Posted by Teresa on July 8, 2011 under Eviction, Lease and Rental Agreements, Rents and Deposits | 
Whether you accept actual checks or electronic rent payments from your tenants, you may face a time when the tenant lacks funds to cover their payment—and your account is hit with a fee. Bounced checks cause loss of time and productivity, and landlords should not allow tenants to treat a returned rent check as anything less than the serious situation it is.
How do you handle bounced checks from your tenants?
Many landlords we know demand immediate full payment from the tenant for the rent, any applicable late fees, and a separate handling fee. The handling fee should cover both your bank’s returned check charge and your administrative time. If the full rent payment comes in after late fees have been assessed, be sure to add them to the total due.
Check your local and state laws regarding the amount of late and returned check fees you can charge. You may be able to charge a tenant penalties and interest; or you may be limited to a flat fee.
In addition, check local and state ordinances or with a landlord/tenant attorney regarding whether late and returned check fees must be spelled out in lease agreements. In some states and localities, fees must be clearly stated in the lease or the landlord may not charge them. In others, whether or not the lease includes the fees has no bearing.
Of course, including all applicable terms and fees in the lease is always a good idea. If your lease clearly spells out the consequences for bounced checks, including late fees, repayment requirements and time limits before eviction proceedings begin, your tenants should have no questions or surprises if and when they do write a rent check without having sufficient funds to cover it.
Protect 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 May 28, 2011 under Eviction, Lease and Rental Agreements |
The Chicago Housing Authority is proposing a new rule that all adult tenants will need to be drug tested, and if they test positive, eviction proceedings will begin. While some private landlords would welcome the opportunity to test and then evict illegal drug users, more have to deal with tenants who smoke pot.
If you’ve noticed the distinctive smell of marijuana wafting out of your rental properties, how did you handle it? Some might think that smoking pot is as harmless as drinking a beer, but it’s still illegal. And if you’re ignoring a tenant’s drug use, you could be putting your business at risk.
Did you know that illegal drug use by tenants in your rental units could subject you to related property damage and personal injury suffered by other tenants or the public? Is it worth it to you?
Your best move as a landlord is to include a clause in your lease agreement that tenants agree to not violate any applicable laws, including the possession, use or sale of illegal drugs. If and when a tenant violates the lease by choosing to smoke marijuana, you have the grounds to evict.
Some landlords might think evicting over pot smoking is overkill. But allowing it can leave you open to litigation; the potential for harm is just too great. Besides, if you can smell marijuana, your other tenants probably can, too. What message are you sending if you fail to enforce the law, as well as the terms of your lease agreement?
Posted by Teresa on May 11, 2011 under Landlord Tips |
Landlords and property managers have to deal with tenant complaints. It’s just a fact of life when you’re in the rental property business. Whether you’re interacting with a tenant who complains frequently or rarely, it’s important to properly track the complaint and your response—you never know when you’ll need the facts of the matter to protect yourself and your assets.
Establish Good Communication With Every Tenant
Encourage tenants to come to you with complaints, rather than letting them go or complaining to other tenants. You can foster this by demonstrating good listening and communication skills. Get to know your tenants as people, listen for clues about what matters to them, and give them the respect they deserve. When tenants trust you, they will be more likely to approach you with a problem.
Establish a Tenant Complaint Procedure
Creating an official form demonstrates to the tenant that you are taking their complaint seriously. It also allows you to keep a record of the situation. You can record details of how you handled the complaint, what repairs or remedies were performed, and you can even make a note of when to follow up with the tenant to be sure the complaint is resolved to their satisfaction. This becomes especially important in cases where a tenant withholds rent for non-satisfaction of complaints.
Fixing broken windows or door locks, replacing noisy ceiling fans and other mechanical problems can usually be resolved to everyone’s satisfaction. When tenants complain about their neighbor’s bad parking habits or noisy parties, you have a more delicate situation on you hands. If your lease agreement includes a list of “house rules” such as quiet time or established parking areas, then you’re covered. You simply speak to the tenant who is breaking the rule and point out that expectations were clearly established. If the problem continues, written warnings and even eviction are your next steps.
It may be difficult–if not impossible–to keep 100% of your tenants 100% happy. But the goal is to keep good tenants in your properties and to keep everyone as safe and as happy as you can. Resolving issues promptly goes a long way toward that goal.
Posted by Teresa on April 6, 2011 under Lease and Rental Agreements |
The utilities section in a property lease is one of the most important. It stipulates who is responsible for the utility bills associated with the rental property. Failing to specify which utilities the tenant will be responsible for can cause headaches and financial loss to the landlord.
Determining who’s responsible for the unit’s utilities—and having a signed agreement—is important because it protects both the landlord and the tenant. Each utility company has different ways of handling rental properties. Once you know how things work in your area, decide which arrangement works best for your situation; there are many options, including:
- In single-family rental houses, tenant pays all utilities directly to the provider
- Landlord pays for utilities that can result in liens against property if unpaid
- Tenant pays for everything except sewer and water
- Landlord pays utilities and has tenants reimburse him
- Landlord pays only for utilities the building owner is responsible for
- Tenants pay for anything that is metered to their unit; utilities with shared meters (usually water and sewer) are paid by landlord and built into the rent
- Landlord pays for garbage and recycling pickup only
Once you determine which arrangement works best, draft your this section of the rental agreement stating that the tenant is responsible for all utilities except for those (specify them) the owner will be paying. Also include language that the tenant agrees to make the payments through the term of the lease and nonpayment will be considered a breach of the agreement. State that any past due utility bills may be paid by the owner and will be charged to the resident, along with applicable fees.
As part of your due diligence before you sign the lease, check with the utility companies to be sure the tenant qualifies for an account in his or her name. Outstanding bills may prevent this—if you sign a lease with a tenant who cannot get the utilities in their name, you’ve just wasted a lot of time working with a tenant who won’t be moving into your rental property.
Finally, most landlords we know have utilities revert to their name between 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 February 9, 2011 under Housing Trends |
Arizona state lawmakers have approved to send to the full state Senate a new law requiring landlords and tenants to share responsibility for bedbugs in rental units. Here’s how the proposed law shakes out:
Rental property owners will be required to:
- Keep their units free of bedbugs.
- Provide tenants a copy of the law, once passed, as well as with educational materials on bedbugs, including prevention and control measures.
- Arrange for a licensed pest control company to inspect a unit within seven business days of a possible bedbug problem.
- Start the process of mitigating the bedbugs in the rental unit within seven days of finding evidence of infestation.
Tenants are responsible for:
- Notifying landlords in writing or via electronic document of infestations.
- Providing access to their units for inspection and bedbug treatment.
- Complying with the bedbug mitigation protocol established by the pest control company is required. This includes pre- and post-treatment procedures, temporary evacuation of the unit and notifying within three days of recurrence.
Additional Requirements:
- Landlords are prohibited from knowingly leasing a bedbug-infested rental unit.
- Tenants are prohibited from moving bedbug infested materials into a rental unit.
- Only licensed pest control applicators would be allowed to treat bedbugs in multifamily housing.
- Tenants must receive written notification of mitigation treatment three business days or more before it begins.
Perhaps most important is the allocation of financial responsibility. According to the bill, while the landlord is responsible for pest control expenses when tenants comply with their obligations, the responsibility falls to a tenant if they fail to comply. In this case, not only are tenants responsible for mitigating the problem in their own unit, but also any surrounding units that become infested due to non-compliance.
This bill is one of the first we’ve seen that tackles the bedbug problem in rental units. And, it seems to be pretty fair to landlords. What do you think?
We’ll follow the bill as it progresses through the Arizona state Senate.
Posted by Teresa on February 1, 2011 under Landlord Tips |
Abandonment is a tricky situation for landlords. It may seem pretty straightforward that abandonment has occurred when a tenant moves furniture and other possessions out of a rental property, hasn’t been seen by the neighbors in a several weeks, and doesn’t return messages—but the law may see it differently.
It’s best to check with a lawyer for the specific laws in your state. But when can a landlord consider a rental unit abandoned, and therefore prepare it to be leased to a new tenant?
Laws vary by state and locality, but here are some general guidelines for landlords:
- A unit could be considered abandoned when the tenant owes rent and has left evidence of abandonment, such as removing furniture and clothing, along with personal care and other items. Again, it depends on the state.
- If the tenant’s rent is current, the unit is not usually considered abandoned, even if the furniture and other possessions have been removed,. You do not want to rent the unit to another tenant, only to see the original tenant return. Wait until the end of the rental period that has been paid before attempting to turn over the unit.
- Cumulative signs, such as a tenant informing the landlord or neighbors that they planned to leave, along with a large amount of uncollected mail, removing all the furniture, and turning off the utilities, could be considered evidence of abandonment.
- Most landlords know to make reasonable efforts to contact the tenant. Telephone calls and emails may be the first methods, but it’s always a good idea to send a certified letter. Make sure to keep copies of letters and notes regarding dates and times of calls and emails.
- If the tenant appears to be gone and didn’t turn in the keys to the rental unit, don’t automatically change the locks. Again, you must first determine whether abandonment has occurred under the laws of your state.
- Tenant property is another area protected by the law. Don’t dispose of a tenant’s property, even if it appears they abandoned it, without checking your local and state laws. Some states allow 30 days for the tenant to claim the property; others allow six months.
It may not seem fair that when abandonment by a tenant occurs, the landlord is responsible for cleaning up the rental unit, gathering all the left-behind property and storing it for the tenant. Fair or not, it’s often the case—and just another part of being a rental property owner!
Posted by Teresa on January 29, 2011 under Landlord Tips |
Landlords are generally responsible by law to provide sufficient heating for tenants—so what happens when the utility company is getting ready to shut off the heat in one of your units? Most leases cover who’s responsible for utilities; some pay their tenants’ landlords utilities, while others require tenants to set up their own accounts with utility providers.
Most landlords are concerned for their tenants’ well-being, but of must also think of potential property damage that can be caused when a unit goes without heat in the middle of winter, like freezing and bursting pipes, and water damage.
Here are a few general answers to the question, “What can I do if my tenant’s heat is cut off?”
When in doubt about legal questions, check with your legal advisor. This blog is not intended to be a source of legal advice.
1. Landlords are not responsible for a tenant’s legal or financial obligations. If they are required by the lease to keep heat on in the unit, and they fail to pay the bill until the utility is forced to terminate service, they are responsible.
2. Your tenant is also responsible for subsequent damage to your property as a result of their negligence. While it may seem like adding insult to injury, it’s simply the consequence of the tenant breaking a legal agreement.
3. Prevention is the key. You do not want to find out about a tenant with utility issues from the downstairs tenant, who calls to report water dripping through the ceiling. Make arrangements with the utility company that any service shut-off notifications are sent to you.
4. Take another look at your lease agreement. Be sure that it states that heat is required in the unit to protect pipes, etc. from damage, and that failure to heat the unit is cause for eviction.
Don’t allow a simple lack of preparation to cause unnecessary damage to your rental property. Make sure you know what’s going on with your tenants and set up notifications with the utility companies that service your properties.
Posted by Teresa on January 11, 2011 under Landlord Tenant Lawsuits, Tenant Screening & Background Checks |
You’re probably familiar with the news story about a house in Escondido, CA, where the resident is accused of making bombs and plotting bank robberies. Because of danger to neighbors, the decision was made to burn the house completely to the ground.
Now the question is, “Who’s responsible for the compensating the property owners?” While the county made the decision to destroy the house in the interest of public safety, where did that leave the owners of the home, who rented it to the accused bomb maker? Should the owners’ insurance company reimburse them for the loss? Or is this a necessary expense of the taxpayers of San Diego County, who are already burdened with the expenses of removing the hazard and the resulting cleanup?
Obviously, the accused man, George Jakubec, bears the full responsibility for his actions. But it’s doubtful he’ll have the ability to repay the homeowner. Some say the landlords should be responsible for their loss and to the county for all expenses because of negligence—that they should have known of this tenant’s activities. Questions have arisen about whether proper tenant pre-screening and periodic inspections were conducted.
However, there is no proof that the landlords didn’t screen the tenant prior to signing a lease. Even if they had, the suspect’s crime record has not been released, so we don’t know whether or not he had a criminal record that would have prevented the landlord from renting the property to him.
Most landlords know that their tenants have the right to peaceful habitation, without harassment or unnecessary inspections. However, landlords who care about their properties schedule periodic maintenance to not only protect the property value, but to ensure that illegal or dangerous activity is not taking place.
In the Escondido case, the landlord’s attorney has filed a claim with San Diego County, asserting that no legal justification existed to burn the house. Further, the claim states the eminent domain procedures that would have compensated the property owners were not followed. We’ll keep watching for updates.
In the meantime, a word to the wise: keep conducting thorough tenant screening and background checks, and schedule periodic inspections of your rental properties. It’s so much better to be safe than sorry!
Posted by Teresa on January 9, 2011 under Landlord Paperwork and Forms, Landlord Tips |
Our previous post about a cop-calling tenant raised some additional questions from landlords:
Marilyn owns a duplex and lives in one unit. She rents the other unit to a tenant who confided in Marilyn that she is afraid that her ex-boyfriend was stalking her. The man was driving past the house several times a day, and the tenant had recently seen his car in the parking lots of the mall and grocery store where she had been shopping. She was worried, and wanted to let Marilyn know about his actions in case he became threatening.
Marilyn wants to protect her tenant and her property, but is rightfully concerned about getting too involved in the tenant’s situation. “I’m planning on calling the police if I ever see him near my property,” she said.
Police might recommend that Marilyn allow her tenant to take care of this problem directly, since the tenant is the legal resident of her unit. An attorney might say that Marilyn must take some sort of action to avoid being held responsible in the event a criminal action takes place against the tenant.
Encouraging a tenant who is being harassed to obtain a restraining order is certainly within a landlord’s area of responsibility. And as soon as Marilyn feels threatened by the ex-boyfriend, she too can seek a restraining order.
It is never a good idea to attempt any confrontation with a violent person. Stalking behavior is not acceptable behavior—it is a warning sign that should not be ignored. While it is understandable that Marilyn wants to protect her tenant and her property, it’s best to follow the law and let the police handle every confrontation with the ex-boyfriend.
Scott’s tenants were robbed soon after they moved into one of his apartment units. The thief took their TV, a computer, some cash and jewelry. The tenants claimed that Scott failed to protect them by providing proper door locks. Scott is curious about the limit of protection a landlord owes his tenants in this situation.
Robberies happen every day, in every level of neighborhood in America. A landlord cannot prevent a criminal who really wants to get in from entering a rental unit. However, solid locks on the entry doors and windows are necessary, and if your rental properties are lacking them, now is a good time to remedy that situation—before a robbery or something worse happens.
To avoid any question of liability, every rental agreement should include a clause requiring tenants to purchase renter’s insurance. Further, it should explain that the landlord’s insurance does not cover theft of the renter’s contents. If a tenant does not carry required insurance, the landlord could move to eviction.
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.
Whether you accept actual checks or electronic rent payments from your tenants, you may face a time when the tenant lacks funds to cover their payment—and your account is hit with a fee. Bounced checks cause loss of time and productivity, and landlords should not allow tenants to treat a returned rent check as anything less than the serious situation it is.
