STEP 1
INDEMNIFICATION THAT ACTUALLY WORKS
Vague or generic indemnification clauses might sound official, but they often fall apart in court. If a tenant causes injury or property damage, your lease needs to clearly shift liability away from you and by extension, your investors and partners. I had a client get sued after a tenant hosted an unsanctioned event that resulted in injuries. The lease included standard language, but it wasn’t specific enough. Insurance coverage got messy, and investor trust was shaken. Custom language would have changed the outcome.
STEP 2
CLEAR MOLD, PEST, AND LEAK REPORTING REQUIREMENTS
Mold claims can be brutal and expensive. I’ve seen operators get sued over health issues when tenants failed to report leaks. The problem? The lease didn’t make reporting mandatory. When you’re using OPM, delayed response = potential negligence. Your lease must require tenants to notify management in writing of leaks, pests, or visible mold immediately. It’s a simple line that can save you six figures in legal fees and remediation costs.
STEP 3
A HARD “NO” ON SHORT-TERM RENTALS
Unauthorized Airbnb use is more common than most operators realize—and more dangerous. From party damage to city code violations, the ripple effects can threaten your property, your projections, and your credibility. If your lease doesn’t explicitly ban short-term rentals or subleasing without written approval, you are vulnerable. And when OPM is in play, reputational risk can hit just as hard as financial risk.
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