How to Decide Whether Requirements Belong in Leases or Site Rules

Like most tax credit sites, you probably include some residency requirements in your leases and some in your site or community rules. But if you include a requirement in the wrong place, you could create confusion and face enforcement problems, liability, and loss of revenue, says Ohio attorney James Bownas. To help you avoid such problems, we’ll tell you which requirements generally belong in your leases and which generally belong in your site rules. And we’ll explain why you should consult your site’s attorney when trying to decide where a requirement belongs.

Which Requirements Belong in Leases

In general, include in your leases requirements that relate to the basics of residency, such as rent, occupancy, or the lease term, advises Bownas. For example, in your leases, require your residents to do the following:

• Pay their rent by a certain day each month;
• Inform you of occupancy changes;
• Cooperate with income certifications;
• Give you notice of early lease termination;
• Follow certain procedures to request unit transfers; and
• Avoid damaging their units (beyond reasonable wear and tear)

Which Requirements Belong in Rules

In general, include in your site rules requirements that are specific to your site and that may at some point be changed. For example, include requirements relating to the following in your site rules:

• Use of common areas, such as your swimming pool or fitness center;
• Potential hazards, such as halogen lamps, space heaters, and grills;
• Pets that residents can keep in their units; and
• Residents’ general conduct, such as recycling and excessive noise.

It’s easier to change your site rules than your leases. And because site-specific requirements are likely to change, you should include them in your site rules. If you include site-specific requirements in your leases, you’ll have to amend all your residents’ leases every time you want to change such a requirement.

Consult Attorney When Making Decision

Consult your site’s attorney when deciding whether a requirement belongs in your leases or in your site rules, advises Bownas. Your state or local law may require you to include certain requirements in your leases. And your attorney can advise you of any such laws.

Also, your attorney may tell you to include a certain requirement in your leases because she believes your residents will take it more seriously if it’s there, or because she has had more success enforcing that requirement in court when it was included in the leases. Or she may tell you to include a requirement that would normally belong in your lease in your site rules, because she believes you’re likely to change it.

You may be tempted to include a certain requirement in both your leases and your site rules to possibly emphasize its importance to residents. But this could backfire and undermine the importance of other site rules. A resident might interpret the lease and rules to mean that requirements that appear in one place aren’t as important as ones included in both places. And if a requirement appears in both your leases and your site rules but isn’t worded exactly the same way in each, you could face arguments about the requirement’s interpretation, says Bownas. As a result, you could have trouble enforcing the requirement against your residents in the way you intended.

Insider Source

James Bownas, Esq.: Partner, Lane Alton Horst, LLC.; www.lanealton.com.