The Importance of “Surroundings” Contract Provision in Rental Applications – A Guide for Property Managers

As a property manager, your responsibilities encompass far more than simply overseeing rent collection and maintenance. One of the key areas where property managers must be particularly vigilant is in ensuring that rental agreements are comprehensive and clear, protecting both the property owner and the applicant from future disputes. A critical yet often overlooked section of these agreements is the “Surroundings” clause within the Rental Application Terms and Condition, which can save both parties from significant legal issues and misunderstandings. Below, we explore the importance of this provision and offer helpful tips for property managers on educating applicants and ensuring the clause is properly implemented.

Understanding the “Surroundings” Clause

The “Surroundings” clause, often found in the Rental Application Terms and Conditions, serves as a waiver by the applicant of any obligation or duty on the part of the property manager to disclose external conditions outside the boundaries of the rental property. These conditions include factors such as crime rates, neighboring residents, nearby public amenities, and even the presence of registered sex or violent offenders. The applicant agrees that they bear the sole responsibility for researching these external elements before committing to the lease agreement.

From a legal standpoint, this provision protects property managers and landlords from potential claims by tenants related to dissatisfaction with factors outside the immediate rental property. If a tenant discovers undesirable neighbors, noisy roadways, or a lack of public transportation after signing the lease, the Surroundings clause ensures that these issues cannot be used as grounds to break the lease or hold the property manager liable.

Why This Clause Is Critical for Property Managers

1. Limitation of Liability

One of the key reasons property managers must include and emphasize the Surroundings clause is the limitation of liability it offers. Without this provision, tenants could make claims or attempt to terminate a lease based on conditions beyond the property manager’s control, such as rising crime rates in the neighborhood or inconvenient public transportation routes.

A well-drafted Surroundings clause protects the property manager by making it clear that external factors do not fall within the purview of the rental agreement. This effectively shields the property manager from costly legal disputes, complaints, and potential damages.

2. Clarification of Responsibilities

By including this provision in the rental agreement, property managers clearly define the scope of their responsibilities. It ensures that applicants understand that their research on the property’s surrounding environment is crucial, and it prevents misunderstandings after the lease is signed. This also encourages applicants to take an active role in determining whether the rental property is a good fit for their needs, thereby reducing the likelihood of future dissatisfaction.

3. Reduction in Lease Termination Claims

Tenants often seek to terminate lease agreements when they feel their living conditions are not what they expected. However, when those living conditions pertain to factors outside of the rental property, such as disruptive neighbors or local crime issues, a Surroundings clause ensures that the tenant cannot legally break the lease for these reasons. By making this waiver clear upfront, property managers reduce the number of tenants who might try to exit their lease due to dissatisfaction with external conditions.

4. Mitigation of Potential Conflicts

Issues like crime rates, schools, or the presence of registered offenders are highly sensitive and often emotionally charged topics. When a property manager is not responsible for informing applicants about these issues, it helps mitigate potential conflicts. The Surroundings clause creates a neutral position for property managers, allowing them to direct tenants to publicly available resources for their own research while keeping themselves out of these often-contentious discussions.

Helpful Tips for Property Managers to Emphasize the Surroundings Clause

1. Encourage Independent Research

While the Surroundings clause waives the property manager’s obligation to provide information about the area, it’s still a good practice to remind applicants of the importance of independent research. Encourage them to visit the neighborhood at different times of day, research local crime statistics, and review other community factors, such as schools or public transportation, to ensure the property meets their expectations.

2. Use Publicly Available Resources

Although property managers are not required to provide detailed information about the surrounding area, directing applicants to publicly available resources is a helpful way to ensure they are fully informed. Websites that offer crime statistics, sex offender registries, and community reviews can be referenced to allow applicants to assess the neighborhood independently. This practice shows that the property manager is not withholding information but is instead encouraging applicants to make informed decisions.

3. Include Clear Language in the Lease Agreement

While the Surroundings clause is a standard part of many rental applications, it’s essential to ensure that the language is clear and easy to understand. Avoid legal jargon that might confuse applicants. Instead, use straightforward language that conveys the applicant’s responsibility to investigate outside conditions, and that any dissatisfaction with the surroundings will not justify breaking the lease. This will help prevent future disputes and misinterpretations.

Conclusion

Incorporating and emphasizing a well-crafted Surroundings clause in rental agreements is vital for property managers. This clause not only limits liability but also clarifies the boundaries of the manager’s responsibilities and reduces the likelihood of lease termination claims based on external conditions.

By clearly communicating the importance of this provision, encouraging applicants to conduct thorough research, and offering access to public resources, property managers can protect themselves from legal disputes while ensuring that tenants enter into the lease agreement fully informed and prepared. Ultimately, this approach leads to more satisfied tenants and a smoother rental experience for both parties, ensuring that everyone is on the same page from the beginning.

Sample “Surroundings” Provision

Applicant agrees that Manager has no duty or obligation, and that any such duty or obligation is hereby agreed to be waived by the Applicant, to provide or disclose to Applicant information about surrounding areas, conditions or persons that may or may not exist outside of the property line boundaries of the rental property of interest to the Applicant, including but not limited to, crime rates, security, neighbors, utility services, public transportation, roadways, schools, sex or violent offenders and that Applicant assumes all responsibilities to research and satisfy himself or herself with all aspects of interest to the Applicant prior to signing the lease agreement. Applicant understands that even if Applicant discovers conditions, circumstances or persons outside of the property line of the premises that are undesired or objectionable, that does not form a basis for terminating the lease agreement. Applicant agrees that if Applicant becomes a tenant of the premises, Applicant waives all claims or rights to terminate the lease agreement based on any such undesired or objectionable condition, circumstance, or persons that may exist outside of the property line boundaries of the rental premises.