Leasing 101 Learn@Lunch Recap

Lease 101: Learn at Lunch Recap

Presented by Carrie Broadus (McDougal Companies) & Theresa Gladding (BH Management)

The Lubbock Apartment Association (LAA) recently hosted an insightful Lease 101 Learn at Lunch, featuring industry experts Carrie Broadus of McDougal Companies and Theresa Gladding of BH Management. This session provided attendees with a deep dive into the fundamentals of lease agreements, best practices, and essential policies for onsite staff and owners.

Key Takeaways from Leasing 101

1. Understanding Lease Agreements

Carrie and Theresa broke down the lease agreement step by step, emphasizing the importance of correctly completing the first page of the lease. Key details include:

• Listing Residents & Occupants:

  • Residents (18 and older) must be named as "residents" on the lease and are financially responsible.
  • Occupants (under 18) should also be listed as "occupants" for record-keeping purposes.

• Lease Term & Rent Structure:

  • Lease start and end dates must be clearly stated.
  • Rent should be defined separately from any additional fees (e.g., pet rent, amenity fees).
  • Security deposits should never be combined with pet deposits—each must be itemized separately.

2. Late Fees & Legislative Considerations

• Late Fee Guidelines:

  • Initial late fees and daily late charges must adhere to state and federal regulations.
  • The max allowable daily late fee is 15 days from the due date.

• Legislative Attention on Fees:

  • Lawmakers are scrutinizing fees (e.g., pet fees, late fees) to prevent them from becoming profit centers.
  • Property managers should ensure all fees are fair and legally compliant.

3. Rent Collection & Payment Policies

• Cash Payments—A Risky Choice

  • Carrie and Theresa strongly advised against accepting cash rent payments due to the difficulty in tracking, potential disputes and safety. 
  • Preferred methods include money orders, cashier’s checks, and online payments.

• Application of Payments

  • Rent must be paid in full and on time, regardless of maintenance concerns.
  • Any unpaid fees (late charges, NSF fees) must be documented and applied per lease terms.

4. Utility Responsibilities & Billing Practices

• Who Pays for What?

  • Single-family properties often require tenants to handle all utilities.
  • Apartments may use allocation services to divide costs fairly among residents.
  • If owners pay utilities and bill tenants, lease agreements should clearly outline how charges are calculated.

• Best Practices for Utility Management

  • Property managers should use detailed addenda specifying how water, sewer, and trash are billed.
  • Inconsistent or unclear billing can lead to disputes and collection issues.

5. Security Deposits & Move-Out Processes

• Proper Deposit Handling

  • Pet deposits and security deposits should never be combined.
  • Pet fees are non-refundable, while deposits must be itemized and refunded accordingly.

• Returning Security Deposits

  • Texas law requires landlords to return deposits or provide an itemized list of deductions within 30 days of move-out.
  • If tenants fail to provide a forwarding address, landlords should send the statement via certified mail for legal protection.
  • Keeping photo documentation of property condition before and after move-in is crucial for justifying deductions.

6. Broken lease, Re-letting Fees & Evictions

• Re-Letting Charge vs. Early Termination Fee

  • The re-letting fee (max 85% of one month's rent) is charged when a tenant breaks their lease early.
  • Alternatively, some properties use an early termination fee (often equal to 3 months’ rent).
  • Tenants must continue paying rent until a replacement is found—this should be clearly communicated to prevent misunderstandings.

• Handling Evictions & Collections

  • If a tenant fails to pay rent after moving out, property managers can:
    • Report unpaid rent to collections agencies (with proper notice).
    • Offer payment plans to encourage repayment while avoiding legal action.
    • Ensure lease agreements clearly outline financial responsibilities upon eviction.

7. Insurance Requirements for Tenants

• Why Renters Insurance Matters
  • Renters insurance protects both tenants and property managers.
  • Some companies require a minimum $100,000 liability coverage and list the landlord as an interested party.
  • If tenants fail to obtain insurance, some companies automatically enroll them in backup policies, typically at $11-$14 per month.

Final Thoughts & Best Practices

The session wrapped up with practical advice:
✅ Encourage tenants to carefully read their lease—many don’t!
✅ Require signatures on key policies (e.g., community rules, maintenance responsibilities).
✅ Communicate clearly about move-out expectations to avoid disputes.
✅ Consider setting up payment plans for tenants who owe money—this often results in better repayment than collections.
✅ Always document everything—especially damages, late payments, and security deposit returns.

Looking Ahead

The next Learn at Lunch will take place on March 13, covering Eviction Appeals. Don’t miss this chance to stay informed and protect your properties!

For more details and upcoming events, visit Lubbock Apartment Association Events.