How to Effectively Conduct Lease Reviews with New Tenants

If you own rental property you can use an "on-boarding" process to improve customer satisfaction and ensure the terms of your lease are fully understood.

The term on-boarding is often used in business when new hires enter the workplace and are formally introduced to the company over a period of a few days - which includes company policies and procedures. Rental on-boarding is similar given that renters are introduced to the policies and procedures they will be expected to follow during the time they live in your property.

The first step of on-boarding should be going over documentation regarding the different rules for tenants to follow. However, few landlords recognize the immense value of going over a lease.

As Rentprep suggests, "if you are treating your investment property like a business, this is one of the most important business meetings you will have." We would argue that this is certainly the truth.

This meeting is so important because it is your opportunity to make sure that everything on the contract is clear and understood. For example, if you charge pet rent you would want to make this clear, even if the tenant doesn't have pets.

Imagine if they decide to get a dog in 3 months and you have to tell them that Old Yeller is going to cost them an extra 100 dollars a month. That probably wouldn't go over very well, and they would likely feel like you are taking advantage of them.

Obviously that wouldn't be the case because you had it right in your lease agreement, but sometimes perception is a lot more important than reality. This is just one example of why it is so important to effectively conduct lease reviews with tenants.

Effective Lease Review Tactics

When going over a lease with tenants there are several steps and details you will want to consider. This includes:

1) Send the tenant the lease before your meeting

When you send the lease agreement before you meet with the tenant it gives them time to fully read the agreement on their own. This is crucial for two reasons.

One, it will make them feel more relaxed during your meeting. Sometimes people simply don't feel comfortable taking a lot of time to read through an agreement word by word. Plus, if they feel rushed by time constraints they may feel like you are trying to "rip them off" with a bad lease.

Two, reading the lease ahead of time will allow them to be more involved during your meeting, which will help to make it a more enjoyable experience.

2) Make Sure You Bring the Lease Agreement

Duh, right? Sure, this might seem obvious, but people have definitely made the mistake of leaving the rental agreement in their car, at their house, or back at an office. Make sure to check this off your list before heading out to your meeting.

3) Ask Them What Questions They Have About the Lease Agreement

Remember, this is all about teaching the tenant about your expectations, which is why we suggest this tactic used by expert teachers. By asking the question, "what questions do you have about the lease agreement?" you accomplish two goals.

First, you involve them in the discussion from the start, which will make it a more enjoyable experience for them. This, in turn, will make it more likely that they will be engaged and pay attention to what you say during the lease review.

Second, by asking "what questions do you have" rather than "do you have any questions" you have subtly implied that you expect questions. This is useful because people often feel silly or stupid asking questions.

By implying that you expect questions, you have made it easier for the prospective tenant to ask them, which will help you uncover details in the lease that they may not understand. Ultimately, this will help you do a better job of making your lease agreement clear.

4) Discuss All of the Policies on the Lease Agreement

Just because you have asked for their questions doesn't mean that you are off the hook. You now need to go through the lease agreement line by line and discuss your policies and expectations. Make sure to clearly state important items like the length of the lease agreement and occupancy limits.

As you go through your lease make sure to read your prospective tenant for non-verbal feedback. If they look confused, you should ask if they need clarification. Likewise, you should listen closely to anything they say, as it might indicate a misunderstanding.

5) Explain Why You Have Your Specific Policies

While you don't need to discuss why you have all of your policies, there are some that you might want to explain.

One such instance would be if you have a very unique policy in your lease. If it seems out of the ordinary, you should offer a reason as to why you included it in the lease. Another instance would be if you have had complaints about a policy in the past. For these policies you should take advantage of the fact that you are in a position to prevent complaints from the day the lease is signed.

As an example, let's return to the hypothetical situation referenced above where you have a tenant sign and then, 3 months later, decide they want to get a dog as a pet. If you don't explain your pet rent policy while you go over the lease agreement, you run the risk of the tenants becoming upset because of a new fee.

However, as an alternative, you can explain during your first meeting that you charge a pet rent because pets tend to be noisy, add extra wear to your property, and require costly cleaning of the property after a tenant moves out.

Then, if you need to charge a pet rent in the future, the tenant will be fully aware of this fee AND understand why it is being charged. This will make their rental experience better, which is better for you as a property investor.

6) Ask Them Again What Questions They Have

As you close the meeting, check with the prospective tenant to make sure they don't have any more questions. As you have gone through the lease review they may have developed new questions, but felt they couldn't interrupt as you went through the agreement.

7) Don't Rush, Be Friendly, Act Professional

As a final note, when you go through the lease agreement try to go slow, be friendly, and act professionally.

In terms of the speed, remember that this is, at most, the second time your tenant has seen this lease. If they didn't look it over after you sent it to them, it will be the first time they are seeing it. Because you have seen this lease or a similar lease every time you have had someone sign for a property, you will know it very well. This will likely make you rush through it. Don't fall into this habit. It makes it really difficult for tenants to follow along and, as previously mentioned, when a landlord goes through a lease quickly it feels like they are trying to hide something.

Additionally, don't forget to be friendly. This means acting upbeat, smiling, and trying to make the experience enjoyable. All of this will make your tenant feel that they are having a good customer service experience, which will be good for you as a rental property owner.

Finally, be professional. Dress professionally and stick to conversation about the lease agreement. You really shouldn't stray too far from this topic. This means that you don't share too much about your personal life, complain about previous or current tenants, or say things that would be considered lewd or inappropriate. For example, we have an employee who rented from an independant landlord (Read: not associated with Active Renter) who felt it was okay to share how many times they used the bathroom during a usual day.


Seriously, there are just some things you can keep to yourself.

In closing, if you follow these steps during the lease review you will be able to improve tenant perceptions of customer experience, retain tenants for longer, and more effectively educate tenants about the terms of the lease. All of this should make you more profitable as an investor.