Most of us dream of establishing passive income and being financially free. Not only will you have less stress, but you'll also have more time to focus on what's most important to you.
While owning a commercial rental property comes with enormous potential, it also comes with substantial responsibilities. For example, you'll need to occasionally make renovations to keep your building functional and modern.
You'll also need to establish rules and guidelines for your commercial lease. Enforcing a lease may seem difficult or uncomfortable, but it's easier than most people anticipate. Let's explore what you should know about proper lease enforcement in Knoxville, Tennessee.
1. Don't Overstep the Law
This is one of the most common mistakes landlords make when enforcing commercial lease rules. Certain types of behavior are legally prohibited. For example, you can't order a tenant to immediately vacate your property if they pay rent one day late.
You also can't charge disproportionate fees for arbitrary reasons. To clarify, a commercial landlord might try to charge a tenant $100 every time they enter the property after a certain time. To avoid potential issues, it's recommended to have an attorney look over your lease.
2. Understand Your Enforcement Capabilities
If your tenants preach your lease agreement, it's imperative to understand your potential options. The best way to handle first time offenses is with a written warning.
Keep in mind this should reiterate established terms and not introduce them for the first time. If you give a verbal warning to your tenants, document this occurrence for your records.
You should also make note of the key topics included in your conversation. If problems manifest in the future, you'll have additional leverage to correct their behavior.
If your tenant continues to break the rules, you can take the course of action mentioned in your lease. As long as you had an attorney review this document, you shouldn't have problems enforcing the agreement.
3. Stay as Transparent as Possible
There should be no ambiguity in your lease terms. This can have a large number of consequences, such as making your lease unenforceable.
It can also fail to prevent certain issues. For instance, imagine if your lease said "Rent is due on the first day of the month. Failure to pay rent will result in a verbal warning."
These terms don't give you any power to do anything except to warn your tenant regardless of how many times they pay rent late. In theory, they could consistently pay late each month, and you wouldn't have the ability to impose a late fee unless your lease established you could.
Never Overlook Lease Enforcement
To get the most out of your property in Knoxville, it's essential to prioritize lease enforcement. This will prevent interruptions in your rental income and ensure you only have desirable tenants at your property.
PMI Knoxville is a full-service real estate management company that has over 20 years of experience. We leverage cutting-edge technology to provide outstanding experiences for each client we work with. You'll learn more about how we can help when you schedule a free rental analysis today.
