Posts Tagged ‘American Apartment Owners Association’

Landlord Quick Tip: Pros and Cons of Furnished Rentals

Written by Apartment Management Magazine on . Posted in Blog

FurnishedApartmentSeasoned landlords know that all tenants are different.

Some like to settle into rentals for years and often stay in the same neighborhood even after they move. Other tenants might prefer short-term rentals and the flexibility it can provide.

Depending on the type of renters you are trying to attract, furnished units can either help — or hurt — your investment.

A month-to-month lease with a furnished apartment is often very attractive to the right tenant — someone who likes to move often and doesn’t like having to haul furniture from rental to rental. A furnished room is very convenient to a renter who travels light or doesn’t have a lot of extra money to spend. They might be sleeping on an air mattress in an empty studio and would be quite happy to upgrade to a dwelling that has, say, a couch or bed. If nothing else, furnishing rentals also can keep some tenants from dragging those dumpster or thrift store couches that may contain roaches or bed bugs into your clean, unfurnished apartment.

Don’t assume that renters seeking furnished are all the drifter type; some renters may own a home elsewhere and are looking for something convenient for work or an extended vacation, and are perfectly acceptable tenants. These tenants may even pay a little more, especially for summer rentals. But chances are they are uncommitted for the long-term.

An apartment with basic appliances is a good draw, but many tenants are going to be dubious about moving into a furnished rental. Most will already have a full set of furniture, and won’t want to get rid of it or pay to rent a storage unit in addition to the lease with you. Many renters shy away from ads for furnished out of fear that furnished rentals will cost more, or require a higher damage deposit to cover the cost of the furnishings.

It’s true that if a tenant damages or stains a piece of furniture, it will look dirty and unattractive to the next tenant. Once you go down that path, you might find yourself having to constantly re-furnish the dwelling as often as you paint the walls. You can’t assume the risk that the previous damage deposit will cover all your costs. Furthermore, tenants are often picky and may not agree with your decorating tastes.

One look at the bland sturdy neutral furnishings may send them running to another rental. Perhaps the idea of a slightly used mattress makes them squeamish.

Your decision to go furnished or not will greatly impact the type of tenants you attract.

If you prefer a higher priced, short-term lease, than furnished may be the way to go. If you want long-term nesters then an empty, clean, well-maintained dwelling should suffice.

In the end the decision should be based on what is the most profitable for you.


logo_aaoa American Apartment Owners Association | Company Website |

Rental property management can be very demanding. Our job is to make this day-to-day property management process smoother. AAOA provides a host of services ranging from tenant screening to landlord rental application forms and contractor directory to apartment financing. 

Turn It Down Already!

Written by Apartment Management Magazine on . Posted in Blog

Loud-noise
For many landlords, noise complaints are all too common.

It is often difficult to monitor noise, and to determine if the particular type or level of noise violates the lease agreement.

Not all noise is from partying or loud music. Other common sources include children, dogs or a TV.

Here are some steps to follow to resolve a noise complaint at your rental property:

Knowledge of local laws is crucial. It’s no coincidence that noise levels often are described in local ordinances. Use those standards as your guide.

But sometimes noise concerns can happen in areas not covered by a noise ordinance. Just because tenants can legally play loud music all hours of the night doesn’t mean your other tenants want to hear it, and unresolved noise complaints will likely have other tenants thinking about how to break the lease and move out.

The next step is to include clear rules regarding noise in your lease agreement. For example, it is a very common practice for landlords to have quiet hours listed, perhaps from 10 p.m to 8 a.m, to avoid late night noise — the most common irritant.

But don’t assume that all tenants work 9-5 day jobs. You might have a tenant who works a graveyard shift and sleeps during the day. For them, quiet hours should look more like 10am-8pm, which is not practical.

Have a policy where tenants can report a problem without forcing tenants to go to one another.  Resolving an issue may not be as easy as just leaving a friendly note on the door. Renters are not always comfortable talking to one another about these situations. Avoid escalating disputes. You should expect to play mediator and investigator.

If you can’t mediate the dispute, then you may have to take the next step: 

You will have to figure out if a tenant’s complaint is warranted, or not. Some tenants might not like the sound of the neighbor’s children running and playing. Complaints involving families are tricky as it might be misconstrued as discrimination if you go after large family gatherings or tenants with children. For this reason, you should be dubious about forbidding tenants from having too many guests, because if the guests are related, it might be discrimination.

Speak to the accused culprit and let them tell their side. Also, talk to other tenants for collaboration. Maybe the complaint comes from someone who expects too much silence for an apartment building. You may have to explain to the complainer that you have done all you can.

If you are receiving complaints routinely, check for yourself how noise-proof your dwellings are.

Do the dwellings need more insulation from the outside noises, as well as in between units?

Many complaints are one-time events, perhaps from a tenant who wasn’t aware of their nocturnal neighbor. It is a good ideal to provide one warning to avoid evicting an otherwise good tenant. But for persistent complaints, you might have to give the offending tenant a “cure or quit notice” informing them that they are in violation of the lease agreement and can be evicted if the problem isn’t fixed.

Then, you have to be ready to make good on your promise and file an eviction. Otherwise, you are never going to hear the end of it!


logo_aaoa American Apartment Owners Association | Company Website 

Rental property management can be very demanding. Our job is to make this day-to-day property management process smoother. AAOA provides a host of services ranging from tenant screening to landlord rental application forms and contractor directory to apartment financing. 

 

Bedbug Lawsuit Costs Landlords, Pest Company $2.5 Million

Written by Apartment Management Magazine on . Posted in Blog

Law and money

Residents of an apartment complex in Iowa will be sharing a $2.45 million dollar settlement after a major bedbug outbreak occurred at the building.

According to a report , the class action lawsuit, which involves 300 current and former tenants, has been going through the courts for four years and eventually ended up in the Iowa Supreme Court. After years of legal wrangling, the case was settled before going to trial.

Three different entities will pay out the settlement: $2 million from the previous management company’s insurer, $350,000 from a development group which acquired the property in 2013 (even though the lawsuit was already filed in 2010), and the insurer of a pest control company which serviced the units is expected to pay $100,000. Individual tenants, many of whom were elderly or disabled, will receive from $200 to $6,000 each, according to the report.

The tenants’ attorney, Jeffrey Lipman, who specializes in bedbug lawsuits, says this case puts other landlords on notice that they can’t simply ignore the problem.

According to the report, the apartment complex became infamous due to the bedbug outbreak, and tenants told reporters that they suffered stigma in the community for living there.

This stigma can cause serious financial problems for rental property owners, especially when the information shows up on bedbug reporting websites, and comments or reviews on rental listing sites. Rental candidates may think twice before checking out a building that had bedbugs.

The best way to avoid losses from bedbugs is to be proactive:

Inspect for the pests on a regular basis, even if you haven’t received any complaints. Bedbugs remain dormant for long periods, which can be deceiving. Ask your pest management expert how often you should inspect.

Encourage tenants to report signs of bedbugs. The sooner the infestation is discovered, the better the chances of a full remediation.

Take complaints seriously. Tenants who feel they are getting nowhere with the landlord will look at other options.

Share tips with tenants on ways bedbugs spread — like used furniture, or in suitcases from travel. Teach tenants how to spot the signs so they can report problems.

Work with a professional pest control company. Don’t try to fix the problem on your own.


logo_aaoa American Apartment Owners Association | Company Website Rental property management can be very demanding. Our job is to make this day-to-day property management process smoother. AAOA provides a host of services ranging from tenant screening to landlord rental application forms and contractor directory to apartment financing. 

Fair Housing Month Good Time to Review Leasing Policies

Written by Apartment Management Magazine on . Posted in Blog

HUD_house in handsEach April, HUD observes Fair Housing Month, in honor of the 1968 Fair Housing Act that prohibits housing discrimination based on race, color, national origin, religion, sex, disability, and family status.

This year, HUD is encouraging rental applicants and tenants to exercise their rights under the Act.

In addition to the legal protections provided under the Fair Housing Act prohibiting housing discrimination based on race, color, national origin, religion, sex, disability, and family status, approximately 20 states, the District of Columbia, and more than 150 cities, towns and counties across the nation also prohibit discrimination against lesbian, gay, bisexual, and transgender (LGBT) individuals and families.

In 2012, HUD published new regulations to ensure that the Department’s core housing programs are open to all eligible persons, regardless of their sexual orientation or gender identity.

Twelve states and the District of Columbia, as well as several counties and municipalities
protect persons against housing discrimination based on their source of income.

A review of recent prosecutions shows confirms that HUD is making good on its promise to
pursue cases where tenants with disabilities have been denied companion animals, and
families denied housing on occupancy limits. A new ruling also clarifies that, while a
policy may not be discriminatory on its face, a landlord may still be prosecuted if that
policy causes a more subtle, “disparate” impact.

Landlords should take the time to review leasing policies for possible discrimination.
Some common areas to avoid include:

Rental ads that discourage protected tenants from applying;
Steering a protected tenant towards or away from a particular property;
Occupancy limits based on 2-per bedroom have come under scrutiny — avoid turning away
families if the property has a “bonus” room, loft, office or den that could easily be converted into a sleeping area.
Denying companion animals for tenants with disabilities, or applying any pet policies in that situation.


logo_aaoa American Apartment Owners Association | Company Website Rental property management can be very demanding. Our job is to make this day-to-day property management process smoother. AAOA provides a host of services ranging from tenant screening to landlord rental application forms and contractor directory to apartment financing. 

Landlord Jailed Over Tenant Crime

Written by Apartment Management Magazine on . Posted in Blog

UnderArrestA Pittsburgh landlord recently was thrown in jail for six months because of his “nuisance” rental.

According to a news report, neighbors and police “suspected” the property was being used as a drug house. Police say they’ve been called to the house dozens of times over the past few years. Officers did find drug paraphernalia on at least one call, and have responded to drug overdoses in the area.

In response to complaints, a judge previously ordered the landlord to evict all of his tenants, pay a $10,000 fine to the city for the nuisance, and repair the house.

However, when the case was reviewed, the court found that the landlord had not fully complied with the order. Now, the landlord will serve a six month jail sentence for contempt of court — unless he complies with the order.

Meanwhile, police have boarded up the building, and city officials are considering demolishing the property, according to the report.

It is unclear in this case whether the tenants were charged with crimes, or if the complaints of neighbors — that tenants were awake and “active” at 5:00 am, or that tenants were “making money” at the property, would have been sufficient evidence to convict each of them of these alleged crimes.

A number of cities across the country have recently enacted similar “nuisance” laws requiring landlords to evict tenants for disruptive behavior or suspected criminal activity. Unfortunately, this can be a daunting task if there is no evidence of an individual tenant’s wrongdoing. Often, police do not charge individuals or issue tickets at the scene, choosing instead to pursue the landlord, who then may have to reconstruct the event and attempt to evict each of the tenants for cause. That places landlords in a no-win situation, especially when fines are being levied daily.

However, there are steps that landlords can take to avoid renting to nuisance tenants:

Be careful who you allow in the property; always screen each adult occupant, including a criminal background check.

Adopt a crime-free lease policy that tracks your local nuisance laws. Make sure you have the ability to evict a tenant who violates the policy, even if you can’t prove they violated the law. Local police may participate in landlord training programs that help reduce crime in the area.

Keep a close eye on the property by performing regular property inspections. If you suspect drugs or other dangerous activities, call the police rather than trying to solve the problem yourself.

Get to the know the neighboring property owners, or at the very least, make sure they have your phone number in case they see something suspicious going on at the rental. You don’t want to be the last to know.


logo_aaoa American Apartment Owners Association | Company Website 

Rental property management can be very demanding. Our job is to make this day-to-day property management process smoother. AAOA provides a host of services ranging from tenant screening to landlord rental application forms and contractor directory to apartment financing. 

Crime Training Pays Off for Landlords

Written by Apartment Management Magazine on . Posted in Blog

CrimeFighting_LandlordsLandlords all across the country are fed up with crime in rental properties, and all the associated costs. Many communities are now pushing landlords to adopt crime-free rental policies. Usually, this means landlords would go to training sessions hosted by the local police department, and allow in-depth inspections of their properties.

The goal in mind for landlords is attracting higher quality tenants who will help to maintain a higher quality rental property, which in turn keeps profits up. A crime-free property accomplishes that goal.

Landlords can learn how to prevent and identify crime directly from a crime prevention officer while completing a training session. It is very difficult for the untrained eye to spot signs of serious crimes like drug sales or manufacturing.

Local police departments are eager to assist landlords wishing to help lower crime in the neighborhood. For example the Salem, Oregon police department is actively registering property managers for its annual landlord training in April. This is a two-day intensive class focusing on local rental laws and crime prevention, with topics like drug recognition in and around rental properties. The cost of this two day workshop is about $70 per person.

This demonstrates a growing trend; landlords who care want advice on how to prevent crime in the rentals. Cities strive to provide that training.

The only downside is the fees.

In addition to tuition, property owners may have to pay an annual licensing fee for each unit, and inspection fees on an as-needed basis. It’s possible for a community to adopt a policy that forces all landlords to attend the training sessions, willing or not.

The alternative is self-education. A central focus on crime training is screening tenants. Most seasoned landlords already know the value of properly performed background checks — and how invaluable quality tenant screening can be. Focusing on who you allow into the rental property can greatly reduce the risk of criminal activity.


logo_aaoa American Apartment Owners Association | Company Website 

Rental property management can be very demanding. Our job is to make this day-to-day property management process smoother. AAOA provides a host of services ranging from tenant screening to landlord rental application forms and contractor directory to apartment financing. 

Fewer Tenants Can Afford Rent

Written by Apartment Management Magazine on . Posted in Blog

Rent IncreaseAccording to a report just released by the National Low Income Housing Coalition, a renter needs to earn $18.92 an hour to afford a two-bedroom rental unit at fair market. That’s two-and-a-half times more than the federal minimum wage, and 52% higher than what was required in 2000.

The report, entitled Out of Reach 2014, reveals the drastic difference between what renters need to earn to afford rent and what the average renter actually earns. In 2014, the average renter earns $14.64 an hour. While housing costs vary nationwide, the report shows that a full-time minimum wage worker can’t afford a one or two-bedroom rental unit anywhere in the U.S.

According to Out of Reach 2014, the top five most expensive states are:

Hawaii, where renters need a wage of $31.54 per hour for a two-bedroom;
District of Columbia, $28.25 per hour for a two-bedroom;
California, where a two-bedroom requires $26.04 per hour;
Maryland, $24.94 per hour for a two-bedroom; and,
New Jersey, where renters need to make $24.92 per hour for a two-bedroom.

New York, Massachusetts, Connecticut, Alaska, and Virginia finish out the list of top 10 most expensive states in 2014.

The most expensive metropolitan area in 2014 is San Francisco, where an individual needs to earn $37.62 an hour to afford a decent two-bedroom rental unit at market rate. At the current federal minimum wage of $7.25, Out of Reach 2014 calculated that it would take more than two people working full-time minimum wage jobs to afford a decent two-bedroom rental home for their family.

Even if the federal minimum wage was raised to $10.10 per hour, as proposed by the Fair Minimum Wage Act of 2013, it won’t help in everywhere — only in Arkansas, Kentucky, and Puerto Rico.

There were over 40 million renter households in the U.S. in 2012, making up 35% of all households nationwide. This is a 1.1 million increase over the previous year and double the rate of growth in previous decades. One in every four of these renter households are extremely low income, meaning they earn less than 30% of the area median income.

The population of extremely low income renters has risen to 10.2 million, and these are the households that experience the greatest housing instability and risk of homelessness. NLIHC calculates that there are just 31 affordable and available units for every 100 extremely low income renter households. However, NLIHC says that closing this gap is achievable through funding of the National Housing Trust Fund, which could provide communities with the money to build, preserve, and rehabilitate rental homes that are affordable for extremely and very low income households.

Extensive data for every state, metropolitan area, and county in the country are available online at www.nlihc.org/oor/2014.


logo_aaoa American Apartment Owners Association | Company Website 

Rental property management can be very demanding. Our job is to make this day-to-day property management process smoother. AAOA provides a host of services ranging from tenant screening to landlord rental application forms and contractor directory to apartment financing. 

The 2 Rules Hidden in Every Lease

Written by Apartment Management Magazine on . Posted in Blog

Signing a LeaseEvery landlord knows that the lease controls when it comes to managing properties and settling tenant disputes.

But did you know there are two hidden rules inherent to every lease agreement, even if these rules are not written in the lease?

Habitability

In every leasing situation, verbal or written, long-term or short, good or bad, a landlord has a duty to provide habitable premises. This is true if the lease is silent on the issue, and remains true even in cases where the landlord has shifted the responsibility to the tenant or attempted to limit this duty in some way.

While there may be language in a local statute and ordinance on habitability, this rule comes from simple contract law, and that makes it very flexible. The duty of habitability covers all the day-to-day necessities, including hot and cold running water, heat, and in some cases air conditioning, safe access, reasonable security from intruders, and compliance with zoning, building and fire codes.

The gray area: the tenant’s own actions. While the landlord has the duty to keep the property habitable at all times, a tenant may be liable for costs of repairs or remediation caused by their deliberate or negligent actions, including the actions of their guests.

Quiet Enjoyment

The biggest beef tenants have against landlords is intrusion on the right to quiet enjoyment, which exists whether or not it is mentioned in a lease agreement. Quiet enjoyment, the right to live without intrusion or nuisance, encompasses everything from excessive or unannounced landlord visits to noisy neighbors.

Despite the label, it’s not just noise that violates this covenant. Secondhand smoke is a common culprit.

Tenants’ Rights

When either of these hidden duties is violated, tenants have a number of possible remedies, including withholding rent (constructive eviction), or breaking the lease entirely, with no ramifications.

In a worst case scenario, the tenant can sue for damages that may go far beyond the actual rent paid under the lease agreement, so it’s important to keep these rules in mind when making property management decisions.


logo_aaoa American Apartment Owners Association | Company Website 

Rental property management can be very demanding. Our job is to make this day-to-day property management process smoother. AAOA provides a host of services ranging from tenant screening to landlord rental application forms and contractor directory to apartment financing. 

End-of-Year Lease Check-Up

Written by Apartment Management Magazine on . Posted in Blog

Lease_RenewalAs the year comes to a close and a new one is set to begin, it’s a good idea to make sure your tenant leases are in order.

Simple oversights or non-compliance can lead to headaches, lawsuits, and if you’re not careful, thousands of dollars of losses.

Here are a few items you need to review:

1. Security Deposit Terms
Security deposits are perhaps the biggest bone of contention for both landlords and tenants.

One of biggest issues that often comes up is the actual amount of the deposit. Make sure that you are not overcharging tenants for their security deposit, or you could end up in hot water.Each state has very specific laws that regulate security deposits. It is worth a quick check to make sure your state has not changed their laws over the last year, and double check that you are compliant with any limitations written into the law.

Another hot button is when the security deposit needs to be returned. Make sure your policy is in line with state law.

If you allow pets, be sure to clearly stipulate whether a separate pet deposit is required, what the deposit covers, and when it will be returned upon acceptable surrender of the unit.

Be careful to check that your security deposit is clearly delineated from other fees that you may be charging, especially the non-refundable fees.

2. Who is Actually Living in Your Unit?
It is extremely common for tenants to flow in and out of a unit, without the landlord’s knowledge. One tenant moves on, and another one takes their place…but nobody notifies you.

In order for you to be able to enforce the provisions of your lease, every adult tenant in the unit needs to be listed on the lease.

So, it probably can’t hurt to send a friendly end-of-year notice to your tenants, confirming who is supposed to be living in the unit, based upon the names on the lease.

If you suddenly learn that the tenants have changed, you should run a tenant check on the new tenants and amend your lease to reflect the changes (assuming the results of the tenant background check are acceptable).

3. The Potential for Crime
Make sure your lease is compliant with the laws of your state in regard to criminal behavior.

Many cities and states are enacting ordinances that make landlords responsible for tenant crimes and other actions. It is not uncommon for these laws to require landlords to take legal action against a tenant in order to avoid hefty fines on the landlord.

In light of this reality, it is especially important to confirm that the tenants who signed the lease originally (those who passed a criminal background check) are still the same tenants that occupy the unit.

If not (and if they have unacceptable criminal backgrounds), you could find yourself in a heap of trouble if they commit a crime in your unit.


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About the American Apartment Owners Association

American Apartment Owners Association offers discounts on products and services for all your property management needs. Find out more at www.joinaaoa.org.