SMARTERLANDLORDING

ADVICE FROM EXPERIENCE

Dealing With Tenants

Familial Status and Quiet Enjoyment

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This article directed towards tenants with children should be interesting to landlords for a couple of reasons.

First, it provides a pretty nice overview of how otherwise well meaning landlords can end up running afoul of fair housing laws when dealing with children. Landlords need to always remember that familial status is a federally protected class. So what does that mean?

It means you cannot deny an applicant a property because they have children. Most landlords get this one.

But it also means that you cannot steer applicants to certain apartments or properties, say with more bedrooms or on the first floor. And here is where many landlords get tripped up. Not because they are trying to discriminate but because they are trying to be helpful. They think that another bedroom or more space might be needed and only discuss certain apartments. Or they believe, like the article states, that they are helping other tenants by only showing first floor apartments so there are less feet tromping around.

To avoid discrimination issues, landlords should tell applicants about all available properties and let THEM decide what is best for their needs. Do not do any thinking for them, no matter how helpful you may think it might be.

Secondly, the article discusses a clause that is in almost all of our leases, the right to quiet enjoyment. Perhaps you assumed, like many others, what that clause means. Quiet enjoyment means that there is no outside interference with an activity. An activity could be something such as renting an apartment. Thus, that term outside interference applies to you, the landlord. It does not, as the article points out, mean tenants have the right to absolute quiet. Rather, they have the right to be left alone in their home without interference from the landlord. Thus as the article again points out, kids playing in the courtyard in the afternoon, while perhaps loud, is a normal activity and does not violate the rights of other tenants.. Could get tricky I know, but understanding the term and being able to explain it to your tenants could help.

The Rent Squeeze Continues

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Rents are going up.  That’s great for us landlords right?  Maybe not.  Rents are outpacing income as can be seen in the attached graph from Zillow.com.

 

 

 

 

 

 

 

 

Higher rents will force many people to make hard decisions.  Not just about where they can live, but also about things.  For example, many at this time of year will be asking themselves if their kids should get Christmas presents or if the rent should be paid in full.   To us that seems like an easy decision.  Not so much to a loving parent.

If you are raising your rents, make sure you are qualifying your tenant’s income and make sure they can afford your property and all of the other things that go into living, like eating and getting around.  Smarter landlords also know that if a tenant starts to fall behind they have to stay on top of the situation.  Even though many things in the economy seem to be booming right now, it is times like these that can make it harder and harder for some folks to catch up and easier and easier to fall further behind.

Simple Mistakes Can Cost You

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Especially when it comes to complying with various government edicts, codes and ordinances.  There are folks like Berton Ring ticking off landlords all over the country. 

It is interesting how he plays both sides of the coin.  

Why Landlords Should Inspect Their Properties

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This is why landlords should inspect their properties. You cannot completely trust the screening process. Some people can look perfectly normal on the outside and in public, but their home life is a complete mess as the linked article demonstrates.

Just because you never hear anything from a particular tenant does not mean that all is perfectly well. Most times it is, but it is best to verify. Do you think the tenant in the story above would have ever called their landlord? It is highly doubtful. They are too embarrassed by their home life to let you in and will likely just vanish one night when no one is watching.

So don’t let this happen to you. Put a clause in your lease like the following that allows you to periodically inspect your property.

Tenant shall be entitled to quiet enjoyment of the use of the property so long as Tenant is not in default of the terms of the Lease. However, upon one day’s notice to Tenant, Manager shall be entitled to access to the Property for the purpose of inspection, repairs or marketing the Property.

Remember, your properties are a huge asset to you, don’t let someone trash them.

 

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The Top 6 Tenant Secrets

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All of us keep secrets. We do this for a variety of reasons. Some things should in fact be kept a secret as they are personal or you may be breaking a social norm, rule or perhaps even a law.   We may also keep something secret because we feel that we will only get into more trouble by saying something, or we will be perceived as ignorant. All of this just seems to be human nature.

Tenants, being human of course, are no exception. But some of the secrets they keep are from us, their landlords. These secrets can be insignificant or quite harmful. Some secrets are a simple flaunting of the rules. But others are more serious and they can put us, our property and our other tenants at risk.

Over the past dozen years I have uncovered a lot of tenant secrets. There do however seem to be some common themes to the secrets that tenants keep from us landlords. Here are my top 6 “Tenant Secrets.”

1.  My Boyfriend/Girlfriend Has Moved In – This is one of the biggest secrets tenants have and can be one of the most difficult to confirm and control. As a landlord you want everyone who is residing in your property to have gone through your screening process. Otherwise, you really have no idea who is living there. Are they a deadbeat? Do they have a criminal record? Is there something even worse they are hiding? Thing is, you just do not know.

On the flip side, how can you prove that they have actually moved in? Are you there every day to see who comes and goes? And even if you are, a significant other is likely to be around fairly often. How often is too often? Who are you to judge? But if there is evidence, such as a closet full of clothes, two cars or words from another tattle-tale tenant, you should confront your tenant.

Don’t be harsh when you do this, just ask if so and so is living there and remind them that it is a major violation of their lease to have an unauthorized roommate. Offer to get the person approved and on the lease, so there will not need to be anymore secrets. I find that most tenants prefer this option and will come in from the cold.

2.  I Got a New Kitten/Puppy – We more experienced landlords have seen this again and again. We go to do a repair or an inspection and see an animal or evidence of one when none was mentioned at move in. Perhaps the pet is new. Perhaps the pet is one that you do not allow. Perhaps you do not allow pets all together. If the last statement applies to you, you must give the tenant the choice; either you or the pet goes. If you allow pets, offer again to let them come in from the cold, pay the pet fees, meet your requirements and stop keeping secrets.

3.  I’m a Bit of a Slob – Sometimes this is an understatement. I have walked into some tenant’s apartments and wondered when the hurricane came through. Clothes strewn about everywhere, dishes piled up in the sink and on the counters. Frankly I can’t understand how people live like that. The problem is that it is very difficult to tell that someone is a slob on the front end. They can hide it pretty well for the interviews. It is only later when you get calls about a sudden bug or vermin problem that you find out. Needless to say “clean you place up!” letters are sent pretty quickly.

4.  I Like To Party – This is one of the worst kept secrets. There is nothing wrong with a little bit of fun. Having a few beers and friends over from time to time is as American as apple pie. But too much of a good thing gets a little old. Little did you know that you rented to Mr. Popular who likes to have friends over every other evening.

Other tenants can be as quiet as a church mouse, and when you go over to repair and inspect you find out why when you notice the bong sitting out on the coffee table. I realize a lot of people smoke weed, but in most places it is still illegal, so put away the bong when you are done and be a bit more discrete with your smoking habits! And believe it or not that smoke does creep out into the hallway and you are not fooling anyone with your patchouli.

5.  The ______ Is Broken – As landlords, we are responsible for maintaining the property. I actually want to fix things because my property is valuable to me. I want it to last a long time. So PLEASE, PLEASE, do not keep it a secret when something breaks. I have found more leaks that were let go to become major problems when they should not have. I have found heating systems with safety features bypassed. I have found holes in places they should not be like in roofs and floors. Why did the tenant keep these things a secret from me? I have never figured it out. Perhaps it has to do with number 3 or they think they will get in trouble, but who really knows?

6.  I’m Unhappy With ______ – Whatever it happens to be so I am just going to go through the expense and hassle of moving rather than speaking up and resolving the situation. Many tenants, if the feel like their needs are not being attended to or feel in some way hurt, will simply clam up and keep that fact a secret from us. I understand you may not like confrontation, but if you had just talked to us about things, we could have likely worked them out. After all, we are human and make mistakes, plus we are pretty nice people. Let us know when something is wrong. How else can we fix it?

So there you have my top 6 tenant secrets. Every year I see a few of these again and again. I guess it is just part of the business.

What do your tenants keep from you? Please share with your comments.

Top 25 Tenant Professions

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Who is more likely to be one of your tenants? Interesting question and Ancestry.com did a study of census data stretching back to 1900 in an attempt to answer it.

Dancers, waiters, bartenders and members of the armed services topped the list. While professionals and trades persons like optometrists, dentists and toolmakers were more likely to be homeowners.

Here are the top 25 professions that are most likely to be tenants based on the last 112 years of data:

Dancers and dancing teachers

Motion picture projectionists

Waiters and waitresses

Counter and fountain workers

Members of the armed services

Service workers, except private household

Bartenders

Charwomen and cleaners

Cashiers

Cooks, except private household

Actors and actresses

Attendants, hospital and other institution

Laundry and dry cleaning operatives

Farm laborers, wage workers

Porters

Attendants, auto service and parking

Roofers and slaters

Attendants, professional and personal service*

Attendants, physicians and dentists office

Demonstrators

Bakers

Gardeners, except farm and groundskeepers

Collectors, bill and account

Painters, construction and maintenance

Shoemakers and repairers, except factory

You can see the entire list here.

Does the list match with your experience? Let me now with your comments.

Questions on Ebola, Apartments and Landlords

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I have been watching the recent news about the ebola virus just like everyone else. Amongst all of the news I noticed that the two victims here in the US lived in apartments. Now, I understand the threat that Ebola is and I also understand the need to contain it. Nonetheless, as a landlord certain questions pop into my head when I read headlines like the following:

“Ebola decontamination begins at Dallas apartment of 2nd hospital worker”

Questions like:

Who pays for this hazmat cleanup?

How was the hazmat team allowed in to the apartment? Who gave them permission to remove all of the tenant’s belongings? Was it by court order? Did the family allow them in? Would I as the landlord have to get close to the place and let them in? Should I get one of these?

What about damages to the apartment caused by the hazmat team? Who is responsible for those?

Is the rent still being paid?

When and how does the landlord get possession of their property back? Do they even want it back?

What happens if one of my tenant’s gets ebola or a similar disease? What rights do I or my other tenants have?

These are all interesting and hopefully unique legal questions that I quite frankly do not have the answer to right now. But, I think it would be helpful to know what a landlord’s rights and responsibilities are on the front end of these things just in case.

I will try and get some answers and put them in another blog post.

If anyone out there has any related experience or expertise, please share it.

What other questions might you have as a landlord in a similar situation? Please share with your comments.

Watch Out For “Professional Tenants”

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I have run across a few “professional tenants” in my time as a landlord trying to rent from me and heard even more horror stories from others who have unfortunately let them into their properties. Trust me, the professional tenant is something you as a landlord want to avoid at all costs. An effective screening process is a good place to start. But also knowing what to look for goes a long way.

 

Richard D. Vetstein, Esq. writing in a real estate column at aol.com has some good advice on what to look for and tips for avoiding the “professional tenant.”

He notes:

“Most tenants are problem-free, yet there is a certain type who make even an experienced landlord cringe with fear: The Professional Tenant.

Let me give you the profile of what I mean by a typical Professional Tenant.”

Read the rest here.

Tenant Moving Out? Insist On A Written Notice

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Ever been told someone’s name and then instantly forget it a few minutes later? Have you forgotten to pick up something from the store because you did not need to make a grocery list? Of course you have, we all have. It is human nature. We are so busy that it is hard to remember everything we need to remember.

We landlords are no different. We have so much going on that sometimes it can be hard to keep track of what day it is. This is why you should never take a verbal notice from a tenant that they are moving out.

Most often, a tenant will call to tell us that they are moving out. They often think that is enough of a notice. But really it is not. It does not really protect them or us (plus it may not be legal in some states). As I said above, we are all busy and things can be easily forgotten.

Tenant move out’s are very important. You as the landlord need to get that property back as clean as possible and re-rented as quickly as possible. The tenant needs to protect their interests as well, making sure they conform to the provisions of their lease. That is why anytime we get a verbal notice from a tenant that they are moving we ask them to also send an e-mail, or at the very least a text message.

With a written record, there will be much less chance of the following:

  • I thought you were moving out today? No, I said Monday.
  • You did not give us 30 days notice as required in your lease.
  • I never received your move out notice.

Plus, once you receive a written notice, it should prompt you to send your move out kit to help you get your unit back in tip top shape.

So please insist on a written notice anytime a tenant wants to move out. Yes, your tenants will moan and groan but it is worth it to both you and your tenant.

When Tenants Overstay Their Lease

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Tenants move.  It’s just a fact of a landlord’s life.  As much as we might like them to stay (well most of them), they rarely do.

When they move, vacancies become a major concern.  The cashflow stops but the bills remain.  So, getting the unit re-rented as quickly as possible becomes a priority.

The best case scenario is to have a tenant move out one day and another move in immediately the next day.  Think about how great that is.  It is almost perfect as there will be little if any interrupted cash flow.  We have had the good fortune to have this happen a few times over the years.

But wait a minute.  No matter how well you might think you have things lined up, Murphy and his darned law is always right around the corner.  Things can go wrong and can go wrong pretty quickly.  The movers might be a day late to move your tenant out.  A new job may be eliminated meaning the tenant no longer wants to move.   A car can break down and a whole host of other things can go wrong.  Other times the tenant just does not get it together and actually move out.

What happens then?  What happens if you have scheduled someone to move in the next day?  Things can get sticky real quick.

Imagine for a moment that you are your new tenant.  You are moving from out of state and have all of your belongings in a truck, a truck that has to be returned the next day.  You have scheduled movers, utility connections, satellite TV installation.  Are you supposed to rearrange all of this?  Are you supposed to sleep in the truck?  What about all of the added expenses, not to mention the aggravation.

Your new tenant is going to be looking right at you for answers.  After all, you are the one breaking a contract by not having a place for them to live.  They will want to be reimbursed and accommodated for their hassle.  They will have a strong case and they know it.

Here is what to do.

First, try to leave a day or so wiggle room from move out to move in.  A loss of one day’s cash flow is not that bad and it may just give you the time you need for when Murphy shows up and starts making things go wrong.

Secondly, place a clause in your lease that charges the tenant $100 per day for any time they (or their stuff) stays in the property past their move out date.  In this way you are somewhat protected if you incur expenses due to someone not moving when they said they would.  Plus it really provides incentive for them to get out when they said they would.

The key is to be very clear about this provision when they move in.  Let them know you will charge it.  Get that motivation started the first day they move in.

Finally, apply the pressure to your old tenant.  Let them know they cannot stay and keep on them.  You may have to literally push them out the door.

Honestly, this scenario is hardly ever a problem, but it can and has come up.  So be a smarter landlord and be prepared for it.

 

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