Pitfalls and Gotcha’s in Leases

Lynn LecrawIt always helps to have talented people on your team! This post comes from a debrief the other day with our contracts expert Lynn LeCraw.

EARLY TERMINATION
What happens when our client is the tenant and they want out of their lease?

Most Lease forms have an “early termination” clause which must be followed exactly. Depending on whether the Landlord or the Tenant is terminating, the requirements can be different. The GAR Lease form (F40) provides that the Landlord can terminate with a 60 day notice to the Tenant. There is also a blank to be filled in as to how much the Landlord would owe the Tenant for the inconvenience of terminating early. Did you use the GAR form? What do those sections say?


AUTOMATIC RENEWAL
What do we need to do when our client is coming up to the end of their lease?

The GAR Lease form also has a clause dealing with automatic renewal. The Lease does not automatically terminate at the end of the original term. Paragraph 28 provides for an automatic renewal unless one party gives notice of termination. Often this paragraph is left blank and there is a dispute as to who is in default at the end of the Lease term.

Woah, that is an crucial provision to remember!


TERMINATION OF LEASE WHEN LISTING A PROPERTY

We have a client who is ready to get rid of a rental property. What do we need to do about the tenant?

As a listing agent of a rental property, you should insist on reviewing the Lease prior to listing the property to familiarize yourself with the terms for termination. In particular, make sure that the following is complied with:

  • Proper notice of termination is given to Tenant or that the contract is written subject to the lease (Paragraph #27)
  • Proper notice is given to the Tenant as to showings (see paragraph #20 of the GAR contract)
  • Proper procedure for signage has been followed, and
  • Review the lease for any automatic renewal (paragraph # 28)

Should there be any question as to when a Tenant must be out, either have all parties sign an Amendment to the Lease clearly setting out the terms OR have the Owner/Landlord consult their own attorney to help with any contracts subject to the Lease

EVICTION PROCESS
One of our clients just called and their tenant is not paying the rent. What should they do?

Grounds for eviction are non-payment of rent, violation of the terms of the lease or remaining in possession after the lease has ended. The Landlord can then file a dispossessory action if the property procedure for termination set forth in the lease has been followed. The Landlord must demand in writing that the Tenant give up possession and vacate; the Landlord must then file a dispossessory affidavit with the Court which then is legally delivered by the sheriff to the Tenant (serve the Tenant). The Tenant then has 7 days to answer in court. If the Tenant fails to respond, a writ of possession is answered and the sheriff can forcible remove the Tenant or Tenant’s property. If the Landlord answers, a trial date is set for the issues to be resolved.

Great information! Thanks, Lynn.

Michael Bunch is a Real Estate consultant, Life Coach, Strategist, Leadership Junkie and Writer. His real estate sales team works out of Atlanta, GA but through his connections, Michael can help you make great real estate decisions all over the world! His focus is long-term, clients first and legacy minded.

Please note: I reserve the right to delete comments that are offensive or off-topic.

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