My recent column about renting a residence to others drew a number of questions. Here are some I wanted to share with you:
Q: I need to rent my house to cover the mortgage, but I don’t want to be responsible for repairs or upkeep. Can I agree with the tenant that they will take care of all repairs in exchange for a reduced rent or something like that?
A: That is a very good question. Georgia landlord-tenant law makes it very clear that a residential landlord may not transfer to another party, including the tenant, his responsibility to repair. Such an arrangement would not be illegal, but unenforceable if the tenant failed to make needed repairs.
That being said, I have known landlords who routinely made such lease agreements. Typically, the renter is responsible for only a certain dollar amount per month, and major repairs (such as furnace replacement) are excluded. This works fine so long as all parties are happy. But if the tenant decides to stop making repairs, or the repairs are unacceptable, the landlord could not evict the tenant on that basis. In other words, this is a risky proposition, and I do not recommend it.
Q: I just have one rental. Do I need a business license or a real estate license?
A: Georgia law says that if you rent a house, you can be required to have a business license. Most counties do not enforce this law, however, and the vast majority of private landlords are unlicensed. Georgia real estate licensing laws apply only if you offer to perform real estate services for a fee, so if the property is owned by you or a family member, you need not be licensed.
Q: My tenant has not paid the full rent in over a year. Every time I threaten to kick him out, he sends me a few hundred dollars and tells me a sob story. I really need to rent to cover the loan payment and taxes. What can I do?
A: Get tough. I strongly recommend that you find a real estate attorney to handle this, and have the resident evicted as soon as possible. Furthermore, stop accepting partial payment. Let the attorney handle the collection. When the tenant calls you to ask for more time, tell them it is out of your hands. The sooner you get rid of this resident, the sooner you can get a paying tenant.
Q: How fast does an eviction work in Georgia?
A: Compared to other legal procedures, remarkably fast. You can usually get your property back in less than thirty days.
Here are the steps: You swear out a warrant and the tenant gets a summons, usually within seven days. If the tenant fails to answer, you can have him removed. If the tenant answers, a court date is set. These courts are set up to handle many cases quickly, and will push hard for a negotiated settlement that lets the tenant stay. If you are determined to get rid of him, insist on possession.
Q: I have only two rental properties, owned by my corporation. How should I handle security deposits?
A: Very carefully. In your case, you are required to treat such deposits as "other people's money," and put them in a separate escrow trust account. You may not use the funds. If the account pays interest, you must disclose in your lease to whom interest is paid.
Georgia also requires a move-in inspection and a move-out inspection as well as certain written notices, so learn all the proper steps before you accept any security deposit. Your attorney can help.
Q: Can my landlord require me to have renter’s insurance? It’s in the lease, but I don’t want to pay for it.
A: Yes, a landlord may require proof of renter's insurance. That insurance is typically inexpensive and covers you and your possessions in case of fire or theft. It also can protect you against liability from actions by you or a guest. I strongly recommend it.
The Georgia Department of Community Affairs provides an online booklet called “Georgia Landlord Tenant Handbook” which presents helpful information. It’s somewhat dated, but it’s free and a good place to start. You can download it at money99.com.
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