Whose Name Is on the Lease?

If you are a landlord employing the services of a professional property manager, do you know whose name is on the lease? You should, because it could cost you in court!

Many professional property managers have opted to put the owner’s name on the lease, as “landlord” rather than the management company’s name. They do this to avoid service-of-process in the event of a lawsuit. They want the tenant’s attorney to go after the owner, not themselves. In reality, in most instances if there is going to be a lawsuit, anyone and everyone associated with the case will be served. So this is really not an effective strategy.

But the problem for the land owner is not about who might be served, because this is a rare instance in the first place, and as already mentioned, it doesn’t really matter, because ultimately both manager and owner will be served regardless of the name on the lease. A more likely scenario would be a case in which the tenant is being evicted, and in the process, elects to answer the dispossessory warrant. In such event, the case will be heard by a judge, usually a magistrate. In most Georgia courts, the judge will not allow the property manager to act as plaintiff if the property management company is not named as landlord in the lease. This is true, even if the property management company filed the warrant, on behalf of the land owner, and in the property management company’s name per agreement. Most judges would consider this to be practicing law without a license, and would disregard the management agreement terms.

When the land owner’s name is expressed as landlord on the lease, the court will only allow the owner, or an attorney for the owner, to address the court. If the owner resides out of state, as many do, the owner would either suffer the cost of a trip to town, or the expense of a lawyer. And if the management company attempts to represent the owner, hoping that the judge won’t catch it, there is a good chance the court will dismiss the case, causing the land owner to have to start at square one with a new dispossessory warrant.

The bottom line is that if the lease is written between the management company and the tenant, then the court cannot deny the property manager the right to defend its position as principal on the lease, saving the owner both expense and inconvenience. So if you are a land owner, it is important that you know whose name is on the lease, especially if the property is professionally managed.

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