By Stephen C. Duringer, Esq., The Duringer Law Group, PLC
Street parking spaces are few and far between near my building. My apartment complex has just enough parking spaces for my residents to each have one space. If a resident has more than one car, they must try to park it on the street. It has been working out fine for years but now I have this one tenant who refuses to follow the rules. He is constantly parking his second car in someone else’s assigned spot. I’ve told him several times but he just ignores me. What do I do?
Your community rules and regulations should specify your parking rules, specifically stating that only one vehicle may be parked on the premises, and that all parking is assigned. Ensure that you have the proper signage at the entrances to the parking area. Most cities require the sign to contain certain restrictive parking language, plus the local police department telephone number, and the California Vehicle Code section that provides for towing of unauthorized vehicles. Contact your local police department for their specific requirements, as they vary from city to city. Next if you know the offender, then provide a written warning of the violation. Attempt to serve it at his residence, post it on his door if he’s not in, and also put the warning on the windshield of his car. If practical, take and save a photograph of the warning on the vehicle windshield, because the offender will always claim that you did not give prior notice before towing. If he fails to remove the offending vehicle, the car may be towed.
I rented an apartment to four roommates quite a while ago. One of the four is now moving out, but the other three want to stay. The one moving out is demanding that I return his portion of the security deposit, he says that he paid it so he should get it back. Do I have to?
No, the security deposit remains with you as long as any of the roommates remains in possession of the rental unit. Often, owners and residents will enter into an agreement replacing one resident with another, thereby removing the one original resident from the lease. The agreement will further provide that the ‘new’ roommate pay the ‘old’ roommate his portion of the security deposit. Absent a written agreement to the contrary, the owner should retain the entire security deposit, then when all the remaining roommates vacate, the refund check should be made payable to all four of the original roommates named in the rental agreement.
I’ve been doing my own prospective resident screening for quite a while now. I think I’m pretty thorough, but I’m just not sure any more. I’ve been noticing more and more inconsistencies in the applications I review, and I even came across one who out and out lied about who she was! I’m concerned about all of the stories I’ve heard about identity theft. I just can’t afford to make a mistake. What can I do to weed out these undesirables and minimize my chances of being fooled?
Identity theft has been a growing problem for several years. Landlords have increasingly been victimized by prospects posing as someone else, using false or fraudulent information. Often times, these thieves take advantage of a desperate landlord, eager to fill a vacancy, or a newbie landlord, who hasn’t gone through the school of hard knocks yet. Completed and signed applications by all adults are a must. Verify the information provided. Personally inspect some form of U.S. government issued photo identification. Make a photo copy of the ID and keep it secured with your file. Verify that the social security or the tax ID number provided by the prospect is actually his number, and is valid. Run and thoroughly review, an eviction and credit check through your apartment association. If practical, go outside to the prospect’s vehicle, and verify that the license number on the car he just drove, matches the license number he just wrote down on the rental application. Many ‘hands on’ owners will actually visit the prospect’s current residence unannounced, prior to approval to ensure the prospect actually lives there, and doesn’t just sleep on the couch. You’d be amazed at what you will learn by a simple visit. Inform all prospective applicants that you have a policy of taking a picture of all residents for the tenancy file. Follow through with this policy and actually take a picture of all proposed occupants and keep the picture in your tenancy records. When verifying employment, and residency, ask for a description of the person, and compare the description with the person who filled out the application. Ask for original utility bills, electric, telephone, cell phone, cable, anything with his name on it. All of these are tools that may be used in proper screening to avoid renting to an identity thief. Use these tools consistently, and apply them equally to all applicants, and your risk will be dramatically reduced.
What types of repairs can I require the tenant to take responsibility for?
A landlord and tenant can agree, in writing by the rental agreement, to allocate responsibility for minor repairs between them. Often landlords and tenants may agree that certain items, amenities, will be the tenant’s responsibility to maintain. These may include refrigerators, washing machines, pools or spas, air conditioning, and minor plumbing issues.
This article is presented in a general nature to address typical landlord tenant legal issues. Specific inquiries regarding a specific situation should be addressed to your attorney. Stephen C. Duringer is the founder of The Duringer Law Group, PLC, one of the largest and most experienced landlord tenant law firms in the country. The firm has successfully handled over 285,000 landlord tenant matters throughout California and has collected over $200,000,000 in debt since 1988. The firm may be reached at 714.279.1100 or 800.829.6994. Please visit www.DuringerLaw.com for more information.
Solutions to California’s housing shortage invariably focus on increasing the density of preexisting cities and suburbs. Legislative solutions include SB 375, passed in 2008, which “incentivizes” cities and counties to approve high density land developments, and the failed (this time) SB 50, which would have forced cities and counties to approve high density development proposals.
One cannot ignore the fact that high density land development benefits special interests. Politically connected developers enjoy windfall profits by selling overpriced homes crowded onto smaller parcels of land. Existing cities collect higher taxes from property owners and shoppers who would otherwise have moved into new cities. Government at all levels can spend more money on pay and benefits, and less on infrastructure. Investors harvest higher returns thanks to the real estate bubble.
In front of the hidden agenda of special interests, however, are moral arguments for so-called “smart growth.” The crux of these moral arguments for high density “smart growth” are that regional ecosystems bordering urban areas should not be sullied by new growth, and that high density development reduces emissions of greenhouse gasses, which furthers global ecosystem health.
Both of these moral arguments are flawed. As documented in an earlier analysis “Grand Bargains to Make California Affordable,” if 10 million new residents moved into homes on half-acre lots, three persons per home (with an equal amount of space allocated for new roads, retail, commercial, and industrial development), it would only use up 3.2 percent of California’s land. If all this growth was concentrated onto grazing land, much which is being taken out of production anyway, it would only consume 21 percent of it. If all this growth were to fall onto non-irrigated cropland, which is not prime agricultural land, it would only use up 19 percent. Much growth, of course, could be in the 58 percent of California not used for either farming or ranching of this.
California’s ecosystems can easily withstand significant urban expansion. Even this extreme low density growth scenario – as if there wouldn’t still be parallel development within existing urban areas – only consumes 3.2 percent of the land in this vast state. Similar concerns about greenhouse gasses are unfounded, because they rest on the assumption that higher greenhouse gas emissions are correlated with low density development. But correlation does not mean causation. Telecommuting, dispersion of jobs into new suburban nodes, clean energy, and clean vehicles, are all examples of future trends that prove growth does not need to be confined to existing cities.
It is unlikely, if not impossible, for high-density development alone to ever deliver a supply of homes that meets demand, lowering prices to affordable levels. Part of the reason for this is the understandable resistance high-density proposals arouse from existing residents who don’t want to see the ambiance of their neighborhoods destroyed. Equally significant is the extraordinary cost of construction in California. But evidence from around the nation is clear – in areas such as the San Francisco Bay Area where urban containment is practiced, home prices are unaffordable, and in areas such as Houston where urban growth is permitted, home prices are affordable.
If you accept these premises – that urban expansion will not cause unacceptable harm to the environment, and that urban expansion is the only way to deliver enough new homes to lower prices, “smart growth” starts to take on a different meaning. “Special interest growth” might be more descriptive.
New Suburbanism Offers An Alternative to Smart Growth
The concept of New Suburbanism is not original, but it also isn’t well established. This makes it malleable, or, at least, this leaves room for a fresh interpretation of its meaning. First expressed in 2005 by urban geographer Joel Kotkin, New Suburbanism is a complement to New Urbanism, a movement initially devoted to the twin principles of architectural and landscape design that celebrates local history and traditions, along with promoting accessible, pedestrian friendly, aesthetically engaging public spaces. Over time, New Urbanism and New Suburbanism have been taken over by the smart growth crowd, with high-density neighborhood design now the overwhelming priority of these movements. But consider these quotes from Kotkin, written in 2006:
“One critical aspect of New Suburbanism lies in its pragmatism. One cannot always assume, for example, that building a new town center, constructing denser housing, or introducing mixed-use development would automatically improve quality of life.”
Kotkin goes on to explain how “sprawling, multipolar” cities that permit suburban growth are creating more jobs and have more affordable homes, how most people starting families prefer single family detached homes, and average commutes in these cities are actually less because “jobs move to the suburban periphery.” He writes:
“We instead should follow a pragmatic, market-oriented approach to improving the areas in which people increasingly choose to live. For example, in a low-density suburban community that seeks to retain its single-family character, it may be more appropriate to introduce single-family detached housing, rather than assume multi-family apartments and lofts must be part of the solution.”
New Suburbanism is a necessary alternative to Smart Growth because Smart Growth is failing. It not only delivers an inadequate supply of homes, it delivers the wrong mixture of homes, because it delivers apartments, condominiums, townhouses, and “detached” homes with yards barely big enough for an outdoor grill, but it does not deliver what people want, which is a home with a yard.
New Urbanism has become an intellectual movement indistinguishable from the Smart Growth policies that mandate high-density development. Here, from the website “New Urbanism” is an accurate representation of the principles of New Urbanism:
And here is a summary of why New Urbanism, or “Smart Growth,” is not so smart:
1 – Artificially and selectively inflates land values, making housing less affordable,
2 – Emphasizes public space over private space,
3 – Makes war on the car,
4 – Promotes high-density infill in low density neighborhoods,
5 – Prefers open space to homes, but not to biofuel crops, solar fields, or wind farms,
6 – Presumes that social problems will be alleviated through forcing everyone to live in ultra high density, mixed neighborhoods,
7 – Incorrectly claims there is a shortage of open space and farmland, and,
8 – Presumes to have the final answer; that its precepts are beyond debate.
New Suburbanism offers an alternative ideology – one that embraces much of New Urbanist concepts, but from an entirely different perspective. These “Principles of New Suburbanism,” are not intended to refute the virtues of high density, but to extol the virtues of low density. Embodied in these principles is the idea that human stewardship and private land ownership, combined with 21st century clean technologies, can enable a suburban and exurban landscape to host bucolic and utterly clean low density communities across thousands of square miles.
Principles of New Suburbanism
(1) Embraces Aesthetic Values: Suburbs can be beautiful. Spacious, forested, with architectural character. New suburban communities can be built with an emphasis on aesthetics, as well as towards creating a sense of place, especially when high density isn’t the prevailing mandate.
(2) Low and High Density Are Not Mutually Exclusive: New Suburbanists support high density zoning in the urban core of large cities. New Suburbanists enthusiastically support building 21st century cities, with high-rises and plentiful car-independent transit options and everything else inimical to the central cores of megacities.
(3) Land is Abundant: There is abundant available land for low density suburban and exurban development. New Suburbanists encourage zoning that recognizes the importance of progressively lower density zoning from urban cores, instead of draconian “urban service boundaries” that arbitrarily restrict development, especially low density development.
(4) Car Friendly: Cars are the future, not the past. Personal transportation devices are tantalizingly close to becoming ultra safe conveyances that can drive on full autopilot and have zero environmental footprint, and we are within a few decades at most of having abundant clean energy. The age of the personal driving machine has just begun.
(4) Road Friendly: Roads are the most versatile of all mass transit corridors since people, bicycles, cars, busses, and trucks can all travel on or alongside roads. Commercial areas should be car-friendly as well as bike and pedestrian friendly. Since land is abundant, this is not all that difficult.
(5) Decentralized & Off-Grid Friendly: New communities can have neighborhood-scale groundwater extraction, distribution and recharge systems. Using new off-grid technologies, sustainable and cost-effective energy and even water independence can be achieved at a household or neighborhood basis, often enabling lower taxes through avoiding more expensive larger public infrastructure.
(6) Farm & Ecosystem Friendly: Via the economic pluralism fostered by permitting flexible and low density residential zoning, i.e., small independently owned, often independently constructed homes on large lots of .5 to 20 acres, you create the potential for a vibrant market in small property leases for specialty farming. Through zoning (or protecting) vast tracts of outer suburb and exurban lands according to New Suburbanist precepts where low density home building and road building is encouraged instead of discouraged, you create a market for relatively cheap abundant land, making more affordable acquisition of land set-asides for agriculture or nature conservancies.
New Suburbanism embraces the inspiring original vision of New Urbanism, its call to create the 21st century’s version of cities and buildings that are welcoming spaces. But New Suburbanism rejects the ideological stridency, the coercion, and the porcine corruption of the powerful high density coalition.
At its heart, New Suburbanism is the necessary counterpart to New Urbanism and Smart Growth, because they are constrained by an imbalanced, unnecessary bias towards high density. New Suburbanism gives back to our cities and towns their freedom; gives us abundant land; gives us affordable homes; gives our cities turned suburbs turned exurbs the unforced, organic, natural and easy transition from dense to sparse. If New Urbanism defines the aesthetic of our new and renewed cities, than New Suburbanism helps define the aesthetic interface between city and country; it gives us back the smooth transition from urban chic to country soul.
Edward Ring is a co-founder of the California Policy Center and served as its first president. This article originally appeared on the website California Globe.
Today, anyone can stream a TV show on-demand, click a computer mouse to order a week’s worth of groceries, or open an app on their smartphone to catch up instantly on local and world news. Yes, we live in an on-demand economy, where consumers expect reliable, instantaneous information.
You already know that it pays — literally — to have all of your properties leased out to renters. But, have you considered how this on-demand economy will revolutionize the real estate industry as well, especially residential leasing?
Would-be residents want information and responses to property listings the same way they want everything else in their lives — fast. From fast replies to following up with interested prospects, here’s a look at five ways you can use AI to improve your lead-to-lease conversion process, filling vacancies fast and bringing your operations into the on-demand economy:
1. Respond to Inquiries as Fast as Possible
The faster you’re able to respond to an inquiry, the less likely it is that you’ll lose out on a qualified renter to the property down the street. And we’re not just talking about within a few hours, we’re talking about within minutes. In fact, research suggests that landlords who respond to inquiries within one or two minutes are up to 40 percent more likely to directly engage with a prospective renter. And while you may not think that waiting even 10 minutes to respond to an inquiry is a big deal, research shows that as many as 20 percent of prospective renters will have already moved on to a new property by that time.
Although a fast response time makes a big difference to your lead conversion rate, it’s not always easy for leasing staff to stay on top of a high volume of inquiries. With leads flowing in from your website and third-party listing sites 24/7, including weekends and holidays, an instant reply to every prospective renter isn’t always humanly possible — though it is possible when teams can collaborate with Artificial Intelligence.
By leveraging recent advancements in AI technology, you can actually reply instantly to each inquiry around the clock, and not just with a stale canned reply or one-dimensional chatbot. New innovations have made it possible for Conversational AI to actually respond intelligently to a variety of questions about open listings and help leads actually schedule showings, creating a personalized, on-demand experience for prospective renters.
2. Qualify Leads Efficiently
Once you have an interested renter, you need to determine whether or not the property is the right fit for them. You don’t want to find out that they’re planning to move in with their dog after showing them a unit that isn’t pet-friendly.
To avoid spending valuable time and resources on a lead who isn’t the right fit, you need a system in place to pre-qualify them before investing any further time in them
Set consistent criteria for prospective renters, and make sure you communicate this information with them upon first contact. You should also include as much information in the listing as possible so they have accurate expectations before they reach out.
However, as every leasing agent knows, prospective residents don’t always read the listing thoroughly before they call or email. Conversational AI can also alleviate this challenge, by asking important qualification questions and answering other questions to help potential residents determine if the unit is the right fit.
If all checks out for both parties, then you can proceed to the showing. Otherwise, you can save time and go your separate ways, or — see if they are a good fit for a different unit.
3. Remember to Cross-Sell
Don’t write off a potential renter if they aren’t a good fit for the property they initially inquired about. Instead, see if they might be a good fit for another property that you own or manage. By cross-selling, you can turn more leads into leases by offering other options.
This is another opportunity to leverage Conversational AI by automatically cross-selling other vacant units that are available. AI can remember the resident’s answers to questions and recommend another unit or property that would better meet their needs, then answer questions and schedule a showing there instead.
4. Follow Up
Following up is an important part of trying to fill vacancies, but research shows that many property managers aren’t doing enough of it. According to Zillow, about 30 percent of property managers follow up with would-be residents just once after the initial point of contact. However, their research indicated that the most effective way to convert leads to leases is to follow up five times within four days of initial contact.
If you follow up only once, consider adding additional touchpoints to keep leads engaged beyond the initial interaction. This doesn’t all have to be done over the phone, either. You can send follow-up e-mails, text messages (if given permission) or even by mail.
Following up with would-be renters is another way AI can pay big dividends. Conversational AI can automatically follow up with leads on a set schedule, using the communication channel they most prefer.
5. Bring Leasing Online
Still relying on printers, scanners, and fax machines for would-be renters to go through screening, submit applications, and sign leases?
It’s time to catch up to modern times. If you don’t yet have an online leasing platform that makes it possible for renters to submit an application, consent for screening, pay application fees, and even sign their lease online — then it’s time to invest in digital leasing.
By letting renters progress through each step of the leasing journey when and where they please, you’ll be sure to wind up with more signed leases, and decrease the amount of time your units sit vacant.
When your leasing flow is digital rather than offline, Conversational AI can even keep residents moving through these steps after the showing is booked — allowing your team to focus on the big-picture rather than managing each step of the leasing flow manually.
Make the most of these five strategies, and stop letting your properties sit vacant because of inefficient follow-up and repetitive manual processes. Do it right, and it can even save time for your team and increase your cash flow.
AppFolio, Inc. develops Property Management Software that helps businesses improve their workflow so they save time and make more money. Appfolio submits articles & blogs including topics of Resident Retention, Improved Owner Communication, Time Management, and more.
Reviewing your portfolio of investment properties should provide a sense of satisfaction. Thanks to your decades of hard work, your portfolio generates cash and operates like a well-oiled machine. But would this continue without you? Is your spouse or successor up to speed on how your portfolio operates? Do they know the addresses for each property you own? Will they be surprised when something you consider routine occurs at one of your properties?
You know it is inevitable, so don’t miss an opportunity to create a seamless transition. One that allows the people you care about to avoid the stress that comes with sorting out your portfolio and figuring out how it works. Even if you have a property manager, their focus is often limited to the on-the-ground property operation and not high-level concerns like strategy, finance, or long term capital expenditures. All this tacit knowledge that helped you build your portfolio is a treasure. Help your successors by creating a map to that knowledge.
The usual estate plan with a will and trust is missing key information during a critical transition. A roadmap to understand how your portfolio operates would help fill so many of those often-overlooked gaps. Below are five essential elements to consider adding to your estate plan:
1. Schedule of Real Estate Owned.
Create and maintain a schedule of real estate that provides detail for each property you own. The schedule should show each property’s address, property type, property manager contact, number of units, number of occupied units, gross and net expected income, lender, outstanding loan balance, and whether you have impounds/escrow payments for taxes and insurance. Knowing your portfolio is half the battle for your successors to handle ongoing management. You can find templates online or use the simple template on my website.
2. List of Trusted Advisors.
Maintain a list all the contacts that support your portfolio. Your list should include your property manager, attorney, insurance agent, loan advisor, maintenance team, and tax advisor. Include each contact’s name, phone number, and email address. Even if you handle some of these areas yourself, you should not expect your heirs to have similar expertise unless they’re already assisting with managing your portfolio. Help your successors get their arms around managing your portfolio by listing experts that you would trust in helping them manage your portfolio if you were not available.
3. Instructions with List of Key Documents.
Maintain a letter of instruction to your successors that (i) explains how you manage your portfolio and (ii) provides access to key documents. Your letter of instruction should explain your routines so that your successor can maintain the portfolio cash flow. Include the schedule of real estate (see #1) and consider providing additional key documents for each property such as deeds, loan documents, insurance coverage, bank statements, rent rolls, and accounting records. Your successor will need this information to manage the property and settle your estate. After you organize your information, consider storing it with your attorney or trusted estate advisor so they can quickly share it with your successor when needed.
4. Staggered Loan Maturities.
Try to avoid having your property loans mature within 6-months of each other and maintain at least 3-years of remaining loan term on each property. Better yet, consider financing your properties with full term loans instead of ones that require a bullet or balloon payment at any point. This way your properties will naturally amortize the loan balance until it is paid-off. Even if the fixed rate period is only 5- to 10-years, the additional term provides you flexibility when there’s another downturn and lenders step out of the market. Furthermore, your successors won’t have to deal with a maturing loan that requires a significant payment in the midst of the transition.
5. Pre-Negotiated Succession Language.
By default, most loans provide the lender the right to demand full repayment upon the death of the borrower or a guarantor. This can cause your whole portfolio to come due and put quite a burden on even strong balance sheets. You can avoid this by asking your lender to alter the due-on-death clause to allow for your successors to take over the loan. Consider that Federal law allows relatives inheriting 1-4 unit mortgaged homes to take over their loan. Your goal with your commercial loan is to get to a similar place so that your heirs won’t have to come up with cash to payoff a lender in the midst of settling your estate. Remind the lender that their primary repayment source comes from the property’s stream of recurring rental cash flow, which remains unaffected by the transition. If the loan is recourse, the lender may ask you to commit to providing a replacement guarantor with acceptable wherewithal. This is still better than your successors having to pay off the loan before they’re ready. Lastly, approaching the lender with this request demonstrates a level of planning beyond the average borrower. It should give them increased comfort that you have a succession plan that considers how you intend to repay your loans.
These five simple elements will help minimize the stress of taking over your portfolio. You probably already know you need to do these things. I hope this article spurs a conversation with your trusted estate advisor about integrating these elements in your estate plan. The ones you love will be grateful you did.
Nick Schoch is an independent loan advisor for 5+ unit apartments and a landlord located in San Diego, CA. You can download Nick’s Apartment Loan Handbook free at his website: nickschoch.com. If you have questions about this article or financing an existing property or purchase, you can contact Nick at email@example.com or call/text (760) 201-6758.
In several past articles on fair housing and Section 8 tenancies, we said that no group should be painted with a broad brush and that discrimination lawsuits are the product of preconceived notions about classes of people.
We might be seen as hypocritical, then, when we outline five profiles of tenants. Not so fast -these personalities span every class, religion, color, source of income, and other characteristics. Indeed, tenants are individuals, and after managing thousands of landlord-tenant relationships, we can provide a contextual framework on where individuals fall into this spectrum.
The political tenant
This tenant inherently sees the landlord-tenant relationship fraught with tension because it begins with the presumption that the landlord is powerful, and the tenant is weak. When the landlord communicates with the political tenant, the tenant is always wary that the landlord is attempting to exploit him or her.
The silent tenant
The silent tenant is just too busy to engage with the landlord and as a result, the landlord may be obstructed in the relationship. For example, the landlord may send letters that go unanswered. When the time comes to make repairs and proper notice is served on the silent tenant, perhaps the landlord still cannot gain access to the unit – the tenant just doesn’t want to be bothered.
Passive aggressive tenant
The passive aggressive tenant can be disappointing because these type of tenants are nice as pie and you think you have a great relationship with such pleasant people but in the end, the tenant takes a surprising turn for the worse.
Passive aggressive tenants are very polite and engaging when you interact with them and they seem to be ideal residents until asked for some sort of responsibility in return as part of a give-and-take relationship. Once they are reminded of their responsibilities, the passive-aggressive tenant takes a hostile stance.
Although they appear to be very nice when there are no underlying issues, these type of tenants will suggest that the landlord has done something wrong to them when concerns are raised or instructions made by the landlord.
The dysfunctional tenant
The dysfunctional tenant’s personal life is constantly embroiled in crisis, making it difficult for them to properly engage in a landlord-tenant relationship. Oftentimes, the dysfunctional tenant will articulate the source of dysfunction to the landlord, in an attempt to gain empathy or sympathy. When the personal crisis leads to nonpayment of rent or other problems in the rental unit, the dysfunctional tenant has no shortage of excuses.
The fifth profile is the perfect tenant who religiously pays rent on time, responds to requests, they are personable and honorable, and that’s the type of relationship landlords would most likely expect.
Let’s move on to how rental property owners can respond to each persona.
As for the political tenant, communication should not be about the relationship itself, but about best practices in the relationship. If, for example, the tenant who has politicized the relationship has not paid the rent on time, you can address the failure to pay rent by saying, “you promised to pay the rent on time, we have a contract – why have you failed to do so?” Both the landlord and tenant have mutual responsibilities, and it is important to set expectations based on this contractual obligation without getting bogged down in the acrimony the political tenant tends to lean towards.
Documentation is always prudent, but even more so with the silent tenant. When tenants do not have the inclination to interact with the owner, the landlord should document their attempts to reach the tenant and amplify their written correspondence with these muted residents. What we’d like to see at Bornstein Law is a paper trail that shows a good-faith effort on behalf of the landlord to have fluid dialog with a tenant who does not reciprocate, so that when there is a conflict later on – for example, when the silent tenant does not grant access to make repairs because he or she has been uncommunicative – you have documentation that shows you as a landlord did your part to have open transmission of information.
When the passive aggressive tenant becomes animated and the landlord believes the tenant is incorrect, landlords should not get involved with drama but instead, pacify the situation. These tenants have a propensity for long-winded dialogue and emails, which can consume a lot of time and energy. The best practice is to not enlarge the discussion but to pacify the tenant by agreeing to disagree, use limited language, and deflate the aggression by moving on.
What landlords should know about dysfunctional tenants is that it is important to compartmentalize their empathy towards a tenant, which can diminish the control of the situation, and the fundamental objective of effectively running a rental business. The key to dealing with dysfunctional tenants is to see beyond the underlying crisis in their life and be firm with expectations.
More than a practitioner in landlord-tenant law, Daniel Bornstein is the Broker of Record for Bay Property Group, a property management company that protects and optimizes the investments of landlords. He is also renowned for his educational seminars and is called upon as an expert witness in complex real estate litigation matters. To avoid or resolve friction within rental units and cauterize risk, Daniel is happy to dispense informed advice to owners, property managers, and other real estate professionals looking to survive and thrive in today’s challenging and litigious rental housing market. Call 415-409-7611 or email firstname.lastname@example.org.
If you are unfortunate enough to receive a letter from your tenants attorney, do not respond, do not pass go, do not collect $200.00. Send the letter to your own legal counsel for review and direction. Sometimes what you say can and will be used against you in a court of law. Sometimes they may try to lead or manipulate you to do the wrong thing, just so they can use it against you. Simply said it is over your pay grade.
Remember the tenant’s rent is due on one specific day as per your rental agreement example rent is due on the first of the month. It would then be delinquent on the 2nd of the month. Your grace period is when the late fee is applied to the account, not when the rent is due.
Be very careful whom you speak to. Example if someone other than the tenant on the written agreement starts asking for keys, requesting maintenance, try’s to negotiate terms , etc. remember you should not speak to anyone other than the tenants on the agreement. And you should not disclose any information to anyone other than the named tenants. Good choice of words might be, unfortunately you are not listed on the rental agreement therefore you cannot act on the residents behalf. I also cannot discuss any of the tenancy with you because you are not on the contract. This trick also works well with overbearing real estate agents trying to assist their client by telling you how it’s going to be handled.
Don’t tell the neighboring residents anything about a tenant you are evicting or what’s going on with them. That is personal private information, so please keep your lips closed. Good choice of words might be Thank you for bringing that to my attention, I will let our legal counsel know.
Stop using email, text messages and your mouth to get you into trouble. Do your job and serve a notice about the issue. Kill a tree. Sending a text message as a 24 hour notice to enter is not valid in a court of law. Using an email or text or your mouth to terminate tenancy or notify of a lease violation is not valid it can and may be used against you. Again kill a tree. The less electronic communication and verbal vomit the less likely the tenants will cry harassment or pull out of context, alter the words in photo shop. Your job is to serve a notice for violations, so please do that instead of emails, texts etc. If what you are trying to say to your tenant is not possible with a notice then maybe you shouldn’t be saying it.
There is 2 parts to a breach of covenant notice that is non-monetary. That’s right I said two parts. Example, you serve a 3 day covenant notice for unauthorized pets in a unit. Make sure that you are also serving the 24 hour notice to come in and inspect after the notice expires. If you get into a court room the tenant’s attorney may ask you “When did you re- inspect and where is your supporting documentation?) This is not the time to have a bad case of the deer in the headlights look.
Remedy upon notification, means correct it yesterday, not tomorrow. So when dealing with a habitability issue remember this the tenant does not owe any rent until it is corrected so don’t dilly dally on the repair, because it is expensive to you!
Providing reasonable accommodations when there is a habitability issue at the property. Please take note when finding them a hotel or a different place to stay during the repairs means they don’t owe rent for that time period, you pay for the hotel, they should also be given a food credit of $10.00 per person per meal per day and reimbursed any laundry expenses. Please talk to your legal counsel for proper credits to be given, considering the circumstances involved.
Please refrain from acting on emotions; I know that it is extremely difficult especially in the heat of the moment or in a conflict. You may feel as if you have been backed into a corner or put on the spot, remember you don’t have to have all the answers in a split second so use a fogging technique such as, Thank you for bringing that to my attention I will make sure that my business partner is aware of your concerns and get back with you.
New Law 9/1/19 With landlord tenant laws changing whenever the wind blows, we need to change with them to stay on top of things, in the past we may wait until the 10th or 15th of the month to serve a 3 day notice to pay or quit, on 9/1/19 when the law changes and we are no longer allowed to count weekends or holidays in the expiration of the notice or also in the answer period of an eviction, we will see this process take longer, So we may need to change our business practice with the law and serve our 3 day notices sooner. Like on the 2nd of the month if the rent is due on the 1st.
Independent rental owners looking to hire a property management company. Please interview them, ask questions, ask to see real-estate license credentials and any other licensing, certifications, fair housing training etc. Remember you as the landlord are ultimately responsible. If the manager violates the law or discriminates that will most likely rest on your shoulders.
Fee management property owners when bringing on a new account and speaking with that owner, for your own benefit and knowledge there are a few very specific questions that you should be asking the owner. Such as, has your tenant reported bed bugs in the last 6 months? Have you received a letter or fine from code enforcement or from the city in the past 6 months? Have you received a call or complaint from fair housing in the past 6 months? Are you currently named in any pending law suits regarding your investment property?
Tenant screening the only thing that you have as a tool when screening a tenant that cannot be altered or modified by the tenant is the credit report. Tenants can alter id’s they can buy fake paystubs online; even purchase bogus bank statements on the internet. The phone numbers they provide to you to call and verify the information on the application, you could be calling a friend or family member. Utilize google to get the phone number to verify employment or look on the credit report to see who the current employer is, that credit report tells you so much info, if you just listen to it.
Patti has over 23 years’ experience in the property management industry. She is an independent rental owner, a property manager by trade, and has been a regional property manager for over a decade. Patti is an advisor and considered an expert in the property management industry. Patti is actively involved with several apartment associations; she is a key note speaker at conventions, writes articles for their publications and is an educator in their training classes. She has been invited to judge several different types of industry awards. Patti also holds various certifications and licenses on both a state and on a national level, Including a CA Licensed Real Estate Broker. She is also a repeat guest speaker at UCLA.
California’s 2019 state legislative session has a projected end date of September 13, 2019. Keep in mind that this state has full-time legislators, allowing the legislature to meet throughout the year after adjourning their regularly scheduled sessions.
*Bills with an asterisk are technically still active, but were either held under submission in committee, are still in committee, or the author withdrew the bill from committee.
PASSED: Tenant Screening Fee for 2019
The total allowed applicant screening fee has increased by $1.81 since last year. Application processing fees cannot exceed $50.94. This adjustment is made based on the changes to the Consumer Price Index.
PASSED: City of Glendale’s “Right to Lease” Ordinance
This ordinance was revised in February to include relocation fees. Relocation fees apply to pre-1995 buildings with tenants choosing to vacate after a rent increase of over 7%. For buildings with 3-4 units, the fee is 3x the actual rent. For 5 and more units, the fee is 3x the amount of the rent after the rent increase. With tenants who have an overall household income equal or less than the median income for Los Angeles County (plus 30% of the AMI), the relocation fee will be based on the length of occupancy. It follows: 3-4 years of occupancy equals 4x the amount of the rent increase, 4-5 years equals 5x the rent increase, and 5+ years equals 6x the rent increase.
This ordinance also requires rental property owners to offer a 1-year lease to rental applicants (which an applicant can reject and enter into a shorter period as agreed upon). Current tenants in good standing are required a 90-day renewal notice that also includes the 1-year lease term. This too can be reduced to a shorter period at the tenant’s request.
PASSED: Inglewood’s Temporary Rent Caps and “Just Cause” Eviction Policy
In early March, the Inglewood City Council temporarily capped rent increases at 5% for pre-1995 apartments. It also imposed a “just cause” eviction measure. These temporary ordinances should last 45 days (expiring mid-April) but could be renewed by the council for up to a year.
Similar to “Ban the Box” employment laws, this bill would prohibit the property owner from inquiring about, or requiring the tenant to disclose, any criminal records during the rental application process. After the initial rental application phase, landlords can request a criminal background check. If the owner considers denying an applicant based on their criminal record, they are required to provide the rental applicant a written statement as to the basis of their possible denial within 5 days of receiving the background report. The rental applicant will then have 2 days to provide evidence of record inaccuracy, evidence of rehabilitation, or other factors. The owner would then need to reconsider within a specified time, and if the decision to deny holds, the landlord would need to notify the rental applicant in writing. AB 53 also requires rental property owners to include, in the application, a notice of the use of criminal records as part of the screening process.
This year, there are two proposed “just cause” eviction bills. While both propose to limit evictions to specific causes (like failure to pay rent or a breach of the lease) and include some “no fault” eviction causes (like demolishing the unit or withdrawing from the rental market), there are a few differences between the two bills. AB 1697 would only apply to tenants residing for 10 months or more, while AB 1481 would apply to all tenants. AB 1481 also bans the owner’s right to terminate the tenancy to move into the unit if the tenant is 60 years or older unless the tenant grants permission or if the lease provides notice of this tenancy termination option.
Both bills were moved to inactive file by Assembly Member Tim Greyson (D-14th district).
Surprise, surprise… rent control is back! As of writing, AB 1482 would cap annual rent increases by 5% plus the percentage change in the cost of living. Rental property owners would be prohibited from terminating a tenancy to avoid the rent increase cap. If passed, these provisions would be active until January 1, 2030.
As AB 36 stands now, this bill would allow local governments to cap rents on single-family rental properties (exempting landlords with 10 or fewer units) and on construction that’s at least 20 years old.
On April 10, 2019 Long Beach became the latest city to push for an ordinance that places a rent cap, plus a base relocation charge and “Just Cause” Eviction rules.
For a month-to-month tenancy, existing law requires that if you increase the rent by 10% or less, the landlord has to provide at least 30 days’ notice. For rent increases of more than 10%, the landlord has to provide an additional 30 days, to a total of 60 days’ notice. AB 1110 would require 90 days’ notice for rent increases of more than 10% but no more than 15%. For increases of more than 15%, landlords would have to provide 120 days’ notice. This bill has moved on to the Senate.
Existing law requires a tenant within a month-to-month lease at the time the rental property is sold in foreclosure to be provided 90 days’ written notice. Tenants within a fixed-term lease (like a 12-month lease) would have right to possession until the end of the lease term, unless in specified circumstances. This existing law expires on December 31, 2019, however, if SB 18 passes, these provisions would stay in effect indefinitely.
PENDING: Allowances for Tenants to Shelter those at Risk of Homelessness
This bill would permit a tenant to temporarily allow a person at risk of homelessness to live with them for up to 12 months, regardless of the lease (written consent by the property owner). Landlords can adjust the rent payable under the lease as compensation for the occupancy of the extra person, and which terms would need to be agreed upon in writing. AB 1188 allows owners to establish rights and obligations for the person at risk of homelessness, the tenants, and the owner. This includes making the tenant liable (to the extent of the terms of the lease) and requiring a written rental agreement.
PENDING: Requirements for the Homeless Coordinating and Financing Council
The Fair Employment and Housing Act currently prohibits housing discrimination based on source of income. While Section 8 housing vouchers do not legally fall into the “source of income” category, this bill would change that. By expanding the definition of “source of income” to include section 8 housing vouchers, it would make it illegal for any property owner to deny a tenancy based on the applicant’s Section 8 enrollment.
The California Work Opportunity and Responsibility to Kids (CalWORKs) program provides cash assistance and other benefits to qualified low-income families, which includes homeless assistance benefits to homeless families that have used “all available liquid resources in excess of $100”. This bill would allow the county to approve of additional days of temporary shelter assistance if necessary to prevent homelessness while the household is transitioning to receive permanent homeless assistance. The CalWORKs program currently provides permanent housing assistance to pay for the last month’s rent and security deposits, up to 2 months of rent arrearages, or utility deposits. This bill would also remove the requirement that rental property owners must have a history of renting properties in order to receive payments.
On April 3rd, the Long Beach City Council voted in favor of an ordinance that would place relocation fee policies on rental properties. Since then, the city council has approved of an ordinance that would effectively cap rent increases at 10%, and limit the ability to terminate tenancies. The formal, second vote of this ordinance is scheduled for June 11th.
As it stands, this ordinance would require landlords with 4 or more units (in pre-1995 housing) to pay a tenant’s relocation fees (based on unit size) if they raise the rent by more than 10% in a year or require the tenant to move. While these amounts will periodically be revised, the ordinance currently lists fees as $2,706 for a studio, $3,235 for a one-bedroom, $4,185 for a two-bedroom, and $4,500 for a 3-bedroom or more.
This bill would expand the current prohibitions against the use of pesticide containing particular anticoagulants in wildlife habitat areas. Also known as the California Ecosystems Protection Act of 2019, if passed, this bill would prohibit the use of common types of rat poison.
FAILED: Housing Development Near Public Transportation
This bill would have allowed eligible neighborhood multifamily projects to submit an application for a streamlined, ministerial approval process that is not subject to a conditional use permit. The approval of a project (under these provisions) would have automatically expired after 3 years (with a 1-year extension available). SB 50 would have also revised the density bonus law by imposing additional requirements for developments located within a county with a population equal or less than 600,000. This bill was held in committee.
AB 724 would have created a rental housing registry for buildings within California. This would have included landlords or property owners with more than 15 units. If it would have passed, information like the name of ownership, the number and size of each unit, and the move-in dates would have been required. AB 724 was held under committee in May.
FAILED: Tenants Associations Withholding to Pay Rent
Despite strong opposition, statewide rent control bill, AB 1482 by Assemblyman David Chiu, D-San Francisco, passed off the state Assembly floor. The legislation now awaits committee hearings in the Senate.
In the final hours of deliberation, AB 1482 appeared to be defeated for the year, being 7-8 votes short of the 41 votes needed for passage. Chiu, however, agreed to several amendments to his proposal, which led the California Association of Realtors to lift its opposition and take a neutral position to the legislation.
Chiu was then able to secure the needed votes to advance his proposal, which passed with 43 yes votes, 31 no votes and six abstentions.
Some highlights of the amendments that Chiu has agreed to take relative to AB 1482:
Increasing the annual cap on rent increases from CPI plus 5% to CPI plus 7%, the same cap adopted by Oregon earlier this year.
Exempting owners with 10 or fewer single-family homes.
Sunsetting the bill in three years, but with the option to renew – a foregone conclusion.
These changes do not remove objections to the legislation. Despite requests, Chiu has refused to provide any assurances that future Legislatures won’t lower the annual cap on rent increases. The Legislature could conceivably lower the law from CPI plus 7 to CPI plus 1 next year. This creates instability in the marketplace.
Additionally, including all buildings that are 10 years of age or older in the rent cap would result in a significant reduction, if not elimination, of new rental housing development projects. It is anticipated that with only a 10-year horizon, investors and lenders will opt to place capital in other ventures.
Moreover, the bill still does not address the crux of California’s housing crisis, which is a housing shortfall. California needs to build more housing as quickly as possible, and a statewide rent cap creates a disincentive for investors to build new housing or to renovate existing housing.
AB 1482 does not include means testing, so the state’s wealthiest residents will be eligible for a price ceiling on rentals, while renters most in need will get no assurances of assistance.
“It defies logic that the state Legislature continues to advance rent cap legislation, which will worsen California’s housing shortage, while rejecting legislation that would actually promote new homes, like SB 50, which would prohibit bans on apartment construction near jobs centers and public transportation,” said Tom Bannon, CAA’s chief executive officer. “This push for statewide rent control also comes just months after voters resoundingly rejected Proposition 10, the statewide rent control measure on November’s ballot.
“It’s time we work together to advance policies that will add housing that working families can afford instead of blanket policies that don’t address the real problem — a lack of supply.”
So, you received your Order to Comply, and now you’re looking to hire a Soft Story Vendor.
Well, I’ve found it’s best to take the time to do a little research before hiring a retrofit contractor. Finding the right vendor makes all the difference in your retrofit experience; from the quality of the work, design methodology, to your emotional stress, and the timeliness of your project. By fulfilling this simple step, you will save a lot of time and money later when it counts.
To help you with the daunting task of qualifying potential soft-story vendors, start by making a list of the qualified soft-story retrofit contractors in your area. It’s imperative to research and ask for recommendations from your friends and colleagues who’ve had a seismic retrofit done on their building. As you narrow your search for potential contractors to work with, ask these 5 important questions to ensure you’ve found the right vendor for your project.
Q1. Is your company a Full-Service soft-story provider or an agency hiring subs?
There are two different types of vendors to be aware of, Regular General Contractors who will sub out the work to other contractors, and Full Service (design/build) Contractors that are responsible for your project from start to finish. Traditionally, general contractors hire a variety of subcontractors to help complete different phases of the project creating scheduling difficulties and project delays. I’ve found it’s more efficient working with Full Service Contractors like CalRetrofit, that do the actual work and not simply act as an agency managing subs.
Q2. What separates you from your competition?
A true belief and mission in Design Minimization and value engineering is one of CalRetrofit’s innovative services. There are ways to significantly reduce the scope of work & reinforcement methods by re-engineering the original remediation plan provided by our clients, thus mandating substantial savings in construction costs and possible change orders.
Approximately 50% of the engineering plans our clients submit for our review are revised, resubmitted to LADBS and substantially minimized.
If your project has been engineered or is still in the pre-engineering phase, I urge you to utilize our expertise to provide the most optimized and cost efficient structural engineering design. This will save you thousands.
Q3. Do you carry Commercial Retrofit Insurance?
A specific commercial retrofit insurance policy is required to perform seismic structural construction. You will want to make sure your vendor doesn’t provide a policy that has no coverage for commercial reinforcement work. You’re covered with CalRetrofit.
Q4. How many soft-story projects have your completed? Can i get list of client references?
Longevity in this business often coincides with experience, and it’s very important to find out how long the company you’re considering has been doing seismic retrofitting. There are no formal credentials, or certifications, in this field. You will want to make sure that the company you hire, has both training and experience in these areas, as well as a thorough knowledge of the steps involved, and are up to date on all building codes, regulations, and each cities specific ordinances and deadlines.
A track record of happy clients speaks volumes. Ask for a list of client references and contact them. Make the most of this opportunity, by asking questions that will give you an understanding of what you can expect working with this vendor. I also recommend visiting a few of the vendor’s constructions sites and completed jobs.
Q5. Will the tenants have parking at night?
Most retrofit vendors completely block off the tuck under construction areas, forcing tenants to have to park their vehicles elsewhere during months of construction. This is a massive headache to say the least. At CalRetrofit we’ve got our clients covered. We cover trenches with steel plates, enabling tenants to drive over covered trenches upon their arrival back home at 5pm. We go through leaps and bounds to protect and secure every job site environment while minimizing the negative effects on property managers and their tenants.
By asking these 5 questions and doing your due diligence you will quick separate the men from the boys and be able to make a decision based on research not on heresy. At the end of the day, it’s in the vendors best interest to be honest and trustworthy because he wants your recommendation to other potential clients.
Carlos Escudero, CalRetrofit Seismic Retrofit Consultant. After over 10 years of Property Management experience working with a large firm in Los Angeles, Carlos was excited to join the retrofit industry and worked with a competitor, however, after a year in, he realized there was a lack of integrity in their business and and was inspired to look elsewhere, until he joined the CalRetrofit team, first as a project manager, and then, after being with the company for a short time and truly understanding their vision and their mindful integrity, he decided to focus his talents on helping building owners and property mangers find their way to this awesome company.
Senator Scott Wiener (D-San Francisco), in late March 2019 introduce his proposed legislation is modeled on the federal estate tax but would lower the exemption rate to $3.5 million, which is lower than the federal estate tax exemption. Senator Wiener introduced Senate Bill 378 at the end of March. If the bill is passed, it would result in a special fund designed to improve socioeconomic equality in the state.
With the lowered exemption rate of $3.5 million, or $7 million for a married couple, the proposed estate tax would phase out at $11.4 million for an individual or $22.8 million for a married couple, which is the current federal estate tax exemption rate. By phasing out at the federal estate tax exemption, the bill would prevent California residents from being double-taxed. In other words, estates would be taxed by California if they range from $3.5 million to $11.4 million. In addition, similar to the federal estate tax, SB 378 has exemptions, including for transfers to a surviving spouse, and for family farms.
If the California legislature passes SB 378, it will appear on the ballot in November 2020. This would not be the first time that an estate tax measure appeared on the California ballot. California residents approved a ballot measure in 1982 that prohibited an estate tax. Accordingly, in order to put an estate tax in place in California, voters in the state need to approve it in a ballot measure.
On the federal level this is the same area where some of the presidential candidates want to change the current $11.4 million for an individual or $22.8 million for a married couple, if they are elected president in 2020.
What this all means is the current estate planning does not worry about estate tax (popularly called the “death tax”) but instead is now more focused on obtaining a step up in basis for income tax purposes. This could possibly change after the 2020 national and state election.
What should you do now, if anything? Some nationally known commentators are recommending making gifts to family members today. The idea is to freeze values today and shift your wealth appreciation over to your family. The commentators point out that there will be no “claw back” under new treasury regulations, Reg 106706-18 when using the enhanced gift tax exemption of $11,4 million today. For example, if you used $100,000 today of the $11,4 million and the exemption amounts change later to a lesser amount of $3,5 million below the current $11,4 million, the $100,000 gift is not reduced from the $3,5 million. Today you can discount value of assets which may not be available after 2020.
Michael Trainotti, Inc., A Law Corp
400 Oceangate, Suite 520
Long Beach, CA 90802
Work: (562) 590-8621
Fax: (562) 590-8181