Our normal lease term is 1-year. Sometimes we are approached and asked if the owner would consider a multi-year lease at a reduced rate. I'm not against a multi-year deal; but what assurance do you have that the tenant is going to stay in the home for the entire term. I would advise that if you do go for a reduced rate, on a multi-year contract, that you include some language in your contract like:
"Landlord and Tenant have entered into an agreement wherein the original rent amount of X has been reduced to Y based on a longer time period contract than normal. Tenant agrees that if they do not serve out the entire lease term that landlord is entitled to receive the full amount of rent X back to the beginning of the contract. The back rent may be taken from any funds held by Landlord, or Landlord's representative, including but not necessarily limited to security deposits, pet deposits, last month's rent held, or any other Tenant funds in Landlord's possession."
What this clause is essentially saying is this. Let's say that normal rent is $2,000 under a 1-year deal. They offer you $1,900 under a 2-year deal, and you accept that offer. They leave in month 18 of a 24 month contract. You have been receiving less than you should under the contract for the last 18 months; you are out $1,800 dollars. You want to be able to, at a minimum, get your money from any of the Tenant's money that you are holding.
Scott Taylor is the principal property manager and co-owner of SCV Leasing in Santa Clarita, California. SCV Leasing serves Valencia, Stevenson Ranch, Newhall, Santa Clarita, Saugus, Canyon Country, Fair Oaks Ranch, Castaic, Sand Canyon, and Westridge with homes for rent, condos for rent, and property management services.
His experience as a rental property owner and as a property manager makes him the best choice for managing your rental. SCV Leasing's unsurpassed marketing plan puts renters in properties fast. Mr. Taylor can be reached at firstname.lastname@example.org.