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Building a Killer Lease Agreement: Unveiling Legal Secrets

Delve into the nuances of lease agreements at the 30th Annual NARPM Convention. Understand adhesion contracts, landlord-tenant dynamics, legal protections, and enforceable clauses. Learn vital dos and don'ts in lease drafting.

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Building a Killer Lease Agreement: Unveiling Legal Secrets

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  1. WELCOME 30th Annual Convention & Trade Show #NARPM2018

  2. Building a Killer Lease Agreement Robert Locke RMP, MPM And Attorney Monica Gilroy

  3. Today’s Agenda Big Picture Things You NEVER Put in Your Lease Things You ALWAYS Put in Your Lease

  4. Is the Landlord/Tenant Relationship So…..?

  5. Adhesion Contract A contract between two parties with vastly different bargaining power.

  6. Mortgage Insurance contract HOA documents Home warranty Rental car Hospital admissions

  7. Written & controlled by one party Standard form boilerplate Customer must take it or leave it No opportunity to negotiate Characteristics

  8. Courts scrutinize to prevent oppressive or unconscionable terms Enforcement is questionable Consumer protection laws written to prevent abuses

  9. Adhesion Contract

  10. The Landlord has All the Power.

  11. The Landlord Hires Help.

  12. Doctor/Patient

  13. Teacher/Student

  14. Parent/Child

  15. Employer/Employee

  16. Lender/Borrower

  17. Government Regulations Laws designed to protect consumers from abuses by people who have undue power over others.

  18. Courts Protect Tenants

  19. 2 Management Styles 4 Lease Configurations.

  20. Broker Style Duties PMA Manager Lease Agreement Landlord Promises to Tenant Tenant Owner

  21. Manager Style Duties PMA Lease Promises Promises Owner Manager Tenant

  22. Broker Style Promises 3 lease configurations

  23. Manager Style Promises Promises 1 lease configuration

  24. Broker Style Owner signs the lease for self Manager signs for company

  25. Broker Style Manager signs the lease FOR owner Manager signs for company

  26. Broker Style Owner signs for self Manager doesn’t sign.

  27. Manager Style Manager signs the lease for the company.

  28. Conclusion 1. There are different ways to do leasing 2. Some are more scalable than others 3. You’ll evolve over time.

  29. Things You NEVER Put in Your Lease

  30. #1 Tenant agrees to: Keep gutters clean Climb ladders Do all minor repairs Pay the first $50 of all maintenance. Things that Put the Tenant in Harm’s Way

  31. #1 Things that Put the Tenant in Harm’s Way Tenant agrees to do the repair if they broke it If it wasn’t broken at move in, they must fix it.

  32. #1 The health and safety of the resident Potential conflict with owners Face the owner vs face the judge.

  33. #2 Things You Are Not Able (or Don’t Have a System in Place) to Monitor and Enforce No pets over 10 pounds Outside pets only Pets on a leash Change filters quarterly.

  34. If it’s in the lease, it’s enforceable You’re the professional, you should know You wrote the lease terms It’s your job to enforce the lease. The Owner has the Right to Expect…

  35. #2 Things You Are Not Able to (or Don’t Have a System in Place to) Monitor and Enforce No guests over 10 days Set temperature at 70 Mandatory renters insurance No smoking WHY?

  36. contractualize what you can’t track or enforce!

  37. #3 Don’t Try to Bluff the Tenant Into Believing Things that aren’t True “If tenant files Bankruptcy, the lease is void and tenant agrees to vacate the property.”

  38. #3 Don’t Try to Bluff the Tenant Into Believing Things that aren’t True If title changes, the lease is void If tenant… they automatically forfeit the security deposit.

  39. Just because you say it doesn’t make it true!

  40. #4 “If resident breaches the lease, resident agrees to pay management’s attorney fees If management breaches the lease, management agrees to pay $1.” Be Fair to Both Parties

  41. Unconscionable Egregious Against Public Policy

  42. #5 Staff names Email addresses Phone numbers Methods of paying rent Operational issues WHY? It’s going to change. Things that Move

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