Offering Extras in Your Rental? Be Sure to Clarify Lease Terms

posted on : March 19, 2024 0 Comment

By David Pickron

If you’ve ever purchased a gift for someone, you’re familiar with those three dreaded words you must be on the lookout for: “batteries not included.”

Most of us have experienced that moment on a holiday morning or birthday when the excitement of receiving something new is dashed as the recipient realizes that without power, they just have an empty box and a lifeless gift.

Knowing what is and is not included in any transaction is critical to achieving the end goal of both parties; this is especially true for housing providers.

I recently had a potential tenant who was going through some life challenges ask me if there was any way that I could include a washer and dryer as part of the rental.

Questions like these set off all sorts of alarms in my head. I’ve been at this for more than 20 years and situations like this have rarely ended well for me… but I reluctantly gave in and provided the washer and dryer at move-in.

Here’s why I entered into this agreement reluctantly: If they own the equipment and it breaks, they never call, but if I own the equipment and it breaks, I am the first call and end up playing repairman. Ideally, I avoid these situations, but under certain circumstances I do go that way and when I do, I always do these two key things that will also help to protect your investment.

No. 1 – Establish Your Ground Rules

When it comes to rental property, the number of items a tenant may ask for is unlimited.

In your business, determine in advance what and what will not even be a possibility to include with the property. When it comes to appliances, those that are attached to the property are usually included. I’m talking about items like a dishwasher or oven.

You might include a refrigerator if it is the built-in variety. Usually not included is anything related to laundry, microwaves, BBQ grills, etc. And speaking of grills, if you decide to provide one, make sure you establish that you are not responsible for providing fuel.

I’ve taken the brunt of an angry phone call from a tenant whose dinner party plans were destroyed when the propane ran out halfway through cooking their meal. Same goes for things like yard equipment if you decide to leave a lawn mower for the tenant who wants to maintain the yard. Each of these items present different challenges that require different rules, and it is best to lay out those rules in your lease.

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No. 2 – Put it in the lease

The lease is your first (and best) line of defense when it comes to items you have included in your property. I would recommend always using language that references the following categories:

Ownership: Clearly state who owns the equipment that is included in the lease. This ensures that if something “walks” off at the end of the lease period, all parties know whom it legally belongs to.
Responsibility: If something breaks, it is critical to know who bears the financial and physical responsibility for its repair. For example, if I were to include laundry units in the property, I include language like, “If the laundry units become non-functional, you are responsible for all repair costs. If you do not want to cover those costs, the units will be removed from the property and you will be responsible for procuring your own units. If, when the lease is terminated, the units are in place and non-functioning, all repair costs will be covered by your security deposit.” Clear and concise, the tenant knows exactly what to expect and you can look back on this if these situations arise.
Terms of Use: The final piece of protection is having them understand the terms by which you are providing any item in the property. This might include a term similar to this, “As the housing provider I am not responsible for any damages to your personal items created by using the laundry units provided.” Or this fun one, “Use of the provided BBQ grill is at your own risk and expense. Housing provider is not responsible for providing fuel for grill and/or for any damage or loss of food associated with use of the grill.” It sounds like overkill, but I’ve seen and heard it all.

Being in this industry is a gift.

I can’t think of another place that would allow me to the opportunity for challenge and growth as much as being a housing provider.

Knowing if and what to include in a lease is paramount to finding success; but without fail, the satisfaction that comes from helping others is definitely “included” in every transaction.