Its Rally time again, and this year is going to be a big one. Every year many local residents decide to rent out their homes for the rally. While this can provide extra money to the homeowner and much-needed living space to those who will be attending the rally, unfortunate circumstances can arise for the homeowners who are not prepared. What follows is a list of things to consider to help avoid legal issues.
1. Think twice before renting to a friend. If something goes wrong it is going to be more difficult to address.
2. Use a written agreement. Oral agreements can lead to misunderstandings and “he said/she said” scenarios.
3. Make the rental agreement as specific as possible. A rental agreement that is specific and organized will assure that both sides are on the same page—or have reason to be on the same page—and will ultimately prevent legal disputes. If you don’t know what is common in a rental agreement, you should find out.
4. Inspect your property before you rent. Make a list of any problems you discover and go over those problems with the tenant before he or she rents the property. This will assist in determining contested damages by the tenant during moving out inspections.
5. Require a security deposit. Security deposits are common because accidents happen. Considering the possibility of damage from smoking, pets, etc., this should always be required.
6. Have a cancellation policy. Consider what happens if your renters don’t show up and then want the deposit back. This should be clear from the outset.
7. Check covenants and zoning ordinances. There may be prohibitions on renting your property.
8. Inform your neighbors. You have to live next to these people for the rest of the year.
9. Talk with your insurance agent. Insurance policies have many exclusions. Damage by renters may well be a problem. You might be able to purchase a separate policy to cover the risk.
10. Consider a minimum age requirement. Older people are generally less likely to cause problems.
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*This article presents general information for informational purposes only and does not constitute specific legal advice.
Jason M. Smiley was born and raised in Rapid City, where he lives with his wife Darby and their two children. He is a partner at the law firm of Gunderson, Palmer, Nelson & Ashmore, LLP, and is admitted to practice in South Dakota and Wyoming.
Jason M. Smiley
Jason Smiley is a partner of Gunderson, Palmer, Nelson & Ashmore, LLP, and a member of the firm’s Executive Committee. He focuses his practice on Construction Law, Real Estate, Civil Litigation, and Insurance Defense. Jason understands that each client’s concerns and objectives are unique.