Monthly Archives: July 2015

Assess the Health of Your Rental Property

There’s no doubt that people who get an annual checkup at the doctors have a better idea of their own personal health and wellness. A rental property can also benefit from an annual checkup so that you can determine what is working, what is not, and what needs to be done to maximize profits and make your business run even better than last year.

Landlords who are in tune with their rental property, the neighborhood and even the area real estate market will have a much easier time benefitting from the boom times and getting through the lean times. Acting as a doctor and psychiatrist to your own rental property is the best way to keep your real estate investment healthy.

Here are 3 things to examine when it comes to the overall health of your rental property:

1. How is the neighborhood?

Whether you are a long-time owner or a recent real estate investor, there’s no escaping the fact that neighborhoods change over time. Location is everything, whether someone is renting or buying. If you purchased your property more than a few years ago, you may not be paying much attention to what’s going on around you. Sometimes, the familiar blinds us so that we don’t see clearly, so take a good objective look at what is happening in the neighborhood where you property is located.

On the one hand, your neighborhood could be experiencing lots of new development and revitalization, with more amenities being included right nearby that are real perks for renters. Common neighborhood upgrades might include parks, a mall, a new light rail stop nearby, a new school and even a new apartment complex or subdivision.

A neighborhood on the downturn can mean that there is not a lot of development and interest in the area by residents or community leaders. You may start to notice lots of homes for sale in the neighborhood, as well as lots of vacancies in rental properties. Remember that high vacancy rates in an area might force you and the other landlords to lower your rent amounts in order to attract and keep tenants. Rising crime, big businesses closing or relocating, and struggling schools are other things that might signal that the neighborhood is going through some rough times.

2. How does your property serve your ideal tenant avatar’s needs?

As a landlord, you should have a tenant avatar, or a description of the perfect tenant for your place. If your tenant avatar doesn’t match up with the kind of property you own, you either need to change your expectations of the right tenant or change your property, either physically or via marketing.

For example, say your tenant avatar is of young urban professionals, either a single person or couple. If you own a cozy 1 bedroom condo, don’t advertise that it is located near great schools and the local playground. Instead, focus on how close it is to public transportation hubs and the new business park being built a few blocks away. On the flip side, if your area is a hot spot for families, and your two bedroom single family home isn’t attracting many qualified parents, it may be time to invest in the property and add a bedroom to get the attention of families looking for a long-term rental.

Another thing you need to assess when making sure your property reflects your ideal tenant include possibly updating and upgrading areas of the property to keep up with the competition. If a new complex has opened up in your same neighborhood, and they are offering brand new everything, you might need to take a long look at your own property’s needs to prevent all the most qualified applicants from going over there.

3. What’s costing you the most and how can you change it?

Owning property can lead to incredible returns, but it can also be a real drain on the budget. It may be time to take a close look at some of your highest costs over the past year and evaluate whether there’s something you can do about it to reduce the impact on the wallet.

For example, if you are paying for the utilities as part of the lease agreement, but your heating and cooling costs keep climbing, it may be time to talk to an HVAC specialist about options on improving things, from a new furnace to adding insulation to the attic. Another example is that if you are constantly getting bad tenants who do lots of damage or break the lease, yet you are doing your own background checks on applicants to save money, consider paying for the services of a background screening company to get the right tenant in your property the first time.

Whether you own a condo in the city, a cottage in the country, or a suburban single family home, your rental property needs to be as healthy as it can be to help you reach your financial goals and give you peace of mind as you do your landlord duties to keep the business going. The advantages of evaluating the state of the property and the neighborhood annually are huge, and the most successful landlords do what they can to give their investment a clean bill of health.

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6 Special Considerations for Vacation Rentals

Are you thinking about purchasing a short-term rental in a resort or vacation area? Or otherwise getting involved in the short-term vacation rental business? Understand what you’re getting into before you buy. There are a number of specific considerations rental real estate investors should be aware of before purchasing these properties. Continue reading to learn about six of these considerations.

1. Enjoy the Property Yourself

Considerations for those who want to purchase vacation rental propertiesFor many people, the best way to own a vacation rental property is to enjoy it themselves. That is, purchase your own vacation home because you enjoy using it yourself.You can rent it out when you’re not using it to offset the expenses of ownership, but it’s very difficult to make a short-term vacation rental a cash-flow positive property in its own right.

2. You Need Additional Insurance

Most landlords understand that a standard homeowners insurance policy isn’t sufficient if they plan to treat their property as a residential rental. That’s why they get special landlord insurance policies.

But even your standard landlord insurance policy won’t provide adequate coverage if you own a short-term vacation rental. In these cases, you’ll need something closer to commercial liability insurance.

Here’s why: your landlord or homeowners insurance doesn’t cover business activities conducted in the dwelling. But in a vacation rental, everything that happens on the property is commercial activity!

Furthermore, in most cases, your personal umbrella insurance coverage won’t protect you against claims arising from your business. You’ll have to get this protection from a separate policy in addition to your personal liability plan as it isn’t designed or priced to provide commercial coverage.

3. Marketing Costs More Than You Might Think

Marketing a vacation rental is a resource-consuming but necessary task. In most cases, vacation rentals have a lot of competition from local hotels, motels, bed and breakfasts and RV parks. Many of these businesses have professionally designed websites with excellent photography, so it’s necessary for vacation rental owners to do some marketing of their own to make their properties stand out.

Well-produced video tours of vacation rentals can help book renters. While these videos aren’t free and usually aren’t cheap, remember that nothing is more expensive to a vacation rental owner than a cheap-looking website that doesn’t adequately sell their property!

Vacation listing websites help you book renters but they can take up to 30 percent in commissions. While this may seem high, remember that each booking can involve dozens of inquiries for each renter. If you don’t hire someone to field these inquiries, you’ll have to do it yourself.

You probably don’t want to rely on a listing website alone for your marketing. If you do, you may be costing yourself a lot of rented nights each year. Here are some relevant facts from the Vacation Rental Property Marketing Blog about vacation rental owners’ marketing expenses:

  • Vacation rental owners spent an average of $1,150 per year marketing their properties in 2011.
  • Half of all vacation rental owners only use listing sites to market their properties. This group experiences annual average occupancy rates of 54 percent.
  • Vacation rental owners who combine listing sites with their own websites bump their occupancy rates up to 76 percent, on average.
  • 94 percent of all vacation rental owners believe they could be doing more to promote their properties.

4. Keep Your Renters Happy

Meeting the high expectations of vacation renters requires a ton of effort. Today’s renters expect pristine furnishings and conditions inside and outside the property. Depending on your niche, market and how you have marketed your vacation rental, you’ll need to have a system in place to ensure that it’s completely cleaned up and ready to re-rent every few days.
This means clean linens, pristine kitchens and bathrooms, wiped-down furniture, and a dwelling that smells fresh, pleasant and clean from the second each new group of renters walks in. This takes an intense housekeeping effort ? and costs a significant amount of money.

There are significant costs associated with failing to keep your renters happy. If a renter shows up at your vacation rental for their dream weekend and the air conditioner isn’t blowing cold air or if the water heater is having problems, you don’t have a couple of days to fix it as residential landlords usually do. You or your handyman have to make repairs quickly and effectively within an hour or so, max. Otherwise, the renter may file a chargeback with their credit card company or trash your vacation rental’s reputation on Yelp, HomeAway.com and other websites future renters may visit.

5. Don’t Get Blindsided by Furniture Costs

Prepare to furnish the entire vacation rental property at once after you purchase it. Most residential landlords don’t have to worry about this, of course, so the costs often take new vacation rental landlords by surprise.

Attractive, comfortable and well-made furniture is expensive. You can easily spend $20,000 to $40,000 on furniture and d?cor on a medium-sized rental house. That’s enough to eat up the first year of rental income that in-demand vacation properties can earn.

6. Take the Long View on Vacation Rentals

While the high expenses associated with purchasing, marketing and furnishing vacations rentals and limited peak tourist seasons found in most resort areas make it difficult to turn vacation properties into profitable rental income generators, you still get the benefit of long-term capital appreciation.

Additionally, if you’re able to get a great deal on a future retirement home today and can offset the costs of ownership in the years prior to retirement by renting it out, purchasing a vacation rental could be an excellent way to go.

Michigan Landlords May Now Serve Eviction Notices Electronically

Under a new bill recently signed into law by Michigan governor Rick Snyder, landlords may now serve eviction notices via “electronic service.” The bill, HB 4038, expands options for landlords who are trying to serve eviction notices on hard-to-locate tenants.  Prior to the new law, landlords could only serve an eviction notice, or “demand for possession,” in person or by first-class mail.

Now, however, the landlord may also serve the eviction notice electronically if the tenant has signed a written consent to electronic service.  The consent form must also be sent electronically and replied to affirmatively by the other party electronically.

The email addresses used to send and reply to the e-consent form are presumed to be the landlord’s and tenant’s respective email addresses throughout the rental period, unless one party notifies the other in writing (or by email) that their email address has changed.  In other words, sending the eviction notice to the email address the tenant used to accept electronic service should have the same legal effect as mailing a paper eviction notice to the tenant’s actual, physical address – even if the tenant is refusing to check email or claims to have changed email addresses without telling you.

Although landlords may ask tenants to consent to electronic service, they may not refuse to rent to a tenant who declines electronic service.

The electronic service option gives landlords greater flexibility in serving eviction notices to tenants. When a tenant appears to have abandoned a property, landlords can find it difficult to determine where the tenant went, making service of paper documents either in person or by mail extremely difficult. Since email is more portable, a landlord can increase their chances of successful service with the click of a button.

The law, which was signed on May 21, 2015, goes into effect on August 19, 2015.  Landlords who wish to take advantage of the electronic service option may wish to talk to their attorneys and begin creating consent forms now, so they are ready to take advantage of the opportunity when the August 19 start date arrives.

Note: This article is not intended as legal advice and should not be understood as such.  If you need help with a specific legal issue, please contact an attorney who is licensed to practice law in your state.

 

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How To Manage Disputes With Your Landlord

There are many benefits to renting a home. For instance, renting may allow you to live in an area or residence you can’t afford to buy. When the air conditioner stops working, you only submit a maintenance request instead of coughing up the money for repairs. On the other hand, you are living in someone else’s property and there are times when you must defer to the rules you agreed to on the lease.

So, what happens when you have an issue or a difference of opinion with your landlord? Ideally, things would remain civil and each party would remain workable, but it doesn’t always work out that way. Situations that negatively escalate can lead to more frustration and stress throughout your tenancy than it is worth, so it makes sense to do what you can to manage disputes with your landlord in rational and professional manner.

Pick Your Battles

Before you decide to tangle with your landlord, make sure you have determined that the issue is worth bringing up in the first place. While you may be completely justified in your grievances, you are far more likely to be taken seriously if your complaints are more infrequent and carefully considered. For instance, ask yourself if the issue you have affects your safety, personal property or directly violates the terms you were promised in your lease.

Make sure that the things you bring up to your landlord are worth the time and effort on your part and will not unnecessarily prejudice them against you.

Take Careful Notes

Your argument is most likely to be heard if you have information and notes to back it up. Approaching your landlord with relevant dates and information, not only helps you come across as organized and ready to approach the issue like the business transaction that it is, but it also helps create a paper trail for your grievance in case you have to take things further. For instance, damage to the property from a leaking pipe could be easily documented with photos, or you could record the dates and times that the heater unexpectedly shut off.

Be Calm and Professional

The golden rule applies to any type of dispute. You will often receive the kind of behavior you exhibit, so make sure that yours is calm and professional. Yes, your landlord is required by law to maintain certain standards of living in his rentals, but you are more likely to get your grievances addressed in a satisfactory way if you don’t go in with an accusatory attitude.

Document Any Follow Up

In the event that you are unable to resolve your disagreement with your landlord face to face, you may need to take it further, depending on the nature of the issue. If this is the case, clearly document your attempts to reach a resolution. If you end up needing to hire a lawyer or take your dispute to small claims court, it will help to have the necessary dates, pictures and details on hand so you don’t have to worry about remembering them correctly.

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Lease Agreement Terms That Are Best For Landlords

Experienced landlords know that the best way to make a profit is to rent to good tenants who want to stay a long time in their rental property. Frequent turnovers mean increased costs, so it is in a landlord’s best interest to put tenants into as long of a lease as possible. But what kind of lease agreement truly benefits a landlord?

Month-to-Month Lease Agreements

The month-to-month lease term is one of the least beneficial types of lease agreement for landlords simply because there is not much reliability. Tenants can simply give a 30-day notice that they will be moving out and the landlord must find new tenants for the rental property. By the time a landlord advertises, finds qualified applicants, prepares the place for the new tenants and signs a new lease agreement, those 30 days have zipped by and the landlord runs the risk of the rental property sitting empty.

There may be situations where a month-to-month lease is in the landlord’s favor, however. In many college towns where transitory students are renting rooms together, it can be much easier for a landlord to create a lease agreement that is month to month so that as roommate situations change, new lease agreements or addendums can be easily created and put into place. Also, when a more traditional lease agreement expires, many default to month-to-month agreements.

One Year Lease Agreements

This is the most common lease term in the rental industry and most landlords and tenants expect to commit to each other for this length of time. Because a one year lease locks the tenant in for an entire 12 months, landlords usually don’t have to worry about turnover too often. It’s also not so long that the landlord can’t implement new changes, increase the rent or other adjustments at the end of every year.

The tricky part is what happens at the end of the one year lease. In other words, landlords can let the term of the agreement expire, in which case the contract would default to a month-to-month agreement. Or, the landlord can try to get the tenants to renew for another one year lease. Of course, the one year lease renewal is usually in the landlord’s best interests, again for lack of turnover and more of a guarantee that the unit will remain occupied. It’s up to the landlord to entice the tenants to renew.

Long Term Lease Agreements

In some cases, where tenants have expressed an interest in becoming long-term residents of the unit, it may make sense to create a long-term rental agreement, such as a 24-month lease agreement. Sometimes, this might work when renting to friends and family where there is a deeper commitment or understanding of living arrangements.

For the most part, it is possible that it goes in favor of the landlord to set up a long-term lease, but even though it represents security in that there is a low risk of turnover, it may also tie a landlord’s hands if something needs done, such as raising the rent or giving tenants a notice to quit when the lease expires. The long-term agreement should really be done on a case-by-case basis.

In summary, it seems that a one year lease may be the best for landlords in that it provides some stability and minimizes turnover, but gives both tenants and landlords a chance to re-evaluate things each year. A too-short lease agreement really favors the renter while a lengthy lease agreement doesn’t really favor either side except in special conditions. The ideal lease agreement terms seems to be one year, with the tenant renewing each year.

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No Due Process

QUESTION: Our pool usage was revoked without any due process and nothing in writing. I went to use the pool one day and couldn’t get in. The president said we were banned as long as he was president and we were lucky we weren’t fined. I asked for a fine schedule but he couldn’t produce one. He said it depended on what the board saw fit for the offense. I mentioned the Davis-Stirling Act and he said it was nothing but a guideline. He said our CC&Rs are the law. Help!

ANSWER: Ah, where to start?

The Law. First, the Davis-Stirling Act is not just a guideline, it’s the law. It encompasses Civil Code sections 4000 through 6150. Violations by the board can result in lawsuits, fines, court orders and an award of attorneys’ fees. Second, your CC&Rs are not the law, they are recorded restrictions known as equitable servitudes. CC&Rs are high on the food chain but they’re a full step below the law.

Due Process. It’s entirely possible your family violated the rules, are a pain in everyone’s rear end, and deserve to have their privileges suspended. However, before any penalties can be imposed, the law requires that you first be given 10 days written notice of the violation and a hearing date so you can defend yourselves. Once the board hears the evidence and makes a decision, it has 15 days to give you its written decision.

Fine Policy. Finally, the board cannot create penalties on the fly. The board must comply with the association’s written fine policy (which must be published annually). If they don’t have a fine schedule, they can’t levy fines or suspend privileges.

RECOMMENDATION: If you’re violating the rules, you should stop. If you’re board is not following the law, they should start.

DEAD TREES

QUESTION: We are a small HOA in central California. With the drought, we look down at our proud brown grass and up at our trees which we hope to preserve. Several owners have giant redwood trees in their back yards. Should we address these tall trees which could fall onto our homes? Is this a board issue or an insurance issue?

ANSWER: Good grief–don’t wait for it to become an insurance issue. If trees topple, you could have dead or injured homeowners as well as significant property damage. Surviving family members will file costly lawsuits that could easily exceed your insurance limits and result in hefty special assessments.

Water Your Trees. If trees are not watered, they will become stressed and subject to insect attacks, disease and death. Despite Governor Brown’s executive order and subsequent legislation about not watering lawns, people should water their trees. If mature trees die, they’re extremely expensive to replace (not to mention the small issue of death and destruction when they fall).

RECOMMENDATION: Even though you can’t fine owners “for reducing or eliminating the watering of vegetation or lawns” (Civ. Code §4735(c)), a lawyer-letter may be sufficient to get owners to water their trees. If someone is too short-sighted to comply and his trees die, you can force him to remove them–which is far more expensive than simply watering them.

RENTER
VOTING RIGHTS

QUESTION: We have a board member that’s a renter. Our bylaws allow it but they don’t allow non-members to vote. So what do we do–keep him as a director but don’t let him vote?

ANSWER
: Your voting restriction likely deals with membership elections. That means your renter can’t vote to elect or remove directors. He can, however, run for the board and, if elected, vote in board meetings because he’s voting as a director not a member.

RECOMMENDATION: To restrict directors to members only, you need to amend your bylaws.

GATHERINGS, MEETINGS
AND WHATNOT


QUESTION
: If a meeting of homeowners and board members is called something other than a board meeting, such as a gathering or a town hall meeting, do the same rules apply?

ANSWER: It depends. If everyone gets together for a prayer meeting or a barbecue and directors don’t hear or discuss business, then it’s just a prayer meeting/barbecue and no rules apply.

Other Meetings. A town hall meeting is a little different. Such meetings are defined as informal membership meetings to discuss a particular issue. Other than giving notice of the meeting and posting an agenda of the items to be discussed, nothing more needs to be done. If a quorum of directors will be in attendance then at least four-day’s notice must be given.

Board Vote. If the board intends to vote on business at your assemblage/forum/whatnot, then it’s a gathering coupled with a board meeting and appropriate notice must be given.

Membership Vote. If the membership were to vote at your gathering/summit/congregation of homeowners, it depends on the nature of the vote. If it’s an informal advisory vote to give the board direction on a particular matter, it’s still an informal gathering and nothing special need be done–members can vote by a show of hands or a voice vote. If the members are expected to formally make a decision on issues requiring secret balloting, then secret ballots are required with at least thirty day’s notice.

RECOMMENDATION: The more conservative approach is to always give appropriate written notice of meetings together with an agenda whenever the board or membership gets together to discuss association business. I even like printed agendas at prayer meetings so I know what I’m praying for.

FEEDBACK

Dead Turf #1. If an owner turns off the irrigation to the HOA’s landscape in front of his home and causes it to die, can he be held liable for the restoration of said landscaping? -D.G.

RESPONSE: Yes he can. Owners have no right to tamper with landscaping maintained by the HOA. Turning off the irrigation falls into the category of “vandalism” and subjects the person to fines and costs of repair.

Dead Turf #2. Medium and larger associations should consider having arrangements with their vendors to make available to the owners acceptable plant material at wholesale or marginally above. This eases the burden on those owners who want to remove turf and install drought tolerant landscaping. Vendors may be willing to do weekend presentations to members on the available materials that will enhance the owners property while meeting the new HOA guidelines and standards. Such programs may also be helpful to make owners switching to drought tolerant material more knowledgeable about how best to successfully install and maintain their new landscaping. -Rich N.

Dead Turf #3. I recently sold my townhome in Covina and moved to a home in La Quinta. The comment about grass bouncing back with just a little water is misleading. Recovery of a lawn may not be possible if the roots are allowed to die. If that is the situation then it’s probably a good time to consider landscaping options such as drought tolerant plants and colored rock ground covering or bark chips. People in California need to accept the fact that changes in landscaping are necessary because of the extended drought. They can’t just ignore the situation or wish the drought away. -John A.


Adrian Adams, Esq.
Adams Kessler PLC

“Much More Than Just a Law Firm!” We’re friendly lawyers–boards and managers can contact us at (800) 464-2817 or info@adamskessler.com.

The Perils of Associations Using Unlicensed Contractors

Associations are on the hook if an unlicensed contractor gets injured on the jobHere’s one of those issues that keeps turning up like a bad penny: the use of unlicensed, unbounded and uninsured contractors on association projects and properties. Sometimes it’s a matter of ignorance or laziness on the part of association managers or board members who should know better. Sometimes it’s a matter of a board member or manager routing business to a friend or relative or just someone willing to provide a kickback in exchange for the work.

Regardless of the reasons behind the use of unlicensed contractors, it’s a bad idea because it’s part of the fiduciary and oversight duties of any condo or HOA board of directors to ensure that all projects done under their auspices are executed by licensed and bonded contractors and that the work is done in accordance with the proper permitting procedures.

Here’s why: Unlicensed contractors generally don’t carry the vital forms of insurance that exist to protect consumers – and by extension, the homeowners in your community.

Example: Gutter Repair Goes Wrong – and Gets Expensive and Litigious

Imagine you bring in an unlicensed contractor for some rain gutter repairs. It?s a minor job, and you expect no complications. Your association manager recommends the repair and further recommends a contractor they’re familiar with, ACME Services, to do the contracting. The price looks a little steep, and a board member mentions they have a buddy at Sluggo Construction who can do the work for much less.

The board approves Sluggo’s low bid, and their crew show up to do the repair. All seems to be going well, but one of the workers, Jim, fell off a ladder and wrenched his back. He now has an insurance claim.

Here’s what happens next: Jim can’t work with an injured back, and he’s got some medical bills. So he files a workers’ compensation claim against Sluggo Construction. But Sluggo’s not a licensed contractor so they aren’t carrying the required workers’ compensation coverage. Jim may or may not have individual health insurance in place, but it’s not supposed to cover workplace claims.

Eventually, Jim’s lawyer advises him to file suit. But not against Sluggo. They know Sluggo has no money and no assets they could collect against. Without insurance, a judgment to collect would be worthless.

So, who’s got the deep pockets in this case? Your condo or homeowners’ association.

If you don’t hire a licensed, bonded, street-legal contractor, and something goes wrong, you are going to be in the line of fire. Because your HOA represents and is entirely made up of the owners in your complex, your owners are the ones who will be left with the liability.

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Your HOA could be forced to issue a special assessment to pay this worker’s medical bills and compensation for lost wages – maybe for years – because your board of directors failed to perform oversight and insist that all work be done by licensed and bonded contractors with all requisite insurance protection in place.

If your board or management company allows the use of an unlicensed contractor, and a worker gets hurt, you can expect courts to hold your association and management property jointly liable as employers.

Your risk isn’t limited to workplace injuries, either. If you get cheap and hire unlicensed contractors, and the workmanship is deficient, or if one of your tenants or residents is hurt because a roof or deck collapsed, you’ll have no recourse against the contractor. If they don’t have workers compensation insurance, they probably won’t carry contractors’ liability insurance either.

Minimum Due Diligence for Contractors

At a minimum, before you authorize any third-party contractor to do any task, you should ensure that either your board of directors or your property manager carries out the following due diligence:

  • Get the state contractors’ license number
  • Verify with state officials that the license number is valid.
  • Make checks payable to LLCs and corporations, not to individuals.
  • Don’t pay huge deposits up front (escrow is normally fine, or materials charges).
  • Get proof of insurance – both workers compensation and contractors’ liability insurance.
  • For larger projects, you may ask the contractor to put up a ‘completion bond,’ or ?surety bond,? which pays your association in the event the contractor can’t or won’t complete the project according to contract.
  • Put contracts in writing.
  • Have the contractor obtain necessary permits and show them to the board’s representative. Sure, the association can get the permits, but they won’t be granted without insurance in place. This is a useful reality check to screen out unlicensed and irresponsible contractors, while also limiting the association’s liability.

Limit Your Liability: Don’t Use Unlicensed Contractors

If the association gets sued, association members could have an opening to sue incompetent or corrupt board members who use unlicensed contractors for projects over a specific amount established by law (usually about $500 depending on the state).

As a board member, you have a fiduciary duty to act with reasonable prudence. If your association is damaged because of liability incurred because you failed to perform ordinary due diligence to see if a contractor is even licensed, you could be sued for violating your fiduciary duty as well. This could be a covered claim under directors & officers’ liability insurance, but if you’re a board member, you don’t want to be in that position.

The obvious lesson here is always, always use properly licensed, bonded and insured contractors.

New York Tenant Files Suit Alleging Landlord Discrimination Due to AIDS

A New York City landlord is facing a lawsuit from a tenant who claims his rental application was turned down because he has AIDS, according to a recent article in the New York Times.

The tenant, a 27-year-old man living with AIDS, recently filed suit in the State Supreme Court in Brooklyn, claiming that the landlord violated a city law that prohibits discriminating against tenants based on the source of their income.

The lawsuit alleges that the tenant’s attempt to rent an apartment from the landlord was going well until the tenant revealed that his rent would be subsidized by a program that helps individuals with HIV or AIDS find housing.  About 26,000 New Yorkers with HIV or AIDS currently receive such assistance with their rent, according to the Times article.

The tenant in the lawsuit claims that an agent for the landlord’s company told him that the company would not accept the program’s subsidy. The federal Fair Housing Act does not prohibit discrimination based on source of rental income, and many states do not prohibit this form of discrimination either.  However, both the state of New York and New York City do bar landlords from using source of income as a means to screen or discriminate among potential tenants.

Supporters of the tenant in this case say that even in places that prohibit it, landlords often refuse to rent to poor individuals whose rent is subsidized by a charity group, rather than paid from their own pockets.  They also say that when the tenant suffers from a stigmatized condition like HIV or AIDS, such discrimination makes it even more difficult for similarly-situated individuals to receive fair treatment in housing and other situations.

However, as many landlords note, accepting tenants whose rent is paid through charitable subsidies can be a difficult proposition, especially when charity funding is highly variable.  Landlords who are prohibited from discriminating based on source of income should work closely with their attorneys to create screening guidelines and rental agreements that follow the law while still addressing the landlord’s business needs.

Note: This article is not intended as legal advice and should not be understood as such.  If you have a specific legal question, please consult an attorney who is licensed to practice law in your state.

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10 Things Renters Wish Landlords Knew

Have you landlords ever wondered what we tenants think? Well, now is your chance to get inside the mind of a typical tenant and learn the 10 things renters wish landlords knew.

1. Give us the benefit of the doubt.

While we are sure you have had your share of nightmare renters, many of us are clean, honest people that want to maintain an attractive home and pay you on schedule. If you have gone to some time and trouble to vet the best candidates for your rental, know that we are likely seeking the same end you are when it comes to your property.

2. Please choose wisely when it comes to carpet.

White or light beige carpet might be a little less expensive, but it is extremely hard to keep clean, especially with a hefty cleaning deposit on the line. Do your renters a favor and install something that is durable and manageable, preferably in a color that highlight every speck of wear and tear.

3. Lighten up a little on monitoring the holes we put in the wall.

While we understand that major holes cause a maintenance problem for you, the smaller ones made to hang pictures and wall ornaments are easily fixed when it comes time to move out. We would even be willing to do it if it keeps us from being treated like vandals for wanting to personalize our home a bit.

4. Keep up on appliances.

An oven that technically heats up, but really only bakes things on the left side or a freezer that constantly ices over deserve an upgrade before they actually stop working. We are not asking for you to pay for top of the line, but we would like to know that the things included in our rental price actually do the job, especially when investing in new ones ourselves is not in our power.

5. We like to live in attractive surroundings.

While we completely understand that rentals often need to be made of serviceable materials, don’t be afraid to step it up a little in terms of making the place attractive. Chances are, most of us that are not in a situation where we can buy our own home would pay a little more to feel like we are living in something more than the grown-up equivalent of a college dorm.

6. Be sensitive about our time.

It doesn’t matter if it is scheduling walk-through inspections or showing the place to potential new tenants or buyers. While we acknowledge that this is a necessary evil, remember that most renters do not have their home picture ready on very short notice. It’s your property, but it is also our home.

7. We appreciate being listened to.

When we call for maintenance requests or concerns, we are as grateful for a hassle-free experience as you would be. Return calls, come when you say you will, and keep us in the loop on repairs that are particularly inconvenient for us.

8. Be understanding if we are late with the rent once or twice.

This one is tricky because while we know that you make payments based on our rent, there are also bound to be times when the stars misalign or the paycheck is delayed and we need to be  few days late. By all means, charge your late fees and don’t feel obligated to suffer the renters that play free and loose with the due date for rent, but practice a little understanding for those of us that are generally reliable.

9. Don’t drop by unexpectedly.

We may like you and we may have an amicable relationship, but that doesn’t mean we are interested in having you casually drop by. Such visits can feel like surprise inspections and while it is your prerogative to knock on the door anytime you want, we appreciate the courtesy of advanced notice.

10. Be reasonable about wear and tear.

Every home that is lived in is going to bear the marks as it gets older. You are within your rights to withhold some of the security deposit when real damage occurs, but walls are going to get nicked, wood floors are going to pick up a minor scratch or two and carpets don’t last forever, even if you have them professionally cleaned on schedule.

Tenants often work hard when they move out because they are relying on getting as much of the security deposit back as possible. Remember that that money is for repairs needed for damage that is above and beyond the usual wear, or make it clear from the start that part of it is nonrefundable. Nothing is more frustrating than getting so little of your deposit back that it hardly feels worth all the time you spent scrubbing.

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