Barclays Bank of New York received a repair invoice after the installation of a new air conditioning system by its owner, the Panel Realty Company. Barclays refused to pay and the case was taken to court. Barclays` lease required the landlord to carry out all structural repairs. The bank was responsible for its share in all other building maintenance and repairs, including air conditioning repairs. The court argued that the replacement of the system went beyond traditional conceptions of reparation. This was an investment expense that Panel Realty was unable to pass on to Barclays. While the bank was winning, it had taken unnecessary risks because its lease did not make the landlord responsible for capital expenditures.1 I received a request for a 5-year lease for a renovated SFH. They ask for a reduced price in exchange for a signed 5-year lease. 1400 per month instead of 1500 per month. I guess if I do the due diligence and make sure they have a good rental story, good credit, and a good background background, then a 5-year lease is a good option. My fears are that they may not be a good tenant and that I will be stuck with them for 5 years.
The only real other concern is whether they have a dog and what they could do with the property for more than 5 years. Beyond the benefits, there`s a potential long-term rental trap that could negatively impact those living in the home and those paying the mortgage — and that`s a loss of flexibility. Today, the majority of new commercial leases are described as „fully repairable and insurance“ leases, also known as FRI leases. This means that it is your responsibility, as a tenant, to repair and pay for insurance for the premises. Purchase option – Use if the tenant wishes to have the opportunity to acquire the property during the lease at a certain price. @Ben Sealey one question I would ask is how confident are you that $1500 a month is competitive in your market? If you think the applicant is qualified and can move in quickly, you can reduce the monthly payment to $US 1450, but only offer a one-year lease. Remember, at $1500 per month, the vacation costs you $50 per day, so an additional 12 days is $600. Embodying a good problem, sometimes even growth, can be problematic if you`re bound by a long-term lease, as you lose the flexibility to move to different markets or expand to a new location.