This sounds like an easy question, but for new landlords there is some uncertainty about how to begin the tenancy. When do I collect the deposit? When do I hand over the keys? Once you’ve found the perfect tenant it’s time to get started on the next steps.
- Signed lease agreement - You will want to get a rental agreement signed by all parties, and that means anyone listed as a tenant in your property. Tenants will be those occupants over the age of 18 who will be listed as tenants in the agreement. Make sure to go over the lease agreement with your tenants, highlighting important parts of the agreement. Take the time to review with your tenants any additional documents, such as a house rules addendum or rules of any applicable homeowners association or condominium board.
- Collect security deposit and first month’s rent and/or prepaid rent - Build in enough time to collect the security deposit and rents due at the beginning of the tenancy, and don’t forget to provide receipts and the necessary separate escrow account information for the security deposit. Kentucky does not have statute regarding prepaid rent, so if you’ve asked for prepaid rent make sure that it is received. If you’ve accepted personal checks make sure the funds clear before the next step, handing over the keys.
- Provide keys to the property - Only do this once you have a signed rental agreement and all funds collected upfront have cleared. Experienced landlords know that chasing down a tenant for money due once the tenant has taken possession can be a frustrating exercise.
Delivery of possession and delay of occupancy
Once the rental agreement is signed, monies are received and cleared, and the tenant has the keys they must comply with all terms of the signed rental agreement, including taking possession of the property. If after seven days from the beginning of the agreement term the tenant does not take possession of the property the landlord can recover possession and terminate the agreement, returning any monies to the tenant.
In the event that occupancy is delayed by no fault of the tenant, rent will abate on a daily basis until the tenant can occupy the property as agreed. In addition, the tenant has options on how to proceed if they are unable to take possession. The tenant can either terminate the rental agreement by providing at least five days’ written notice to the landlord, and the landlord must return the security deposit and any prepaid rent, OR demand performance of the rental agreement by landlord. With the second option the tenant can also elect to maintain an action for possession of the premises against the landlord or anyone else in wrongful possession of the premises.