The landlord’s life can be pretty sweet most of the time, but it has its downsides. Searching for fantastic tenants, avoiding evictions, and dealing with maintenance issues can be a pain. One thing almost every landlord struggles with most, though, is the mountain of documents and paperwork that accumulates.
Every tenant has a package of paperwork and important documents concerning their lease. Then there are court documents about evictions, receipts for rent payments, security deposit insurance, receipts, records of maintenance and replacement of appliances, and many other items.
It’s important for landlords to maintain all records for future reference, and that can be overwhelming to even an experienced operator. This guide will explain why they should keep files, which landlord documents to keep, and where to keep them.
The Importance of Keeping Landlord Documents
Accurate documentation is critical at every phase of renting a property. The most common reasons for landlords to keep detailed records include:
- Legal issues
- Tax responsibilities
- Improves relationship with tenants by minimizing disputes
A landlord without proper documentation is inviting trouble on many fronts. Staying organized and using an efficient filing system is the best way to be prepared if issues arise.
Landlord Documents to Keep for Every Property
Every rental situation is unique and requires documentation of the details that make it so. Some landlords may enforce a strict noise policy, for instance, and they should have on file each tenant’s agreement to stay quiet between certain hours. The landlord may have grounds for eviction if the tenant violates the contract with the signed document in their files.
The law requires landlords to keep certain documents on hand for a specified number of years, but it varies by state. There are some standard documents that every landlord should keep track of, however. These documents are typically used in legal proceedings and tax documentation and should always be saved for at least seven years:
1. Rental Application
Rental applications serve as an introduction between the tenant and landlord. It typically lists a tenant’s contact information, references, past rental information, proof of income, and authorization to pull public records such as criminal history and credit report. Keeping rental applications around for at least three years helps identify people who have been turned down or might be future tenants.
2. Screening Documents
The second step in the rental process after receiving the application is to screen the prospective tenants. The screening process results in several documents, including:
- Background check
- Criminal background check
- Rental history
- Credit check
Storing screening documents allows landlords to double-check the information at will and save money if the applicant reapplies.
3. Signed Lease
A signed lease is proof that the tenant has agreed to all stipulations set forth for the rental unit. It covers every aspect of the business relationship, from rent payments to the number of occupants and any stipulations about pets. All terms are fully enforceable as long as the landlord has a copy of the signed lease.
4. Records of Property Improvement
Keeping records of improvements can help landlords in a few ways. It’s proof that improvements are regularly made to the property and can help with replacements if something breaks. It’s also valuable at tax time if the improvements are tax-deductible.
These records can also be a big help when having the property appraised. Knowing how much has been put into the property can help determine if the appraisal is fair.
5. Utility Records
Holding onto utility records can be helpful whether the landlord pays the bills or the tenant. Keeping track of account numbers and amount of utilities used for each tenant can help landlords be aware of leaks or existing problems with hardware.
6. Lease Renewal Letters
Landlords typically send lease renewal letters to tenants they want to retain a few months before their lease ends. It’s a formal invitation to continue living in the unit, and it also lists any changes or adjustments to the current lease. This could be rental increases, incentives, or changes to the pet or parking policies.
7. Pet Policies
Leases typically include pet policies, but sometimes they’re a standalone document to draw attention to their significance. Some units are pet-free because of tenant allergies or some other health-related issue. Pets can be deadly to others when this is the case, so it’s good to have that documented.
Landlords should always keep signed pet policies in each tenant’s file to document that they are fully aware of and agree to all terms. This can serve as proof of violation if it comes to eviction or responsibility for damages.
Most of the reasons for keeping diligent records as a landlord are obvious. What isn’t so obvious is how to store all these critical documents safely.
Ways Landlords Can Store Vital Records
Landlords should always store vital records for property management in more than one manner and place to ensure a copy is always available in an emergency, such as a fire. Here are a few ways landlords can file leasing documents:
Paper Copies
They can store original paper copies of all signed documents in a fireproof filing cabinet. This old-school way of filing is a common approach for holding onto original documents, but it comes at the risk of damage and loss.
Digital Copies
Paper copies of documents can be scanned and stored on a hard drive or in cloud storage. This is a great option when office space is limited, but it’s always a good idea in any case. Digital copies are simple to store and access at any time, and space is not an issue.
Tenant Screening Service
Landlords can use a tenant screening service to simplify the screening process. These services collect applications, leases, rent payments, additional fees, and other documents to help landlords stay organized.
Keeping crucial lease records is a must, but efficiently storing them is equally important. Many landlords are leery of jumping on the digital bandwagon, but it makes the process much easier, and many are making the leap.
A Digital Approach to Help You Stay Organized
Record-keeping doesn’t have to be a problem. Rent Safe is a digital service that helps renters easy-submit their applications for rentals and enables landlords to streamline the steps it takes to screen potential tenants. Ready to minimize the risk of low-quality tenants? Want to protect your properties and your bottom line? Then you need to check out Rent Safe.
Our online portal lets you easily create custom tenant applications and screening processes. Your applicants can add cosigners, share references, upload documents, and more, and the customized dashboard provides convenient access to all the information you need. Contact our office today to learn more.
