Posted by Teresa on September 8, 2011 under Landlord and Tenant FAQs | 
Every now and then, landlords are faced with unusual requests from their tenants. One we’ve heard of recently involved a tenant asking for a discount on rent in exchange for paying a full years’ worth up front.
The rent is $650 per month, and the tenant offered a full payment of $7,200 or $600 per month. The landlord wanted to know if it was a good idea to accept the tenant’s money and move on, knowing she didn’t have to worry about late rent for a full 12 months.
While it might seem like a no-brainer to eliminate one concern that comes with being a landlord, this might not be such a smart way to go. Here’s why:
- Even if the landlord put the entire amount into the bank, interest rates are hardly attractive right now. Other investments might garner more return—or not. Is the risk worth it? There are few incentives for the landlord to give up $600 in rent.
- Offering a tenant a discount doesn’t make sense when you consider the lease stipulates rent is $7,800 per year, to be paid monthly at the rate of $650 per month. Monthly payments are all a landlord needs to do to make rent easier to pay.
- Entering into negotiations such as this with tenants could lead to others seeking discounts for paying two, three or six months in advance. This could lead to a bookkeeping nightmare for the landlord. And anyone who thinks tenants won’t find out about such an arrangement should think again. Tenants talk!
- If the tenant breaks the lease, or the landlord needs to evict, holding the tenant’s money for future rent could complicate matters.
In the end, a $50 discount is far more generous than any bank would give the landlord—so why give it to the tenant?
Posted by Teresa on August 18, 2011 under Landlord and Tenant FAQs |
Q: Can a landlord prevent a tenant from breaking a lease with 60 days’ notice, due to trauma from a violent crime that occurred in the rental unit?
A: In some cases, and in some jurisdictions, the law would allow a lease to be broken without penalty. Usually, a tenant who signs a one-year lease cannot terminate it mid-term, even with a 60-day notice. In general, a landlord is not liable for unforeseen criminal acts of a third party against his or her tenants. If the tenant had reported issues regarding safety, such as inoperable door or window locks, or insufficient lighting, the tenant may have recourse, as the landlord could be considered in breach of the lease for failing to protect the tenants.
In a case like this, landlords could find themselves between a rock and a hard place, wanting to avoid any admission of liability by allowing a tenant out of a lease, while understanding why they would want to move.
Q: If I see that a tenant is demonstrating some hoarding tendencies, should I intervene?
A: Landlords have the right to expect a tenant will keep the rental property in good, clean and safe condition. Hoarding can be a safety hazard, particularly if flammable materials are kept in large quantities or emergency crews would have a difficult time navigating through the unit. Tenants who keep debris, garbage, empty boxes and cans, and stacks of newspapers in a rental unit are endangering themselves and other tenants.
Don’t ignore this situation. Keep the lines of communication open and respectfully and gently talk to the tenant about the situation. You may need to try contacting a family member (perhaps from the emergency contact listed on the lease application).
Q: My tenant damaged a wall and hardwood floor by carelessly leaving a window open during a rainstorm. I took the repair money out of their security deposit, and they replenished it. Now I want to terminate the lease to prevent this from happening again. Do I have that right?
A: Carelessness is not gross negligence. If the tenant is on a month-to-month lease, then you may terminate with notice, with no reason given. But if it’s a longer lease, this situation probably will not qualify as an allowable reason.
Legal disclaimer:
The contents of this article are intended for general information purposes only, and should not be relied upon as a substitute for obtaining legal advice applicable to your situation.
Posted by Teresa on July 19, 2011 under Landlord and Tenant FAQs, Screening and Background Checks |
Landlords approach apartment or rental house rehabs differently. Some think that no matter what they do, tenants will damage their rental property, so there is no reason to upgrade or make it look nice.
Other landlords invest in major improvements to their properties in order to charge higher rents and attract higher-income tenants. Still others make small improvements each time a tenant moves out, to slowly but surely increase the appeal and attract the best tenants.
There is no right or wrong approach – just the one that works for you. Here are some pros and cons to each approach:
Leave Your Rental Property as Is and Make No Improvements
Pros:
- You save money.
- You can turn over the rental to a new tenant more quickly.
- You avoid the possible frustration of seeing improvements damaged or ruined by tenants.
Cons:
- You probably won’t be able to increase rents unless vacancy rates decline.
- You could easily find your rental property losing value.
- You may attract only tenants who are okay with living in less-than-attractive housing.
Invest in a Major Rental Rehab
Pros:
- The result is usually worth the effort.
- You can often charge a premium rent to increase your return on investment.
- You can attract more desirable tenants.
- The value of your rental property may increase.
Cons:
- Remodeling can be very expensive.
- There is no guarantee your work will be valued or respected by tenants.
- Your rental property value may not increase, due to current market conditions.
Make a Few Improvements Each Time a Tenant Moves Out
Pros:
- Your investment is spread out over time.
- You may increase the value of your rental property.
- You can gradually improve the quality of tenants your attract.
Cons:
- It can take much longer to see real improvements.
- You may not keep up with the market at a slower pace.
- There is risk in subjecting your property to less desirable tenants for a longer period of time.
Remember, attracting desirable tenants is a worthy goal, but it’s not for every landlord. If you’re fine with minimum investment in your rental property, just beware of starting down the slippery slope to slumlord status!
No matter how nice your rental property is, you can’t be sure that tenants are going to keep it that way. Minimize your risk by conducting tenant credit screening and tenant criminal background checks.
Posted by Teresa on May 10, 2011 under Landlord and Tenant FAQs |
Ken is a long-time landlord who, in his own words, is getting tired of constant requests from tenants for maintenance and repairs in his rental units. Ken’s 6-unit building is beginning to show signs of age, and he’d love to make each tenant responsible to repair or replace their apartment’s appliances and heating system when they stop working properly. In fact, he’s thinking about adding this clause to his lease agreement.
Is this a good idea?
Experts don’t recommend landlords allows tenants to perform upkeep, preventive maintenance or repairs for a number of reasons:
- A tenant’s level of competence with repairs and maintenance is a complete unknown.
- Tenants may not repair appliances to an acceptable level—especially since they don’t own them.
- The liability of having a tenant work on electrical equipment is just too great. If they harm themselves or others, the landlord could face a liability suit.
- It’s not likely you’ll find a tenant who will properly perform preventative maintenance when it needs to be done or who will pay someone else to do it.
- Most renters like the fact that they are not responsible for repairs and maintenance—otherwise, they’d be homeowners.
- Putting such an important aspect of property ownership under the control of one’s tenants is just too big of a risk to take.
Ken might want to think about raising his rental rates to a level that will cover the expense of hiring a maintenance professional.
When a rental property starts deteriorating, it’s usually worth the effort and expense to fix it up. You’ll not only have a property you can be proud of, you’ll also attract tenants who care about their living quarters and will help you keep it in good shape. With a strong rental market, more landlords can afford to make improvements and upgrade their rental properties—and their tenants!
Posted by Teresa on May 6, 2011 under Landlord and Tenant FAQs |
What is a landlord’s responsibility after a tenant notifies that he or she is breaking a lease early? Can landlords just allow a rental unit to sit empty, requiring the old tenant to continue paying rent until the end of the original lease?
In a word, no. When a tenant breaches the terms of a lease, landlords are required to mitigate their losses by making a real attempt to fill the empty unit. Otherwise, apartments and rental houses everywhere would be sitting empty while tenants who need to move are paying rent at both their new and old places. Meanwhile, tenants who need homes to rent would be kept out of rentable units.
But how much effort is required of a landlord? If he or she makes an attempt to fill a rental unit, does that suffice? How far must a landlord go before requiring the former tenant to make up the loss in rent?
Here are two scenarios to illustrate typical landlord actions:
- Landlord A advertises a rental unit at above-market rates. In this case, it’s not the tenant’s fault when the listing doesn’t attract any new applicants. The landlord is increasing her chances of loss of rent by advertising the unit at above-market rents. It wouldn’t be fair to require the tenant to keep paying rent until someone willing to pay too much comes along.
- Landlord B advertises the rental unit at the same rent the tenant was paying and posts “For Rent” signs on the building. This landlord is showing a real effort to mitigate his losses. If no suitable tenants come forth, it is not the landlord’s fault, and therefore the tenant would likely be required to continue paying rent until the unit is leased.
Keeping rental units full at rates the market can bear is good for landlords ad tenants. So, when a tenant notifies you that they’re moving out ahead of the lease termination date, make every effort to fill that vacancy, and you’ll make three people happy—the old tenant, the new tenant and yourself!
Learn more about protecting your rental property and assets through tenant background checks. Proper tenant screening will ensure you are leasing to the best possible tenants.
Posted by Teresa on April 1, 2011 under Landlord and Tenant FAQs |
Question: A landlord accepts applications from three potential roommates for a three-bedroom rental unit. The first two check out fine. The third proves to be difficult and unpleasant, even borderline verbally abusive, in all her interactions with the landlord. He decides to not even order a tenant credit report and rejects all three applicants. Is the landlord allowed to refuse a tenant for reasons other than a credit score?
Answer: Of course. A landlord may decline an applicant for any reason other than those covered under the Fair Housing Act, which bars discrimination based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents or legal custodians), pregnant women, elderly people, people securing custody of children and handicap (disability).
A landlord does not have to disclose reasons for rejecting a tenant—you can simply say a more qualified applicant was approved. (Under the Fair Credit Reporting Act or FCRA, a letter must be sent to an applicant if credit is declined, including for rental housing)
Question: A landlord advertises a rental property using the following language:
For Rent. 3BR apartment, 3rd floor. Not suitable for kids or elderly.
Is this discriminatory?
Answer: Yes. See above: landlords may not deny housing based on family status or age. This landlord could get in big trouble for this type of ad.
Question: A landlord starts eviction proceedings after discovering a tenant has kept a cat in her apartment—contrary to the lease, which states no animals are allowed. The tenant tells the landlord that she needs the cat because it is a therapy animal. Is the landlord discriminating against the tenant based on a disability?
Answer: It often depends on where the rental property is located. In most areas, a tenant must provide proof that the therapy or companion animal is necessary for the individual’s mental health or stability. This is usually a statement by a medical provider. The Americans with Disabilities Act (ADA) does not include companion, emotional support or therapy animals, because they have not been trained to perform tasks that benefit a disabled person.
Posted by Teresa on March 17, 2011 under Landlord and Tenant FAQs |
Most landlords and property managers know that whether or not pets are allowed in their rental properties, exceptions must be made to accommodate companion and service animals for the disabled, under the Americans with Disabilities Act (ADA). But what functions as a service animal for a tenant might not look like a service animal to you.
A landlord might wonder how a bird or a snake could be used as a service animal. After all, it’s not as though they help the tenant cross the street.
Rental property owners and managers must remember that not all disabilities can be seen. For example, people who suffer seizures sometimes use boa constrictors to warn them of a coming seizure. The snakes gently squeeze their owners when they feel a seizure coming on, so the person can take medication or remove him or herself from a stressful setting.
Cats and ferrets are sometimes used by individuals who experience anxiety. The animals might serve to calm them down when during air or water travel. And a parakeet can help a person with severe depression by acting as the focus of the person’s care and attention. In this way, the bird improves the person’s daily functioning—which is the definition of a companion animal.
The ADA rule covering companion animals requires tenants to obtain certification by a medical professional that the animal is necessary to relieve the disability. If a tenant has such an order, then the rental property owner or manager must make reasonable accommodations for the animal. And remember, service animals are not pets.
The U.S. Department of Justice is currently trying to define service animals. Last year, it received thousands of comments when it announced plans to exclude from the definition wild animals and service animals whose sole function is to provide emotional support, comfort, therapy, and companionship, and to promote emotional well-being. We will keep you posted on what the DOJ decides!
Pre-screen all tenants as part of your standard application process. Background and credit checks will help ensure you rent to qualified tenants. For more landlord resources, including forms and information on tenant screening, turn to E-Renter.com.
Posted by Teresa on November 30, 2010 under Landlord Paperwork and Forms, Landlord and Tenant FAQs |
Many landlords we hear from believe that a thorough, well-written and lawyer-approved lease should contain all the rules and regulations a tenant needs to follow. And that’s partly true. But there’s a difference between the terms of a lease and the everyday policies you want your tenants to follow.
As a rule, leases are where the legalese lives: the legal description of the property, legal names of the parties involved, legal termininology, and the landlord’s legal recourse when terms are not followed. The “house rules” are generally more relaxed in language, are more flexible (i.e., they can change at any time with notice to all residents) and are simply intended to help everyone get along better and live in harmony. They are generally not legally-enforceable documents.
A signature on your list of policies or house rules is just as important as the signature on the lease. You want to be clear that your tenant understands the rules and agrees to abide by them. Review them together at the time of the lease signing, and be sure to ask if any item needs clarification.
10 Items to Include in Your Rental Property Rules
- Noise: Emphasize that consideration for other tenants is required, and that while your rental unit is well-constructed, it is not to be considered sound proof. Noises that disrupt others’ quiet enjoyment are not allowed. Include quiet hours, if desired.
- Window Treatments: Here you’ll include whether or not blinds or drapes are included with the rental unit and what care they require. If no treatments are provided, you may want to specify what color and type of coverings are allowed—and what are not allowed (like aluminum foil).
- Keys: Any key replacement fee should be included here, as well as emergency lock-out fees if a tenant forgets his or her keys after hours.
- Inclement Weather Procedures: Inform tenants of your requests during times of high winds, low temperatures, or high rain, as well as thermostat settings when the rental unit is occupied for specified lengths of time.
- Trash and Recycling: Tenants need to know what can be recycled and where it goes, along with non-recyclable trash.
- Parking: Where tenants are allowed to park, how many vehicles each unit is allowed to keep onsite, where not to park, and whether or not non-running vehicles are allowed are some of the rules you’ll want to spell out here.
- Common Areas: Are tenants allowed to leave property in common areas like hallways, sidewalks and patios? Who is responsible for clearing snow and ice from walkways? Spell these things out here.
- Storage: Indicate where tenant storage is located, how they can access it, and any limitations (flammables, vehicles, dangerous chemicals, etc).
- Guests: Include things like where guests may park their vehicles and tenants’ responsibilities for their guests.
- Bicycle Parking: As bicycle commuting becomes more popular, many tenants will want to know where they can park their bikes. If you don’t want them chained to fences or balcony railings, specify where bike parking is allowed. Better yet, create special areas for bikes that are convenient and secure for cycling tenants.
Presenting a friendly list of house rules lets all tenants know what is expected of them and their fellow tenants. After all, who (besides fraternity kids, perhaps) wants to live in a place where there are no rules?
Posted by Teresa on October 22, 2010 under Eviction, Landlord and Tenant FAQs |
Have you ever needed to break a lease with a tenant? We’ve heard from a few landlords who did just that, for different reasons:
Nancy rented out her home in Virginia when her husband was transferred to San Jose, CA. Six months later, he was laid off from his job and they returned to their hometown. Financial difficulties kept them from buying another house. Nancy and her husband wanted to move back into their home, but their tenant still had several months left on the one-year lease they signed when they moved.
Jerry rented an apartment above his business to the son of a friend. At first, everything worked out well—but soon, the tenant started paying rent a few days late, didn’t keep the apartment clean, and made way too much noise during Jerry’s business hours. He didn’t want to evict his friend’s son, but realized he made a mistake signing a one-year lease with him.
Steve’s situation was the opposite—he had a tenant who purchased a home and wanted to break the lease three months early. Steve’s first inclination was to say “no” and require the tenant to pay all three months’ rent. But the tenant had been great—never late with rent, quiet and no trouble—and he didn’t want to punish her. He was just concerned about renting the unit again.
Nancy and Jerry handled their problem with the same solution—they incentivized their tenants to voluntarily break the lease. Nancy calculated how much she and her husband were willing to offer before picking up the phone and calling the tenant. She explained the situation, offered to help the tenant find another place to live, and then asked if he would be willing to move out early. He accepted her offer of assistance and cash, and all was well.
Jerry also offered his friend’s son an incentive to move out. He had a talk with him, explained that it wasn’t working out but he didn’t want to evict him, and gave him the rest of the month (about 20 days) in free rent if the tenant agreed to move out. (And Jerry never rented to a friend or a friend’s kid again.)
Steve wanted to end his relationship with his tenant on a good note. He calculated the three months’ rent, inspected the unit and found that it was in good shape, and offered to let the tenant out of the lease in exchange for keeping the security deposit and one month’s rent. She quickly agreed, and recommended the apartment to a co-worker, who signed a lease with Steve soon after.
It is possible to break a lease with a tenant, whether it’s you or the tenant who wants it broken. Usually a little incentive does the trick—but it doesn’t hurt to be reasonable, polite and open-minded! The next time one of your tenants wants to break a lease, think about solutions rather than problems. You might be surprised to see that it can work out for both parties.
Posted by Teresa on August 9, 2010 under Landlord and Tenant FAQs, Rents and Deposits |
When a tenant informs you that they will not be renewing their lease, provide them with move-out instructions. Written notice of your expectations is always a good idea when it comes to dealing with tenants.
What Should Move Out Instructions Cover?
- The first item should be that a written move-out notice is required from the tenant. This helps clear up any possibility of confusion over dates and terms of the move-out.
- Ask the tenant to provide an address to which you can return the security deposit, after deducting legitimate expenses for repairs or cleaning.
- Inform the tenant you will be contacting them to conduct the move-out inspection. Let them know this is not optional: you will need the tenant to be present to initial and sign the inspection list.
- Let the tenants know that according to the terms of the lease, the unit must be returned to the same condition it was in when they moved it. If they’ve painted a different color on the walls, they need to repaint it. If they don’t clean the unit thoroughly, you can hire cleaners and deduct the fee from the tenant’s security deposit. Any damage repair costs will also be deducted from the deposit.
- If there is a fireplace in the unit, let tenants know they must have it professionally cleaned before moving.
- Tenants might not know that the last day of the lease is the day they must be out. Inform them that any extra days will be charged a prorated amount of their monthly rent. To calculate daily rent, divide the total rent by 30.
- Ask the tenant to set the thermostat at whatever temperature you prefer.
- Utilities need to be transferred to you or turned off, according to what works for you. If ther is another tenant lined up, then obviously you don’t need to turn them off. Let the tenant know to inform the utility companies, including gas, electric, cable, water and sewer, of the last day they will be in the space. Warn them not to have the utilities transferred or turned off until the end of the last day of their lease.
- Let the tenant know where to leave any extra trash and where to drop off the keys.
One thing landlords can count on is that eventually, all of their tenants will move out. Whether it’s a good thing or bad, it can be a smooth process when you’re organized and approach each move-out the same way.
Every now and then, landlords are faced with unusual requests from their tenants. One we’ve heard of recently involved a tenant asking for a discount on rent in exchange for paying a full years’ worth up front.
