AirBnB Case Pits Landlord Against Tenant

Posted by Teresa on June 8, 2012 under Lease and Rental Agreements, Legal | icon: commentBe the First to Comment

tenant screening, tenant prescreeningA Brooklyn landlord obtained a restraining order against a tenant who has been renting out his apartment by the night through Airbnb, the site that connects travelers with homeowners or tenants who have rooms, homes or apartments to rent.

By turning his apartment into a full-time hotel room, the tenant made nearly $20,000 in nine months. He regularly grossed $1,000 per month over the cost of his rent by inviting unscreened, unapproved guests from all over the world to stay in his apartment.

Not any more. The landlord was well within his rights to use the court system to stop the tenant from endangering his business through running his own business out of the apartment, which is not only an illegitimate use of the rental property, but could lead to all sorts of problems.

Landlord’s insurance would not likely cover incidents that can occur when hundreds of strangers inhabit a property in a given year—while the chance of accidents, thefts, property damage and fire increase. There is simply much greater risk to the insurance company and the landlord when a property is used as a hotel.

Rentals are typically not allowed to be commercial enterprises, such as clothing boutiques, restaurants, bakeries or doggie day cares, so why would a tenant believe it’s okay to make money and put the landlord at risk by running a hotel?

The funny twist to the story is that the landlord has started renting empty units himself on Airbnb.

Landlords, remember to be specific in your leases about which activities are and are not allowed in your rentals. If you do not allow roommates without your approval, or subletting without your approval, you should add that you do not allow tenants to have paying guests by the night, by the week, or at all without your approval. Check with your attorney for proper language to protect your interests.

Lead Paint Violations Sending Baltimore Landlord to Jail

Posted by Teresa on June 7, 2012 under Legal | icon: commentBe the First to Comment

tenant screening, tenant credit checksDespite repeated warnings, a Baltimore landlord kept violating lead-paint regulations for decades. He has now been sentenced to a year and a day in prison.

Cephus Murrell owned 175 rental units, all built before lead paint was banned for its dangers, especially to children. Since 1974, he has been issued more than 20 violation notices and compliance orders. More alarming is that a city Health Department inspector testified at his sentencing hearing that children in at least 11 of Murrell’s properties have tested positive for lead poisoning over the last 30 years.

The jail sentence was imposed for three misdemeanor violations of the Toxic Substances Control Act. Murrell pleaded guilty to the charges, including failing to notify tenants of lead-based paint hazards, potentially exposing children to lead dust by conducting an abatement while they were present, and falsely certifying that abatement work was being properly supervised.

Under Title X, or the Residential Lead-Based paint Hazard Reduction Act, landlords are required to disclose any known lead-based paint or hazards in their rental property before signing or renewing a lease with a tenant.

Under a federal plea from last year, Murrell was required to obtain certificates of reduced lead-based paint risks at 60 properties. To date, he has submitted only 11 certificates, according to the Maryland Department of the Environment.

The judge also ordered Murrell to get out of the rental housing business. His attorney indicated that he had turned over his properties to a trustee after filing for bankruptcy in March.

The law was enacted in 1992 to reduce the health threats of lead-based paint to adults and children. When lead-based paint peels, chips or is sanded, it can lead to lead poisoning, which affects nearly every system in the body. Infants and young children are particularly susceptible. Lead poisoning can lead to behavior problems, impaired growth and reading and learning problems. The Centers for Disease Control (CDC) estimates 250,000 U.S. children ages one through five have elevated blood lead levels.

It’s a landlord’s responsibility to follow the law, notify tenants of hazards, and take care of lead-based paint issues. So many children are affected for life by negligence like that shown in this case.

Prohibiting Smoking vs. Prohibiting Smokers

Posted by Teresa on June 1, 2012 under Lease and Rental Agreements, Legal | icon: commentBe the First to Comment

tenant screening, background checkMore rental property owners are prohibiting smoking in their buildings. The reasons to do so are many: avoiding the smell and stains that permeate your property, lowering the risk of fire, and protecting the health of children and non-smoking tenants. Plus, a number of municipalities are passing no-smoking laws for multi-family or public housing buildings.

However, smoking is not illegal. While you may have decided to prohibit smoking inside your rental units, can you deny the lease applications of smokers? And what can you do if you find out after the fact that someone was smoking in your smoke-free property?

First of all, smokers are not a protected class. The Fair Housing Act does prohibit housing discrimination against people based on religion, sex, disability, race, color, national origin, and family status. But it doesn’t deny landlords the right to choose tenants based on their smoking status.

To prevent smokers from taking advantage of lease loopholes, such as smoking outside their units, you might consider strengthening your lease language to prohibit smoking anywhere on the property. Since you are the owner and it is private property, you have the right to prohibit smoking wherever you’d like.

Being a hands-on landlord can help you avoid the problem of hidden smokers. When walking through your property, you may notice cigarette butts, or smell smoke. Asking tenants if they’ve noticed any smoking will indicate that you care about their health and enforcing the terms of your lease. If you do find out someone has broken the lease by smoking, you could have grounds for eviction (check with a landlord/tenant attorney for advice).

While frequent inspections can flush out smokers, many landlords don’t see the inside of their units until a tenant has moved out. If you discover signs of smoking, such as odor, cigarette burns or a layer of tar on walls and ceilings, you are likely entitled to withhold clean up costs from the tenant’s security deposit. Track all expenses (cleaners, primer, paint, new flooring) and keep receipts. Of course, it’s best to conduct a move-out inspection with the tenant so he or she can acknowledge all damages.

Protect your rental property and assets through tenant background checks. Proper tenant screening will ensure you are leasing to the best possible tenants.

Are Landlords Responsible for a Tenant Watch Group’s Actions?

Posted by Teresa on May 23, 2012 under Legal | icon: commentBe the First to Comment

online tenant screening, tenant prescreening, tenant background checkIn the wake of the Treyvon Martin shooting earlier this year, rental property owners and managers are rightly concerned about possible liability for actions taken by tenant watch or apartment watch groups on their properties.

In a case that made headlines everywhere, 17-year-old Martin was shot and killed by a neighborhood watch leader while visiting his father, who lives in the community. Evidence keeps coming out, but it is unknown what exactly happened that day. The shooter, George Zimmerman, has been charged with second-degree murder.

The circumstances around the shooting have many wondering who is liable for Zimmerman’s actions? Was he sanctioned by the homeowners association in the community? Will the individual homeowners be subjected to a lawsuit and paying damages? And if something like this happened on a rental property, would the owner be liable for a tenant watch group’s actions?

It’s a tough call. In many communities, the police have encouraged citizens to form crime watch, neighborhood watch and tenant watch associations to discourage and report crime in their communities. Many of these groups were formed with the help of the local police.

The inherent risks in sponsoring or advocating for a tenant watch group can be mitigated by including the local police department for guidance and training, as well as by consulting with an attorney who specializes in homeowners and community associations. It’s also important to create a process of recruiting only responsible volunteers who will follow procedures, and screening each potential volunteer.

Establishing procedures for reporting suspicious activity and keeping safe are vital for success and safety, and “do not engage” and “no guns allowed” rules are the most important. In the Martin case, Zimmerman was told to remain in his car, but ignored that directive from the police dispatcher.

Still, a landlord or property manager cannot prevent accidents or lapses in judgment. And in the Martin case, if Zimmerman is found guilty, it’s likely a lawsuit against the community’s homeowner association and property management company will follow.

Could the same thing occur in your duplex, rental home or apartment complex? If you want to avoid liability, then perhaps hiring a private security firm is the better way to go.

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.

No matter how competitive your rents are, you need to protect your rental property and assets with tenant background checks. Proper tenant screening will ensure you are leasing to the best possible tenants.

What Happens When a Landlord Fails to Disclose Lead Hazards?

Posted by Teresa on May 10, 2012 under Legal | icon: commentBe the First to Comment

tenant credit check, tenant background, tenant screeningUnder Title X, or the Residential Lead-Based paint Hazard Reduction Act, landlords are required to disclose any known lead-based paint or hazards in their rental property before signing or renewing a lease with a tenant.

The law was enacted in 1992 to reduce the health threats of lead-based paint to adults and children. When lead-based paint peels, chips or is sanded, it can lead to lead poisoning, which affects nearly every system in the body. Infants and young children are particularly susceptible. Lead poisoning can lead to behavior problems, impaired growth and reading and learning problems. The Centers for Disease Control (CDC) estimates 250,000 U.S. children ages one through five have elevated blood lead levels.

Adults with lead poisoning often have high blood pressure, memory problems, joint and muscle pain, nerve disorders, and problems during pregnancy.

It’s clear that following the law is important, and the right thing for landlords to do. Landlords are required to tell prospective tenants about the location and condition of lead-based paint in housing built before 1978. They are also required to provide information, such as pamphlets provided by the CDC, about lead paint hazards and how to prevent exposure. Tenants may then make an informed decision about renting or not.

Recently, a landlord in Bridgeport Conn. was found to have rented apartments to families on seven different occasions without making the necessary disclosures. The landlord was charged with:

  • Failing to give tenants the required information pamphlets.
  • Failing to include proper warning statements in the leases.
  • Failing to disclose any known lead-based paint or paint hazards.
  • Failing to provide records or reports on previous lead paint enforcement actions or violations.

The landlord is now facing a federal fine of up to $127,000 for his carelessness.

In Indianapolis, Ind., the chipping lead-based paint in a rental home led to serious health issues for a three-year-old. The child came down with a fever, stopped talking, slept constantly and could not eat. A medical exam revealed lead poisoning.

In 2007, the county health department tested the home and found hazardous levels of lead in the doors, door frames, window frames and other areas. Inspectors recommended what needed to be done to bring the home into compliance. The owner of the property at that time was First National Bank of America. The home was tested again in 2009, and a letter was sent to the new owner, a private landlord, outlining that all of the lead hazards had not been corrected.

The tenant started renting the home a year ago, and asserts she knew nothing of the dangers. Doctors told her to vacate the house as soon as possible. She is now in the process of moving, but fears the home will be rented to another unsuspecting tenant. The landlord of this property could face the same charges and fines as the Bridgeport landlord.

Lead poisoning is serious—and so are the laws landlords are required to follow to keep their tenants safe. Don’t make the same mistakes as these two landlords. Protect your tenants and yourself by following Title X to the letter.

Landlord Faces Jail Time After Medical Marijuana Bust

Posted by Teresa on March 27, 2012 under Legal | icon: commentRead the First Comment

tenant screening, tenant prescreeningCould this happen to you? A Montana landlord faces up to three years in prison for renting to a medical marijuana business. The landlord neither grew nor sold marijuana; he is the only landlord charged after two rounds of federal search warrants were served on Montana medical marijuana operations last year.

The landlord, along with three tenants, was charged with conspiracy to manufacture marijuana, conspiracy to distribute marijuana and possession with intent to distribute marijuana.

After making arrangements with the prosecutors, one tenant pleaded guilty to money laundering and will serve six months in federal prison with six months of house arrest. The others pleaded guilty to conspiracy to manufacture marijuana and received sentences of a year and a day.

The landlord, Jonathan Janetski, faces sentencing on April 19, on a charge of maintaining drug-involved premises, with a maximum penalty of 20 years in prison and a $500,000 fine. His lawyer says that sentencing guidelines point to a likely sentence of 30 t o 36 months in federal prisonmore than the people who grew and sold the marijuana.

Janetski’s lawyer said his client thought the business was legal under state law. The raids surprised growers and medical marijuana dispensaries alike. State law legalized medical use of marijuana, but growing, distributing and possessing marijuana is still a violation of federal law.

Growers in California also thought their state’s law made it legal to grow and sell marijuana for medical use. There, authorities sent out warning notices before conducting raids. Landlords often used that opportunity to evict marijuana-growing tenants and remove the plants. The head of a drug task force in California’s Central Valley said that strategy proved more efficient than raids.

No such letters were sent in Montana, where one landlord who thought he was following the law has found himself facing criminal charges and jail time.