Posted by & filed under Uncategorized.

Get Late Tenants To Pay Their Rent

New tenants can be a bit of a gamble. Someone may have an ideal rental history, but there’s no way to account for changes in financial status or other factors that could affect their future ability to pay rent. The only way to know for sure how reliable they’ll be is to give them time to prove themselves. Most tenants make every effort to pay their rent on time, while others consistently push the limits of the due date – and your patience. How can you get tenants like these to pay their rent on time?

  1. Ask them about payday
    Many people live paycheck to paycheck, which can make the days leading up to payday financially difficult. If your rent is due a few days before the tenant’s payday, rather than after, it could make your tenant’s rent late simply because they haven’t been paid yet.

    Try talking to your tenant about when their rent is due and offer some flexibility. By adjusting the date their rent is due, you may solve their chronic late payments. You can also prevent this from happening with future tenants by adding the question about payday on your tenant applications. By setting your rent due dates around tenants’ paydays, you’ll increase the chances of getting paid on time and your tenants will likely appreciate your consideration.

  2. Offer online rent payment
    People make online payments for just about everything now and many younger tenants prefer the convenience of it. Online payments make it easier to pay rent immediately, which increases the chances that your tenants will pay it on time. Many online payment platforms also allow tenants to set up rent due date reminders or to schedule recurring payments.

  3. Late fees
    The question of whether to be flexible on late rent payments is a valid one. On the one hand, tenants are more likely to stay at a property where the landlord or property manager is willing to work with them to find solutions that work for everyone. However, you may also look at your policies and realize that they’re too flexible. If you have tenants who are taking advantage and are consistently paying their rent late because there are no consequences, you may want to enforce late fees.

    Charging an additional fee for rent can help motivate chronically late tenants to pay on time. The rules about how much you can charge vary from state to state, so you’ll want to check your local laws. If you decide to enact a late fee for rent, you’ll need to include a clause in your lease. The clause should clearly outline how much the late fee is and when it will be applied. Be sure to mention it when you go over the lease with your tenants. If the late fee wasn’t included in the lease, it’s not legal to impose one after the lease has been signed.

  4. Offer incentives
    Another tactic that works well with getting tenants to pay on time is to incentivize early or on-time payments. Here are a few types of incentives you could offer:

    – Give them a small discount if they pay their rent 10-15 days early
    – Set aside $10 every month the tenant makes a payment on time. At the end of the lease, use the money to buy them a gift card
    – If they pay rent on time for a certain number of consecutive months, you can offer them a percentage off their next month’s rent
    – Offer to not raise the price of the rent if they make 12-consecutive payments over the course of the year.
    – Make your rent higher from the beginning and give them a discount for on-time payments

    Incentives can be very effective with the right tenants because they offer positive reinforcement for good behavior rather than punishment for bad behavior.

  5. Report late payments to the credit bureau
    If you’ve tried other methods and are still having an issue with a consistently late tenant, let them know that you’ll report the late payments to the credit bureau if they continue. In many cases, the threat alone will be enough to motivate some tenants. If they continue to pay their rent late, report them.

  6. Send a “pay or quit” notice
    Most states require landlords and property managers to send a “Notice to pay or quit” when a tenant fails to pay rent within a certain time frame – generally around 3 – 5 days. If the tenant doesn’t pay the rent within the time period, they legally lose their right to occupy the property and must vacate. If the tenant refuses to leave, you’ll have to proceed to eviction.

    Eviction is a lengthy process that can end up costing you more time and money than it’s worth. However, if none of the other methods have persuaded your tenant to pay on time, it may be worth considering – particularly if their consistent late payments are causing financial issues for you. Eviction laws vary by state, so you’ll want to make sure you’ve reviewed your state’s laws to make sure you’re taking the proper steps and following all legal requirements.

Consistent late rent payments can cause a lot of stress for you and your tenants. In many cases, open communication and a clear lease agreement that covers the details about rent – when it’s due, the penalties for late payments, the incentives for on-time payments, and the actions that will be taken if the issues become chronic – will be enough to keep most tenants in line. Go over your lease in person during the lease signing to make sure the tenant understands your policies. Thorough screening of applicants will also help you select tenants with a good rental history who are more likely to pay on time.

Posted by & filed under Landlords.

Every tenant wants a peaceful home. Likewise, every landlord wants good tenants who will take care of their property. Unfortunately, misunderstandings can undermine the goodwill between tenants and landlords. Misunderstandings can quickly escalate and create uncomfortable situations between both parties, sometimes even damaging the relationship permanently. With that in mind, it’s important to know how common misunderstandings arise and how to prevent them.

Delayed Rent Payments

Most (if not all) landlords have a set date for when they expect to receive rent payment. When a tenant can’t pay their rent on time, it creates understandable tension. In some cases, delayed rent can cause financial burden on the landlord. If this happens repeatedly with the same tenant, it can be very frustrating!

While you have no control over your tenant’s financial health, there are a few things you can do to lessen the chances of late payments. Screening applicants is a great way to find a tenant who has a reliable rental history. Once you’ve selected a tenant, go over your lease agreement with them in person. Make sure they’re aware of all policies, including when rent is due and how much the late fee is. When tenants know there’s a late fee for rent, they’re more likely to pay on time.

Offer several different ways to pay rent, including the ability to pay online. Younger tenants, in particular, are more likely to want (or even expect) to be able to make online payments. Since the process is so convenient, it increases the likelihood that your tenants will pay on time and recurrently. Tenants can also set up reminders for the rent due date and schedule reoccurring payments, further eliminating the risk of forgetting or intentionally delaying payment.

Delayed Repairs

No matter how careful a tenant is, property damage happens. Pipes can burst, doors and windows can become jammed, and major appliances can break. Some things, like a burst pipe, may cause significant damage to the property if it’s not repaired right away. If the landlord takes too long to communicate with the tenant or prolongs repairs entirely, tenants can get understandably angry. They’re living with the damage, so even if it seems like a minor issue, it may be a large problem to them.

If your tenant contacts you about a repair, you should respond to them immediately and try to make the repairs as soon as possible. Repairs that affect the habitability of the property should be handled immediately, as you have a legal responsibility to keep the home habitable. Unnecessarily prolonging such repairs may cause legal issues and the tenant may be within their rights to withhold rent. Some examples of repairs that affect habitability include:

Misunderstanding With Tenants
  • Structural repairs, such as severe damage to the walls, ceiling, or floor
  • Electrical system repairs
  • Plumbing system repairs
  • Pest extermination

The type of repairs that are considered habitability issues can vary from state to state, so it’s a good idea to read up on your local laws to make sure you understand which repairs should be handled immediately. If the repair doesn’t affect the habitability of the property, they should still be completed as soon as possible. This ensures the safety of the property and allows you to maintain a good relationship with the tenant – and maintain a good reputation as a landlord.

Recurrent Problems with Neighbors

No matter how well a landlord screens their tenants, there are no assurances that tenants living in a multifamily unit will get along with each other. Some people are just bound to butt heads. While it’s fair to allow tenants to resolve the issue themselves, some tenants may want the landlord to get involved. This can cause misunderstandings or tension on the part of both tenants. It can also get messy if the landlord decides to evict the problematic tenant.

You can’t make tenants get along with each other, but you can outline community expectations within your lease. Include provisions about maintaining a peaceful and safe environment for all residents. This can include strict intolerance of harassment or other provisions like being loud in the common areas. In many cases, having an outline of expected behavior will prevent problems, but there may still be times where you’ll need to step in. Read more about the steps you should take to resolve tenant disputes here.

Security Deposits

Security deposits are one of the most common causes of misunderstandings between tenants and landlords. This can occur because tenants don’t understand the purpose of a security deposit or because the landlord uses the deposit for something other than what they’re allowed to use it for. Misunderstandings can also arise over when the security deposit is returned to the tenant.

To prevent problems with security deposits, make sure that you understand exactly what the security deposit can be used for. Then, make sure that this is clearly outlined in your lease and understood by the tenant. Again, going over your lease in person will give the tenant a chance to ask questions on anything they’re unclear about and prevent misunderstandings. Although state laws vary, landlords can typically withhold part or all of the deposit to pay for:

  • Unpaid rent
  • Repairing damage to the property that goes beyond normal wear and tear
  • Excessive cleaning required to return the rental to the level of cleanliness at the beginning of the tenancy
  • Restoring or replacing property that was taken by the tenant (such as appliances or furnishings)

If you do need to keep part or all of the security deposit, we recommend using a security deposit deposition form explaining how much of the deposit is being held and what it will be used for. This documentation will help you avoid miscommunication. Most states require landlords to refund security deposits within a specified time frame after the tenancy ends. Check your state’s laws and make sure to return the remaining security deposit promptly to avoid misunderstandings or legal issues.

Clear Communication and a Well-written Lease

Both tenants and landlords want to have a peaceful business relationship throughout the tenant’s occupancy. Most misunderstandings can be prevented with clear communication and an understanding of both party’s expectations. A detailed lease allows you to start the relationship off right and prevent many issues before they start.

Posted by & filed under Property Management.

How To List Your Property On Craigslist

Part of your success as a landlord depends on finding great tenants who will be reliable and responsible. Finding these tenants isn’t always easy, so you’ll want to advertise in several different places to give you a large pool of applicants to choose from. Craigslist is commonly used by renters looking for a new place to live, so it’s helpful to understand how this free platform works and how to post to it effectively.

Step-by-Step Posting to Craigslist

  1. Find your location
    First, you’ll want to go to Craigslist. From the main screen, you’ll see a list of metropolitan areas on the right-hand side. Navigate to the area that’s closest to where your property is located to ensure you’re posting your advertisement to the right area.

  2. Choose the type of post you’d like to create
    Next, you’ll click on “post to classifieds.” This should be in the upper left-hand corner of your screen. After that, you’ll need to choose the type of ad you’d like to post. Select “housing offered” and then choose the neighborhood where the property is located.

  3. Review the advertising rules
    After you’ve selected your post type and the location, you’ll see a link that says, “Get the facts and avoid being persecuted under the Fair Housing Law.” Click on the link to review the guidelines. This information is very important because it will help you avoid breaking any Fair Housing laws within your advertisement. Even if you’re already well-versed on these regulations, it’s still a good idea to review them. A violation of Fair Housing laws is very serious, and violations can cost upward of $15,000.

  4. Complete your advertisement
    Once you’ve reviewed the Fair Housing information, you can begin to fill out the details about your rental property, including the price, number of bedrooms, and address of the property. You’ll also need to include an email address where you would like to receive inquiries about the property. After entering this information, you can begin filling out the posting box, where you’ll include all the additional information about your rental. Here are a few things that are helpful to include:

    – Number of bathrooms
    – Square footage
    – Special features, such as a garage or pool
    – Any relevant upgrades to the property
    – Any other features that may entice a renter

  5. Add photos to your post
    Click on “add/edit images” under the description box to add images of the property to your post. Make sure to include clear, bright photos that will appeal to applicants and encourage them to inquire about the property. Once you’ve added these images, press “Continue” to move onto reviewing your ad.

  6. Review and post your ad
    Look over your ad before posting to make sure all the information you want to include is there and correct. You’ll then be asked to agree to the terms of service. After you’ve agreed, you’ll be taken to a page where you’ll be asked to create a Craigslist account. Enter your information and be sure to make a note of your username and password so you can access your account later. Now your post will be live and can be viewed by renters.

Posting to Craigslist is relatively easy, but there are a few things you can do to make your posts more effective. Here are a few tips:

  1. Repost your property
    Posting once may not be enough to find that perfect tenant. It’s not uncommon for many landlords to post once and then forget about it. Unfortunately, ads on Craigslist often don’t stay up as long as you’d think. Posts in large cities often expire in seven days. Less populated areas may keep them active for as many as 45 days. You’ll want to monitor your post and make sure to repost it as needed.

  2. Use high-quality photos
    Regardless of where you’re advertising your property, it’s important to use high-quality photos. The better your photos are, the more interest you’re likely to gain. Applicants will expect to see photos that present your property in the best light possible. The more applicants can get a feel for the property online, the more they’ll likely be interested in viewing the property in person. This is also likely to give you a larger pool of applicants to choose from.

  3. Play to the best features of the property in the title
    When creating the title for your property, it’s recommended that you include the most attractive features in the title. This attracts applicants from the moment they first view your ad. Adding some descriptive words to the title is also a great way to showcase the character of the property and garner more interest.

  4. Bullet-point the information
    A large majority of people skim blocks of writing, particularly when reading information online. For this reason, it’s a good idea to make bullet point lists about the property rather than long paragraphs. This allows applicants to read through the information easier and it will be less likely that they’ll miss important details about your property.

  5. Update your ads as needed
    Update your ads to reflect the most current information about the property. This shows applicants that you’re attentive to the property, which will make them more likely to apply.

As Craigslist is such a popular place for renters to look for housing, it might be tempting to only post there. However, it’s essential to post advertisements in several locations. Advertising on as many channels as possible will help you bring in more applicants, increasing the odds that you’ll find one who’s a good fit for your property. It can take some trial and error to discover the best platforms for your rental listings, but once you have three or four, you can use them consistently for future advertising. 

Selecting the right tenant isn’t just about having a large group of applicants to choose from; it’s also important to make sure that the applicant you choose is has a responsible rental history. Screening potential tenants is the best way to ensure you end up with a tenant who will be reliable and treat your property with respect for the duration of their residence.

Posted by & filed under Uncategorized.

Millennials are now the largest generation in the United States. At 80 million strong, it’s little wonder that they largely dictate digital and social trends. Even the multifamily housing industry isn’t immune to the demands of the millennial generation. Approximately 2/3 of millennials rent, and their desire to conduct many aspects of their lives online has inspired a new market segment known as “Gen C” or the “Connected Generation.” Millennials fully embrace technology and use it for everything from making purchases to staying connected with friends and family. Unsurprisingly, they expect to be able to pay their rent online as well. This is an important consideration for landlords and property managers.

Moving Towards an Increasingly Digital World

Regardless of the activity, Gen C uses digital platforms readily. In general, they tend to prefer digital methods compared to face-to-face interactions or phone calls. They don’t typically make payments using checks or money orders, in contrast to previous generations. The Center for Generational Kinetics (CGK) found that five million millennials didn’t have a checking account; later research discovered that they don’t carry much cash on the whole. According to CGK recommendations, the best way for businesses to attract millennials is to make it easy to pay with a credit card. This is also an important consideration for attracting Gen Z, consumers who have never known a world that wasn’t digital.

The way these generations are choosing to pay is transforming the way landlords and property managers receive rent. In the last ten years, renters have come to expect digital payment as one of their payment options. With more processes and systems migrating to the digital landscape, online payment is becoming the rule rather than the exception. According to the National Multifamily Housing Council/Kingsley Renter Preferences Report, more than 76 percent of renters now pay their rent electronically every month. The increase of online access through mobile devices and tablets has no doubt added to more renters utilizing these channels for payment.

Bridging the Generation Gap with Multiple Options

In contrast, Baby Boomers have been slow to embrace digital payments. Nearly half of renters 65 and older prefer to pay at the front office with a check or money order. For landlords and property managers, it’s important to be able to bridge the generational preferences. By offering as many choices as possible, you can ensure that you’re keeping up with the times while offering payment methods that work for tenants of any generation. 

The Advantages of Online Rent Payments

Providing multiple options also makes paying rent more convenient for your tenants, lessening the chances of late or missed payments. Most online payment systems allow consumers to set up reminders for when payments are due, and many of them allow for the scheduling of recurring payments. Paying by check is extra work for you and the tenant – plus, there’s always the chance that the payment can get lost in the mail or stolen. In a time where identity and mail theft are serious concerns, online payments are more secure for you and your tenants.

Online payments can keep your tenant more accountable for paying their rent on time. While it may take a couple of days for the payment to be applied to your account, receiving payment statuses in real-time eliminates the need to take the tenant at their word that they mailed it out on time. It’s also generally quicker to receive the ACH payment than waiting for the check to arrive, taking it to be deposited, and waiting for the check to clear. Another benefit of accepting online payments is that you’re able to see rent payment status in real-time. You’ll have accurate digital documentation available, allowing you to skip the paperwork and eliminate human error.

Ready to start offering online payments? Here’s a list of some verified services that make the process hassle-free. 

Online Payments Benefit You and Your Tenants

Regardless of their generation, your tenants will appreciate having multiple options for how they can pay their rent. Allowing them to pay online saves time, reduces stress, and increases transparency. Likewise, it’s beneficial to you because you’ll know when to expect the money in your account, and you’ll increase the chance that you’ll receive your money consistently on time. Offering online payments ensure you’re doing everything you can to make rent collection as easy as possible for you and your tenants.

Posted by & filed under Housing.

As a landlord, it’s crucial to keep up to date with your state and local rental housing laws to prevent legal issues. Each year brings with it new legislation, and 2019 was no exception. Some of the changes were positive, some negative, and some were downright crazy. While the list of new laws is far too long to cover in this post, here’s a look at some of the most notable ones that were passed in 2019:

Illinois: Service Animal Documentation

Service animals can complicate the “no pets” policy, but Illinois’ new law seeks to meet tenants and property owners in the middle. The new law allows rental owners to require service animal documentation for applicants or tenants who ask them to make an exception to their no pets policy. The documentation will state the tenant’s disability as well as their disability-related need for the animal. The law prohibits pet-related deposits and fees, but it does allow properties to charge tenants for any repairs caused by the service animal that goes beyond normal wear and tear.

Portland, Oregon: Resident Screening Restrictions

Portland’s new ordinance restricts the property owner’s ability to perform tenant screening to two options. The property owner can use the city’s “low barrier” criteria or adopt an individualized assessment model. The “low barrier” screening process offers landlords a standard set of criteria that allows rental candidates who have gone at least three years without a misdemeanor (or seven years, in the case of a felony) to be considered during the application process. Unfortunately, the low-barrier policy doesn’t include exceptions for those convicted of violent crimes.

Landlords can apply more stringent screening criteria, but if they do, they’re required to give the applicants an individual assessment. If the applicant is denied due to housing barriers (like credit or criminal history) the landlord must allow them the opportunity to appeal the decision.

The ordinance also requires landlords to consider applications on a first-come, first-serve basis after providing 72 hours of notice for available apartments. Applicants don’t need to provide proof of citizenship or provide a government-issued photo ID if they have other forms of photo identification that can be used to verify their identity.

New York: Eviction Records

New York’s new law states that property owners and managers cannot refuse to rent to an applicant based on pending or prior landlord-tenant litigation. Additionally, it establishes a “rebuttal presumption” that an owner is in violation if they request eviction records from a screening company or inspects related court records and the applicant is denied. Violations of this law aren’t minor, either. Each violation could cost anywhere between $500 – $1000 each.

California: Rent Control, Eviction Regulations, and Relocation Fees

California passed several number of significant rental housing laws this year. The first is a rent control law that limits annual rent increases to 5%, plus inflation. The inflation figure will be set regionally. The law also caps exempt properties that are less than 15 years old and most single-family homes unless they’re owned by a corporation or an LLC in which at least one member is a corporation.

Additionally, the law imposes new “just cause” eviction rules and relocation assistance – or rent waivers for “no-fault” evictions. Landlords will be required to list one of several reasons why they want to evict a tenant from their property. This applies to any tenant who has been living at the property for 12 months or more. The reasons include:

  1. Nonpayment of rent
  2. Breach of material lease
  3. Nuisance
  4. Criminal activity by the tenant
  5. Assigning or subletting in violation of a lease
  6. Refusal to allow the owner to enter the unit

There is also a no-fault just cause stipulation that grants the owner the right to evict the tenant if the owner intends to occupy the unit or make renovations to the property, but it must be clearly stated in the lease. The owner would still be required to pay a relocation fee. This law went into effect on January 1, 2020, and will expire after 10 years.

Seattle, Washington: Renter’s Right to a Roommate

Seattle’s ordinance gives tenants the right to add a roommate, family member, or family members of a roommate to the lease as long as they remain compliant with the unit’s occupancy limit. They must also provide a 30-day notice. Property owners are prohibited from imposing any conditions – and yes, that includes screening the new resident.

Final Thoughts

Regardless of how you feel about any new housing laws, it’s essential to know how they will affect your properties and processes. It can be challenging to keep up to date, but doing so will potentially save you time, money, and litigation.

Posted by & filed under Rentals.

As a property manager, your success relies on the ability to manage several properties at once. Unfortunately, the more properties you manage, the more likely you’ll experience conflicts among tenants, property owners, or neighbors. Communication skills play a crucial role in resolving disputes and keeping the communities you manage peaceful. You need to be able to listen to the upset party, understand where they’re coming from, and find ways to work together to solve issues that arise. Here are some tips on how to minimize tenant disputes and keep your community harmonious.

Outline Community Guidelines in the Lease or Rental Agreement

If you’re involved in creating the lease or rental agreement for the property, you can include a section that outlines how tenants are expected to behave. Include provisions that cover maintaining a safe and peaceful environment for all residents. This could include strict intolerance of harassment, violence, or inappropriate behaviors.

You can also create a move-in package for new tenants to welcome them to property. Include a guide on living there, including how to interact with other tenants respectfully and good conduct practices in common areas. You can also include any additional information that may help prevent conflict, such as where visitors can park. By providing tenants with clearly defined guidelines, you may be able to avoid many disputes before they have a chance to start.

Become a Neutral Mediator

Small issues, however petty, have the potential to become intense arguments. Most of the time, the tenant simply wants their view to be heard. So, one of the first things you should do is listen. Allow the tenant to explain their point of view and acknowledge the issue. Avoid making personal comments or attacking anything the tenant is saying. 

The most common disputes you’ll have to deal with will most likely involve noise, personality clashes, issues with parking spaces, or other mild annoyances. You can earn the tenant’s trust by showing them empathy and focusing on their complaints. Instead of arguing, work toward a solution that benefits all parties. Keep the conversation open and productive to ensure that things are successfully resolved before they have the chance to escalate.

Keep your tone polite but professional when having the conversation, whether it’s by phone or email. All communication should take place during business hours unless there’s an emergency. Treat problems like parking space disputes or noise complaints empathetically and handle it through effective communication. If it’s a serious issue, like harassment, threats, or violence, you’ll need to get the police involved or resort to legal action. Make sure that if serious offenses occur, you reassess the security at the property and to reassure the rest of your residents.  

Ideally, it’s best to have the tenants sort out the issue between themselves, but this isn’t always possible. If you need to get involved, you have a couple of options. You can try to resolve the issue by finding a solution that works for everyone, such as asking a loud second-story tenant if they’d be willing to move to an available unit on the first floor. Or you can handle the situation more directly, by addressing the issues with the offending tenant and giving them suggestions on how to change their behavior. The method you choose comes down to your management style as well as the severity of the issue.

You should take the following steps if you need to confront the tenant directly:

  1. Listen to the first tenant’s complaint, empathetically. Let them know you understand the situation is upsetting to them.

  2. Contact the offending tenant by phone and let them know about the complaint. It’s generally not a good idea to name the tenant who complained, as this can cause further tension. However, the offender will often know who it is, especially if they’ve already tried to resolve the issue themselves. If they’re breaking terms of the lease, remind them of this. Often a warning is enough to stop any bad behavior.

  3. After your phone call, send a letter or email to the offending tenant, reminding them of what was discussed in your conversation. Mention any actions they need to take, as well as any lease violations. If the issues are particularly severe, you can also serve them with a Notice of Lease Violation, which threatens eviction if they don’t change their behavior.

  4. Document the conversations you’ve had with both tenants. If the situation progresses into a formal legal matter, you’ll have proof that you took action to try to resolve the conflict.

  5. Follow up with both tenants at a later date to see if there have been any positive or negative changes concerning the issue.

When handling any conflicts, make sure to keep records and documentation of the conflict and whether it was resolved. Tenants who make repeated complaints with no resolution are more likely to look for a new place to rent; good retention is essential for the reputation of the property and your business.

Conflicts between tenants can also cause stress among the other residents at the property, so it’s essential to try to resolve any issues as soon as possible. Preventative measures like tenant screening and guidelines in the lease can go a long way in finding the right tenants, but there’s no way to account for how people’s personalities or lifestyles might clash. Maintaining a peaceful community benefits everyone – from the property owner and tenants to your property management company.

Posted by & filed under Property Management.

The last thing any landlord wants to deal with is losing money because of a bad tenant. Despite this, sometimes it can be difficult for landlords to know whether it’s worth pursuing the money they’re owed. One situation that can be tricky to navigate is knowing whether it’s okay to use security deposits for unpaid rent. While it may seem like the answer would be yes, that’s not always the case. In some circumstances, refusing to return the security deposit could get you into legal trouble. So, it’s essential to have a good understanding of how and when a security deposit can be used.

Security Deposit Laws Vary

Despite seeming straightforward, security deposit laws vary between states. However, the general rules are relatively similar between them. The following guidelines will take an overarching approach to how security deposits can be used. Still, it’s a good idea to review your local laws before you officially withhold your tenants’ security deposits.

What Can Security Deposits Be Used For?

Typically, landlords collect security deposits to protect their property during the rental period. If the tenant took good care of the property, the deposit is returned when they move out. If there was damage at the property, the landlord is generally allowed to deduct the cost of repairs or losses from the deposit before returning it to the tenant.

There are some limitations to how the security deposit can be used in this way. Some common situations include:

  • Unpaid rent
  • Unpaid taxes (if it’s outlined in the lease that the tenant is responsible for them)
  • Cost of repairing any damage that falls outside of normal wear and tear
  • Early lease termination (if stated in the lease)
  • Excessive cleaning costs

Ultimately, a landlord can keep the security deposit to cover unpaid rent or unexpected expenses caused by the tenant directly. To avoid confusion or disputes later, it’s a good idea to make sure the above items are clearly outlined on the lease. This gives you and the tenant a clear reference point if any questions arise.

It’s important to note that if the rental is sold while the tenant is still living there, the landlord is supposed to transfer the security deposit to the new owner. If the previous owner fails to transfer the security deposit to the new owner, the tenant can sue the previous owner for it to be returned, or for the portion that the tenant is entitled to receive.

What Can’t You Use Security Deposits For?

On the flip side, there are also some ways you cannot use security deposits. These may not be intentional, so it’s essential to be aware of them, so you don’t accidentally break any laws.

In general, you cannot use security deposits for:

  • The last month’s rent (unless you and the tenant agree on it in writing)
  • Routine cleaning costs from normal wear and tear
  • Routine repairs from normal wear and tear
  • Covering costs not related to that tenant

Most landlords wouldn’t use a security deposit in this way. However, to avoid falling into this trap, it’s best to keep the terms of the security deposit very clear in your lease.

Using the Security Deposit to Cover Unpaid Rent

As mentioned above, landlords can use security deposits to cover unpaid rent. That’s one of the main reasons that the security deposit is generally the equivalent of two month’s rent since this can protect the landlord from not being paid.

If your tenant moves out or is evicted, you can subtract the amount of unpaid rent from the total security deposit before returning the money. While this is an entirely legal practice, some tenants will want to dispute it. But you have a right to the money you’re contractually owed. If your tenant owes you more than what the security deposit covers, you have the right to evict them before they move or take them to small claims court.

To prevent this type of situation, it’s recommended you outline the details of the security deposit in the lease. Make sure that you go over the lease in person with the tenant, so they have a chance to ask any questions or clarify anything they’re unclear about.

So, if your tenant owes you unpaid rent, make sure to check the terms of your lease. If your lease has clearly outlined that the security deposit will be used for unpaid rent, subtract the amount owed from the security deposit before you return it. If the security deposit doesn’t cover the total amount, you can file in small claims court for the remaining money owed. In conclusion, security deposits are designed to be a guarantee between yourself and the tenant that they will be respectful and keep your property in good condition while they’re living there. However, it also guarantees that you won’t have to suffer any monetary losses from unpaid rent. Screen your applicants to avoid tenants who have a history of skipping out on rent and keep good records of all rental payments. Having all terms relating to the security deposit stated on your lease will also help you avoid any issues if you do need to use their security deposit for unpaid rent.

Posted by & filed under Property Management.

Good tenants make your job as a landlord or property manager easier. They pay their rent on time, they’re respectful of your property, and they let you know when something needs maintenance or repair. Naturally, you want to keep good tenants at your property for as long as possible. Not only do you know you can trust them, but filling a vacancy can be a hassle. So, once you have a good tenant, how can you get them to stay? There will always be circumstances you can’t control, like a tenant relocating for a job, but there are several things you can do to keep your tenants happy – and willing to continue renting from you.

Why Do Tenants Stay at a Property?

There are many reasons why tenants stay where they are. They may not be able to afford the down payment on a home, or they may just prefer the flexibility of renting. They may be putting off marriage or having children – two factors that frequently lead people to buy homes.

If your tenant has been at your property for more than a year, they are likely to want to stay for a while. A comprehensive study conducted by Zillow found that 40% of tenants who have lived at their rental for more than a year have no plans to move within the next three years. Nearly half of them stated they were happy with their living situation, including the price of rent and the neighborhood. A third of respondents stated that they didn’t want to deal with the stress of moving.

What about the tenants who aren’t happy with their living situation? The study also found that 55% of long-term renters who are planning to move within the next three years planned to move to another rental. This means that most renters continue to be renters. If you have a good tenant, you want them to stay at YOUR rental.

5 Ways to Keep Your Tenant Happy

  1. Be Available and Responsive
    A good tenant/landlord relationship begins with a clear lease that outlines your expectations. If you’re unsure what to include on a lease, check out our other post on Lease Writing 101. Make sure to review your lease with the tenant in person, so they can ask questions about anything they’re unclear on. This will also help you establish a good rapport with them. Let your tenant know the best way for them to contact you, including times you may not be available. If any concerns come up, make sure to respond to them quickly.

    A quick response shows your tenant that you care about them and the property. You can further that message by checking in with them on occasion. Tenants can sometimes be hesitant to bother their landlords for small problems, but they should be addressed quickly to prevent them from progressing into a larger one.

  2. Be Welcoming
    When your new tenant moves in, make them feel welcome. Help them feel connected to the neighborhood, so they have more incentive to stay. You can give them a small welcome package with useful information about the area, such as nearby parks, services, or points of interest. Take out menus are also another nice item to include. Give them information that will help them get established and comfortable in the community.

  3. Respond to Problems Promptly
    When issues come up, make sure to respond to them quickly. It’s important to remember that a broken dishwasher or jammed door impacts your tenant’s daily life. Waiting to fix problems can cause them to progress into a larger repair – or worse, frustrate your tenant enough to make them want to leave. Treat their problems like they’re important, no matter how insignificant they seem. You’ll send your tenant a message that you’re reliable and care about their quality of life. After the problem has been resolved, make sure to follow up to make sure that the solution was effective.

  4. Keep Your Tenants in the Loop
    If there’s a change or problem that will impact your property somehow, you should let the tenant know as soon as possible. Even if it’s something minor, like having a gardener trim the hedge, you should keep in mind that this is your tenant’s home. Giving your tenant advanced notice shows them that you respect their privacy, time, and occupancy. Significant changes, like sewer line repair or an increase in utility charges, should be communicated as early as possible.

  5. Be Human and Approachable
    Your rental property is a business, and you should manage it like one. However, this doesn’t mean that you should treat your tenants like they are inferior to you. A good manager knows how to manage things while still treating their employees considerately and respectfully.

If you have a great tenant who is having personal problems, like losing their job, you may want to consider whether the “all business” approach is best. Do you really want to tack on late fees, and make things harder for a good tenant? You should always be cautious when making exceptions to your policies, but in some cases, it may be better to give a good tenant leeway. They’ll be grateful for your understanding and will be more likely to stay in your rental. Like most relationships, the tenant/landlord relationship requires investment. By being respectful and thoughtful about your tenant’s needs, you can improve the chances they’ll want to stay. If they are still set on moving when it’s time for the lease to renew, ask them why. In some cases, it may be beyond your control, but there’s a possibility you can improve on your processes to make them happier. If not, you can use this information to inform you of what you can do differently with the next tenant.

Posted by & filed under Property Management.

Our sense of smell is linked closely with memories and emotions, so unsurprisingly, the way your rental smells is important. Former tenants can leave behind stubborn odors that may be bad enough to deter prospective tenants; in some cases, these bad smells may even keep your unit vacant. So, how can you get your property smelling great and move-in ready after a particularly odiferous tenant moves out? Here are a few DIY tips for some of the most common smells landlords and property managers encounter:

Rotten Food and Garbage

Hopefully, your tenant will throw out any unwanted food and garbage before they leave, but if not, you could be in for a smelly surprise next time you enter the unit. Depending on how long it’s been there, you might also find fruit flies or other types of pests. Start by opening all the windows. Throw out the food or trash, then scrub the area it was resting on with some soap and water. Afterward, spray the area with some Lysol to disinfect it. This usually takes care of any odors. Insects will often go away on their own once the food or garbage has been removed. You can also put out traps or hire an exterminator for any pests that refuse to leave.

Pet Odors

Pet odors have a way of saturating the walls, carpets, and even fabric window coverings. The best approach is to start by opening the windows and thoroughly cleaning the unit. Vacuum and steam clean the carpeting. Scrub all hard surfaces with a 50/50 mixture of water and vinegar. You can also use a black light to pinpoint any source of the odors. Wait until it’s dark, turn out the lights, and walk around the room with a handheld blacklight. Any urine stains will be illuminated and easy to spot. For particularly tough stains or odors, you may want to use an enzymatic cleaner. Make sure to follow the directions on the label and allow the cleaner to sit for the recommended amount of time; otherwise, it may not be effective.

If this doesn’t get rid of the odors completely, you can hire a company that specializes in pet odor removal. This will save you the cost of replacing carpeting or repainting.

Strong Foods and Spices

Some foods and spices can leave behind a very strong smell that lingers long after the tenant has left. Change all the air filters in the unit, and scrub all surfaces using a vinegar and water solution (one cup of water and two tablespoons of vinegar). Pay special attention to the kitchen area, and make sure to get around the stove. If the smell is especially strong in the kitchen, spray down the surfaces with the vinegar and water mixture, so they’re damp. Keep the windows open to allow the home to air-dry.

Cigarette Smoke

Like pet odors, cigarette smoke has a way of permeating everything. The process of removing smoke odor depends on its severity. If your tenant was smoking in the unit for many years, you might have to contend with stubborn resin and tar contamination. In this case, you may want to consider replacing the carpeting and any other fabrics, like curtains or lampshades. Open all the windows and use fans to circulate the air. Scrub down hard surfaces using a 50/50 mixture of vinegar and hot water.

Make sure to scrub down everything – walls, doors, light fixtures, ceilings, and fan blades. Steam clean any carpets you’re planning to keep. You may also want to replace the air filters or even have the ductwork cleaned. If the smell remains after you’ve cleaned everything, you can place activated charcoal or bowls of white vinegar around the rooms to absorb the odors. Stay away from scented odor removal products, as these generally will just mask the smell.

Marijuana Oil and Methamphetamines

The legalization of marijuana in many states has made it increasingly likely that you may encounter smells caused by indoor growing or oil production. With these odors, the cleaning process will depend on the severity. Like cigarettes, marijuana contains sticky resins that can cling to surfaces. Start by cleaning the walls, ceiling, and hard surfaces with soap and hot water. This should cut through the residue and remove the smell, but if you’re dealing with a more severe case, you may want to follow up with a 50/50 mixture of hot water and vinegar. Then, steam clean the carpets.

If your tenant was using methamphetamines at the property, you might notice odd chemical odors similar to nail polish remover or cat urine. Since meth is water-soluble, you can use the same method as with marijuana. Make sure to scrub all surfaces thoroughly, and steam clean the carpets. If your tenant was manufacturing meth at the property, you’ll need to take a different approach. The process of cooking meth can leave behind toxic, combustible residues that can contaminate every surface in the home. In this case, your best course of action is to have the property tested for contamination and hire a professional cleaning crew. You’ll also want to check with your local laws, as many areas have specific regulations regarding how to handle getting your property ready to rent again.

Getting rid of bad odors may seem like a daunting task, but with some deep cleaning and patience, they can be removed. And, if you’re short on time, you can always turn to the professionals to remove those stubborn smells. The cost of cleaning will be worth finding new tenants who want to occupy your rental!

Posted by & filed under Uncategorized.

The deeply troubling trend of increasing gun-related violence is difficult to ignore. The wide range of places where these incidents occur – from schools and churches to night clubs and workplaces – suggest that they can happen anywhere.

Unsurprisingly, this trend has many business owners nervous. It’s not uncommon for the families of victims to sue business or property owners for damages caused by an active shooter incident, especially in high profile cases. Many insurance companies have started offering active shooter insurance, also called active assailant coverage. This type of insurance provides financial relief for all expenses related to an active shooter incident.

So, as a landlord, should you have active shooter insurance for your multifamily properties? Here’s a look at what most policies include and some of the factors you should consider.

What is an Active Shooter?

The FBI defines the term “active shooter” as “an individual actively engaged in killing or attempting to kill people in a populated area.” This term is often confused with the term “mass shooter.” An active shooter is referred to as a mass shooter once four or more people have been injured or killed.

While “active shooters” are clearly defined, the way active shooting incidents are documented varies. This makes it difficult to know the total number of incidents that occur. Some organizations stick closely to the FBI’s definition, while others don’t include incidents that are gang-related or related to other crimes.

What Does Active Shooter Insurance Include?

Depending on your coverage, the standard liability insurance may not cover an active shooter crisis. Active shooter insurance is a standalone policy that supplements your current general liability coverage. Depending on the policy, it could include financial aid for:

·       Crisis management services

·       Emergency response teams

·       Costs for business interruptions

·       Public relations

·       Legal liability expenses (defense costs, indemnity, judgments, or settlements)

·       Physical damages to the property

·       Future preventive measures (security, or aid in identifying troubled individuals in the future)

·       Job retraining or relocation

·       Victim expenses (medical, dental, victim counseling, psychiatric care, and death, funeral, and burial expenses)

·       Workers compensation for rehabilitation, vision loss, hearing loss, or permanent disablement

Active Shooter Insurance Considerations

If you’re thinking about purchasing coverage for your property, it’s essential to pay attention to the policy’s terrorism exclusions. Some policies define terrorism differently than an active shooter. This may prohibit you from receiving aid from an incident that doesn’t meet the policy’s precise definition.

Here are a few things you should consider when purchasing active shooter insurance:

Employee coverage and casualty thresholds
You should avoid any policies that only include residents and their guests – or only includes coverage for your employees. Some policies also have casualty thresholds, where coverage only applies if a certain number of people have been injured or killed. If you’re going to purchase a policy, it’s worth it to make sure that any or all victims are covered.

Weapons and vehicle restrictions
Some active shooter policies define their coverage as an attack made with only a firearm or bladed weapon. These policies won’t cover incidents where explosives or improvised weapons were used. They also may not cover attacks that were carried out with a vehicle.

Crisis management
If you have an active shooter incident, it’s important to have resources available to help everyone who was involved. Make sure your policy has coverage that includes aid for crisis management services like counseling, public relations, or consulting.

Should You Have Active Shooter Insurance for Your Property?

The aftermath of an active shooting event is taxing, emotionally and financially. There are many costs that may not be initially apparent. With that in mind, should you purchase an active shooter policy for your multifamily property? Unfortunately, there’s no straightforward answer.

Workplace violence isn’t a new development. According to the Bureau of Labor Statistics Census of Fatal Occupational Injuries (CFOI), workplace violence and injuries are the 3rd leading cause of occupational injuries in the United States. While not all active shooter incidents result in death or injury, it’s clear that these events are on the rise. According to the FBI, the average number of active shooting incidents per year jumped from 6.4% between 2000 and 2006 to 16.4% between 2007 to 2013. While the chance of an active shooter incident happening at your property is low, having coverage could provide some needed relief if such an event occurs – particularly in the way of victim counseling.

However, active shooter events are relatively rare and occur spontaneously. The incidents tend to occur at a wide range of locations, from schools and churches to restaurants and medical offices. Active shooter incidents can occur anywhere, at any time, making the need for active shooter insurance unclear for many businesses. There’s a good chance that if you purchase an active shooter policy, you may not need it.

As with all supplemental insurance, you’ll only need the policy should an incident occur – and there’s no way to know if one will. The costs of an active shooter policy may be enough to dissuade many landlords from purchasing one. Still, if an incident occurs, it could end up saving a substantial amount of money and hassle. Ultimately, you’ll need to weigh the benefits with the costs to decide whether it’s worth it to you to purchase a policy for your property.