Posted by & filed under Eviction.

the notice of eviction of tenants hangs on the door of the house, front view

The federal eviction moratorium has been extended another month, with an end date of July 31, 2021. The CDC says this will be the last time the moratorium will be extended, however, some states (like California) have extended the moratorium even longer. While evictions can still take place under some circumstances, all evictions based on nonpayment of rent or other fees are prohibited.

Although you may not be able to pursue eviction at this time, there are some steps you can take to mitigate the financial impact of tenant defaults.

Look into Rental Assistance for Your Tenants

Although the CDC doesn’t provide rental assistance for tenants, you may consider researching the U.S. Department of Housing and Urban Development’s (HUD) emergency grants and other programs to see if there’s one your tenant might qualify for.

Likewise, check locally to see if there are any types of rental aid in place; some areas have also been offering rent vouchers or emergency funds to tenants in need of assistance. There are currently many resources available to help renters, so it may be in your best interest to research these options and bring them to your tenants’ attention – do what you can to help them pay you.

Here are some additional resources that may help.

Work Out a Temporary Solution with Your Tenants

Depending on how much you rely on rental income from your tenants, you have a few options for working with those who have fallen behind on their rent:

  • Forgive rent. If your financial situation allows it, and you’re willing, you could waive rent for a month, with an agreement to revisit the payment arrangement in the future.
  • Postpone rent and offer payment plans. You could offer to postpone rent for a designated period of time, with an agreement that the rent will be repaid. In your repayment agreement, make sure to state whether the payments for the rent owed can be spread out over time, paid all at once, or paid back when they receive a stimulus or other form of financial aid.
  • Reduce the rent. In some cases, lowering the rent may be a good option for you and your tenant. This will allow the tenant to meet some of their financial obligations to you while providing you with some income to handle your expenses. For example, if you normally collect $1,200 a month for rent, but your mortgage is $900, you could temporarily lower the mortgage to $900 so you can continue to pay your lender. You may not be able to make a profit this way, but it can help you avoid defaulting on your mortgage.

Keep in mind, though, that a rent reduction is permanent. This means future rent increases must be based on the lowered amount, which becomes the new base rent. In addition, landlords aren’t allowed to withdraw or cancel the reduction at a later date. In areas with rent control, you’ll only be able to raise the rent according to the set increase rate and market conditions.

In California, for example, this would mean you could only enact a 5% rent increase plus the annual CPI (Consumer Price Index) percentage change. Depending on how much you lower the rent and where your property is located, it could take some time to be able to raise the rent back to its previous price.

Before you decide to make any of these changes, talk to your tenants and ask them what they think would work. If you can accommodate their suggestions, there’s a better chance they’ll work harder to uphold their end of the bargain. Whatever is decided, make sure to put it in writing (preferably as an addendum to your lease or rental agreement) and have the tenant sign it.

Offer to Let Tenants Out of Their Lease

If carrying a non-paying tenant has become too much of a hardship, you can offer to let them out of their lease early and without penalty – including the back rent – if they agree to leave by a designated time. If they don’t want to leave, gently remind them that they will continue to owe all the back rent they haven’t paid.

Cash for Keys

If your finances allow it, you may be able to pay your tenant to leave. Known as “cash for keys,” this can be an effective method when you want a tenant to leave as soon as possible. Explain to the tenant why you’d like them to move and offer them a lump-sum to move out as soon as possible. The lump-sum amount should generally be based on the average cost of rent in the area. If the tenant agrees, write up an official agreement outlining the terms, and make sure you and the tenant both sign it.

Continue Due Diligence for New Tenants

Hopefully, this has given you some ideas on how to deal with non-payment without resorting to eviction. If you have vacancies, it’s more important than ever to continue screening tenants to ensure that they’re in good financial standing before you choose to rent to them. Although circumstances can change, screening continues to be the best protection against future nonpayment.

Posted by & filed under Rent.

The pandemic has caused unprecedented migrations from metro areas and rent declines nationwide, but San Francisco property owners have been hit especially hard, with rents decreasing by nearly 27% between early 2020 and early 2021.

Lower Rents, More Incentives, and Less Money for Landlords

While many renters have struggled to get by, so too have many small landlords. Many have experienced nonpayment of rent, coupled with eviction moratoriums that have prevented them from evicting overdue tenants. Desperate to place renters, many landlords have tried to incentivize their vacant properties, with offers of lower rent, free rent, free gym memberships, and hundreds of dollars’ worth of gift cards.

One San Francisco landlord stated that there was a time when potential tenants accepting the asking price for her rentals; now, nearly every tenant offers less. To make matters worse, lower mortgage rates have turned many would-be renters into first-time homebuyers, leading to a drop in potential tenants and more competition for filling empty units.

And for everything that is reduced in price or purchased as an incentive, that’s more money out of landlords’ pockets. On top of that, they may be struggling to pay their own mortgages. Smaller landlords have even more expenses to consider, like electrical, sewage, garbage, repairs, maintenance, property taxes, and insurance.

“There are some landlords that will struggle to pay their bills because they aren’t receiving rent from tenants, or have units sitting vacant,” said Jeff Tucker, a Zillow economist. “It’s not like a larger property management company that can manage units and mostly muddle through. For a smaller-scale landlord with only a handful of rental units, they could easily be forced to sell their rental units or be foreclosed on if they have a mortgage on it.”

David Levy, a San Francisco real estate agent, noted that the property owners who have been most impacted during the pandemic are those who are paying off their mortgage and seniors who live on a fixed income who rely on their rental payments to make ends meet. “A lot of tenants assume that because someone owns property or multiple properties, they’re millionaires, and they can afford to rent this place out for free,” said Levy. “That’s plain not true. A lot of people who rent out their property rent it out because they need money to pay the mortgage or bills or expenses.”

No Easy Answers

While lowering the rent is a good tactic for those who can absorb the losses, it may put other landlords on track for just barely staying afloat – or losing their properties entirely. With the statewide rent control, landlords are generally only able to impose a 5% rent hike annually, plus the price of inflation as determined by the consumer price index (CPI). For those who have dropped their rent by more than 5%, it could take some time before they reach their pre-pandemic prices again. And in the meantime, the price of goods and services continues to rise.

The state plans to provide some relief to landlords, using 2.6 billion in federal assistance funds as rent subsidies to pay landlords 80% of unpaid back rent from low-income tenants for the period between April 2020 and March 2021. In exchange, landlords must forgive the remaining 20% and agree to halt evictions. While this presents a lifeline to some landlords, many others must deal with what will likely be a permanent loss of income that could have lasting financial consequences.

Posted by & filed under Rentals.

Mortgage and Home Buying Concept. Huge Human Hand Put Golden Coin into Slot at Roof of Cottage House. Investment in Real Estate, Loan Payment, Building Purchase, Debt. Cartoon Vector Illustration

The Federal eviction moratorium is set to expire on June 30, 2021, with nearly 9 million households behind on their rental payments. Although it’s unclear whether the moratorium will be extended as it has in the past, it appears this is the end of the line for it, along with the few remaining state moratoriums following in suit. As the world slowly starts to return to many pre-COVID processes, you may be wondering how this will affect your collection practices. Here are some tips on how to handle collection from current tenants, previous tenants, and some steps you can take to avoid future collection issues. Please note that this is for informational purposes only and is not intended as legal advice.

Collecting Rent from Current Tenants

Rent collection should continue in accordance with your lease agreement, however, keep in mind that some residents continue to be financially impacted by COVID-19. Since some areas still have local moratoriums in place, you should check the emergency orders in your jurisdiction to see if there are any restrictions to your rent collection.

One of the main stipulations of the lease agreement is that the tenant will pay their rent on time in exchange for the right to live at the rental property. Despite COVID, if a tenant pays rent late or less than the agreed amount, they’re in violation of the lease. Here are a few ways you can proceed:

  • Payment arrangements.
    If your tenant’s payments are severely delinquent and local regulations allow it, you may consider giving the tenant a fresh start with a payment arrangement. One example would be to have them pay their next months’ rent in full, plus an installment amount that can be put towards their debt. If you decide to allow payment arrangements, be sure to create an addendum to your lease that clearly outlines what you and your tenant agreed upon.
  • Payment Incentives
    Depending on your regulations, you may consider offering a rental discount for on-time, full, or partial payments. This may encourage tenants to put in more effort to pay their rent – or at least as much rent as they’re able.
  • Lease renewals.
    If the lease is going to end soon or the amount owed is very large, you may want to consider having the tenant sign a lease extension to give them more time to pay off their debt. This can be a short-term lease or a month-to-month lease if the tenant doesn’t have the financial means or the flexibility to committing to longer lease terms.
  • Resident resource lists.
    You may also want to consider providing a list of local and national resources to help struggling tenants, including:
    • Contact information for national organizations like the Salvation Army, United Way, and American Red Cross
    • Local social services, religious, and charitable organizations
    • Organizations that assist with food, utilities, unemployment, and other essential services

What You Should Avoid When Collecting Rent

In addition to finding ways to encourage your residents to pay their rent in full and on time, there are also some steps you should avoid when collecting rent:

  • Don’t take the matter into your own hands.
    Most landlords and property managers understand when rent collection requires an outside party, but every so often you hear about a landlord who takes the matter into their own hands, like shutting off utilities or removing the front door. This type of behavior isn’t just unprofessional – it’s illegal. No matter how frustrating the situation becomes, follow the laws and know when it’s time to turn the matter over to another agency.
  • Don’t Harass Tenants.
    Even if they’re behind on rent, tenants have the legal right to enjoy the privacy of their homes without harassment. To ensure you’re not accidentally crossing any lines, make sure you’re following all guidelines and regulations when communicating with your tenants about rent. This includes verbal as well as written or electronic communication.
  • Don’t Send Unauthorized Notices.
    Late rent notices, notices to quit, notices to vacate, and demand letters are all considered legal documents. Check with your state and local laws to make sure you’re sending the appropriate notices and how they should be served. For example, if the laws state you must post a notice on the door, place the notice in a sealed envelope.
  • Don’t call tenants outside of business hours.
    Make sure you’re following any local guidelines regarding calls during normal business hours. Not only is this polite, but it can also prevent accusations of harassment.
  • Don’t abuse electronic communication.
    Email and text messaging make it easy to shoot off a quick message anytime, but like phone calls, these types of communication should only be done during your normal business hours. It’s also easy to make electronic messages more informal — but keep in mind that these are business communications. Keep all communication (whether verbal, written, or electronic) between you and your tenants professional and appropriate for the context.
  • Don’t show up to the property unannounced.
    If you need to visit the property for any reason, make sure to provide appropriate notice. Going to the home for collection purposes is considered harassment unless you’ve otherwise made arrangements with the tenant to pick up payment.

Handling Past Due Balances

Many misinterpret the eviction moratorium to mean rent forgiveness; because of this, some renters may believe any communication regarding a past due balance violates the moratorium. However, any past due amount is still due. So how can you have a discussion about a late balance without the tenant perceiving it as a potential discussion about eviction?

Check your state guidelines to see if you’re still allowed to use a pay or quit notice as part of your collection practices. Even though the eviction moratorium is still active, there should be documentation of the late payments that shows the tenant that they owe rental debt and that it’s still due. Essentially, the consequences of breaking that section of the lease are paused, but the tenant still has an obligation to pay you.

You may also want to check with an attorney to make sure any notices you provide your tenants regarding rent comply with the latest federal and state regulations.

Collecting a Previous Tenant’s Past Due Rent

What if a previous tenant owes you rent? You have a few options:

  • Pursue repayment in-house.
    You may attempt to contact the previous renter and arrange for them to repay the amount owed, however, this can be difficult if they haven’t provided a forwarding address. You can begin the process by sending a demand letter to the last address on file, even if it’s the address of your rental.

    Make sure to write “address service requests” or “address correction requested” and add additional postage to cover the delivery plus the additional service. Once the post office has received it, they’ll research the new address in their database and, if found, will forward the letter. In addition, you’ll also receive a postcard with the corrected address.
  • Debt reporting.
    Another option is to report the outstanding debt to the three major credit bureaus, where it will remain on the tenant’s credit reports as unpaid rent. To remove this from their credit report, the previous tenant will need to repay the balance.
  • Small claims court.
    If the first two options are unsuccessful for any reason, you have the option of taking the previous tenant to small claims court, where you may be able to collect past rent due as well as additional damages, late fees, and legal fees. However, keep in mind that this can require a substantial amount of time and resources throughout the process. You’ll need to determine whether the amount the previous tenant owes you is worth your investment of time and money.

    If you choose to go this route, check your state collection laws. Once you’re familiar with your rights in the process, contact your local small claims court for the required paperwork and provide your tenant’s new mailing address so they can be notified about the court proceedings.
  • Debt collection agency.
    In many cases, working with a debt collection agency is the best option for landlords and property managers because you aren’t required to track down your previous tenants. In addition, reputable debt collection agencies will follow the regulations outlined in the Debt Collection Practices Act (FDCPA) and provide access to a team of trained professionals like skip tracers, attorneys, private investigators, and collection agents who are all working to get the debt resolved.

    Some agencies offer a flat fee collection option, which allows you to immediately report the delinquent tenant to the credit bureaus and order collection letters to be sent by the agency. This can typically be done online and allows you to keep the majority of the proceeds.

Steps You Can Take to Avoid Collection Issues

COVID-19 has thrown a wrench into many processes, but setting clear expectations for your tenants and keeping communication open remain the best ways to avoid potential collection issues. Frequent and timely communication can help you get ahead of issues and allow you and the tenant to work together to find a mutually beneficial solution. Additional steps you can take include:

  • Conducting tenant verification and screening on all new tenants
  • Create a rent collection policy that’s clearly outlined in your lease agreement. Consider adding:
    • A note that partial payments are a breach of the lease agreement and must be pre-arranged
    • Location and office hours for in-person rent payments (you may also want to consider providing pre-stamped, pre-addressed envelopes and a drop box for after-hours drop-offs)
    • Outline all the payment methods you accept, if there are any exceptions, and how these payments can be processed
    • List any payment processing fees
    • The date the rent is due. Be sure to make it clear if the rent is due on or by that date and if you offer a grace period
    • List any additional fees, such as late fees, processing fees, returned checks, non-sufficient fund fees, etc. Make sure you check your local laws on fee limits, as well
    • A note that it’s the tenant’s responsibility to have the applicable funds available for processing the chosen payment method
    • Any consequences for non-payment of rent, such as termination notices
  • Offer a variety of payment options.It’s been shown that the more methods available to tenants for paying rent the more likely tenants are able and willing to pay in full and on time.

Final Thoughts

Although it’s not clear if there will be future COVID-19 restrictions to collecting rent or evictions, your best bet is to stay current with local, state, and federal regulations to ensure your processes are fully legal and conducted by the book. Keeping open communication with your tenants throughout is also important in ensuring not only timely payment but also in preventing relational or potential legal issues. When in doubt, consult with legal counsel to ensure your procedures are conducted within your legal rights.

Posted by & filed under Property Management.

Not long ago, a rental property owner went viral after she snatched some packages from her renters, which she claimed was payment for the rent she was owed. Unsurprisingly, her actions weren’t well-received online, causing her to quickly backtrack on her position.

Real estate agent is holding a house model. Buy, loan for a house

A story like this is a great example of what NOT to do as a property manager. And although it seems obvious that you shouldn’t steal from residents under any circumstance, it’s likely this won’t be the last time we’ll hear a story like that on the news. So as a helpful reminder, here are some of the top “no-no’s” you should avoid as a property manager. Please keep in mind that this is for informational purposes only and is not intended as legal advice.

Stealing from Residents

Although the pandemic is getting better, there are still many residents who are behind on rent. However, this doesn’t mean that property managers are entitled to take compensation however they please. Stealing mail, in particular, is asking for legal issues. Even if it’s a package left on the street, mail theft is a federal offense. It’s likely a jury wouldn’t be favorable towards you if you were to end up in court over the matter – not to mention, the property owner could fire your property management company.

Asking Intrusive Questions

When interviewing applicants, keep in mind that there’s a limit to the type of questions you should ask. Some common (and acceptable) questions include asking whether they smoke, if they’re employed, or if they have any pets. Don’t ask questions that could be seen as discriminatory, such as questions regarding their race, religion, sexual identity, or other personal questions.

If they have a service dog refrain from asking questions about whether the dog is actually a service dog or why they need one. Another example of questions to avoid is asking an applicant about their drinking habits or if they enjoy partying. Even though you may be wondering about any of these things, asking intrusive personal questions is a good way to find yourself in legal trouble.

Using Social Media to Vet Applicants

When selecting an applicant, it’s helpful to do your due diligence to make sure they’re the right fit. With the majority of people being on social media, it may be tempting to use these platforms to aid your vetting process. However, a person is not their social media account. Social media is typically curated moments; it doesn’t offer objective data to base a decision on. In addition, many people now have multiple accounts where they compartmentalize different aspects of themselves.

One person could have a professional account, a “family-approved” account, and another account they use only with their friends. Who knows which one you’ll stumble across? Not to mention, it becomes a privacy issue with legal implications. Social media won’t prevent you from seeing information that you’re not allowed to use in the decision-making process. The best way to vet applicants is to stick with the industry gold standard: tenant screening.

Making Assumptions

Some people claim they can tell everything they need to know about a person within the first five minutes of knowing them. While you may have a good sense of people, it’s best to avoid making assumptions of any kind. This includes things like assuming someone must be a hard worker because they’re wearing a button-down shirt, or assuming an applicant doesn’t have much income because their car looks older or dirty. The only thing you can know for a fact is that they showed up to the interview and are interested in renting the property.

Dropping by Unannounced

Plenty of property managers (and property owners!) would love to drop by to check on their properties whenever they want. This isn’t advisable, however. Tenants have a legal right to privacy and must be given reasonable notice should you want to stop by for an inspection or maintenance. The length of notice you’re required to give could vary depending on where your property is located, so make sure you’re up on the local laws to prevent any privacy issues.

When in Doubt, Put Yourself in Their Shoes

These are just a few things you should try to avoid in your property management company, and there are undoubtedly more. A good way to avoid making these mistakes is to see things from the perspective of the tenant or applicant. Would you want your property manager stopping by unannounced, stealing mail, snooping through your social media, or asking you invasive questions about your lifestyle? If it’s something you wouldn’t like if the situation was reversed, chances are the tenant wouldn’t like it either. Take a step back every once in a while and make sure you’re not accidentally crossing any lines!

Posted by & filed under Leases.

Landlords are faced with many important decisions when renting their properties, including the duration of the lease. Although all landlords would like to have stable long-term tenants, there are times when a month-to-month lease may be a better option than an annual one.

Business legal document concept : Pen and glasses on a lease agreement form. Lease agreement is a contract between a lessor and a lessee that allow lessee rights to use of a property owned by lessor

A month-to-month lease lasts for 30 days and automatically renews at the end of the month until either the landlord or tenant decides to cancel it. Monthly leases work similar to a longer lease, with the same clauses, deposit requirements, and penalties. Most states require at least 30 days’ notice to quit the lease, although it varies from state to state. Month-to-month leases can be a great option for many landlords, but it’s important to weigh the pros and cons to make sure it’s the right fit for your property.

Please note the following is for informational purposes only and is not intended as legal advice.

Pros of a Month-to-Month Lease

Flexibility and Control

The most obvious reason to choose a month-to-month lease is the greater flexibility it offers compared to a yearly or 6-month lease – for both landlords and tenants. A monthly lease makes it easier to adjust the lease as you see fit, like removing outdated policies or adding new ones. If you want to raise the rent (within your location’s rent control limits), you can do that without needing to wait a year.

Month-to-month leases give you greater control over your property by not keeping you locked into renting to someone for an extended period of time; if the tenant isn’t a good fit for some reason, you don’t have to renew the lease. If the tenant isn’t sure they want to rent your property long-term due to uncertainty in their life or other circumstances, a monthly lease can be used as a trial run. If something changes and the tenant decides they’d like to stay on, the monthly lease can be converted to a standard lease.

Monthly Premiums

Increased flexibility for tenants also means taking on greater risk of temporary vacancies. For this reason, some landlords will charge more for short-term rentals to cover costs like advertising, cleaning, and preparing the home for a new tenant. Check with a lawyer in your area to find out if this is a legal option for you.

Fewer Complications

If your tenant doesn’t pay rent for the month or violates the lease in some way, you don’t have to worry about breaking your contract, working with an eviction lawyer, waiting for a pay-or-quit, or other considerations you’d have with a yearly lease. All you need to do is give the tenant proper notice that you won’t be renewing the lease.

As long as there are no “just cause” requirements in your area for short leases, evicting a nonpaying renter is simpler. Just make sure that you’re up on your local laws and any restrictions in place due to COVID-19.

Cons of a Month-to-Month Lease

Now that we’ve looked at some of the benefits of a monthly lease, here are some cons to be aware of:

Turnover

A yearly lease gives you the benefit of knowing you likely won’t have a vacancy for a year; with a month-to-month lease, that certainty goes out the window. Although a tenant could easily become a long-term renter, they could also be gone in a month or two. It could be difficult to find a new tenant with only 30 days’ notice, so you may have vacancies for longer periods – which can affect your finances.

Another thing to consider is that with only 30 days’ notice, you may be crunched for time to find a new tenant. Don’t be tempted to skip important steps like tenant screening – it’s the best way to make sure you’re choosing quality tenants who pay their rent on time.

Anxiety and Uncertainty

If you tend to be anxious about vacancies, a monthly lease may not be a good option – you may find yourself worrying that every new month may be the last one the tenant plans to stay. Unfortunately, month-to-month leases bring uncertainty because there’s no way to know for sure how long the tenant will stick around.

Stable Renters

Whether you’re using a month-to-month lease or a yearly lease, you want good long-term tenants. Likewise, many responsible tenants want stability and may not like the idea of a month-to-month lease. You may find that it’s harder to attract potential long-term tenants without some sort of incentive.

Final Thoughts on Month-to-Month Leases

Although there are pros and cons to month-to-month leases, many rental housing professionals tend to see them as the most flexible option. In states with tough eviction laws, a monthly lease may also be the easiest way to make sure you don’t get stuck with problematic tenants long-term – and save time and money on the eviction process.

However, other rental housing professionals like the stability an annual lease offers, especially in areas that have higher turnover, like college towns or military communities. Keep in mind, though, that there’s no guarantee a tenant won’t break the lease anyway.

Ultimately, you’ll need to weigh both the pros and cons in relation to your needs to determine which type of lease works best for your property.

Posted by & filed under Uncategorized.

It’s common to see tips for “winterizing” your rental for the cold months, but summer maintenance is often overlooked. With warm weather on the way, now is an ideal time to check in on your properties to ensure everything is in perfect working order – especially if your rental is currently vacant.

Miniature house and umbrella on beach, blue sea and sky on blurred background. Real estate, sale or property investment concept. Symbol of dream home for family. Copy space

Typically, summer is one of the most active times of the year for the real estate market. For example, families with school-age children tend to move in the summertime before the next school year begins. Many college students and graduates are relocating for school, internships, and jobs while some renters choose to move in the summer so they can get settled in well before the holiday season.

This makes the summer an especially lucrative time of the year for rental properties! With that in mind, here are a few tips to ensure your rentals are summer-ready for your existing tenants or future ones.

Inspect Your Air Conditioning Unit

With the temperatures rising, it’s important to make sure your rentals are cool and comfortable. The best way to do that is to make sure your air conditioning unit is well-maintained.

Start by changing out the filter. This is usually located in the blower unit near the return duct. If the filter is clogged, it can cause the cooling coil to freeze up or the unit to overheat. Both of these issues are fairly expensive to repair, but a replacement filter is cheap and easy to replace. While you’re looking inside the unit, check the belts and bearings and replace anything that looks worn or damaged. Being proactive now will save you money in the long run!

Next, you’ll want to make sure that the exterior condenser has room for airflow. There should be at least two feet of space around the unit. If your unit is outdoors, you may have to trim nearby plants or shrubs, remove low-hanging branches, or clean up leaves or other debris.

Check the Interior Airflow and Ductwork

Once you’ve inspected your air conditioner and performed any needed maintenance, it’s time to go inside and check out the airflow and ductwork. First, check to see if all the air vents are open and free of things that could obstruct them, like furniture, rugs, or picture frames.

Next, it’s a good idea to take a look at the ductwork. Do you see excessive dust or mold? These can cause health problems, especially for tenants with respiratory illnesses, so it’s worthwhile to invest in having the ductwork cleaned.

Prep the Doors and Windows

Windows and doors should be inspected from a cosmetic and structural standpoint.

If you currently have dark, thick curtains, consider swapping them out for something lighter and allows the natural light inside. This makes the space feel larger, more open, and more inviting.

Next, check the areas around the doors and windows for any gaps that could let cool air leak out or allow insects to come in. Depending on the size of the gaps, you may be able to add some weather stripping or caulk to close them off. You should also check the window screens and replace (or repair) any that are ripped or torn.

Test Smoke and Carbon Monoxide Alarms and Security Systems

This tip isn’t specific to summer, but if you’re already making inspections, now is a convenient time to check your alarm systems to makes sure they’re functioning properly. If they’re in good working order, you may want to consider replacing the batteries while you’re there.

Clean the Dryer Vents

According to the National Fire Protection Association, firefighters respond to approximately 15,000 property fires caused by clogged dryer vents each year. These result in several deaths, hundreds of injuries, and millions of dollars in property damage. Fortunately, these types of fires can be easily prevented. If your property has laundry in-unit or in the building, make sure to unhook the dryer duct from the wall and remove any dust or lint that’s collected there.

Clean the Fans

Many people don’t use their fans during the winter, which means there are at least several months where dust can build up on the top side of the fan blades. This can create a downpour of dust once they’re turned on and potentially overwork the motor, so it’s best to clean them periodically.

Landscaping Maintenance

Typically, less landscaping maintenance is needed during the winter. Once the warm months come around, you’ll need to make up for the lost time. Cutting the grass, removing fallen branches, trimming shrubs, planting flowers and pressure-washing dirty surfaces will make your property look more attractive. This is especially important since many residents will likely be spending more time outdoors.

Check for Summer-Related Requirements

Depending on where your property is located, there may also be state or local requirements for summer maintenance. For example, in Washington D.C., landlords are required to put screens on the windows and doors from March 15 through November 15 to guard against insects and other pests. Since housing rules often change yearly, it’s always a good idea to double-check for new state or local requirements that could affect your properties.

Final Thoughts

Completing seasonal maintenance can feel like a chore, but knowing what needs to be done and taking care of maintenance items proactively can help you save time, money, and hassle. It also ensures your existing or future residents will stay comfortable all summer long!

Posted by & filed under Property Management.

House key with home keyring in keyhole on wood door, copy space

In most cases, the residents who live the properties you manage will be paying tenants. They were selected to live there, have signed a lease or rental agreement, and pay their monthly rent. In rare cases, however, you may encounter squatters. These are individuals or groups of people who haven’t signed a legal contract allowing them to take up residence at the property. This can be a frustrating and sometimes complicated situation for property owners and managers alike.

So how should you handle the situation? Here’s a brief overview of what property managers should know about squatter’s rights and how to prevent them from taking up residence at one of your vacant properties. Please note this is for informational purposes only and is not intended as legal advice.

What You Should Know About Squatter’s Rights

Even though squatters haven’t signed a contract or paid to live at the property, some laws require property managers to go through the eviction process to get the unauthorized tenants to move. They must be treated just like any renter who’s fallen behind on rent: the eviction notices must be delivered through the local police department or by mail. You’re not allowed to just kick them out.

Nearly every state has laws pertaining to squatter’s rights. California, for example, allows squatters to lay claim to a building or unit after establishing residency. Establishing residency isn’t difficult to do; they need to come and go through the front door, have their mail and bills sent to the address, and pay property taxes for at least five years.

However, if the squatter doesn’t pay property taxes, or the property manager or owner catches them living at the property without consent, the squatter can be arrested for trespassing and evicted.

Prevent Squatters by Keeping an Eye on Vacant Properties

Most property managers will have vacancies from time to time, so it’s important to visit these properties frequently to ensure no one has taken up unauthorized residence. The easiest way to do this may be hiring a full-time security guard. If this isn’t an option, make sure to stop by to perform routine maintenance and safety checks. It’s common for squatters to keep watch on vacant buildings to make sure no one is coming and going before they move in, so frequent comings and goings are a good way to deter them.

It’s also important to know that in most states, you’re not allowed to add padlocks, barricades, or other types of physical deterrents to keep squatters out. This also includes shutting off utilities. Intimidation isn’t an option, either. The best thing to do when you discover a squatter is to contact your local law enforcement agency and ask for assistance. If you come across a squatter at one of your properties, don’t wait to get law enforcement involved. The longer the squatter lives there, the more likely the court will believe they were living at the property with consent.

If law enforcement decides the situation is a civil matter, you’ll need to move onto the eviction process. The first step you should take is to provide notice to the squatter. The squatter may decide to vacate on their own, but if they don’t, you’ll need to pursue an unlawful detainer lawsuit to help with the eviction. It’s also recommended that you research your local laws surrounding squatters so you know how to handle removing them legally and don’t run into legal issues. If in doubt, consult legal counsel to determine your best course of action. Click here for more information on squatter’s rights.

Posted by & filed under Tenant Screening.

Tenant relationships can be difficult to navigate at times, especially when it comes to the end of a lease. Although you may be ready to renew the lease, your tenant may have other ideas. Keep an eye out for these warning signs your tenant may not be planning to renew their lease so you can start preparing to fill the upcoming vacancy:

Late Rent Payments

lease renewal icon, black vector sign with editable strokes, concept symbol illustration

Has your tenant gone from consistently paying rent on time to being habitually late as the lease renewal gets closer? Recent recurring late payments can be one of the easiest ways to tell your tenant has no intention of renewing the lease.

It’s important to keep in mind that with the pandemic, even the most reliable of tenants can fall on hard times. You may want to consider discussing the reasons behind the late payments with your tenant or find ways to encourage timely payments, like offering the ability to pay their rent online. If late payments are also accompanied by some of the other warning signs, however, it’s likely they’re not planning to renew their lease.

Shorter Lease Requests

If the tenant requested a shorter lease, such as a month-to-month or a six-month lease, this could be a sign that the tenant views your property as a temporary housing situation. This is most likely to occur at the initial lease signing, but it could also happen at lease renewal. A request for a shorter lease doesn’t necessarily mean they’re not a good choice as a tenant, but it could be a red flag if you’re searching for a long-term resident. Depending on how much the vacancy is costing you (or could cost you in the future), you may want to consider a shorter lease and increase the monthly rent to offset expenses.

Lease Renewal Cancellation Questions

One of the most telling signs your tenant isn’t planning to renew the lease is if they start asking questions about canceling the lease renewal. Many leasing agreements include automatic renewal clauses requiring tenants to give notice if they plan to terminate the contract once the initial lease is up. If your tenant asks when the cancellation date is, it’s a fairly sure sign that they’re not planning to renew the lease – or that they’re at least considering their options. Another sign your tenant is shopping around for other places to rent would be if you receive inquiries about your resident’s rental history from other landlords or property management companies.

Other Indications Your Tenant Won’t Renew

Along with some of the more obvious signs your tenant isn’t planning to renew, there could be some subtle indicators that they’re going to move, such as

  • Avoiding discussions surrounding lease renewal
  • Closed or uncomfortable body language when discussing the subject
  • Constant requests to negotiate expenses, like the cost of rent or utilities
  • Numerous complaints about the property or requests for updates to the property
  • Communication breakdowns or inability to reach the tenant when they’ve previously been very communicative or responsive
  • Lease violations
  • A change in relations, such as the tenant suddenly becoming rude or disrespectful
  • The tenant’s maintenance responsibilities (such as maintaining the yard) are being neglected
  • Unauthorized residents or pets at the property
  • Consistent disputes with the neighbors

Although it’s often in everyone’s best interest to renew a lease, it’s also important to watch for the signs that the tenant could be planning to move on. By staying vigilant in the time leading up to the lease renewal period and keeping communication open, you’ll be less likely to get caught off guard if your tenant plans on moving – and you can start preparing to find new occupants.

Posted by & filed under Tenant Screening.

How to Choose the Best Tenant Screening Services

Tenant screening services provide numerous benefits for landlords and property managers. They’re convenient, efficient, and allow you to focus on other aspects of your business. However, not all screening services are alike. Many of them vary in terms of the types of reports and support they offer. So, what should you look for? How do you know which screening service is best?

Here’s a list of things you should look for:

A Full Product list

If one of your goals is to save time, you’ll want to avoid screening companies that only offer one or two types of reports. Make sure to choose a vendor that offers all the reports you need; this not only saves time but also makes it easier for documentation purposes. Click here to see a complete list of TSCI’s tenant screening services, including tenant verifications, credit checks, and background checks.

Credit Score and Credit Reports

Credit scores and reports are essential for determining if a potential tenant will pay their rent on time. However, some tenant screening services may offer limited credit reports or just a score. While this is better than nothing, it doesn’t give you the complete picture. A full credit report should include:

  • The applicant’s personal information (social security number, name, and address)
  • Credit accounts, limit, and score
  • Loans, balances, and payment history
  • Public records, such as bankruptcies or collections

Criminal Background Checks

Some tenant screening services may only run a state-specific background check, which means the applicant could have criminal records in a different state, and you wouldn’t know about it. It’s always best to choose a company that offers screening through a nationwide criminal record database.

Eviction History

Does the company provide an eviction history report, and if so, does it show court actions related to an eviction? Is the eviction history state-specific or from a nationwide database?

Pricing

Another thing for you to consider is pricing. How much does the service cost overall, and how are the products priced? Does the company offer bundles or a la carte options? While both have their advantages, it’s best to work with a company that offers both options, so you have flexibility. Bundles are cost-effective and convenient, and they might be the best choice for the majority of your screenings, but what if you want to add on an additional service?

Another thing to look for is a clear pricing structure. Avoid companies that don’t have their prices listed on the website or aren’t responsive in answering questions about pricing. Professional tenant screening companies will have their prices clearly listed on the website.

Who Pays for the Screening?

Tenant screening services can add up, especially if you’re screening a large number of applicants, so it’s important to know who will be responsible for the cost. Does the company offer an option to defer the cost to the tenant? If you’re responsible for the fees, are they low-cost and reasonable for the service and reports you’re receiving?

Turnaround Time

How long does the whole process take, from ordering the reports to being able to view them? The turnaround time should be reasonable for the amount of information you’re receiving. Stay away from instant screening reports that are available as soon as you pay; these are often pulled from automated databases and may not contain the level of detail you need – and even worse, they may have outdated or incorrect information.

Online Forms

Does the company provide free online forms, like rental applications the applicant can fill out?

A Secure, Easy-to-Use Online Platform

Ordering your reports should be easy and secure for you and the applicant. The more difficult a platform is to navigate, the less likely you (or an applicant) will want to use it! It’s important to find a tenant screening company that has an online ordering process that can be accessed from any computer with an internet connection. The platform should also provide clear information on the types of reports offered.

Accessible Customer Support

Nothing is more frustrating than needing an answer to a question and not being able to reach a live person! Avoid this issue by choosing a company that offers live customer support. Look for a screening service that has its support line clearly listed, like TSCI. You can contact us directly Monday through Friday from 9 am to 5 pm PST at 1-800-523-2381 or reach us through our contact page.

Skip the Search and Choose TSCI

If you’d like to save time and resources on your tenant screening, you’ll find TSCI meets all of the above criteria. We provide comprehensive tenant screening and tenant verifications for landlords and property managers throughout the U.S. Our products are available online, 24/7, making it easy for you to order screenings whenever it’s most convenient for you. In addition to our traditional screenings, we also offer RentalConnect. Rental Connect offers an excellent alternative to the expense of full tenant screening. This service requires no on-site visits, sign-ups, or membership fees, and the cost of the screening is deferred to the applicant.

TSCI stays up-to-date and fully compliant with TransUnion, Experian, The Fair Credit Reporting Act (FRCA), The Investigative Consumer Reporting Agencies Act (ICRAA), and the Nevada Private Investigators Licensing Board, so you can feel confident that the reports you receive won’t violate federal or state screening laws. We also maintain membership with the Professional Background Screening Association and have been accredited with The Better Business Bureau since 2014. For more information, visit our services page, or feel free to reach out to us with any questions you might have.

Posted by & filed under Credit Score.

If you’re tired of being inundated with commercials for large ticket items talking about how these are “unprecedented times” we’re living through, you’re not alone. Although the availability of vaccines has given us all some light at the end of the pandemic tunnel, we’re certainly not out of the woods in many ways, especially economically. Anyone who’s been paying attention to the state of affairs knows this isn’t a good time to purchase a new car, travel abroad, or go on a cruise. A recession is likely on the way (if it’s not here already).

This is a fact that’s not lost on many in the rental housing industry, especially as unemployment rates hit record highs this year. People are struggling around the nation, and the industry has essentially come to a halt. Many residents aren’t able to pay their rent – and in many cases, landlords and property managers still aren’t able to evict for unpaid rent. States that have reopened their eviction courts are facing a backlog, extending the burden on property owners. While the latest relief package offers minor respite for landlords, it’s not enough. Some property owners still aren’t able to pay their bills, while others have properties that are just getting by, but in desperate need of income.

With this in mind, there are still plenty of renters who are searching for their next home, but you should consider that the next vacancy you fill may look very different from one pre-2020. There’s a high likelihood that the next applicants you screen may not meet your typical rental criteria. Strapped for cash with less economic opportunity, you may find that a large portion of your applicants have lower credit scores than what you previously would have seen as acceptable.

Anticipate Lower Scores and Make Some Adjustments

While it’s reasonable to want tenants with good credit, it’s also important to look at the situation from all angles. Credit scores are important because they allow you to make an informed decision on which applicants present the lowest financial risk. However, every month your vacancy goes unrented costs you money.

The fact is, 2020 is really an outlier, and it may be beneficial to see your future tenant screenings through this lens. Nothing was normal about last year, so it’s likely this will be reflected in some of the applicant’s information. You may find some of the applicants have a history of steady work up until 2020, or that they had no history of evictions up until last year. In these cases, it’s best to consider making some allowances.

Here are a few ways you can adjust your rental policies or criteria to accommodate some of the special circumstances your applicants may have encountered in 2020:

  • Modify your credit score requirements
    One simple way to make an allowance for lower applicant credit scores is to lower the number you deem to be an acceptable credit score. However, if you decide to do this, it’s best to stay on top of the current news regarding employment rates and credit scoring analysis from credit bureaus to make sure you’re in line with any changes in the economy. Keep in mind that if you decide to go this route, you’ll also want to pair your credit checks with other methods, such as tenant verification, or a background check to give you a better idea of the applicant’s rental and employment history.
  • Month-to-month leases
    If none of your applicants have a credit score that matches your rental criteria, you may want to consider offering a month-to-month lease. Although this can come with its own problems, month-to-month leasing may be a good solution, at least in the short term. A month-to-month will minimize your risk if you’re not convinced the applicant will be able to consistently pay their rent; you’ll quickly get a feel for what you can expect and can make a decision on whether or not to renew the lease. If the tenancy doesn’t work out, you’ll at least have some income coming in for a while.
  • Increase your security deposits
    Another option you have is to increase your security deposits – although, make sure to consult with a lawyer to make sure it’s legal in your area. Having a larger deposit may give you some peace of mind in place of an ideal credit score.
  • Require a co-signer
    Requiring a co-signer is common for young renters who have little to no credit history, so it could be a good option for applicants who have struggled over the past year as well. If the applicant’s score is too low, ask them if they’d be willing to have someone with a higher score agree to cover a defaulted rent payment. If you have employees, make sure to discuss this with them as well, so they understand how to vet applicants and how to answer applicant’s questions regarding the rental criteria.

By taking certain precautions and making adjustments to your operations, you can ensure that your rental properties stay occupied – and protected.