Despite this provision, some tenants don’t want to play fair. What can be done about it?
Worst case assumption. Usually when the 60 day clause is written the underlying assumption is that the tenants will be uncooperative. If they are cooperative, the restrictive language in this clause is unnecessary. But to hedge out bets we prepare for worst case scenarios.
Unrestricted access. For example, our lease says that we have a right of unrestricted access during the 60 day period. Regardless of this provision, I can tell you for certain that I would never endorse showing the property without the tenant’s approval. Even though we say that, we are just attempting to bolster our position in the event that we really do have an extremely uncooperative tenant and decide to take some legal action. This language gives us some leverage to try to frighten them into submission.
Literal interpretation. While the language of the lease is also designed to garner the fullest cooperation of the tenant so that we can best serve our client landlord, it is questionable whether those terms would be literally interpreted by a court. We want the presumed leverage of being able to refer to these terms when setting expectations for the tenant/management relationship. But it still requires the willing cooperation of the tenants.
Keep the home show-ready. We also have a clause that requires the tenants to keep the home ready for showing at all times. What we are hoping for is that they would approach these showing opportunities the same as an owner occupant. That’s pie in the sky, because the tenants are not invested in the outcome. Sometimes this happens, but it really should not be expected.
Act of breach. It should be noted that if a tenant does not literally comply with these terms, it could be deemed an act of default and without timely cure could be deemed a breach of contract. While that is easy to claim it is extremely difficult to prove, which would be our burden. And if we press the tenant’s too hard, they can subtly make life difficult for us.
Subtly uncooperative. There is a wide line dividing what making the home show-ready would mean. Dirty dishes in the kitchen, underwear or wet towels on the floor in the bathroom, keeping window blinds closed, for example, are ways tenants can make this difficult. They could also claim that they will be home ill for the day, or whatever story they come up with. They can become pretty creative in order to be subtly uncooperative. Do these things constitute a breach? Are we just talking about differing lifestyle standards? One could make an argument either way. What would a court decide, and would we really go there considering the expense and an uncertain outcome?
Unhappy tenant is bad news. In reality, we recognize that attempting to lease or sell a property while tenants occupy is difficult at best. Many owners don’t understand or accept this reality, but that doesn’t change the truth of it. We have to work with what we have to work with. A moderately cooperative tenant is the realistic expectation. We are always more successful when the property is vacant and properly priced. After all, the two things that get a home sold or leased is how it shows and the price. The tenant holds the key to one of them, the owner holds the other. That’s why an unhappy tent can kill the deal.
Recourse for bad actors. If the tenants don’t comply, probably the best solution is to simply let it go. Wait until they move out to show it. When they eventually do move out you can charge them damages for noncompliance or default. The amount you would claim would depend on how long it takes to sell it or move a new tenant in. That’s the actual damages to the landlord. Threatening the tenant with default notices is probably not going to be an effective strategy.
Bottom line: Do what you can to garner the cooperation of the tenants. Be respectful of their time and lifestyle. In any case, playing the hard line will probably only get you worse cooperation. This is a time for patience and diplomacy. You really want and need their cooperation.
About the author: I have been a licensed real estate practitioner for 23 years, practicing sales and property management in the Atlanta metropolitan area. While I have worked all across Atlanta, the first property management company I owned was located in East Cobb County where I provided property management services in the cities of Marietta, Woodstock, Cumming, Alpharetta, and Roswell, Georgia. My second property management company, and the one I currently own and operate, is located in North Fulton County and is headquartered in the city of Roswell. It provides property management services in Roswell, as well as the surrounding communities, with a satellite office in East Ellijay, up in the North Georgia Mountains. This newest company, 3 Options Realty, also offers sales services. In addition to my professional services I have been investing in residential properties for 19 years. I’ve learned a few things about this discipline and I want to share my experiences with you.
Daniel R. Wilhelm
3 Options Realty, LLC., CRMC®, The Green Broker
The author of this Blog is neither an attorney nor an accountant. Nothing written should be construed as legal advice. Conclusions conveyed are outcomes based upon practical experience and should not be depended upon to be a common outcome of other similar circumstances. Consult with a professional before making tax or legal decisions.
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