If your tenants decided to form an association, how would you react? Would you be surprised? Should you be worried? Or would you be angry?

Tenants who wish to form an association may have common concerns, among them are:

• Repairs and maintenance
• Emergency repairs and loss of essentials such as heat, water, electricity or gas
• Inadequate heating
• Loss of utilities due to landlord non-payment
• Privacy violations
• Abusive behavior
• Rent increases and security deposit concerns

While the vast majority of landlords treat their tenants fairly and with respect, and take care of their properties (after all, they are investments), there are those who don’t, and who may respond more quickly when tenants exert a little pressure.

So, what can a good landlord do when tenants form an association?

• Don’t panic.
• Establish a line of communication with the leaders of the association.
• Show an interest in their concerns.
• Listen.
• Fix what’s wrong. If you can’t make necessary repairs right away, explain why and set a date when they will happen.
• Attend association meetings, if they allow you. (They don’t have to.)
• Allow the association to use common areas for their meetings, as long as you allow other groups to use them.
• Don’t discriminate against members of the association, and don’t offer incentives to new tenant to not join the association.
• Check your local and state laws regarding tenant associations. You may be subject to specific regulations.

While tenant associations may not be landlords’ favorite groups, they don’t have to instill fear. Talk to your tenants, take care of their legitimate concerns, and you can improve your relationship for the long run.

Landlords, have you ever been the victim of a scam pulled off by a “professional tenant?”

Jeff is a new landlord who recently arranged with a couple to lease a rental unit he owns. They wrote a check for the first month’s rent and security deposit, which Jeff deposited into his account. A week later, they cancelled the lease because their employer was transferring them out of state. They asked for a refund. Jeff refunded the full amount, only to discover the original check was written on a non-existent account. It was counterfeit. The couple flew the coop and Jeff is out nearly $1300.

Banks don’t typically place holds on every check, so Jeff assumed it had cleared the bank with no problem.

One way to avoid this scam: Ask for the first month’s rent and security deposit in cash. That would have sent these two packing.

A better solution: Run a thorough tenant screening on every applicant. Check their credit history and criminal history. Call previous landlords and their current employer. Remember: scammers do their best work when no questions are asked.

Another story is about a famous scam where the tenant moves into an apartment and proceeds to trash the place. Or he just stops paying rent. He then waits for the eviction notice or sues the landlord for unsafe housing. He’s an expert at stretching out the judicial process though filing complaints, asking for judge recusals and causing postponements. In the meantime, landlords are racking up massive attorney’s fees, he’s living rent-free for months or years, and usually the court decides in his favor.

The only way to avoid this type of tenant scam is through tenant screening. One of the victims of this scammer admitted she didn’t check with any of his previous landlords before renting him an apartment.

Protect yourself, your business and your wallet by keeping your guard up, trusting no one you don’t know, and running a tenant background check on every prospective tenant.

When your tenants sublease without your knowledge, they have prevented you from conducting your usual due diligence on the people who are living on your property. You don’t know if they have a good rental or credit history. You have no way of knowing if they will take care of your property or be good neighbors. You don’t even know if they have jobs.

How do landlords find out about sublessors? Sometimes, the rent checks keep coming in from your tenant, because the sublease tenant is paying him or her. In other cases, the tenant will have the sublessor send their own checks directly to you. If you accept online payments, your tenant can simply give the sublessor the login and password, and they can pay out of their own account. Depending on the e-pay service, you may or may not have access to the name on the account.

When faced with an unauthorized sublease situation, the landlord holds all the cards. If your lease clearly states “no subleasing,” then you have recourse and can likely start eviction proceedings against the original tenant. And in most sublease agreements, the sublessor only has rights to occupy as long as the original tenant does.

Check with your attorney for all the details, but in most cases, landlords are never under any obligation to accept a sublessor if the lease prohibits it.

The rental market has been very good over the past year or so

If you haven’t raised your rents during this landlord’s market, you may be thinking about doing so, before the pendulum swings back to the tenant’s favor. Here are some simple steps that can put more money in your pocket and keep good tenants from moving:

• Study your market rents. There are a number of online tools you can use to check comparable rents in your area. You need to know whether your rents are in line with, above or below market. Obviously, if your rents are above market, you should rethink the plan to raise them any further.
• Review your expenses. Have the costs of maintenance, insurance and other business-related expenses gone up? Take this into consideration when setting your new rents.
• Determine which tenants you really want to keep, and which you think you could replace with better quality tenants. You may choose to lower the amount of the rent increase for great tenants that you’d like to stick around.
• Examine your lease records to determine which will be up for renewal in the next 12 months. What does your lease or state law say about rent increases? Do you need to give a tenant 30, 60 or 90 days’ notice if raising the rent at lease renewal? 30 days is usually not enough for a tenant to make a decision to move and let you know they will not be renewing. The longer notice you give, the better your relationship with your tenants will be.
• Formulate a plan. Decide how much of an increase is fair, based on market rents and the tenant’s history with you. If you really want to keep a good tenant, think about a smaller increase. You can also be ready to offer a longer lease at the new rate—18 months, for example—so the tenant can be assured that the rent will remain stable for a longer period of time. Have your market data ready to show tenants, so they know they’re still getting a good deal.
• Prepare a well-written notice. Be sure to thank your tenants for their business and for being good tenants. Let them know the amount of the rent increase and the process for lease renewal. Soften the blow by letting them know that your expenses have increased, that you’ve studied the local market and are keeping rents within the average range. Typically, if the tenant does nothing, the lease renews at the new rate. If tenants give notice, let them go and replace them with new tenants who will pay the new rent.

Of course, keeping a good tenant is always better than the expense and trouble associated with finding a new, qualified tenant. Keep this in mind when determining the amount of your rent increase. Follow these steps and you can be on your way to painless rent raising!

The last thing most landlords and tenants want to face is an eviction

There are ways to prevent a landlord-tenant relationship from ending in eviction, including proper tenant screening and conducting thorough tenant credit checks. But even good tenants lose jobs or have unexpected medical bills that can lead to difficulty paying rent. And when they stop paying rent, and won’t move on their own, eviction is the landlord’s legal recourse.

Depending on the state you live in, landlords are typically required to follow a strict protocol and process of notifying a tenant of impending eviction. Whether or not the tenant decides to fight the notice will determine whether the process goes quickly or drags out. The latter will add time and legal fees to the landlord’s case.

Other legal fees a landlord typically encounters in an eviction case include unlawful detainer for each adult in the rental unit, judgment, garnishment and service fees.

If you win your case, you then must remove the tenant from the property. In most states, you cannot just throw a tenant’s belongings out on the sidewalk. Typically, local law enforcement serves a notice and gives the tenant several days to leave. If they don’t, they will be removed by law enforcement.

In a few states, landlords are allowed to dispose of property a tenant leaves behind, but in most places, you’ll need to store the tenant’s property and follow proper notification procedures. In New York and New Jersey, for example, a landlord must store an evicted tenant’s belongings for 30 days, resulting in additional costs that are rarely recovered.

Expenses for cleaning and repairs add to the losses experienced by the landlord, since any security deposit paid by the tenant has likely been offset by loss of rent and legal fees.

By properly pre-screening tenants, offering an iron-clad lease to qualified applicants, and requiring strict adherence to rent due dates, landlords can establish a business model that lessens the chances of eviction—and saves them significant money and time.

One thing all landlords need is proper liability insurance coverage on their rental properties:

• If you’re renting a room or section of your own home, you will probably be okay with your existing homeowner’s insurance coverage.
• If you don’t live in the same house with your tenants, you’ll likely need a separate policy.

Why Do You Need Landlord Liability Insurance?

Imagine losing your savings over a lawsuit brought by a tenant because of an injury suffered on your property. Or if a neighbor’s child is bitten by your tenant’s dog on the sidewalk in front of your property. Even a visitor to your tenant’s unit could possible sue if he or she is injured on your property through no fault of yours.

Will your retirement fund be wiped out? What about your kids’ college funds? Could you lose your home, as well as your rental property? All of these assets could be at risk when you begin renting out a property you own without proper liability insurance.

Check with your insurance provider about your options. They may include:

• Basic coverage, for fire and vandalism.
• The next level of coverage will typically include acts of nature, such as windstorms.
• The top tier, an “open peril” policy, covers all perils, except those specifically named.

Some insurance companies offer special landlord insurance packages, which typically cover damages to your building and outbuildings, as well as your personal property stored on site. Some offer loss-of-rental-income and legal defense and court cost coverage.

If you’re a new landlord who hasn’t yet looked into insurance, your next call should be to your insurance agent!

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.

For landlords in most markets, 2011 was a good year

Strong growth in rental demand. Forecasters say demand will continue to grow for rental housing, based on a continued weak job market. Employment is expected to improve at a slow rate, which could increase demand as more people move out of shared housing situations.

A continued soft housing market. Losing renters to home purchases will probably not be a big issue for rental property owners. In some areas, such as Texas, home sales started increasing in the last half of 2011. Wherever employment growth occurs, demand for rentals will continue, and some home sale increases are expected.

Lower than normal supplies of multi-family housing. While construction permits are increasing and new development is starting to happen, most big construction projects are still in the planning phase. In most areas, new supply levels won’t be much higher in 2012. Exceptions are Washington DC, Dallas, Tex. and Orange County, Calif.

Higher occupancy rates. The economy will continue to produce renters for low- and mid-tier properties. High-end properties are still in high demand, but as wages stagnate, more renters will be pushed into lower rents, driving those occupancy rates higher.

Rent growth of 4% to 4.5%. Property owners who continue to increase rents could see higher turnover; others will likely see value in keeping existing tenants.

Top Ten Rental Markets for 2012

1. San Francisco will continue to lead the nation in apartment rental growth, followed by:
2. Austin, Tex.
3. San Jose, Calif.
4. Oakland, Calif.
5. Boston, Mass
6. New York City
7. Denver, Colo.
8. Dallas, Tex.
9. Charlotte, North Carolina
10. Houston, Tex.

1. Avoid the temptation to go through your tenants’ private spaces. Sounds like a no-brainer, since tenants have the right to privacy, even though they live in your property. But when a tenant recently reported coming home and finding the contents of her closet on the floor, along with a note saying that overstuffing will break the door, it apparently needs to be addressed.
2. Don’t show up at your tenant’s door without the appropriate notice, as specified by the law and in the lease. Even if you’re already in the neighborhood, and you just want to stop in and change the furnace filter, and it will only take a moment, avoid this bad habit. Unless you see an imminent threat to your tenant’s safety, you need to give them proper notice.
3. Avoid being like the San Francisco landlord who is being sued for $10 million by his tenants for failing to deal with bugs and mold. We’ll never be able to completely eradicate the rats, bedbugs, cockroaches, and other creepy crawlies that most people do not enjoy having around. But it’s a landlord’s duty to provide a safe and habitable living unit. And mold is a serious health hazard, especially for those with asthma or compromised immune systems. So if your tenants report a problem with bugs or mold, take care of it.
4. Don’t discriminate against your tenants or prospective tenants. Raise your awareness of what constitutes discrimination—because it’s illegal. For example, one Ohio landlord recently got in trouble for her “White Only” pool sign. She said it’s an antique, and must have thought it was harmless, but one tenant didn’t find it to be harmless. The landlord has been fined by the state Civil Rights Commission, and is appealing the charges

Landlords aren’t perfect—and neither are tenants. But it’s important to keep a professional business relationship with your tenants—keep that in mind as you go into the New Year!

• Trim dead tree branches and limbs: Snow, wind and ice can bring down branches, damaging property or causing injuries. They can also take power lines with them, which is even more dangerous.
• Clean gutters: If gutters are filled with leaves and debris, snow and ice can build up, causing damages to the roof an eaves, and eventually harming walls and ceilings.
• Check chimney flues: In units with working fireplaces, it’s important to have an annual inspection by a qualified professional. Creosote buildup can cause fires.
• Check each unit’s smoke and carbon monoxide (CO) detectors: If any unit has missing detectors, add them. If they run on batteries, replace the batteries each year. Now is a good time. Or, convert them to hard-wired units for even more security.
• Provide tenants with a Storm Preparation Tip Sheet: Prepare a list of instructions and tips to leave with each tenant, so they can consult it if a winter storm arrives. Give them tips on how to survive a few days without power, such as making sure they have flashlights, batteries, and adequate food and water on hand.
• Prevent frozen pipes: Instruct tenants to let faucets drip when temperatures are expected to dip way below freezing. Wrap pipes that are exposed to external walls with insulation or even layers of newspaper covered with plastic. Show tenants where water main shut-offs are located in case of emergency.
• Provide tenants with emergency numbers: Let them know how to reach you if a winter emergency occurs on your rental property. Let them know that downed power lines are especially dangerous, and to call the power company immediately (provide the number on a Storm Preparation Sheet).

And holiday lights and other decorative lights caused nearly 150 fires per year in that same period with an average of eight deaths, 14 injuries and $8.5 million in property damage.

Some of the top causes of the Christmas tree fires include:

• Electrical problems (33%)
• Heat source too close to the tree (20%)
• Decorative lights (13%)
• Candles (11%)

Help keep your tenants safe. Prepare a safety letter with fire prevention tips and make sure that each tenant gets one. Be sensitive to tenants’ various religious practices, and use non-denominational language.

Include the following tips in your notice:

• Follow the manufacturer’s directions for using holiday lights.
• Lights with loose cords, loose bulb connections and frayed, worn or broken cords should not be used.
• Lights should not be on when you are not at home. Unplug lights before leaving home or going to sleep.
• Never use candles on or near a tree.
• Place the tree at least three feet away from any heat source, including fireplaces, space heaters and heat vents
• If using a live tree, cut several inches off the base of the trunk before placing it in the tree stand and water it daily. Recycle the tree when it begins dropping needles. Don’t leave a dried-out tree in a storage area or against the building.
• Make sure you have a working smoke detector. Contact the rental office if you need to have yours checked.

Check with your local fire department for additional tips. It only takes a few minutes to prepare this notice and to help your tenants stay safe during the holiday season. Avoid the tragedy of a house or apartment fire.