Who Are the Stakeholders Involved in a Rental Transaction Process?

You make look at the rental transaction process as one of the easiest task from the outside but if you think from an a property owner perspective then there are lot of risks and challenges that are involved in this transaction process right from initial to closure stage. Behind that smoothly working rental process there are multiple stakeholders who are involved in every stage to complete this transactional process.

Right from the property managers, maintenance vendors to the brokers all the housing societies and payment providers working in the rental industry, each and every stakeholder plays an unique role at various stages of the rental lifecycle of any property.

It is important that these stakeholders responsibilities and importance need to be understood so that it can help the property owners and managers to effectively coordinate all the required operations efficiently.

What is a Rental Transaction?

A rental transaction is the process of signing an lease agreement. It includes various activities which primarily involves finding a property, selecting a perfect tenant, agreeing on terms and conditions, signing the lease, rent collection, managing the entire property and eventually renewing and ending the tenancy of the property.

It depends on the property and the arrangement between the parties, various stakeholders may participate in this overall lifecycle.

Let's look out the key stakeholders that are involved in this process and their roles and responsibilities.

1. Property Owner or Landlord

The property owner is the person who owns the property and ultimately has an interest and authority for its financials and performance.

Their responsibilities may include:

• Deciding whether and when we can rent out the entire property
• Setting or approving all the rental terms
• Selecting a property good manager
• Authorising significant repairs and expenses of the property
• Receiving rental income of the property
• Making decisions about lease renewal or any termination

2. Tenant

The tenant is the individual, family, or any business or firm which owns or occupies the property under the terms of mentioned rental agreement.

A tenant's responsibilities typically include the following:

• Always paying rent on time manner
• Paying the agreed security deposit amount to the owner
• Following all the terms and conditions agreed as per the lease
• Taking responsibly care of the property
• Reporting maintenance & repair issues

3. Property Manager

The property manager acts as the operational bridge between the property owner and tenant which helps to connect them and manage them throughout the tenancy period.

The responsibilities of the property manager are as follows:

• Coordinating with the tenant onboarding
• Collection and tracking monthly rent
• Managing lease related dates and important information
• Handling tenant queries & complaints
• Coordinating maintenance & repair related work
• Managing vendors associated with the property related work
• Conducting property inspections and required maintenance
• Preparing owner reports & updates

4. Real Estate Agent or Broker

A real estate agent and brokers are involved before the tenancy officially begins for any property.

Their role of the real estate agents primarily include helping owners market the property, finding good tenants, arranging the property visits and facilitating negotiations for final closure of the deal.

They lso assist with the following work which are:

• Tenant and property introductions with each other
• Rent negotiations for final deal closure
• Documentation coordination during closure stage
• Communication between the parties eg owner and tenant
• Supporting the closing of the transaction at early stage

5. Property Management Company

In larger rental properties, property management usually handled by a firm rather than an individual property manager who takes care end to end operations right from rent to closure.

A property management company provides a variety of services which covers various properties and tenants.

The services includes are as follows:

• Leasing and tenant onboarding process
• Rent and financial administration of agreement
• Maintenance management of the property
• Vendor coordination & property inspections
• Lease administration & reporting related work

6. Maintenance Vendors and Service Providers

A rental property needs regular maintenance so that the property can remain functional for the tenants. This brings various group of stakeholders into the rental ecosystem: service providers which are as follows.

These can include:

• Plumbers & electricians
• HVAC technicians & the cleaning agencies
• Pest-control providers
• Security services
• General maintenance contractors

7. Housing Society or Building Management

The housing society and building association plays an vital role when various building committees are involved in the managed communities.

They may establish rules which will be mandatory to follow relating to:

• Registration of tenant
• Move-in and move-out procedures
• Parking & visitor access
• Common-area usage & maintenance charges
• Security requirements of the society

Key Takeaways

• A rental transaction involves multiple stakeholders more than just a landlord and tenant which we are commonly aware.
• Property owners are responsible for all the important financial and property level decisions which they can manage through the property managers.
• An overall Effective rental management depends on systematic coordination between multiple stakeholders, clear responsibilities and aware about the accurate information.
• As rental properties grow in numbers, having a property management platform can help to connect various stakeholders and streamline the rental lifecycle.