Posted by & filed under Rental Housing.

Real estate concept. Houses on schema diagram. Person search, compare and select proper rent apartment in laptop.

Rental housing laws regarding tenant screening, applications, and rental housing decisions are constantly evolving. Although it can be time-consuming and difficult to keep up, it’s important to make sure your written rental criteria adapt to the latest regulations. Updating your rental criteria annually is the best way to ensure you’re following all the guidelines – while avoiding actions that could cause legal issues. Here are some key factors to keep in mind to ensure your rental standards stay up to date and in line with the latest laws; please note this is intended for informational purposes only and is not intended as legal advice.

What are Rental Criteria?

You likely already know what rental criteria includes, but here’s a quick refresher. Rental criteria refers to a set of standards that applicants are required to meet in order to be considered “approved,” “conditionally approved,” or “denied” tenancy at your property. Although rental criteria can vary, it typically includes the following:

  • Credit scores
  • Income requirements
  • Specific criteria regarding eviction records
  • Specific criteria regarding criminal convictions

Although you can adjust rental criteria to your own standards and personal preferences, you’ll need to check to make sure you’re following Fair Housing Laws to avoid anything that could be seen as discriminatory. Likewise, it’s best to review your local laws to make sure your criteria don’t conflict with regulations regarding factors like criminal or eviction records.

If you choose to include criteria that involve current or previous landlords, or personal references, be cautious about the source. For example, it’s possible an applicant could provide the number of a friend or relative instead of a landlord. Tenant verification also less objective than credit history, for example, but it’s often the best first step to see if you’re interested in screening the applicant further. If you’re planning to include tenant verification in your criteria, save yourself some time and hassle by ordering yours from TSCI.

Key Factors for Creating Your Rental Standards

As you establish your written criteria and audit them annually, here are some important factors to keep in mind:

  1. Always Base Your Decision on Objective Data

Although some landlords and property managers investigate prospective tenants by looking at their social media or other subjective methods, doing so is a good way to potentially find yourself in legal trouble. Your leasing process should always use objective data, like credit, criminal, and eviction history.

A good way to make sure you’re not going out-of-bounds is to work with data from a tenant screening service, like TSCI. Screening reports provide objective, legal information to help you decide whether the applicant might be a liability.

  1. Avoid Blanket Standards

Blanket standards, also called bright-line standards, include overly broad language in your written criteria. This means the standards don’t factor in the differences between federal, state, and local laws. Blanket standards can increase your liabilities, as one may be able to argue that they’re discriminatory.

One example of this would be saying one of your requirements is “no felonies.” A rule like this doesn’t take into account that what one state considers a felony may not be considered a felony in another state. In some states, it’s considered a felony to possess marijuana; in others, it’s completely legal. Blanket standards could potentially bar a good applicant from meeting the criteria without considering why they were convicted.

  1. Local Laws

Write up a rough draft of your rental criteria, including the requirements for meeting “approved,” “denied,” and “conditional.” After that’s done, take a look at your local laws. These can significantly affect which information you’re allowed to use to make a decision on an applicant’s eligibility. For example, in Cook County, Illinois, landlords and property managers may only consider criminal convictions that have occurred within the past 3 years. In Seattle, Washington, the only criminal record you’re allowed to consider is the National Sex Offender registry.

This is especially important because many screening companies have an industry standard of criminal records going back 7 years. If you weren’t aware of a local law stating you can only consider the past 3 years, and you make a rental decision based on a conviction that happened 5 years ago, you could end up in legal trouble. Fortunately, TSCI follows all current local regulations regarding criminal and eviction records, so you aren’t provided with any information you can’t legally consider.

  1. Protected Classes

As long as you’re basing your rental decisions on objective data, considering protected classes shouldn’t be an issue – but it doesn’t hurt to review it anyways. As an added precaution, you should check to make sure your criteria don’t infringe on any federally or state-protected classes. This includes discriminatory language or criteria based on:

  • Race
  • Color
  • National origin
  • Religion
  • Sex
  • Familial status
  • Disability.

Depending on your state, you may have additional protected classes, such as source of income, sexual orientation, gender identity, or gender expression.

  1. Adjust Your Standards Based on the Property

It wouldn’t make sense to have the same rental standards for a luxury apartment as you would a small studio on the outskirts of town, so when creating your criteria, think about the types of applicants your property is likely to attract. If you have more than one rental, consider tailoring your criteria to each property individually. This could mean adjusting your income requirements or credit scores required for approval, or sorting your properties by type, and create a set of criteria for each category.

Apply Your Rental Criteria Equally

Once you’ve determined your leasing criteria, you’ll need to make sure you apply them equally to each applicant. Every applicant should be subject to the same qualifying questions, screening process, and rental standards. Even though your properties may have separate standards, make sure each applicant is treated equally within the property’s criteria.

This is one important reason to have your rental criteria written out. Whether you’re training a team at a property management company or you’re an independent landlord, written criteria give everyone a clear checklist, so to speak, that can easily be referred to. Without this, it’s easier to make exceptions or unintentionally overlook an important legal consideration.

For more information on vetting applicants, writing leases, and other helpful tips, visit our blog.

Posted by & filed under Property Management.

Messy Room

Dealing with messy tenants can be a tricky situation. Trash on the patio is one thing, but it’s another thing completely if there’s mold growing in your rental due to the tenant’s slovenly lifestyle. Everyone has a different idea of what “clean” looks like, so how can you ask your tenants you’d like them to keep the property up to your standards? Here are a few tips on how to go about asking your tenants to clean up their act. Please note this is for informational purposes only and is not intended as legal advice.

Why Does Cleanliness Matter?

Technically, landlords shouldn’t be telling tenants how and when to clean, but if their cleanliness is becoming a health hazard or could damage your property, this is a valid reason to address it.

Some tenants may not see their messiness as a problem. After all, they’re the ones living in it, so why should it matter? Unfortunately, there are some expensive issues that come with their way of living – which could come out of their security deposit. If you need to confront your tenants about their cleanliness, here are some issues you can mention:

  • Structural damage – Large, damp messes can leave behind unsightly stains, rot, and smells, that can only be removed by professional cleaners. There could also be damage to support beams or other important structures of the property, which could be a safety hazard.

  • Infestations – Messy living areas can attract a variety of pests, like cockroaches, water bugs, flies, ants, and rodents. Besides being gross, they can be a health hazard. Some of them can carry vector-borne diseases or affect allergies and asthma. If you have several units on the property, they can also impact neighboring tenants’ quality of life. Pests can be difficult – and expensive – to get rid of.

  • Hygiene – Good hygiene is an important topic, especially with the pandemic. Remind your tenant that you’re responsible for ensuring the property stays safe and clean for all tenants, including future residents.

When addressing cleanliness with the tenant, you may also want to consider their age. Are they a young college student? If so, it’s common for younger people to be a bit messy as they get into the groove of taking care of themselves. Try to put aside your frustration and view it as a positive teaching moment instead.

What Types of Cleanliness Issues Should Be Addressed?

Clutter and garbage here and there is unsightly, but it may not be enough to bring it up to the tenant. Here are some more serious issues that are worth addressing:

  • Mold
  • Animal feces
  • Excessive garbage
  • Rodents, roaches, or other pests
  • Overwhelming or unpleasant odors
  • Spoiled food left out or piles of dirty dishes
  • Sticky or strange substances left on surfaces
  • Junk or clutter that blocks entryways or air vents
  • Hoarding*

*If you believe your tenant is a hoarder, you should be careful with how you approach the situation. Since hoarding is considered a mental health disorder, there could be legal and medical protections to consider. Federal (and some state) laws prohibit discrimination based on hoarding and require landlords to make reasonable accommodations. If in doubt, consult with legal counsel on how best to proceed.

Keep Communication Open

Once you’ve noticed a cleanliness issue, it’s important to say something. If you noticed the problem and walked away, that’s understandable! It can be difficult to know what to say at the moment. Contact your tenant and let them know in a professional and kind way that you have concerns about potential health and safety violations.

Make sure to be understanding and address any limitations the tenant may have in their life, such as long work hours, family, or mobility issues. You should also double-check your lease to ensure you’ve included a clause that states the expectation of the tenant to maintain the cleanliness of the property for health and safety reasons. If you do have such a clause in your lease, make sure to bring this up in the conversation.

Tenants want to feel you care about them, the property, and the community, so make sure to let them know their health and safety are important to you. You can say something like, “It’s important to me that the property is safe for everyone, and it’s my responsibility to make sure it is. I’m concerned that the current state of the property could cause health and safety issues due to the [mold, pests, or other concerns].”

It’s always a good idea document when you talked to them and what was discussed. You may also want to consider sending a follow-up email regarding your conversation. This serves two purposes; it reinforces what was discussed, and it provides you with additional documentation.

In some cases, being firm about the cleanliness issue won’t be enough to get the tenant to change their ways. If you’ve already had a discussion and sent a follow-up email without any sign of progress, it may be time to send the tenant a formal notice. Check with your legal advisors to determine the specific language you should include and to make sure you’re going about everything legally.

Posted by & filed under Eviction.

eviction notice paper

On January 20, 2021, President Biden issued an executive order instructing the Center for Disease Control (CDC) to extend the federal eviction moratorium. Per the president’s request, the CDC announced on January 29 that the moratorium would be extended through March 31, 2021. While this likely came as good news to millions of struggling renters, it leaves many landlords saddled with financial burdens – particularly small independent landlords, who provide more than half of the nation’s rental properties.

Initially, the CDC order was slated to end in December, but it was extended through a provision in the second stimulus package. The order continues to require tenants struggling with payment to provide their landlord with a declaration of loss of income and inability to pay rent. Although renters are being assisted in the short term, the moratorium fails to address how many of them will be able to pay for owed back rent once the moratorium is lifted. In the meantime, landlords are still struggling to cover their own monthly expenses. Without the income from rent, it’s more difficult to maintain rental properties and meet other financial obligations.

There’s no question this is a complicated issue – and an ever-evolving one. Here’s a look at some of the most important things you should know about the eviction moratorium as it currently stands. Please note this is for informational purposes only and is not intended as legal advice.

How do Tenants Qualify for the Moratorium?

To qualify for the moratorium, tenants who are unable to pay rent must provide their landlords with a sworn declaration affirming the following:

  • The tenant has “used best efforts to obtain all available government assistance for rental or housing.”
  • The tenant earned $99,000 or less in 2020 as a single tax filer (or $198,000 or less for couples filing jointly). Tenants who weren’t required to file taxes in 2019 or who received a stimulus check also qualify.
  • The tenant has been unable to make full rent payments due to loss of hours, wages, layoffs, or high out-of-pocket medical expenses exceeding 7.5% of the household’s adjusted gross income for the year
  • The tenant has made every effort to make timely rent payments that are as close to the full payment as possible
  • That the eviction would either cause the tenant to be homeless or force them to move into a close-quarters living situation
  • The tenant understands they will still need to pay rent at the end of the moratorium
  • The tenant understands that any false or misleading statements could result in criminal or civil action

Landlords are not required to notify their tenants of the CDC order. In addition, the eviction moratorium doesn’t apply to tenants living in hotels, motels, or other forms of temporary housing.

Is Back Rent Forgiven?

Although a tenant may qualify for the eviction moratorium, unpaid rent still accrues. Some states also allow landlords to apply fees, interest, or other penalties to late rent payments. If the rent is more than $1,000 a month and hasn’t been paid since August 2020, your tenant would owe $1,000 for each month that went unpaid, as well as any interest or fees that you’re legally entitled to.

Do Tenants Automatically Receive Rental Assistance?

Even though a tenant qualifies for the eviction moratorium, they may not necessarily receive rental assistance. The moratorium applies to evictions exclusively. Renters may qualify for the assistance given their income is less than 80% of the median household income in their area, they’ve been adversely affected by COVID-19, and as a result, are at risk of losing their housing. If your tenant receives rental assistance, it can be used for utilities, back rent, or future rent. The qualifications for rental assistance are separate from those of the eviction moratorium.

Does the Moratorium Include Financial Assistance for Landlords?

Unfortunately, the eviction moratorium doesn’t include financial assistance for landlords – however, qualifying property owners can take advantage of the latest COVID-19 relief bill, The American Rescue Plan. This bill is set to provide $15 billion in grants for small businesses affected by the pandemic, as well as $175 billion in funding for small business loans and $30 billion in rental relief for tenants. Additionally, the bill will include new legislation that will extend foreclosures and eviction moratoriums through September 30, 2021.

As a landlord, you’ll still be able to pursue back rent, fees, interest, and evictions once the moratorium has ended. However, it’s important to know that violating the moratorium could mean facing fines as high as $100,000, a year in prison, or both. In the event that an eviction was somehow tied to the death of a tenant, the penalty can be as high as $250,000 and a year in prison.

Does the Moratorium Prohibit All Evictions?

No; only tenants who meet the qualifications are protected from being evicted. Additionally, you can still evict any tenant who engages in criminal activity on your property, threatens other tenants, or caused damage beyond regular wear and tear. Any tenant who acts in bad faith can have the eviction protection revoked.

That being said, it’s recommended to consult with legal counsel prior to evicting a tenant to avoid any potential fines or legal issues. The CDC’s guidelines are fairly straightforward, but they can be complicated with the addition of locally-enacted eviction moratoriums. Your legal team will be able to advise you further on the best steps to take.

Posted by & filed under Tenant Screening.

Tenant screening is common for landlords and property managers of single-family homes and multi-family homes, but what about mobile home parks? Although mobile home parks are somewhat unique, tenant screening and verification are equally important to ensure that you have reliable, responsible tenants.

What Are the Unique Considerations for Mobile Home Parks?

Mobile homes aren’t on a permanent foundation, so mobile homeowners can move at will; despite this, mobile homes aren’t frequently moved and will typically stay on the same lot once they’re installed. Unlike a single-family home or apartment, tenants often own their mobile home, so they’re just renting the lot – although some mobile home parks rent out homes as well.

For landlords who are only renting out the lot, there are often fewer concerns or more relaxed policies about choosing the right tenant. If the tenant causes damage to their own home, that’s on them. Due to this, it might seem like tenant screening is unnecessary for mobile home parks, but it’s important to remember that every tenant you choose becomes a member of a larger community. Mobile home parks are typically more intimate than the average residential neighborhood, which means neighbors are more likely to interact, and in turn, affect the overall feel of the community.

Mobile Home Park

No one wants to deal with neighbors who disregard the park’s rules or cause problems in other ways – and as a landlord, you don’t want tenants that pay rent late, either. It’s in everyone’s best interest to ensure that applicants with a good rental history are chosen. By taking the step to verify and screen your mobile home tenants, you can ensure that you’re building a thriving community of responsible tenants and reduce potential problems down the road.

What types of screenings should be run for mobile home parks?

We offer a variety of screenings to help you find reliable tenants for your community. With many state laws changing around when tenant screening can be used, tenant verification is often the best first step for many landlords. Our tenant verification service allows you to verify that the information applicants provide you is accurate, including:

  • The applicant’s current and previous address
  • The length of time they lived at each property
  • Verification of the applicant’s current employer
  • The length of time the applicant has worked at the company, their position, salary, and employment status (full time/part-time)
  • Whether there have been any late payments, bounced checks, balances owed, complaints on file, or legal notices
  • The applicant’s current and previous monthly rent payments
  • Whether the applicant has any pets
  • Whether the applicant would be eligible to re-rent either property
  • Whether the applicant gave proper notice of their intent to move

We conduct the verification on your behalf, saving you valuable time that can be spent on other aspects of managing your mobile home park.

Importance of Credit Checks

Credit checks are also important as they give you an idea of how well a tenant handles their debt. Applicants who were sent to collection agencies or defaults can be risky tenants, but so can those with a high debt-to-income. For example, if a tenant has a high amount of debt, they may have difficulty paying rent in the future, especially if they change jobs, have a baby, or experience other life events that might impact their finances. Background checks can be another very helpful screening tool, giving you information about eviction or criminal history.

All of our screening services are available online 24/7 and we offer RentalConnect, which allows you to defer the cost of the report onto the applicant. As with all our reports, we strongly suggest reviewing your local laws to ensure you’re using the information legally. Some states and local governments have enacted limits to when certain types of screenings can be conducted and under what circumstances. For more information and tips on tenant screening, visit our blog or contact us at 800-523-2381.

Posted by & filed under Rentals.

hand signing papers

Although interviewing applicants for your property may feel daunting, it’s an important step in finding the right tenant. Finding a tenant you have a rapport with from the beginning and who meets your rental criteria can make the whole rental experience easier on everyone and helps to ensure your relationship remains mutually respectful. So, which steps should you take when vetting applicants? Here are a few helpful tips. Please note that this is for informational purposes only and should not be considered legal advice.

Pre-Screening

Interviewing applicants can take up a lot of your valuable time, but you can reduce your workload by pre-screening them before moving forward. Some of the most important things to consider when pre-screening are:

Monthly Income

If your tenant can’t afford the rent, approving them for your rental is taking on a risk – and potentially setting them up for failure. Neither is fair, to you or the applicant. It’s recommended to select applicants who make at least 3x the amount of rent to make sure they’ll be able to cover it comfortably.

Credit Score

Many people have things that have negatively affected their credit score, but you should check to make sure that their score is in at least the “good” range. Credit scores show how a person handles their financial responsibilities, so it’s critical to make sure you’re choosing an applicant who’s in good standing with their debt and payments.

Employment History

Employment history can give you insight into an applicant’s reliability and stability. Although employment gaps aren’t necessarily red flags (especially if they happened during the pandemic) they could signal that your applicant has difficulty holding a job – which could affect their ability to pay rent consistently and on time.

Background Checks

It’s also common for seasoned landlords and larger rental agencies to run a background check and a credit check as part of their vetting process. These types of screenings can give you information about:

  • Criminal Records
    A criminal record can be a concern, particularly if your vacancy is in an apartment building where other people could be at risk. However, keep in mind that not all criminal records are the same – and be sure to check your state and local laws to make sure you’re using criminal records legally.
  • Past Evictions
    Although there are always two sides to a story, past evictions could be a red flag. While an eviction doesn’t necessarily mean the applicant would be a risky tenant, it’s worth asking them about it during an interview, as well as discussing it with their previous landlord.
  • Public Records and Court Cases
    Past lawsuits that appear on the background check should also be discussed with the applicant. Although some lawsuits are unavoidable and will have no basis in how the applicant would perform as a tenant (like divorce or child custody), other lawsuits may give you information about how they handle financial matters and how responsible they are, such as bankruptcy or unpaid child support.

What Should You Look for in the Rental Application or During the Interview?

After you’ve prescreened your applicant, it’s time to take a close look at their application and begin the interview process. Here are a few things you should look for on the application:

  • – All portions of the application should be completely filled out. References should have working contact information, dates should be filled in, etc.
  • – Ideally, employment history should have no gaps. If the applicant doesn’t include contact information for past employers, this could signal that they may have left on bad terms or were an unreliable employee in some way. Their employment field can also give some clues as to whether they’ll be able to afford rent or not.
  • – Lifestyle factors like pets or working night shifts should also be listed on the application to give you an idea of whether your property will be a good fit for their living situation.

To save time verifying information on the rental application, you may want to consider our tenant verification service. We’ll reach out to the current and previous landlord and current employer on your behalf to confirm the information provided on the application is accurate. Taking time to speak to their references gives insight into the honesty of your applicant and how they may behave as a tenant. For example, a past landlord may have important information about whether the tenant paid rent on time, how they cared for the property, and how they got along with neighbors. Talking to their employer can also give you valuable information about how they work with colleagues, their overall reputation, whether they’re a reliable employee, and whether they have a steady source of income.

Once the application checks out, you can prepare the questions for your interview. A rental interview is very similar to a job interview in that you’re essentially trying to determine whether the applicant will be a good fit. Some important “dos and don’ts” to remember when conducting an interview:

  • – DO ask about their employment and income
  • – DON’T ask about anything that could be considered a violation of the Fair Housing Act
  • – DO ask how many adults would be living at the property
  • – DON’T ask if they’re married or have kids, as this could be seen as discriminatory
  • – DO get approval to run a credit check
  • – DON’T have different rental criteria or screening methods for one applicant versus another. All your rental criteria and screenings should be the same across the board
  • – DO ask if the applicant has ever been evicted
  • – DON’T ask if the applicant has ever been arrested

If you have difficulty coming up with questions to ask, take a look at our list of 23 questions to ask potential renters.

Although the interview process can be lengthy, it’s well worth it to ensure you’re choosing the best tenant for your property! And with our tenant verification and screening services, you can cut down the time you spend on the pre-screening process. For more information on tenant screening and verification, visit our services page or contact TSCI at 800-523-2381.

Posted by & filed under Tax Season.

COVID-19 has amplified many things about our society, one of which being how interconnected landlords and their tenants are. When tenants are struggling to pay rent, it directly affects your livelihood. The Coronavirus Aid, Relief, and Economic Security Act (CARES) Act, passed in March 2020, did provide some tax relief for small landlords, but what about tax relief in 2021? Here’s a look at what you should know for this year’s taxes. Please note that this is for informational purposes only and is not intended as financial advice.

Changes with December’s COVID Relief Package

tax season calculator

In December 2020, a second stimulus package was passed. This reversed an April 2020 IRS ruling that stated business expenses paid for with proceeds from a forgiven Paycheck Protection Program (PPP) loan were not eligible for tax deductions. With this reversal, forgiven PPP debt is no longer considered taxable income so you can deduct these funds as long as you meet the requirements. Additionally, this also applies to Economic Injury Disaster Loan (EIDL) grants.

“Tax extender” tax provisions that were set to expire on December 30, 2020, have also been extended for an additional year some of them have been made permanent. Some of these provisions that could benefit you as a landlord include:

  • Mortgage Insurance Deduction – Eligible property owners may deduct mortgage insurance premiums that were paid for using private and FHA/RHA/VA payments.
  • Energy-Efficient Commercial Buildings Deduction – The Section 179D deduction for commercial and multifamily housing units that meet or exceed energy efficiency standards has been made permanent.
  • Depreciation – The depreciation period for multifamily rental units has been shortened from 40 to 30 years.

Does the New COVID Relief Bill Include Additional Relief for Landlords?

The American Rescue Plan (the latest COVID relief bill) is projected to be signed into law in early March. This bill is set to provide $15 billion in grants for small businesses affected by the pandemic, as well as $175 billion in funding for small business loans and $30 billion in rental relief for tenants. These should, hopefully, help many landlords who have been hit hard by the pandemic. Additionally, the bill will include new legislation that will extend foreclosures and eviction moratoriums through September 30, 2021.

At this time there doesn’t appear to be any tax-specifics for landlords, however, President Biden has indicated that he intends to pursue additional relief legislation that could have broader tax implications.

Will These Tax Law Changes Affect my Taxes for Prior Tax Years?

Some of these changes will apply to previous tax years. For example, you can apply your 2018 – 2020 net operating losses as far back as five years from when the loss occurred. Businesses, including landlords, can also deduct loan interest that totals 50% of taxable income for the 2019 and 2020 tax years. Check with your accountant or financial advisor to see if you should amend your tax returns from previous years.

Will States Provide Additional COVID Tax Relief?

Some states may be implementing additional tax relief for landlords, however, the majority of it will be handled at the federal level. New York has introduced three different bills that would put a 3% cap on penalties for unpaid property tax assessments from smaller landlords during the pandemic.

With the large amount of tax-related changes being made in the past year, it’s more important than ever to speak with a knowledgeable tax professional to ensure you’re taking advantage of any tax relief as it applies to your rental business.

Posted by & filed under Landlords.

All property owners are required to protect their tenants from criminal activity to some degree. Not only are landlords liable for criminal acts committed by their tenants, but they also have a responsibility to protect the neighborhood from the illegal activities of strangers.

With that in mind, landlords need to take steps that not only limit the potential for crime, but also reduce the risk of being held responsible if an assault, burglary, or other crime occurs. Here are a few things you should consider, although please note that this is for informational purposes only and is not intended as legal advice:

  • Review all the state and local security laws that apply to your property, such as deadbolt requirements, locks on the windows, and ensuring areas around the property are well-lit.
  • Take a genuine assessment of the crime in the neighborhood your property is located and use this information to design a security system that will improve the safety of your tenants. Reach out to local law enforcement, your insurance company, and private security professionals to get advice and recommendations.
  • Educate your tenants about neighborhood safety and the types of crime typically seen near the property. You should also go over the security measures you’re providing, including how to use them and any limitations they have.
  • Perform regular maintenance inspections, keeping an eye out for any potential security issues like broken locks or burnt-out floodlights. Check in with your tenants too – ask if they have any suggestions or if they’ve spotted any problems you might have missed.
  • All tenant complaints about suspicious people or activities, dangerous circumstances, or broken security items should be handled immediately. Failing to do so could cause you to take on more liability if a tenant becomes injured after making a complaint.

Although some safety measures can be costly, they’re worth preventing larger issues caused by crime occurring at your property – and potential settlements, which could cost hundreds of thousands of dollars or more. If your safety measures require a rent increase, discuss it with your tenants. Many of them will likely be fine with paying more if it increases the safety of their home.

Another thing to keep in mind: you should be particularly careful when choosing a property manager, especially because they’ll be your tenants’ first point of contact and have access to all the master keys. It’s crucial to run a complete background check on the property manager and pay close attention to their job performance, especially since a tenant could sue you if they have property stolen or damaged because you failed to supervise the property manager closely. If you receive reports of the property manager behaving in a troubling or illegal way, take notice! Investigate the matter and replace the property manager if the claims are valid. Also, you’ll want to make sure that your insurance coverage includes illegal acts carried out by employees.

What if a Tenant Deals Illegal Drugs on the Property?

Liability concerns don’t just involve strangers – sometimes they come from your own tenants. What happens if you have a tenant who is dealing drugs on your property? Unfortunately, this can cause practical and legal issues.

Anyone (whether they’re another tenant or someone in the neighborhood) who’s injured or concerned about a tenant dealing drugs can technically sue a landlord on the grounds of the property being a public nuisance or threat to public safety. In addition, federal or locawl authorities can enact fines on the basis that you’re allowing illegal activity to continue. In some cases, law enforcement may even seek criminal penalties – and in extreme cases, the property can be confiscated. Beyond creating potential legal problems for you, a property where drugs are being dealt can make it difficult to find and retain good tenants, and it could even affect your property value.

How Can Landlords Avoid Liability Caused by Tenants Breaking the Law?

Fortunately, there are several steps you can take to avoid issues caused by tenant-related criminal activity and reduce your liability.

  • Screen your tenants carefully to ensure you’re choosing people who are responsible and law-abiding. Be careful with criminal records, however, since some states have laws regarding when in the application process you can use criminal records. Make sure to review screening laws as they apply to your property to ensure you’re screening everyone legally.
  • Avoid accepting cash for rent payments; instead, choose methods that have a paper trail, such as a check or online payments.
  • Don’t look the other way if a tenant is disruptive in some way. Make sure your lease or rental agreement clearly prohibits selling drugs and other types of illegal activities. If you discover a tenant has violated those terms, begin the eviction process immediately.
  • Stay aware of what goes on at your properties, including any suspicious activities like excessive traffic coming and going from the premises.
  • Be responsive to complaints you receive from tenants or neighbors, especially if they involve drugs or other illegal activities. Once you’ve been notified of the problem, contact the local police department for guidance on handling the issue.

Rental property owners are being sued more regularly for negligence in criminal activity, with many settlements and jury awards ranging anywhere from $100,000 to $1 million, so it’s essential to take the matter seriously and take all steps to prevent problems from arising. You may be at even greater liability risk if similar situations have occurred in the past, so make sure you keep a close eye on your properties and reassess your security measures regularly to keep your tenants – and yourself – protected.

Posted by & filed under Property Management.

flushable wipes placed in toilet

Flushable wet wipes have become increasingly popular over the past decade or so. Marketed as “plumbing and septic” friendly, it’s easy to see why many consumers have embraced the hygiene product –especially when toilet paper shortages affected much of the nation last spring. Despite their name and how they’re marketed, it’s important to know that not all brands of wipes are actually flushable – in fact, many of them can cause major plumbing problems.

Regardless of the brand, wet wipes are made from fibrous materials; some are also reinforced with polymers like viscose. When flushed, they’ll go down the toilet easily, but problems can start when they reach the 45-degree elbow in the plumbing because many of the materials in them don’t break down. Once a wipe or two starts to collect in the elbow, they’ll often continue to catch more wipes, which can eventually lead to a blockage. Unfortunately, wet wipe blockages can lead to thousands of dollars’ worth of damage to plumbing and septic systems.

Whether you’re a landlord or property manager, you definitely don’t want to deal with the potential plumbing issues wet wipes can cause! Many plumbers recommend that only toilet paper is flushed down the toilet and this is a good piece of advice to use with your properties. Not only can damage to the plumbing system be expensive to repair, but cleaning costs can add to the overall bill.

What You Should Do

With this in mind, you may want to consider adding a clause to your lease or rental agreement that states wet wipes are prohibited at your properties – or that any plumbing problems caused by them are the tenant’s responsibility to pay for. You can also direct them to the ample collection of articles online that talk about the plumbing horrors wet wipes can cause. It may seem like a bit of a scare tactic, but it can be very successful in helping tenants understand why they should avoid flushing wet wipes down the toilet.

Although there’s no sure way to stop your tenants from purchasing and using these products, making them aware of the issue and including gentle reminders throughout the year does tend to help. In multifamily units especially, plumbing issues like these can quickly become a nightmare for multiple residents if the main plumbing line gets blocked. Families may have to be displaced for a time, belongings can get ruined – it’s a hassle for everyone involved! So, take some time to educate your tenants and decide what your policy will be. A little education and planning will help everyone in the long run!

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As a landlord or property manager, you’re likely familiar with the Fair Housing Act of 1968 (FHA). The FHA was created to ensure anyone searching for a place to live has a fair chance at finding one, without fear of discrimination based on their protected class. Although it wasn’t the first law of its kind (the Rumford Fair Housing Act of 1963, among others, helped pave its way) the FHA has made the largest impact on the rental housing industry. Please note that this is intended for informational purposes only and is not intended as legal advice.

FHA Overview

The FHA was created during the peak of the Civil Rights Movement, prohibiting discrimination in housing decisions based on seven key factors: race, color, national origin, religion, sex, familial status, and disability. Discrimination based on any of these factors is illegal. This includes circumstances like refusing to rent a home, using different qualifying criteria, instigating separate rules or prices for rent or late fees, or other types of discriminatory behavior. Additionally, discrimination would include things like harassment, threats, retaliation, or refusing to provide repairs or maintenance.

Most types of housing are covered under the FHA; the following types of housing may be exempt in very limited circumstances:

  • Owner-occupied buildings with four or less units
  • Single-family homes sold or rented by the owner without the use of an agent
  • Housing operated by religious organizations and private clubs that limit occupancy to members

Property Advertisement

Advertising vacancies is one of the first steps to finding the right tenant, however, you should be aware that discriminatory advertisements are also prohibited by the FHA.

Some examples of discriminatory advertising include:

  • “No young men”
  • “Females preferred”
  • “White applicants only”

These are all obviously discriminatory, but discrimination in an ad can also be subtle and completely unintentional, like stating that the property is “perfect for single people or couples” or even “nice, quiet, mature neighborhood.”

When writing an ad for your property, keep the focus on the property – not on preferred tenants or directed towards a certain group of applicants. Instead, talk about the features, like how many bedrooms there are, the size of the yard, or that the property has new appliances. When talking about the neighborhood, focus on nearby attractions, such as parks, shopping centers, or services.

Tenant Screening and Interviews

Likewise, it’s important to avoid discrimination while talking to potential applicants. If you’re like many landlords, your first step in tenant screening likely begins with talking to the applicant before you decide to move onto a credit or background check. This might be in person during the showing of the property or via a phone call, text, or email. However you’re communicating, it’s important not to make any inadvertent discriminatory remarks, such as:

  • Do you have a service dog?
  • Do you have kids?
  • Do you like the church in our neighborhood?

While these questions may not be purposefully discriminatory, they could be interpreted as such. Instead, keep all questions and comments directly related to the property and the terms of your lease or rental agreement.

Additional Protected Classes

In addition to federally protected classes, some states have added to the list. California, for example, has extended housing protection laws to include the following groups:

  • Sexual orientation
  • Marital status
  • Source of income
  • Age
  • Arbitrary characteristics (such as tattoos, hair color, etc.)
  • Gender identity and expression

It’s not just state governments that have additional protected classes, either. New York City has its own set of protected classes, which includes:

  • Age
  • Alienage or citizenship status
  • Color
  • Creed, religion, or race
  • Disability
  • Family status
  • Gender or gender identity
  • Lawful occupation
  • Lawful source of income
  • Marital or partnership status
  • National origin
  • Race
  • Sexual orientation
  • Immigration status
  • Military service
  • Pregnancy
  • Presence of children
  • Status of victim of domestic abuse, sexual violence, or stalking

Since laws can vary from state to state – and even from city to city – it’s always recommended to stay up-to-date on local laws in order to protect yourself and your properties from risk. This is especially important if you have rental properties located in different states. By staying informed and updating your policies as necessary, you can prevent potentially costly legal trouble! You may also want to consider working with a lawyer when determining how to rent and advertise your properties to ensure all your legal bases are covered.

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The roof is your rental property’s first line of defense against the elements, but it’s also arguably one of the most vulnerable parts of the building – and one of the costliest to replace. However, just like bringing your vehicle to the mechanic regularly for maintenance will lower your overall repair costs, roof maintenance can extend the lifespan of your roof and how often it will need replacement.

Tenant Screening Cambridgeport MA

Property maintenance is an essential part of keeping your property maintained and habitable. Capital budgeting also becomes more predictable and simplified when you factor in preventive maintenance and inspections. With that in mind, here are some tips on how to extend your roof’s lifespan and save money in the long run.

Routine Maintenance

Regular maintenance on your roof is one of the most cost-effective options for landlords and property managers. Manufacturers tend to agree; it’s estimated that routine maintenance can extend a roof’s lifespan by 25%. Maintenance would include things like removing snow, re-caulking or re-sealing as needed and clearing debris. If there are trees around the property they should be trimmed back away from the roof to reduce leaves, twigs, moss, and other debris from clogging the gutters and to prevent animals from getting onto the roof. You should also check that the insulation in the attic is adequate, especially if you provide electricity for your tenants. Poorly insulated attics are one of the largest sources of potential energy loss, particularly during extreme temperatures.

Although you may have some small upfront maintenance expenditures, keeping up with your roof maintenance can significantly minimize the roof’s overall cost. A well-maintained roof needs minimal repair annually and will have fewer expenses associated with it overall, plus it minimizes how often the roof will need to be replaced.

Roof Maintenance Inspections

In addition to performing maintenance on your roof, roof maintenance inspections can help you plan and budget for any future costs. For example, a contractor can provide you with a detailed report that will tell you you’re likely going to need repairs in about 3 years, and a complete replacement in 12 years. Using this information, you can reduce the likelihood of budget shortfalls and emergency repairs.

While you should conduct your own visual inspections regularly, most experts recommend consulting with a roofing contractor twice a year for a more detailed inspection and projection of what types of repairs will be necessary in the future. Keep in mind the location of your rental property when scheduling inspections, as things factors like snow and salt air can put substantial wear and tear on a roof that may require more frequent maintenance or repairs.

Lower the overall cost of your roof replacement

Performing regular maintenance and minor repairs as they occur will help prevent larger-scale projects and reduce the overall costs; it also protects your building operations from interruptions that can be expensive and time-consuming. Repairing small leaks, for example, can protect your deck or other structures from becoming damaged and ensure the insulation doesn’t become saturated and require replacement.

Simple maintenance items can save you up to 30% of the entire expense of replacing your roof and may provide even more savings when you factor in the costs of replacing other areas that would have become damaged otherwise. On average, a well-maintained roof will cost approximately $3 – 5 per square foot for a re-roof, as opposed to $12 per square foot for a poorly maintained or structurally unsound roof. These costs can easily be mitigated by implementing a regular maintenance plan.

It’s easy to neglect roof maintenance, especially while capital planning; however, consistent upkeep will significantly reduce the need for repairs and replacement, as well as unforeseen costs. Additionally, as the landlord or property manager, you have a responsibility to keep the property habitable in accordance with your state laws. Hiring a contractor to conduct regular annual or bi-annual inspections will also ensure you have a complete picture of what your roof will need and when, so you can plan and budget accordingly.