How Long To Keep Rental Agreements

The legal obligations related to the landlord-tenant relationship do not automatically stop when the tenancy agreement ends. For homeowners who have income on rental property, the IRS can challenge tax returns for the past six years – more if they suspect fraud. Maintaining a complete paper trail for at least the duration of the prescription in your state is your first line of defense if you are examined or judged. When it`s time to reject old leases, shred them. You do not want personal financial information about you or your tenants to be available to unscrupulous people. Rental documents are held for two reasons: in order to comply with tax laws and to give the landlord the opportunity to defend himself, a former tenant should already file a complaint for breach of the tenancy agreement. After a certain amount of time set by state law, a former tenant can no longer sue you in court and, with a few exceptions, the IRS will no longer check old tax returns. The statute of limitations for filing an action on the basis of a breach of contract in Wisconsin is 6 years from the date of the infringement. The safest thing for a landlord is to keep the rental record of a former tenant, and in particular all contracts, at least 6 years from the date the contract ended. Always keep all records that may affect your tax returns, including your renter-tenant relationship, for seven years, advises the American Bar Association. These include maintaining signed leases, customer requests and requests that provide information about potential customers. Keep all requests, including those you`ve rejected or withdrawn from customers. How long does it take you to keep your taxes, receipts, bank statements and other important documents? Each type of document is different, so keep all your papers long enough before turning on the shredder, even if you think you`re done with them.

I always scan my leases and digitally guard them in a document server forever and forever. It is important to keep all financial statements relating to your leasing activities. When you are examined, you must provide proof of all the inferences you make. You can scan and store electronic records, cancelled cheques, credit card vouchers, rental payment records, electricity bills, bank statements, year-end credit summaries and insurance vouchers. If you own more than one rental property, you keep separate records for each unit. Property management companies should keep audit reports of accountants and legal documents indefinitely. If the IRS suspects that you have undervalued your income by 25 per cent or more, it may challenge your tax returns for the past six years. The watch starts to rotate on the day you submit the return or the due date of the submission, if too late. If you do not make a referral or if the government suspects you of fraud, there is no statute of limitations.

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