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More Questions Every Renter Should Ask - 2007-09-01 |
Last week we began covering critical questions that every renter should ask before signing anything. If you are a renter, here are the rest of the questions that should be on your list:
* Does any of the rent apply toward a purchase price?
In today's real estate market, many landlords are actually owners who would like to sell, but have found the resale market unfriendly. At the same time, many renters hope to someday own their own home, but are unable to qualify for financing.
One possible solution to both problems is a rent-to-own relationship. In such an arrangement, you agree to rent the house and might be given credit for a portion of the rent that you pay toward an eventual purchase price.
If your agreement is called a lease-option, you get to decide at some point in the future whether or not you wish to buy the house. But if your agreement is a lease-purchase contract, you will likely be obligated to complete the sale by a specific date in the future. Failure to perform under a lease-purchase contract often means a financial penalty, such as the loss of any down payment made through the agreement.
Because there are so many variables that must be addressed in a lease-option or a lease-purchase contract, there is no standard form. Every arrangement is unique based on the needs and abilities of the buyer and the seller.
The bottom line here is that any form of lease that grants you an option to purchase or obligates you to purchase is a legal document that needs professional attention. I strongly recommend that you consult with a real estate attorney before you agree to sign such a document.
* Who is responsible for repairs, and how do I request them?
This is an area of frequent contention between landlords and tenants, and it's best to know the proper procedures before a problem comes up.
Some managers allow repairs to be requested by phone, while others require a written request. It's best to follow the specific rules of your landlord to avoid delays in the repair.
Also, if you are signing a lease-purchase agreement, it is not unusual that the renter-buyer is asked to become responsible for all repairs, although it's not clear if such an agreement is enforceable.
* What duties will I have as a renter, and who handles routine maintenance?
In some rental agreements, the tenant agrees to take care of exterior maintenance, such as mowing the lawn, cleaning the gutters, and trimming the shrubs. If you agree to this type of arrangement, be sure you know exactly what is expected of you before you sign.
Also, who is responsible for property maintenance items like changing the furnace filter or trimming dead limbs from trees? While you might not describe these chores as repairs, they do take time and cost money.
* Are there any restrictions on how I can use the property?
This would be especially important if you planned to work at home.
I once had a tenant who was an auto mechanic, and he made it clear to me that he fixed cars for a living. But he didn't tell me that he planned to use the driveway and street in front of the house as a repair facility.
When I insisted that he cease using the residential property for commercial purposes, he protested that we had already discussed the matter. When I pointed out that he was in violation of the county housing code, he relented and moved his business to a garage.
Ask your landlord for a list of house rules or regulations before assuming you can make any unusual use of the property.
* Where are the smoke detectors and where is the fire extinguisher?
While home fires are rare, they do happen, and a knowledge of how to test the smoke detectors and how to use the fire extinguisher might save a life. And if your landlord doesn't offer a fire extinguisher, he is being foolish in my opinion. They cost less than fifteen bucks at hardware stores and may prove to be priceless.
* Who do I contact in case of an emergency, especially after hours?
This is an important point. There is a good chance that if a major problem does occur, it may happen after normal office hours.
If there is a serious plumbing leak, what should you do? If there is a fire, who should you call?
Obviously, in any situation involving a threat to life or property, it's best to call 911 first, but how do you reach the landlord if it's after hours?
Some larger property managers offer a round-the-clock emergency contact number, but most smaller landlords simply can not be contacted in the middle of the night.
This puts the tenant in an awkward situation, because most leases prevent the tenant from making their own repairs, yet they require the tenant to take reasonable steps to prevent additional damage to the property.
The key here is the word "reasonable."
As a landlord myself, I would certainly understand and agree to pay if a tenant called a plumber in the middle of the night if a toilet was overflowing and simply would not stop. However, if I found that the original problem was caused by the tenant's negligence, I would expect the damages to be covered by the tenant's security deposit.
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Upcoming Events
BUYING FORECLOSURES IN GEORGIA
NEW for 2008: Bank-Owned Home Bonanza
This seminar has been updated and revised for 2008 to reflect the dramatic changes in the Georgia foreclosure marketplace. We are literally facing a flood of foreclosure properties, and there is profit to be made in each and every one of these homes.
Whether you want to build a portfolio of homes for your retirement or you simply want to find a better home for yourself and your family, this program is for YOU.
LAST CHANCE THIS MONTH!!
• Saturday, Oct. 11th, 2:00 P.M. until 5:00 P.M. - Renaissance Waverly Hotel in the Cobb Galleria
This COMPLETELY NEW SEMINAR examines the roots of today's foreclosure meltdown and explains how you can take advantage of this opportunity in your spare time.
Advance Tickets: $69; bring a friend for an additional $30.
Couples share materials.
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This course approved for 3 hours of Continuing Education credit by the Georgia Real Estate Commission.
The Real Estate Investor's Institute will be held at Emory University on
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Detailed information is
available under "Seminars."
This course is approved by the Georgia Real Estate Commission for 12
hours of Continuing Education Credit. Agents must bring license number.
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