A recent article by CNBC stated that home ownership across the country is down to its lowest rate since 1967. This means that more people, especially young adults, are renting instead of buying. Middle Tennessee fits perfectly into this mold as well. With residential real estate prices soaring, and more people flocking to the next “it” city, rental property supply is having trouble meeting the demand. As the Wall Street Journal noted, rental rates in Nashville are rising because of the growth in population related to attractive job opportunities.
So what does all of this mean for landlords and tenants? First, landlords have a vested interest in protecting their rental property because it is a growing source of income. This means they need to (1) research potential tenants, (2) invest in a solid written lease agreement and, if needed, (3) move quickly in resolving disputes that may arise with tenants. Failing to do any of these three could result in lost rent, lost value and ultimately lost income.
Background checks are easy and inexpensive and can provide a landlord with extremely important information. Our firm runs them on almost every case we take because it can provide valuable information that we may otherwise not have found out. This can include past judgments and lawsuits, evictions and criminal history. When dealing with multiple potential renters for a property, more information is vital.
A written lease is the most important thing that exists between a tenant and a landlord. Although most counties in Middle Tennessee are governed by the Uniform Residential Landlord Tenant Act, the clauses of a lease will govern most landlord tenant disputes. This document should cover all areas of potential dispute and set out the rights and responsibilities of each party. Having a thorough and well thought out lease can resolve a majority issues quickly and will be imperative if a need arises to go to court.
Lastly, for landlords, being able to resolve disputes quickly is especially important because it can mean the difference not losing monthly rent and losing several months. Tennessee law requires different types of notice for different types of rental violations. Many of these can be waived with a solid lease agreement, which in turn can result filing an eviction action weeks quicker than the alternative. Besides filing an action, having a solid legal team that you can communicate with is also important. Through my experience, a number of these cases can be settled through an open dialogue. This means you and your attorney need to discuss each case, because each case will have its own unique circumstances. Finally, if the case does have to go to trial, you will want an advocate who can present the case before a judge to get back property and any damages that may have been incurred.
With Nashville’s rental rates and demand growing, where does that leave current tenants? The landlord/tenant laws in Tennessee tend to favor landlords, but that does not mean tenants are without rights. With a high demand and low supply of rental properties, some tenants may become victim to landlords who are looking to increase rent at the tenant’s expense. In Tennessee, a landlord has the right to increase rent or terminate a lease, but there are certain steps that must be followed to do so legally.
The most important thing a tenant can do is know their lease agreement. As discussed above, a good lease agreement will identify all of the responsibilities regarding their rented home and can settle a majority of disputes. If the lease agreement leaves information to be desired, then the next place to turn is Tennessee’s landlord tenant laws. Anything not covered by a lease is then controlled by Tennessee’s landlord/tenant act.
The last bit of advice for tenants I can give is to communicate with your landlord and document any issues that arise. It is important to remember that rental properties are a source of income for landlords, and that they are more likely to turn to the court if they do not know what is going on with their property. Furthermore, if a dispute should go to court, having documentation of what has occurred can be key. When issues arise, they are more likely to be resolved through negotiations rather than in court if the landlord has the information to make an informed decision.
In conclusion, the decrease in home ownership means that rental property is now more valuable than ever in Middle Tennessee. Whether you are a landlord or a tenant, failing to be prepared can lead to a loss of income or a place you call home.