Posted by Teresa on January 20, 2012 under Eviction, Landlord Tips | 
Just because you don’t allow subleasing in your rental units doesn’t mean your tenants won’t do it—for a number of reasons. Perhaps they landed a new job in another city, or want to move in with a significant other, or maybe the apartment of their dreams became available. Tenants sometimes want to move before the lease is up; and rather than breaking the lease, finding someone to move in and take it over is a better option. For them.
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.
Posted by Teresa on September 17, 2011 under Lease and Rental Agreements |
Dealing with tenants who want to break a lease early doesn’t have to be unpleasant. Experienced landlords often offer tenants a buy-out agreement as a way to compensate them for the trouble of a breaking the lease.
You can set the conditions of the buyout according to your needs. For example, you can release your tenant from the lease and any remaining rent obligations, in exchange for a fee. While the fee does not affect the tenant’s obligations for any property damage (any security deposit paid by the tenant is a separate matter), it can compensate you for your time and trouble in finding a replacement tenant, plus your advertising expenses and possible loss of rental income while undergoing the process.
Be sure that the terms and conditions of the buy-out agreement are clearly spelled out in a document that will be signed by you and all tenants listed on the original lease agreement. Include the dollar amount of the fee, which might equal one, two or three months’ rent, along with the date the property will be vacated, and other details concerning property inspection, key return, security deposit, and forwarding address information. It’s a good idea to have all of your lease and agreement documents reviewed by a landlord/tenant attorney.
The amount of the fee should cover the loss of rent for the time you expect it will take to re-lease the property, advertising expenses and any other costs related to the tenant terminating the lease.
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 6, 2011 under Landlord Paperwork and Forms, Landlord Tips, Lease and Rental Agreements |
Most landlords we know require each person over 18 who lives in a rental unit to be on the lease. Most require each roommate to fill out a lease application, and undergo tenant background and credit checks. And that’s the extent of involvement for most landlords we know.
Roommates don’t always work out, which can cause headaches for landlords. If you’ve experienced your share of roommate drama, you can help educate your tenants to be better roommates—which in turn can make them better tenants for you.
Why not provide all of your tenants with a Roommate Agreement? Here’s what it can do for you:
- Facilitate better tenant relationships
- Minimize roommate arguments
- Increase awareness about legal responsibilities
While the agreement will not alter the terms of the lease each tenant is subject to, it serves to clarify some of the issues roommates often have with each other. Be sure that the agreement states that the roommates are jointly and severally liable for all terms of the lease/rental agreement. And of course, have a legal professional review it before you hand it over to your tenants.
What to Include in a Roommate Agreement
- Address of rental unit and lease beginning and ending dates.
- Name of each roommate, share of rent and security deposit each is responsible for, and which bedroom is his or hers.
- Security deposit rules: an agreement that whichever roommate is clearly responsible for damages will pay any applicable fees in full. All roommates agree to share equally in the cost of other fees and damages.
- Utilities: Determine in whose name the utilities (electricity, water, gas, cable, phone) will be and how the roommates will split and pay the bills.
- Subletting: State whether subletting is or is not allowed under the terms of the lease. If so, specify guidelines.
- Guests: Specify that each roommate is responsible for guest behavior, determine where each guest may stay, and the consequences when guests cause trouble or any damages. Place a limit on the number of days a guest may stay, according to the terms of the lease and the roommates’ comfort level. Specify whether guests may smoke and who is responsible for cleaning up after them.
- Quiet hours: state when roommates agree to observe quiet hours for sleep, study, etc.
- Pets: Guidelines for pet owners, according to the terms of the lease.
- Smoking: If the lease allows smoking, this section can spell out whether or not it is allowed by the roommates, and if so, where.
- General household rules: State who is responsible for trash and recycling, where to park vehicles and bicycles, guidelines for cleaning, sharing food, etc.
All roommates should sign and date the roommate agreement. While these guidelines may seem obvious, a formal agreement where all terms are spelled out and agreed to in the beginning can avoid many typical roommate problems. Good roommates make better tenants, and accepting the responsibilities that go along with living together can make the situation much more pleasant for everyone involved!
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 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 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.
Posted by Teresa on March 5, 2010 under Landlord and Tenant FAQs, Tenant Screening & Background Checks |
Verifying a tenant’s employment history and income is a vital step to approving his or her application. The unfortunate economic situation makes it even more important; while many good people have lost their jobs through no fault of their own, your tenants still need to pass your litmus tests, including meeting minimum income requirements.
Here are five reasons to verify employment and income on potential tenants:
1. Because landlords and property managers must know that each tenant who signs a lease agreement can live up to its terms—including paying the security deposit and upfront fees, plus the rent in full each month. Whether the tenant will pay on time each month is certainly not guaranteed—but you need to know whether they even have the capability before you sign a lease.
2. Because even if the tenant has the upfront fees ready to hand over, you’ll want to know if their employment history is solid. Holding a job is no guarantee that a tenant will pay rent on time, but it helps!
3. Because verifying the source of a tenant’s income is a great way to prevent those engaging in illegal activities from becoming your problem. In other words, if a tenant has plenty of cash but no job, be suspicious. Same for obvious high spending with a low income. It is not discriminatory to ask a tenant to prove how much money they make. Remember: pay stubs are your friends.
4. Because tenants sometimes go to great lengths to pull a fast one on a landlord. Just because they say they’re working for Jones Construction Company doesn’t mean they do. Ask for proof. Call the supervisor—and make sure that when you do, you’re actually speaking to the supervisor, not a friend pretending to be one.
5. Because knowing that your new tenant is stable and can afford the rent is one less worry for you. And landlords and property managers need to reduce worries as much as possible!
Posted by Teresa on March 2, 2010 under Landlord and Tenant FAQs, Rents and Deposits |
While some landlords avoid bounced checks by requiring cash or money orders from tenants, most still accept checks—and the risk that goes with that. Studies show that while the number of online payment options grows, the number of checks being written is declining. Still, plenty of folks pay their bills—including rent—with checks.
What are your options when a tenant’s check is returned by your bank?
Depending on the state in which you do business, writing a bad check can range from a misdemeanor to a felony. And, bad checks can be treated by law enforcement as a serious matter—or as a nuisance. Follow these steps to avoid the need to involve your local police or sheriff’s department.
- The first thing most landlords do is to demand full payment from the tenant, including the amount of the check, plus a handling fee. Make sure this fee covers any bank charges for returned checks and your bookkeeping time.
- Check your state and local laws to determine if there is a limit to the amount you can collect as a returned check fee. Some states allow for penalties and interest; others limit landlords to a flat fee.
- Give your tenant a time limit to pay in full. Many landlords and property managers begin eviction proceedings if they have not collected the full amount due by the end of the time limit.
- It is perfectly reasonable to require payment in the form of a money order or certified check—and to require subsequent rent be paid in the same way.
- If you charge a late fee for late rent, remember your tenant will be responsible for that if they pay in full after the agreed-upon date. So add it to the total tab.
- When drawing up lease and rental agreements, be sure to include a provision that covers your policy on returned checks. Include the compensation language, time limits, and late fees, and your requirements for money orders and/or certified checks.
Posted by Teresa on February 25, 2010 under Landlord Tips |
Their reasons for hiring a property management company are different for each property owner. In general, a property management company’s job is to keep your rental business trouble-free. That means they need to be knowledgeable about federal, state and local housing laws, how to best collect your rents, maintain your properties in proper working order, and ensure your tenants are keeping their end of the lease agreement.
Property management companies will also work to fill your vacancies, advertising the rental unit, interviewing and screening prospective tenants, and keeping up with all of the new tenant paperwork.
Property management companies are not free. And their fees and services can vary widely. Many landlords we know interview several companies to determine which is the best fit for their needs.
Here are some questions you might ask when interviewing property management firms:
- What does your standard service agreement include?
- What are your costs?
- How do you conduct repairs and maintenance? If the company has their own maintenance and landscaping staff, you can check out their quality before you sign anything. If they hire outsiders, inconsistencies could occur.
- What reporting can I expect? At minimum, a monthly report should be included. Some PM companies have online accounting systems that you can log into on your own to see what’s going on—just like online banking.
- What is your fee for filling a vacant unit? It’s usually either a flat fee or a percentage of the rent.
- How do you collect rent? You might prefer a company that does everything through electronic funds transfer—or you might need a service that can handle cash, money orders, or checks.
- When will I receive my money? Most PM companies will have your check or a direct deposit to you by the 10th of the month.
- Do you mark up subcontractors, materials, and supplies? You don’t want to be surprised by a bill that includes a $6.00 roll of paper towels—after you’ve already signed the contract.
- How do you handle emergencies? You might want an agreement that allows your PM company to spend up to $500 without needing your approval.
- How often will I hear from you? If you’re the type of landlord who only wants to hear from the property manager if the building is on fire, then you won’t want one who calls three times a week with questions and problems.
- What about evictions? Find out ahead of time if they offer eviction services and how much they charge.
Get a client list and call for references. Ask other landlords about unexpected expenses, unnecessary or unauthorized repair work performed, and mark ups on maintenance parts and services.
Meet the staff you’ll be dealing with to get a feel for communication styles and professional behavior.
Finally, check out the company’s insurance coverage and bonding status.
If you do hire a property management company, be absolutely sure before you sign any agreements–because you will probably be required to pay a few months of fees if you decide to cancel!
Just because you don’t allow subleasing in your rental units doesn’t mean your tenants won’t do it—for a number of reasons. Perhaps they landed a new job in another city, or want to move in with a significant other, or maybe the apartment of their dreams became available. Tenants sometimes want to move before the lease is up; and rather than breaking the lease, finding someone to move in and take it over is a better option. For them.
