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Just as in any business, there are always tricks of the trade to minimizing the time and risk. The following is a list of practices that will help make your experience as a property manager as pleasant and trouble free as possible.
1. Put everything in writing. Although technically, oral contracts are binding in most states, unless a conversation is transcribed onto paper (or admitted by both parties), it’s as if it never took place in the eyes of the law. Maintain a log sheet for every tenant to make notes of dates and specifics of conversations and reiterate any verbal understandings in writing with a follow-up email or letter to the tenant, keeping a copy for yourself as well as any responses. Never undestimate the significance of even the smallest verbal requests or arrangements.
2. Never give someone access to the rented premises until they are approved, the lease is signed and ALL monies are exchanged. If you allow someone to take possession prematurely, they can be considered a legal tenant and are protected by applicable law. Even allowing a “probable” tenant to store personal belongings in the premises can constitute giving them tenancy. This means all forms of payment must be deposited and cleared by the bank prior to the tenant taking occupancy. Better yet, make it your policy to only accept money orders or cashier’s checks at move-in.
3. Be strict about timely rental payments. If a tenant’s rent payment is late or their rent payment is returned by the bank as NSF, always charge associated late fees, bank charge reimbursements, returned check fees, etc. as specified in your lease agreement to demonstrate your intolerance for it. If a check or electronic payment bounces more than once, make it a strict policy to require all future payments to be made by money order or cashier’s check.
4. Beware of roommate situations. Having multiple tenants as roommates can be a potential can or worms. Be very clear with each tenant about their responsibility to uphold the terms of the lease both individually (each person) and severally (as a group). You might even institute a policy that the applicants have to have previous history living together to establish that they are compatible. Also make it clear that issues over damages and security deposit refund disbursement will be their responsibility and that no refunds or credits will be given by you to roommates who move out early until the lease termination date. When refunding security deposits or other credits, make checks payable to all parties as stated on the lease. If one roommate moves out, they will not be removed from responsibility for the lease unless approved by you. Do not allow another to take his/her place without being approved as a tenant at which time you can create an addendum to the lease or create a new one altogether.
5. Keep your tenants happy. A healthy manager-tenant relationship goes both ways. if you take care of repair and maintenance issues in a timely fashion, make every effort to accommodate your tenants whenver possible and respect their time and privacy by properly notifying them prior to your visit, they will be much more likely to offer the same types of courtesies to you. A happy tenant is one who will be more inclined to pay their rent on time, take care of your property and stay for a longer period of time. They may also refer other good applicants to you.
6. Maintain and update your properties as necessary and appropriate. If your properties are unkempt and in disrepair you are certain to alienate good tenants, most of whom want a nice place to live. The cost of keeping up the property will reap great dividends in the long run in terms of attracting ideal tenants that are more likely to stay beyond the initial term lease. Also, take into consideration what your goals are when budgeting for improvements. For example, if you are managing a long term investment then plan on the need for capital improvements such as a new water heater, roof and carpeting and discuss such things with the property owners in advance. When deciding on these items, remember that in many cases you will be better off paying more for quality purchases that will last longer and save you money in the long run.
7. Join organizations. You should be able to find local real estate managment groups (such as NARPM – the National Association of Real Estate Managers and/or IREM – the Institute or Real Estate Management) who are comprised of people just like you who are happy to share their knowledge and resources. Often they will have regular meetings to discuss managment issues and will provide tips and forms applicable to your local jurisdiction. The relationships you make here could be your most valuable allies in terms of getting free advice in a timely manner. You may also invest time and money in attending industry seminars, or getting memberships to industry magazines, e-zines or internet blogs many of which provide a library of reference and educational tools, monthly tips, help with credit reports, tenant screening, etc.
8. Refine and revise. Take all the infomation you can, apply what works, reject what doesn’t and figure out what works best for you given your current interests, needs and goals. Continually develop your management strategies to fit different needs at different tiimes. The property management industry is an ever-changing world and it’s important to stay on top of new trends and practices (such as electronic payment processing and security deposit insurance options) to make your job easier as well as keep up with the competition in your market. Being part of an organization, keeping up on management blogs and regularly reading industry publications and newsletters will help in this effort.
9. Always verify move-in funds. Require money orders or cashier’s checks. If you accept electronic payments be sure to allow for enough time to clear their account and make sure you understand your banking institution’s timelines and limitations on verifying funds. Once a tenancy has been established you may accept checks and e-payments as long as they are always honored.
10. Be diligent about collecting late fees. You will make a very important statement to your tenants about your intolerance for lease violations by being strict about your policies. Being lenient, even and especially on the first violation will give the wrong impression about the kind of property manager you are and may set a precedent that it’s okay to pay late sometimes. On the contrary, this is an opportunity to make it clear that the terms of the lease are to be honored and respected and that a tenant should not expect you to help solve ther cash flow problems.
(“10 Habits of Highly Successful Property Managers”, Sharon Flory, Apartment Owners Association News, March 2011, pp. 26-29)
Resident Hoarding can cause significant health and safety problems, both in the hoarder’s unit and in neighboring units. Hoarding can create pest infestations and mold problems, as well as increase fire risk, interfere with entrance or exit of the unit, and/or exceed maximum load bearing floor capacity.
Hoarding is rarely self reported by the hoarder. Instead, it is often discovered by maintenance staff making a repair in the hoarder’s unit or in a neighboring unit. Hoarding can create a problem for surrounding units, such as water intrustion, mold or a pest invasion in a neighboring unit.
Hoarding is not just a matter of poor housekeeping. Hoarding is believed to be a form of anxiety disorder and/or obsessive/compulsive disorder. Depression can also be a component. Hoarding is loosely defined as:
- The acquisition of a large number of possessions that appear to be useless or of limited value.
- Living spaces cluttered so they can no longer be used for their intended purposes.
- Causing significant distress or functional impairment.
Hoarding items may be valuable collectibles, or trash, or anything in between. Units can be literally packed, floor to cieling and wall to wall, with just a small path for movement in the unit.
Because hoarding is caused by one or more pyschological disorders, compulsive hoarders are generally considered disabled. Federal and state fair housing laws protect people with mental disabilities. Fair housing advocates contend that before eviction of a mentally disabled resident whose disability is causing the person to violate terms of the lease/rules, good faith efforts must be made to accommodate the resident’s disability. This generally requires that the resident be given an opportunity to come into compliance so that he or she can remain a tenant. Examples of potential accommodations include:
- Setting scheduled unit reinspections and establishing goals that the resident must meet.
- Providing the resident with a list of community resources that can assist the hoarder.
- Working with a fair housing and/or mental health advocacy group assisting the resident to develop a plan to bring the unit into compliance.
When dealing with a hoarding situation, the focus should be only on solving legitimate health and safety issues rather than attempting to achieve ideal housekeeping habits. It should be recognized that even if the hoarder meets minimum health and safety standards, the unit may not be in “optimal condition”.
Hoarders may not recognize the severity of the problem or be equipped to resolve the hoarding problem on their own. Some hoarders believe their hoarding is beneficial because they are savers, not wasters. Others deny that any problem exists. As a result, it may be helpful to involve a neutral third party such as a fire department, code enforcement or health inspector who can inspect the unit and identify code or other health and safety violations. Accomodations may not be required, and termimation of the tenancy may be possible, if:
- The person is a clear, direct and immediate threat to the health and safety of other community residents.
- There are serious health and safety issues that cannot be mitigated through accommodation.
- The resident has caused serious monetary damage to the unit and will not reimburse the landlord the cost to repair the unit.
- The hoarder will not engage in the accommodation process or cooperate to bring the unit back into compliance.
Even if health and safety ussues are intially resolved, a hoarding resident may “slip” and rehoard again in the future. Therefore a written “Accommodation Agreement” should be considered, providing periodic unit inspections and a specified time period for the correction of future health and safety issues.
No two situations are alike. Each hoarding situation requires analysis based on the facts of the particular case. It is advisable to seek legal advise before taking any action to terminate a tenancy if compulsive hoarding may be involved.
(“Unclutter Fair Housing Law”, Lynn Dover, Attorney, Apartment Management, October 2010, pp. 26-27)
It’s a common scenario. A property manager, home builder or commercial landlord is contacted by a resident or tenant who reports that he has a water or mold problem in his unit. In some cases, the tenant has performed surface testing for mold with a home test kit or even has an alleged professional conduct air testing. The tenant states that the unit has “elevated” levels of airborne mold. Is the proper response to conduct further air testing? What does the prudent property manager or landlord do?
In general, the common response to the idea of paying for further air testing for airborne fungi is that it is both expensive and results in little, if any, useful information. For example, the United States Center for Disease Control and Prevention “does not recommend routine sampling for molds”. In a recently updated CDC article entitled “Dampness and Mold in Buildings”, CDC states the following:
CDC does not recommend routine sampling for molds. Generally, it is not necessary to identify the species of mold growing in a building. Measurements of mold in air are not reliable or representative. If mold is seen or smelled, there is a potential health risk; therefore, no matter what type of mold is present, you should arrange for its removal. Furthermore, sampling for mold can be expensive, and standards for judging what is an what is not an acceptable or tolerable quantity of mold have not been established.
There are too many variables impacting results, and the sample size is too small for air testing for mold to be reliable. Air sampling’s lack of utility in determining the level of mold found in indoor air may be a surprise to some, given the frequent references to these tests in mold litigation. But the limitations of this type of testing were recognized more than 10 years ago in the standard text in this field, Bio-aerosols: Assessment and Control, by the American Conference of Government Industrial Hygienists:
Investigators should bear in mind that samples provide infomation about a site as it existed at the time tested. However, the findings may not represent conditions at a time in the past or future, even the relatively recent past or near future. Changes in the kinds, concentrations, and proportions of biological agents in the air can be rapid and substantial.
Ten years ago, ACGIH concluded that air testing provided a snap shot of conditions at the exact time and place of the sampling, but nothing more. CDC’s current position is that such a snap shot is not reliable, representative or worth the cost. Any claim based solely on air sampling results is inherently suspect. There is no reason to respond to questionable testing by conducting more of it.
That still leaves the question of what should be done in response to a report of mold or moisture in a building. One important piece of information can be obtained immediately through a visual inspection. Specifically, a determination as to the size of the contaminated area must be made. The only state regulations regarding mold remediation are found in Texas: Section 295 of the State of Texas Administrative Code. These regulations specifically exempt from regulation the clean up of any area of mold contamination which is leas that 25 contiguous square feet in size.
Another guideline is offered by the U.S. Environmental Protection Agency. In a publication entitled A Brief Guide to Mold, Moisture and Your Home, EPA explains to consumers that “if the moldy area is less than about 10 square feet (less than roughly a 3 ft. by 3 ft. patch), in most cases, you can handle the job yourself” following EPA guidelines. The Texas Administrative Code and EPA Guidelines are not controlling law in the state of California. Both, however, offer guidance in judging how serious a specific situation is and the appropriate response. Certainly a good argument can be made that any area of mold contamination that is less than 10 square feet can be handled appropriately by trained maintenance personnel, rather than by outside contractors.
This does not mean that mold or moisture in a building can be ignored. A lack of response is ofter the precursor to litigation. The key is always to respond in the right way. The scientific value of air sampling is nonexistent. The urge to perform “defense” air testing in response to a claim should be tempered by the knowledge that the results of all air sampling, plaintiff and defense, has little if any scientific or evidentiary value.
Despite this fact, air testing is attractive to both individuals who want to pursue a claim and to their attorneys. The results offer what appear to be objective, quantifiable evidence of contaminants in the air. If a claim results in litigation, defence counsel will need to educate the judge and jury that, as recognized by CDC and ACGIH, these tests have no scientific validity. This task is made more difficult when the defendant has engaged in the same form of testing.
Rather than perform costly air testing to determine airborne mold levels, the first steps in responding to reports of mold or moisture should be to perform a visual inspection and to locate and repair the sources of moisture in the impacted area. EPA offers some very straightforward guidance on this issue:
It is impossible to get rid of all mold and mold spores indoors; some mold spores will be found floating through the air and in house dust. The mold spores will not grow if moisture is not present. Indoor mold growth can and should be prevented or controlled by controlling moisture indoors. If there is mold growth in your home, you must clean up the mold and fix the water problem. If you clean up the mold, but don’t fix the water problem, then, most likely, the mold problem will come back.
In the words of the EPA, not all mold can be removed. But eliminating excess moisture can control its growth. Testing to determine the source of the water is more important than any test to determine airborne mold levels.
In some instances, a landlord or property manager may be better served by having a qualified Certified Industrial Hygienist perform a thorough visual inspection and develop a comprehensive plan to eliminate moisture and remove all water – and mold – damaged materials, rather than handling the problem in-house. Situations where a professional is needed may include those involving areas of contamination larger than 10 (or 25) square feet, claims by tenants of allergic reactions, respiratory problems or other illnesses allegedly resulting from mold exposure, or where litigation has been threatened.
A CIH can perform a visual inspection and make recommendations for safely removing any contaminated materials. But recommendations regarding testing must be carefully considered in any situation where litigation may result. Attacking the admissibility of a plaintiff’s test results is a common defense strategy. But if a defendant chooses to engage in the same type of testing as the plaintiff, subsequent arguments that the methodology is unreliable and lacks validity may ring hollow when made in court. In too many mold cases, defendants have paid for tests, which are both invalid and ultimately are used as evidence against them.
(“Sparring Over Spores”, Patrick S. Schoenburg, Attorney, Apartment Management, October 2010, pp. 20-24)
CAA has negotiated amendments to SB 782 (D-Yee), which provides valuable guidance to rental property owners when a resident faces domestic violence abuse at the property. While a rental housing provider cannot terminate a tenancy simply because a resident has faced domestic violence, SB 782 provides that a rental housing provider has the right to evict a resident is she allows the perpetrator to return to the property or when the rental housing provider believes that the presence of the perpetrator poses a physical threat to other residents, guests or invitees, or to a resident’s right to quiet possession of the property. A victim of domestic violence is allowed to change the locks under the provisions of this bill or ask the rental housing provider to change the locks. A property owner is not liable to any other resident for any action that arises due to the rental housing provider’s compliance with the section. CAA has a neutral position on this bill.
(“Sacramento Report”, Debra Carlton, Apartment Management, November 2010, p. 44)
In late September, certain provisions were added to the laws governing evictions and related tenant rights. While a landlord cannot terminate a tenancy simply because a tenant has faced domestic violence, the revision to the eviction statutes provides that a landlord has the right to evict a tenant if he/she allows the perpetrator to return to the property or when the landlord reasonably believes that the presence of the perpetrator poses a physical threat to other tenants or visitors, or to a tenant’s right to quiet possession of the property. A victim of domestic violence is also allowed to change the locks under the provisions of the new law or ask the landlord to change the locks.
(“Legal Questions & Answers”, Richard Beckman, Attorney, Apartment Owners Association News, December 2010, P. 20)
According to a survey by Fannie Mae, the economic downturn is working in landlord’s favor. That’s because people are choosing to rent while they pay down debt and wait to see if the home ownership market has reached its bottom.
The survey, released in September, shows that 33% of Americans are more likely to rent than buy, up from 30% in January. One in five renters-and one in eight of all respondents-said they had delayed plans to purchase a home in the last 12 months. Only 67% of Americans believed home ownership was a safe investment in July, down from 70% in January and 83% in 2003.
(Apartment Management, November, 2010, pp. 46-47)
