students accommodation.

(iii) Companies when they downsize – also think of subletting the premises.

The First and Foremost thing to be done before subletting the property is to check with the Rental Agreement / Lease Agreement for the subletting terms and conditions. If it is not mentioned or permitted as per the agreement, then you have to get a written permission explicitly from your Landlord (better in writing) before you sublet the property to avoid conflicts and legal issues. In such a case, the Landlord may charge a fees or additional rent for subletting the property.

Sublease

Sublease is a lease agreement between the tenant (who already has a lease with the Landlord) and the new occupant who will take a part of the building or whole of it for a particular period. The Landlord is generally not a part of the sublease. The sublease claims that the original tenant decides to let someone else share and stay in the property with the permission of the Landlord. On the other hand, as an owner of the Property, the Landlord, having more rights can refuse to sublet.

Sublease can be for a long term or short term. The sublease does not affect the lease between the Tenant and the Landlord but the original lease is incorporated by reference in the sublease. Similarly a sublease cannot overrule the restrictions contained in the original lease. For instance, if the sublease is for a restaurant and if original lease has a restriction for commercial or retail, then the sublease cannot be allowed.

Though subletting could be an ideal (practical) choice for making use of the unused space in the rented house and also generate additional income, you need to evaluate the pros and cons of the decision.

Advantages of Subletting

Space Utilisation – If you have a space that is unused, subletting results in maximum utilisation of the vacant space.
If you are not staying in your house and paying the rent, then you feel that money is being wasted. When you sublet – you are sharing the rent thereby saving money.
If you are frequently travelling and will be away from your property regularly, then you have someone to take care of the property in your absence.
Helps to ensure that the Landlord gets the rental payments due to flexibility of financial burden and sharing of the maintenance tasks.
You do not break the lease when you sublet the property and gives you flexibility.
Subtenants can become primary tenants at a later date if required.

Disadvantages of Subletting

Tenant Finding is the most important factor in subletting. You have to make a thorough background check of the individual before subletting else it could pose a serious risk to both the tenant and the Landlord and you can end up with many obstacles.
If the subtenant is unreliable, you could end up spoiling your reputation with the Land Lord. Since your reputation is at stake, you can use the services of Rental Assistance Service Providers or Property Management Service providers to find a tenant or do the background check.
If the subtenant damages or skips the rent, then you will end up paying for the same because the Landlord is not a part of the sublease.
The Landlord must rely on the primary tenant to ensure the original terms and conditions of the lease are followed by the sub tenant.
If there is a conflict with the subtenant then you will run into various obstacles. You will be responsible to the terms and conditions as per the original lease agreement with the Landlord.

It is very important to create a sublease agreement and not do things over a handshake or by word of mouth. This could result in leaving you open to pay for the damages and taking over unpaid rents.

Keys Factors to consider for Sublease Agreements

It is important to determine the security deposit (along with the rent) when subleasing the property to cover the damages and unpaid rent (if any in future).
The Sublease should mention the rent and the payee details to be clearly mentioned – whether it is to be paid to the Tenant or to the Landlord.
The Sublease should specify the period of the sublease and the renewal terms and conditions.
The sublease contract should clearly mention the property extent that the subtenant will use and control including the utilization of the amenities and common areas including the parking sharing.
The condition of the property is to be mentioned and any improvements to be done by the sub tenant should be mentioned.
The sublease is to mention the purpose for which the property is to be used and the duration of the same.
There should be a plan for the payment of the common bills and the utility bills.
The Sublease should mention the utilization of the premises and the amenities provided to the subtenant

Conclusion

Now that you have got a fair idea of the subletting, subleasing the important point is that you have to screen the subtenant and make sure he is reliable else it could cause more problems than solving the problems. The worst thing that can happen is having a tenant who is unreliable and breaches the sublease. You are ultimately legally responsible with the Landlord.

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