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Tenant Reporting Own Inspections

If your lease or your Rules, Regulations & Fee Schedules have this requirement, you can make your tenants self-report property conditions once a month. Why would you want to do that?

  • It gives you early warning of problems as tenants go down a checklist of items on your form, and report condition and any observed defects. Your form should also ask about additional occupants on the premises, and any new animals.
  • Having to self-report every month tends to make tenants more careful of your property.
  • Reports showing no defects or damages prevents the tenant from later claiming something was wrong, usually after they default and are looking for excuses to make it all the landlord’s fault.
  • There is a high probability that if the tenant lies on the reports, there is significant tenant-caused damage, and then the tenant later files for bankruptcy, the landlord’s claims for damages will not be discharged in bankruptcy. That is because the tenant engaged in fraud. The claim will still have to be paid.
  • Refusal to complete the form is an early warning sign of tenant damage, illegal occupants, or illegal animals. Better to know now, rather than at lease end, isn’t it?
  • If you are selling or refinancing your rental property, the monthly reports are a good due diligence item. If you include on the form the beginning and ending date of the lease, the monthly rent, the security deposit being held, and the lack of any claims against landlord, those letters also constitute “tenant estoppel letters.” Most buyers and lenders require such letters, but it is often awkward having to ask for them because landlords don’t want tenants knowing their plans. The information in this paragraph can be included at the end of the form, in an inconspicuous manner.

Self reporting does not take the place of your own inspections. They are merely a supplement–another tool in your arsenal of good property management. Keep your form short. If you want, you can vary the items each month for the less-important matters.

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