One of the biggest issues landlords and tenants seem to have is the handling of the security deposit

The security deposit is:

• Money collected up front to compensate for damages. At the termination of the lease, any repairs, cleaning fees or other expenses incurred to take care of damages outside ordinary wear and tear will be taken out of the tenant’s prepaid security deposit.
  
• Money collected up front to compensate for failure to pay rent, fees and late charges. In case a tenant fails to pay rent, fees or late charges, the landlord may get compensation from the security deposit.
  
• The best way to prevent financial squabbles between landlords and tenants. Once the tenant has moved out, it’s nearly impossible to chase him or her down to collect for lost rent or damages.

The security deposit is not:

• The last month’s rent. You should not allow a tenant’s security deposit to be used as the last month’s rent. They are two separate categories. Tell all tenants that they need to pay their last month’s rent, and after they are all moved out, you will conduct an inspection and walk-through to determine whether there are any damages to the property, and how much, if any, of their security deposit they will receive back.
  
• A savings account. Some states, such as California, require landlords to pay interest on security deposits held for at least a year, but most do not. California landlords may elect to hold the security deposit in an interest-bearing account or pay the interest established by a state commission. However, most states do not have the interest-paying requirement, and therefore, landlords may return all, a portion of or none of the security deposit to the tenant without any additional interest. Check your local and state laws.
  
• The landlord’s money. It is your tenant’s money, which you are holding as a small insurance policy against the possibility of loss due to damages or unpaid rent, fees or late charges. Smart landlords deposit tenants’ security deposits into separate accounts which they do not use for business expenses.

By the Way: It’s not up to the tenant to determine whether he or she has caused any damage. Checklists and photos of the rental unit on move-in day and move-out day are a great way to document any needed cleaning or repairs.

Being a landlord isn’t easy.

Using the same old lease, or someone else’s lease: Landlords who’ve been leasing properties for a long time often use the same lease for decades. And those who are new at it, often download a lease agreement off the Internet, or borrow one from a friend. It’s true that most leases contain common language, but it’s best to have yours customized for your property, your circumstances and your preferences. It could be well worth it to sit down with a landlord-tenant lawyer and have your lease reviewed.

Forgetting that time equals money: You might not mind doing repairs, cutting the grass or performing maintenance at your rental properties. If you’re an expert at these things, it could be cost-effective to do it yourself. However, if your work is sub-par, it takes longer than it should or requires follow-up repairs, you are probably wasting your time—and losing money. Hire experts to do the things you can’t do, and focus on what you do well. Fill empty units, update your website or take classes to make yourself a better businessperson.

Breaking anti-discrimination laws: You cannot refuse to rent to a prospective tenant based on race, national origin, religion, familial status, color, gender or disability. Landlords are not allowed to ask prospective tenants questions that refer to these things, either.

Basing acceptance of a tenant on anything other than cold, hard facts: Look at an applicant’s previous rental history, current and former employment, income, and credit worthiness. Run a background check to weed out those with criminal records. But don’t make decisions based on how a tenant applicant looks or dresses, or the car he or she drives.

Failing to follow the same procedures with every applicant: You could be accused of discrimination if you don’t require each applicant to follow the same process.

Making decisions based on emotion: Every experienced landlord has regretted allowing a tenant to be late on rent “just this once,” or to letting a tenant move in without paying a security deposit up front because they promised to pay “next month.” Well, “just this once” is never once and “next month” never comes. It’s difficult to be tough, but landlording is a tough business. If you want to succeed, you’ve got to take a hard stance.

Regardless of whether you have to follow laws or regulations, you’ll want to review pool safety with all of your tenants, especially those with children. Use these tips to improve the safety around your community’s pool—and increase the fun for everyone this summer.

• Use clear signage: Not only do clear, legible signs help inform users of the rules, they can also help your case if there should be any problems with injuries or litigation. Posting signs that say “No Lifeguard on Duty,” “No Diving,” “No Access After Dark” and “Keep Gate Closed” are essential.
• Be sure that any guests or non-residents are accompanied by a tenant at all times. Consider selling guest passes for $2.00 or $5.00 per day to reduce the number of guests.
• Enforce a minimum age rule. Children under the age of 15, 16, etc. must be supervised by an adult.
• Don’t allow food or beverages in glass containers near the pool, to reduce the possibility of injury.
• Request that people with infections diseases, skin abrasions, cuts, or other injuries avoid using the pool.
• Do not allow pets inside the pool area.
• Keep trash receptacles close by and empty them frequently.
• Equip the pool area with safety equipment, such as life rings, life hooks and whistles.
• Compile a complete list of pool rules and warnings, include them with the lease, review them with new tenants, and have them initial the page at lease signing.
• Close the pool during inclement weather, especially during and after thunder/lighting storms.

But before you evict a tenant, make sure you are following the laws of your state. Failure to follow the proper legal procedures can result in plenty of trouble for you, and an undesirable tenant still living in your property.

There are certain reasons you can legally evict a tenant, including staying past the termination of the lease and non-payment of rent. Having a pet, sub-leasing or allowing guests to stay without your permission are other examples of legitimate cause for eviction. Disliking the appearance of their visitors, the food they cook at home or the church they attend are not legitimate causes.

Each state will have its own detailed requirements, so be familiar with your state’s procedures before you start. You’ll be required to terminate the lease and give notice of eviction, in writing, before you begin the filing process. The number of days for the notice to vacate will vary according to the state law. Some states require landlords to give tenants time to correct the problem; others don’t.

Depending on your reason for terminating the lease, you may issue:

• A Pay Rent or Quit Notice, which gives the tenant several days to pay or move out.
• A Cure or Quit Notice, which gives the tenant time to correct the problem, such as having their sub-tenant move out or finding a new home for the cat.
• An Unconditional Quit Notice, which requires the tenant to move out, with no chance to pay rent or fix the problem. These are generally used with tenants who engage in criminal activity, repeatedly break the rules or fail to pay rent on time.

Once you start the eviction process, you may be in for weeks or months of court appearances. Tenants can defend themselves, or look for errors in your documents that give them time to stay. If a tenant thinks you are being discriminatory against him or her, or are retaliating for complaints they’ve filed, you could have a long case on your hands.

Before you evict, make sure you have documented all of your correspondence with the tenant; keep things completely professional and whatever you do, don’t change the locks or turn off the utilities in order to force a tenant out. That’s illegal.

If you follow the procedures outlined by your state, you can usually evict a tenant for cause in a matter of weeks. If you don’t, you could lose your case. You can always consult with a landlord-tenant attorney if you need to. Good luck!

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.

Properly placing plants, trees, fences and other landscape elements can make your property unattractive to thieves and other lawbreakers. A new approach is called Crime Prevention through Environmental Design, which includes using landscaping and site layout to support natural surveillance, access control, territorial reinforcement, and image and maintenance.

Natural surveillance means keeping trees and shrubs trimmed so that all sightlines are clear for tenants and people walking or driving by. This means no overgrown shrubbery in front of windows or low-hanging tree branches covering walkways.

When you discourage the wrong people from entering your property, you’re practicing natural access control. Simple practices like installing noisy gravel paths and shrubs with spines or prickly leaves can keep would-be criminals away from your rental units. Avoid shrubs and trees that allow easy access to second-story windows and balconies.

Territorial reinforcement can mean a simple fence, which designates the boundaries of the property, as well as well-placed lighting, which will reveal anyone sneaking around at night. Keep plants trimmed around light fixtures for optimum coverage.

Remember that promoting a clean and organized image sends a signal that people who live in and own the property care about it and keep an eye on it. Neglected properties with overgrown landscaping, garbage strewn about and broken sidewalks, shutters, fences and other elements invite more problems.

When it comes time for planting shrubs and trees, allow more room between them. Less is more, especially when the plants grow and fill in. You don’t want to provide any hiding places for less-than-desirable visitors!

We’re not insurance experts, so if you have questions specific to your situation, consult your insurance agent. But we can offer some common-sense guidelines.

First of all, when you become a landlord and lease out your property, you take on more risks. In many states and cities, landlords are also held to certain rules regarding safety. So if a tenant falls down the stairs, for example, you could be liable for her injuries, depending on whether or not proper handrails, non-skid surfaces and other safety measures are in place.

If you have followed all the rules, the tenant’s personal insurance might cover her losses. But if not, she might try to seek retribution from you.

What about when a water pipe bursts and water leaks in your rental unit, soaking the carpet, damaging the ceiling below or soaking into the drywall? Water can do a lot of damage, as can fire. You need to protect your business and personal assets from the costs of rebuilding from fire, water and smoke damage.

These are three good reasons to have landlord insurance. A liability policy will protect you from damages. However, it’s important to realize—and tell your tenants—that your liability policy will not typically cover their possessions. They’ll need their own renter’s insurance for that coverage. Renter’s insurance will also cover tenants if they are negligent and cause injury or damages.

It’s a good idea to require tenants to have renter’s insurance.

Not everyone loves a landlord

One town decided to take steps to limit the number of rentals allowed in a neighborhood. West St. Paul, Minnesota passed a law, effective January 1 of this year, which permits no more than 10% of homes on a block to be rental properties.

West St. Paul has had more than its share of foreclosures. Home values have fallen. But there’s little evidence that the number of tenants living in its neighborhoods has anything to do with it. Studies provide mixed results; some say higher rates of homeownership raises home values, but others conclude that even large, mixed-income, multifamily rental properties don’t affect the values of surrounding single-family homes.

Besides, with all the foreclosures in the town, where are former homeowners supposed to live? Not in West St. Paul. And not in Madison, Mississippi, which banned all rentals in 2009. In addition, what about homeowners who need to sell a home to take a better job elsewhere, but are unable to sell? What if they’re not allowed to rent their home? How many will walk away from their mortgages and ruin their credit history?

Not surprisingly, homeowners are not taking this lying down. They’re filing lawsuits, claiming that renting one’s own property is a legitimate property right.

Municipalities might mean well by limiting the number of rental properties on a block, but it seems like a recipe for disaster. Americans are demanding more flexible housing, with less upkeep and expense , the ability to move at the end of a lease without penalty and no worries about falling home prices wiping out their equity.

If surrounding homeowners worry about their home values, they can insist on stronger laws that support landlords’ efforts to keep their properties in good shape, and limit noise and other nuisances. They can get to know the landlord and the tenants that own and live in the rental properties in their neighborhoods. Communication is a better way to start than passing laws to prevent property owners from leasing their properties.

Recent data shows that approximately one in five American households live in multifamily rental properties, most of which are owned by individuals—not large companies.

The two agencies produced a report that combined existing information and new data on number of units, value, ownership status, mortgage financing, Federal and state benefits, and other information.

A few statistics from the survey:

• 73% of multifamily rentals are comprised of one building.
• 67% are owned by households or individuals.
• 77% provide parking.
• 19% have buildings built before 1920.
• 87% of owners reported making repairs to their properties in 2010 or 2011; the median cost was $699 per unit.
• In multifamily rental properties with 50 or more units, 45% have 20 or more buildings.
• 73% were acquired by their owners before 2005.

It’s clear that not all Americans can or want to buy their own home. For some, renting is a way of life; for others, it’s the only viable option available. Multifamily rental housing, according to the report, is “critical to solving the nation’s affordable housing problems.”

“I thought you said I could have a roommate.”
“I told you I was going to be getting a dog after I moved in.”
“No, I didn’t realize I wasn’t allowed to park my RV in the parking lot.”
“We didn’t know we weren’t supposed to skinny-dip in the pool.”

Have you ever heard a tenant explain that they broke the rules of the lease because they didn’t know or realize what those rules were? Or because they thought they heard you say it was okay?

Many an experienced landlord can tell stories about the misunderstandings that go on nearly every day with tenants. That’s why it’s so important to establish good communication from the start of your relationship with every tenant.

Here are some tips for improving landlord-tenant communication:

• Never assume. Don’t assume you know what a tenant is thinking or planning.
• Put it in writing. Especially when it comes to changing the terms of a lease, such as allowing a roommate or a pet, put it in writing and have all parties to the lease sign and date it. Even if it’s simply to use an extra parking spot, don’t rely on verbal agreements. They’re difficult to remember, not to mention prove in court.
• Over communicate. If you’re going to err on either side, over—don’t under—communicate.
• Use multiple platforms. Some tenants will prefer to talk with you on the phone, others via text. Still others will only respond to email. All legal correspondence should be delivered through the U.S. Mail.
• Ask questions. Whether you’re reviewing the terms of the lease, or making an appointment for a maintenance call, make sure the tenant understands what you’re saying by asking clarifying questions. And if you’re unsure about what the tenant is saying, ask again.
• Listen. Be an active listener. Make eye contact. Watch body language. Repeat back what you’ve heard and ask if that’s what the tenant really meant.
• Don’t interrupt. Show interest, provide feedback and be patient when your tenants are speaking.

Good communication takes some effort, but remember that your tenants are your customers, and establishing positive communication will go a long way to keep the relationship positive.

The Fair Housing Act (FHA)

Under the disability section of the FHA, it states that landlords must make reasonable exceptions to their policies to ensure that people with disabilities receive equal housing opportunities.

This means that if you have a no-pets policy, you may be required to make an exception for service or companion animals that people with disabilities depend on to manage their lives.

But not all disabilities are obvious. The Americans With Disabilities Act (ADA) defines an individual with a disability as “a person who has a physical or mental impairment that substantially limits one or more major life activities, a person who has a history or record of such an impairment, or a person who is perceived by others as having such impairment.”

It’s a broad definition, but that doesn’t necessarily mean that every animal kept by a person with disabilities must be allowed. Not all dogs are service dogs—some are simply pets. Certain court cases have ruled in favor of landlords, such as when a dog owned by person with a hearing impairment was found to be completely untrained, and not an assistance animal at all.

Other examples include a case where a property management company changed its pet policy to ban all animals. One tenant had lived there for years, and owned a dog. When it came time to renew his lease, he was asked about whether he would be giving the dog away or leaving his apartment to comply with the new policy. He stated that since he’d been in an accident a year before, he needed his dog as a companion animal. He supplied evidence from his physician, and was allowed to keep his dog.

If you have an issue with a tenant over whether or not the service or companion animal they’re keeping truly fits the definition, consult your attorney. Keep in mind that some disabilities, like heart trouble, depression and diabetes cannot be seen. Assuming your tenant does not have a disability can be considered discriminatory in itself. Be sensitive, proceed with caution, and give your tenant the respect he or she deserves.