Never Stop Learning in Rental Property Investing and Management

“It’s what you learn after you know it all that counts.”
~ President Harry S. Truman ~

Colorado Realty and Property Management, Inc. wholeheartedly believes in this sentiment and puts it into action. Continuing our industry education and enhancing our knowledge of the ever changing landscape of Property Management is critical.

Recently, Lyle Haas, President and Managing Broker of Colorado Realty and Property Management, Inc. (Colorado RPM) attended the Northwest Regional Conference held in Spokane, WA. This conference was one of five Regional Conferences sponsored by the National Association of Residential Property Managers. Mr. Haas took a six hour course on Tenancy and an additional six hour course on In House Maintenance, both issues that garner strong reaction.

The objective of the Tenancy course was to look at and understand the elements of a Lease Agreement, company policies and procedures, handling conflicts and understanding the owner/broker risk. Sounds dry, doesn’t it? It’s not! This comprehensive course covered the intricate day to day issues that come up in a property management office.

The objective of the In House Maintenance Company course was to provide the property management professional with the tools, techniques and the background of information necessary effectively operate an in-house maintenance company. This impacts all of our owners as we want to make sure we are using capable vendors and not just the least expensive option. Effective vendors maximize your maintenance dollars!

The final and possibly most important class was on Ethics. This course covers the basics of ethical behavior in a property management business. Only NARPM® members are required to take the Ethics class, though we strongly believe that all Denver and Boulder Property Managers, whether members of NARPM® or not, should be required to participate. The NARPM® Code of Ethics is reviewed as well as the entire grievance process.

All Colorado RPM employees are required to take at least two continuing education classes per year that are specific to the property management industry. We focus on Fair Housing, Evictions and keeping up to date on the ongoing developments to legalized marijuana, bed bugs and other governmental changes. It’s important to note that there are differences between Boulder property management and Denver property management. There are always opportunities to learn more and be more effective in the property management industry. Classes are sponsored by the Realtor Associations, local trade or industry organizations, Real Estate schools, local Property Managers and Attorneys. There are also courses online.

You can’t learn enough about your chosen field.

Should You Let A Tenant Out Of Their Lease?

Most property owners seek a valuable asset for their investment property – a long-term lease agreement with good tenants. A lease is a contractual arrangement calling for the lessee (tenant) to pay the lessor (owner) for use of an asset (property) for an agreed period. The perfect situation, of course, is a tenant who is obligated to a set period of time, pays on time, takes care with the rental unit, gives proper notice as their lease is about to expire, and satisfactorily completes the agreement.

What happens when the resident requests to be let out of their lease agreement?

Unfortunately, even the best tenancy can want or need to be let out of a lease. Although this is not something the landlord really wants to hear, it is important to take a common sense approach to the tenant’s request. Burying one’s head in the sand and informing the tenant that it is “too bad, you are obligated to the lease” generally does not solve the problem.

• Find out the reason for this unfortunate request. As your property manager we know it is critical to ascertain the underlying reason WHY the tenant wants out of the lease. Many scenarios cause a resident to make this request – they have an unexpected job transfer, they wish to buy a home, they are experiencing financial difficulties, there is going to be a divorce, etc.
• Sit down and review the lease. It is important to have a frank discussion with the tenant on the terms of their lease. This is a contractual agreement and it is important for residents to understand what this means financially and legally. If they have a clear understanding of their obligations, this can assist both parties in working out a solution.
• Avoid a combative confrontation. It is easy for emotions to cloud the issues. The tenant feels they have justification for the termination and the property owner feels they are legally bound to the contract. A shouting match about who is right will solve nothing. Instead, now is the time to set up the road map to achieve a resolution for solving the problem.
• Take reasonable approach. There are important steps we take with the tenant to resolve the situation.

Although the owner cannot prevent residents from moving, we discuss with the resident that they have an obligation to the lease until we can re-rent the unit. This is done verbally and in writing whenever possible.

• We counsel the tenants on their obligation to continue rental payments until the property is re-leased. If the reason for terminating the agreement is because of financial difficulties, we endeavor to set up a payment resolution. It is also important to review the disposition of the security deposit.
• We set up an agreement with the tenant that they allow the property to be placed on the rental market and that they must cooperate in showing the property. If they are moving out early, we strive to set up a walk through, obtain possession in order to re-rent the property as quickly as possible. Moving out does not absolve them from the terms of the lease.

We remind the tenant that the condition of the property while showing the property or when they move out is a key factor that can affect both their financial obligations and possibly their credit and rental history.

• We also make clear to the tenant that the property management company on behalf of the owner will rent the property and they are not to “sublease” the property according to the terms of their agreement. If they do know of any party that is interested, we ask them to contact us as soon as possible so they can make an application to rent the unit.

There is no “one” answer to a request from a tenant to be let out of their lease agreement. Every situation is different. What is important is to have open communication and whenever possible have both sides working toward a peaceful and successful resolution.