Posted by Teresa on June 2, 2010 under Landlord and Tenant FAQs, Landlord Paperwork and Forms, Tenant Screening & Background Checks | 
Leases begin and end; tenants come and go. Often, life interferes with details like legal documents (leases) and a tenant comes to you with an announcement: “I’m moving, but don’t worry—I found someone to take over my lease!”
For some landlords, this is when the worrying begins. For others, it’s not a big deal—having a new tenant without advertising and showing the rental unit is the best part about subleasing.
Subleasing is when a tenant assigns his or her lease to a third party; in effect, they are renting the unit from you, while renting it out to someone else.
To protect yourself, you should be aware of the following when considering whether or not to allow a sublease situation in your rental property:
1. Make sure the original tenant knows that a sublease itself does not release them from the original lease. If the sublease renter defaults on the terms, the original lessee is still responsible.
2. If you as landlord choose to release the tenant from the lease, then the sublease renter becomes responsible for rent and other obligations of the lease, and you become responsible for responding to the sublease renter’s needs under the lease.
3. In many cases, landlords do not release the original tenant from the lease, so the original tenant collects the rent from the sublease renter, and pays the landlord per the terms of the lease. The original tenant is also responsible for any damages to the property caused by the sublease renter.
4. You are still in control—not only can you approve or deny the applicant who wishes to sublease, but you can refuse to participate at all in a sublease situation. You then handle the tenant’s breaking of the lease agreement the way you normally do, whether it’s collecting the balance of the lease period’s rent, keeping the security deposit, or agreeing to let them out of the lease providing you find a new tenant.
5. Keep in mind that tenants don’t always inform landlords of their plans. Sometimes they move out and let their sublease renter move in—and you’re none the wiser. You are under no obligation to accept the situation, and after checking with your legal advisor, may be able to start eviction proceedings against the sublease tenant and the original tenant, too.
If your tenant asks about subleasing your rental property, check with your legal advisor first. To ensure you’re protecting your best interests, as well as your other tenants’, insist on full application procedures and tenant screening on the sublease renter.
Legal disclaimer:
The contents of this article are intended for general information purposes only, and should not be relied upon as a substitute for obtaining legal advice applicable to your situation.
Pre-screen all tenants as part of your standard application process. Background and credit checks will help ensure you rent to qualified tenants. For more landlord resources, including forms and information on tenant screening, turn to E-Renter.com.
Posted by Teresa on May 29, 2010 under Landlord Tips, Tenant Screening & Background Checks |
You’ve advertised your vacant rental property, had some calls of interest, and pre-screened the callers to weed out those that aren’t best-fit tenants for you.
Now, you’re ready to show the property in person. Here are a few tips for a successful showing of your rental property:
If you can, schedule an open house to show your rental property to multiple applicants. Not only is it easier on you than running back and forth several times, it also helps create a sense of urgency in the potential tenants. When they see other interested parties, they might be more willing to sign a lease sooner, rather than later.
If you don’t have enough prospective tenants for an open house, you can still try to schedule appointments back-to back, to maximize your time. Of course, you can’t expect your potential tenants to alter their schedules to suit yours; but suggesting a time that works for you is fine—even if it just so happens to be right before or after another showing.
When setting up appointments, get a couple of ways to reach the prospective tenant. If the appointment is several days out, give them a call or drop an email a day ahead, or even the day of, to confirm the appointment. It’s better to take a few minutes to do so than to waste time on no-shows.
Be careful when showing your rental property. Setting up a time to meet a complete stranger is always risky; be smart, be alert, and if possible, don’t go alone—especially if the appointment is after dark or in a shaky neighborhood. You can even meet the prospective tenant in a public place first, then proceed to the rental property. Take precautions—don’t carry cash or credit cards, or wear expensive jewelry. If you ever feel unsafe during the showing, grab your cell phone, call a friend, and walk out.
Assuming most potential tenants mean you no harm, put on your best smile and be 100% professional when meeting them. Greet them warmly, shake their hand, and make eye contact. Introduce yourself and learn their name—even ask for the spelling if you’re unsure of how to pronounce it. Refer to the notes you took during your phone conversations, so the potential tenant feels important.
Don’t let the prospective tenant wander through your rental property on their own. This is a showing, so show it off! Point out the features and benefits of living there. Listen carefully and answer their questions thoroughly.
Pay attention to the first room the potential tenant heads for—this indicates which room is most important, so be sure to describe its best features. If they head for the kitchen, don’t steer them into the bedroom. Take as much time as they need to talk about the kitchen.
Make sure you don’t skip the garage, storage areas, and yard. Take them to the fitness and laundry rooms, and the children’s play area. Be sure that every potential tenant gets the full tour—you could be inadvertently sending discriminatory signals if you do not.
For vacant rental units, a few pieces of furniture helps potential tenants mentally place their own sofa, loveseat, or bedroom suit in the space—taking care of any concerns the apartment or living room is too small.
And encourage the potential tenant to submit a rental application before they leave. Gather all the information you need to run a tenant background check, and you may just have a new tenant for your vacant rental unit!
Posted by Teresa on May 25, 2010 under Landlord Tips, Tenant Screening & Background Checks |
Every landlord has his or her way of dealing with potential tenants who have less than stellar credit histories, or whose income is lower than the required minimum for a rental property. Many just outright reject the tenant applicant and move on until they find a better fit. Others take into consideration the tenant applicant’s work and rental history and character, and try to work with them. Requiring a larger security deposit is one way a landlord might feel better about a lower-quality tenant.
What about college-town landlords? They routinely deal with young students who’ve yet to establish credit histories. How do they get around it?
For many a landlord’s anxiety over young tenants or tenants with poor credit scores, co- signers are the answer. Requiring a co-signer is your prerogative; however, dealing with co-signers brings its own set of potential problems.
Here are a few tips for dealing with co-signers on rental property leases:
- Clearly state your expectations and the co-signers’ responsibilities in the lease. If the co-signer is liable for the rent when the tenant doesn’t pay, establish a method to collect the rent from the co-signer. Include time limits and eviction action in the case of non-payment of rent.
- Know your co-signer. You must be comfortable that the co-signer is financially capable of abiding by the terms of the lease, including paying the rent in the event the tenant does not. Obtain permission from the co-signer to run a background screening credit check to be absolutely sure your co-signer meets your qualifications.
- Obtain at least two ways to reach the co-signer. You need to be able to get in touch with them immediately upon non-payment of rent.
- Meet with the co-signers, if possible. If you cannot meet in person, try to have a three-way call with the tenant and co-signer. Go over the terms of the lease with both parties.
- Don’t allow the tenant to move in without a signed lease, first month’s rent, and security deposit. Do not allow a stick of furniture in your property until you have received the co-signer’s signature on the lease. Preferably, notarized!
It’s not necessarily a bad thing to require a co-signer on a lease—especially if you’re having trouble filling a rental vacancy. Just be thorough, keep good records, and check the co-signer’s credit history before approving the application.
Posted by Teresa on May 21, 2010 under Landlord Tips, Rents and Deposits |
Every landlord we know would agree with this understatement: rent is important. Actually, it’s more than just important—rent is like a fertilizer that keeps your rental business growing and healthy. Rent is as necessary to your rental property business as rain is to plants.
If only collecting rent was as easy as collecting the rain when it falls from the sky. Rent collecting can be an easy task—or it can be a monthly struggle. It all depends on how you set up your leases, your management skills, expectations, and consequences.
Lease Language: Make sure your lease clearly states the amount of the rent, the day of the month rent is due, any grace period, late fees and when they are added, and number of days until eviction action is taken for non-payment.
Terms of Acceptance: Let multi-roommate units know that you do not accept multiple checks—you don’t want the hassle of chasing down several tenants for rent. Let your tenants figure out who owes whom how much, and collect one check from someone. Also, it’s best to avoid accepting partial payments. Evictions for non-payment are difficult to obtain if you’ve accepted a payment!
Manage the process: It’s up to you to determine how things are going to run in your rental property business. After all, nobody else is taking on the responsibility and liability of owning rental property. So manage your business like the boss that you are. Keep excellent records, establish procedures, and stick to them. Let your tenants know that you don’t waive late fees, and that you will file for eviction if they don’t pay within an agreed-upon time frame.
Expectations and consequences: If you’re managing your rental property well, your tenants know exactly what is expected for rent: they are to pay you on the day the rent is due, not later; they are to pay with one check; they are not to bounce checks; and they are to notify you if any of the previous terms are impossible, due to circumstances beyond their control.
It’s your job to clearly communicate your expectations to every tenant. Let them know up front the consequences for not meeting your expectations, too. Not every tenant has been asked to strictly keep to the terms of a lease. Let your tenants know that you expect them to, and they will be more likely to do so.
More and more landlords are turning to online rent collection. It’s a convenience for you and for your tenants. There are many services to choose from, so ask your friends in the business if they’ve had good experiences with online rent collection. It certainly eliminates the need to make runs to your post office box and the bank, as well as a tenant blaming the U.S. Postal Service for late rent checks!
Posted by Teresa on May 18, 2010 under General |
There are just as many rental property owners who wouldn’t dream of personally managing their rentals as there are landlords who would never allow a property manager to do it. As your rental property business grows, you may find it becoming too much to handle by yourself.
If you’ve made the decision to turn over the day-to-day management of your rental business to a property manager, keep these tips in mind for managing the individual or company you hire.
1. Even though the property management contract is signed, you’re not off the hook. You’re in charge, so you can feel free to take charge, be in control of the relationship, and require a certain level of performance from your rental manager.
2. Supervise their activities as well as you can. This can be a little more difficult if you are an out-of-town rental property owner. Still, you’ll want to avoid nightmares like unauthorized repair bills, erroneous charges, and poor rent collection. Require photos of repairs for proof they are done properly and to your satisfaction.
3. Be realistic. Some repairs will cost more than you think they will. Property managers shouldn’t have to call you for permission to spend $10 on your behalf. And emergencies happen—so don’t risk creating a bad relationship by complaining about emergency repairs—especially if they will save you money in the long run.
4. Remember, rental property managers are in business to make a profit. If they are providing a valuable service, you should expect to pay for it. Just be sure to check over invoices carefully, ask for clarification if don’t understand something, and require explanations of anything you don’t recognize as necessary.
5. Keep your contract handy and make sure they are following its terms. If rents are due in your account by the 15th of the month, and they routinely miss it by a day, they are in breach of contract. If monthly tenant reports, vacancy reports, and marketing reports are required—but are not happening—don’t let the property manager get away with it, or they’ll continue to do so. Be sure that you are abiding by the contract, too—remember you agreed to it.
6. If the terms of the contract you signed aren’t working out as you had hoped, ask to re-negotiate. It can’t hurt to ask. And if the relationship is still unsatisfactory at the end of the contract term, find another property manager. At least you’ll have a better idea of what works and doesn’t work for you.
7. Show the property manager that you’re the boss. Someone has to be in charge, and it’s your property with your tenants—and your liability. So that someone in charge should be you! Don’t pay for repairs you don’t authorize. Require pre-approval for any expenditures over a certain amount, like $100. Don’t allow tenants to sign leases unless they meet your criteria for tenant background screening and credit checks.
Property managers can be 100% honest, wonderful communicators, and an integral part of your rental property business. But not all of them are. When you hire a company to manage your rental property, you still need to manage the manager!
Posted by Teresa on May 14, 2010 under General |
Whether hiring an outside contractor for regular maintenance, emergency repairs, or both, landlords need to know a few things first—especially if they’ve never hired a contractor before. It’s important to keep your rental properties in good working order and safe for your tenants—so having a great repair person can bring you peace for mind. Besides, they’re a good investment in your business.
1. Is the contractor a member of your local building and remodeling association? Call them and find out! These associations are great sources for information and referrals. And generally, their members are experienced professionals who see value in associating with other professional contractors.
2. Is the contractor licensed and insured? Most localities and states require contractors to hold proper licenses. Most also require liability insurance—and closely scrutinize contractors. Before hiring one, ask your repair professional or contractor to show you their license and insurance coverage documents. Just because they say they do doesn’t mean a thing—and you don’t want to find out after they walk off your job or damage your property that your contractor has neither a license nor insurance!
3. Find out how they collect deposits and progress billings. We’ve all heard the nightmare stories of homeowners and landlords who are swindled by unscrupulous contractors. Paying large deposits—or the entire estimate in full—before the work has started is a risk. Some landlords never seeing the contractor again—and it happens every day. If your contractor is licensed by the state and a member in good standing of your builder’s association, you stand a better chance that they are reputable.
4. Does the contractor have excellent references? A good estimate and friendly personality doesn’t mean you should sign a contract. Too many people don’t check references—so too many dishonest contractors get away with illegal activities. Ask for references and call them. And be suspicious if they are too good—you could be talking to a friend of the contractor!
5. Does the contractor have a criminal past? As a landlord, you are responsible for the safety of your tenants. Imagine the potential liability of allowing an ex-con, thief, or sex offender around your tenants and their neighbors. For complete security, consider running a background check on the contractor you choose—before you sign the contract!
Posted by Teresa on March 19, 2010 under Landlord Tips |
Like most articles about secrets, you’ll find that the ones we’re about to share with you are mostly common sense reminders—but every one needs easy-to-remember hints now and then.
Landlording is about people, as well as the buildings they live in. If you’re a landlord, you probably spend much more time dealing with people than you do with the rental houses or apartment building you own. Successful leaders and managers of people have some common traits—and so do successful landlords.
The first is that they listen more than they talk. Your tenants want to be heard and understood. You can hear someone if you’re doing more talking than they are. The best tgift ou can give someone is to make them feel like they’re the only person in the world. You can do that by making eye contact and really focusing on your tenant and what they are saying. Indicate you’re listening and ask clarifying questions if they say something you do not understand. Repeat back to them what you just heard.
Successful landlords are strong and sometimes even stern. The word “no” is an important part of every landlord’s vocabulary. Making sure that all your tenants are treated fairly means saying “no” to certain requests. Being a pushover may make the current situation more tolerable, but it can lead to undermining your authority.
That doesn’t mean that successful landlords aren’t flexible. In fact, being willing to change a policy or admit you are wrong is vital to maintaining good relationships with your tenants. For example, more landlords are allowing pets than ever before; this helps fill vacancies and keeps animal-loving tenants happy.
Finally, successful landlords are some of the most patient people we know. This is no business for hotheads or those who are unwilling or unable to negotiate, renegotiate, and count to 10—or 100—several times every day. Watching what you say, taking a deep breath when a tenant is upset, and exercising patience in every situation will go a very long way to your success as a landlord. Remember, not everything is an emergency and, not every tenant is trying to get something over on you.
Listening, showing respect to people from all backgrounds, being patient and saying “no” are all common-sense attributes to successful rental property management.
Posted by Teresa on February 23, 2010 under Landlord Tips, Tenant Screening & Background Checks |
Mark O. is a landlord who just purchased a single family rental house on foreclosure. The neighbors have informed Mark that although the home has only 3 bedrooms and 1 bathroom, there are several cars parked at the house all the time, and seemingly a dozen adults living there.
Mark is concerned about the wear and tear on his property, with good reason. Here’s how he plans to handle this situation:
First, Mark is going to require a new lease agreement for the property. The lease will contain a clause about the number of people allowed to reside in the rental unit. His limit will be two adults per bedroom, or six adults total.
Next, Mark plans to require that each adult over the age of 18 who is living in the house complete his tenant application. Mark’s standard practice is to conduct background screening and credit checks on each potential tenant. Any potential tenant who does not meet Mark’s minimum requirements for income and credit worthiness will not be allowed to sign the lease—and will have to move out.
Mark knows that the Fair Housing Act prohibits discrimination against tenants based on family status (married, unmarried) or number of children. Therefore, he has no intention of not renting his new rental property to any adults with children who pass his application process. Mark is also familiar with his local zoning law on rental units, which says that no more than three unrelated persons may share a single dwelling unit.
Limiting your rental properties to properly screened tenants who have passed your application process is the best way to protect your investment and your liability. If non-tenant adults have moved in with your tenants, you are under no obligation to allow them to stay.
Pre-screen all tenants as part of your standard application process. Background and credit checks will help ensure you rent to qualified tenants. For more landlord resources, including forms and information on tenant screening, turn to E-Renter.com.
Posted by Teresa on February 18, 2010 under Eviction, Landlord Paperwork and Forms, Landlord Tips |
Depending on the state in which your property sits, you can probably collect back rent and damages from former tenants through wage garnishment.
Garnishment of wages is done through the courts, after a judgment is made against the debtor. The debtor’s employer is ordered to withhold a portion of his or her wages, and turn them over to the court, to be disbursed to the creditor.
The question most landlords ask is if the amount of money in question is worth the time, trouble and expense of the court proceedings required. The best way to determine this is to obtain an accounting of the fees involved: usually there are court costs, process server fees, filing fees, and attorney’s fees—unless no attorney is involved.
As with eviction proceedings, many landlords hire a landlord/tenant law specialist to file garnishment papers the first time, and then decide whether or not they can handle the process themselves. And that’s a personal decision, just like deciding what dollar amount makes the court action “worth it.” Every landlord is different in this respect. Once you determine the out-of-pocket costs, you can then make your decision.
Obtaining a judgment is one thing, but if the tenant has no means to pay it, you may never see the funds owed to you—and working hard to collect them could be a huge waste of your time. And it should go without saying that your former tenant needs to be employed in order for his or her wages to be garnished.
There are other factors to consider in making a decision to garnish a tenant’s wages:
- Do you have the tenant’s new address? If not, filing will be very difficult.
- Have they moved out of state? Again, filing becomes more complicated.
- Do they have other garnishments, such as for child support payments? Other garnishments must be satisfied first.
- Is the tenant’s income below the poverty line? If so, they are exempt.
If you decide to file for a Writ of Garnishment, you’ll need to gather all the tenant paperwork, including the lease application, the lease or rental agreement, proof of rent payment, proof of any notices to Pay or Quit, eviction papers, and notes from conversations and electronic communications.
The contents of this article are intended for general information purposes only, and should not be relied upon as a substitute for obtaining legal advice applicable to your situation.
Posted by Teresa on February 16, 2010 under Eviction, Landlord and Tenant FAQs |
Christopher is no newbie landlord. He has purchased and rehabbed several properties in his city, and is running his investment property business full time. His tenants are a mix of couples, families, and singles from every income tier and diverse backgrounds. He’s had his share of problem tenants, but the only real problems he’s had to face are late rent payments.
Until a few months ago. Christopher surprised a tenant—although completely unintentionally—and discovered signs of drug use in his property. Here’s what happened: while doing some routine maintenance at Apartment #1 of a duplex, he realized he needed to shut off the water main. Unfortunately, the main fed both living units. So Christopher knocked on the door of Apartment #2 to see if anyone was home, and to let them know the water would be off for a few minutes.
When his tenant opened the door, she appeared surprised at seeing Christopher; she quickly stepped out and closed the door behind her. While Christopher maintained his tenant’s privacy by not looking into the apartment, he couldn’t help but notice the odor wafting out the door and into his nostrils! It was definitely marijuana.
Christopher informed the tenant of the impending water shut off and left, feeling conflicted about how to handle the situation. But he soon made a decision.
If you were the landlord what would you do?
A. Nothing. Marijuana should be legal.
B. Nothing. If the tenant is not hurting anyone, it’s none of my business.
C. Have a talk with the tenant. Let her know that illegal drugs are not tolerated on my property and give her written warning that the next time it happens, I will start eviction proceedings.
D. Start eviction proceedings immediately. Illegal drug use harms all my tenants and the community and could make me liable for any related property damage or personal injury.
Christopher chose door D. Backed by a solid rental agreement that clearly states illegal drugs are not allowed on his property, Christopher did what he always did when it came to handling tenant issues: he enforced the terms of the lease, as agreed to by the tenant.
Christopher did not want to evict this tenant. He had no prior issues with her, and she paid her rent on time. But he strongly believes in treating all tenants equally and enforcing his lease and tenant rules fairly. He felt he had no choice other than to evict this lease-breaking tenant.
The outcome of this story? While evicting tenantsis never pleasant, Christopher discovered he did it just in time to prevent the occupants of Apartment #1 from moving away. Turns out they had noticed marijuana odors from the apartment next door for months and no longer wanted their kids subjected to it. When they discovered their neighbor had been evicted, they thanked Christopher for keeping of the duplex drug-free and enforcing the lease.
