EXTREME CARE MUST BE TAKEN WHEN

APPROVING A CORPORATE TENANT

 

1.   IF THE REASON GIVEN FOR THE LEASE TO HAVE A CORPORATE TENANT IS FOR “TAX PURPOSES”, THIS IS INCORRECT.  THE IRS DOES NOT CARE WHOSE NAME THE LEASE IS IN WHEN ALLOWING A DEDUCTABLE EXPENSE.

 

2.   LEASING IN A CORPORATE NAME PROTECTS THE OWNERS OF THE CORPORATION AND OCCUPANTS AND PROVIDES NO PROTECTION FOR THE LANDLORD.

 

3.  IF THE TENANT IS A CORPORATION, THE OCCUPANTS MUST BE CLEARLY LISTED.

 

4.  IF CRIMINAL BACKGROUND CHECKS ARE NOT DONE ON THE OCCUPANTS, THEN THE LANDLORD OR PROPERTY MANAGER IS TREATING THESE PEOPLE DIFFERENTLY THAN TYPICAL INDIVIDUAL TENANTS AND COULD BE SUBJECT TO A FAIR HOUSING VIOLATION CLAIM.

 

5.  THE CORPORATION NEEDS TO BE INVESTIGATED FOR THE CORRECT NAME AND THE PERSON SIGNING FOR THE CORPORATION MUST BE AUTHORIZED.

 

6.  THE CORPORATION’S STATUS MUST BE UP TO DATE, ACTIVE AND THE ANNUAL REPORT FILED.

 

7.  IF THE CORPORATION IS OUT OF STATE, THIS WILL CAUSE FURTHER EVICTION DELAYS AND COMPLICATIONS.

 

8.  IF AN OFFICER OF THE CORPORATION WILL NOT SIGN IN THEIR INDIVIDUAL CAPACITY, THIS IS A MAJOR RED FLAG. 

 

9.  ONLY IN LIMITED CIRCUMSTANCES SHOULD A RESIDENTIAL LEASE EVER HAVE A CORPORATE TENANT.

 

10. AN EXAMPLE OF A “SAFER” CORPORATE TENANT WOULD BE A LOCAL HOSPITAL WANTING TO RENT A HOME FOR A DOCTOR.

 

11.  IN THE EVENT OF AN EVICTION, THE CORPORATE TENANT MUST BE EVICTED AND THIS WILL COMPLICATE THE EVICTION CAUSING EXPENSE AND DELAYS.

 

BE VERY CAREFUL AND WARY OF THE REQUEST TO EVER HAVE A CORPORATE TENANT.  THE LANDLORD MUST BE ADVISED OF THE DANGERS AND ACCEPT THOSE DANGERS OR THE PROPERTY MANAGEMENT COMPANY COULD BE HELD LIABLE FOR THE COMPLICATIONS THAT MAY OCCUR IN THE EVENT THE CORPORATE TENANT DEFAULTS.

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