Economy Affects Landlords

Landlords Affected in Tough Economic Times

Tough economic times affect every consumer that includes tenants and it has become quite evident recently with the global financial meltdown that many consumers/tenants have overspent and incurred more debt than they are able to handle financially.

So when consumers default on their financial obligation who suffers? Credit card companies, financial institutions and landlords? Yes landlords. More and more consumers, who are tenants, will leave landlords stuck with unpaid rental fees and damaged rental property where they are unable to meet the terms of their lease agreement because of heavy debt load and unemployment, many tenants become angry and frustrated and trash the rental unit. Where this scenario arises the tenant(s) may just decide that it is easier to hire a midnight mover and forego the lease agreement and the last few months rent as there is little or no consequence for doing so.

No this is nothing new as it has been happening for years, it is evident however that rental defaults are rising and are becoming more common occurrence in these new tough economic times.  Tenants use landlords as a revolving line of credit because it is easy to do, there is no consequence, and many tenants in today’s unstable financial environment feel that they have no other choice. The major credit reporting agencies do not report tenant pay habits and a court award or an arbitration award means nothing in most instances as it is a worthless piece of paper that is more often than not, unenforceable.

Landlords reporting tenant pay habits to a credit reporting agency is a viable solution to maintaining a profitable rental business and reducing income loss.  The risk of extending a lease to a high risk tenant that has stiffed another landlord is very real and landlords need to take additional measures to protect their business.

Advising the prospective tenant prior to signing a lease that monthly pay habits are reported to a credit reporting agency and that there is a consequence for late rent payment and/or leaving a landlord stuck with unpaid rent is a significant deterrent.

One of the premier tenant screening services in North America, TVS Tenant Verification Service Inc. provides the residential rental industry with a repository for reporting pay habits that stops high risk tenants from using landlords as a revolving line of credit and benefits good tenants that make rent payments in a timely manner.

Landlords and good tenants’ benefit, high risk tenants that use landlords as a revolving line of credit will soon come to the realization that there is no such thing as free rent.

Article from http://www.atenantscreen.com/

Marv Steier, President
TVS Tenant Verification Service Inc.
www.tenantverification.com 

Renters doing background checks

As I landlord I’ve been doing tenant screening for years. Been with http://www.tenantverification.com for most of it. And during all of that time only two applicants have ever request information from me to run their own search.  Research is just as important to do if you’re the renter as it is for the landlord .

Don't assume landlord's insurance covers all damage

Posted 03/22/2012 by Janet Portman

Q: I read a recent New York Times article about renters insurance, which quoted an insurance professional who warned that if a tenant's possessions are damaged, "the landlord's policy is not going to cover your damages." But the article says there's "an exception to that ... if the landlord was 'aware of a prior hazardous condition, failed to correct it in a reasonable time frame, and your property was damaged.'"

I'm confused -- as a landlord, am I insuring my tenant's property if it's damaged as a result of my carelessness? --Paul B.

A: Your confusion is understandable. In a sense, this insurance professional was right: Tenants in this situation might get some money from the landlord's carrier. But it's not correct to conclude that when landlord carelessness is involved, the landlord's policy will "cover" the tenant. Once you see how these claims work, you'll see what I mean.

Here's a typical scenario:

Suppose Sam's computer, which he left on the kitchen floor while it was recharging, is ruined when the pipes burst under the kitchen sink, causing a flood. Sam's landlord had supposedly fixed the leak just that day, but a plumber later confirms that the landlord did a shoddy job. It's pretty clear that the landlord was careless.

Sam's landlord has property insurance, but that insurance covers only the landlord's property; it wouldn't extend to Sam's computer. The landlord also has liability insurance, which covers the landlord when his carelessness results in damages or injury.

If Sam the tenant has renters insurance ...

Here's how things would play out if Sam has his own policy. Sam takes pictures of the floor and his computer, gets a statement from a computer repair shop and the plumber, and submits the claim to his insurance carrier. The company pays Sam; most companies do not dispute these claims unless they have solid reasons to suspect fraud. Sam buys another computer. (Hopefully, he's got "replacement value," not "actual cash value" coverage, which results in enough money to cover the total cost of a new computer.) Sam's carrier can go after the landlord (known as "subrogation") to get reimbursed, but because this is a small claim, it probably won't. Even if it did, Sam wouldn't be involved.

If Sam has no renters insurance ...

In the absence of his own policy, Sam wants the landlord to pay for the results of his shoddy repair. He sends documentation of the damage to the landlord, demanding reimbursement. Sam cannot make a claim on the landlord's property policy, because that policy did not insure Sam's stuff.

The landlord then has three options: Pay Sam; refer the claim to his carrier, which will treat it as a claim against the landlord's liability policy; or ignore Sam. If he doesn't pay voluntarily but refers the claim, the carrier will get in touch with Sam and probably settle. But if he simply ignores Sam, Sam will have to sue the landlord to get his money. Even then, the landlord is under no obligation to involve his insurance company, and may choose not to in order to keep his record clean.

If Sam wins in small claims court, he will get a judgment that he will have to collect. But if the landlord won't pay, he can't just present the judgment to the landlord's insurance company. Instead, he will have to attach the landlord's bank account or garnish his wages.

So you see, Sam may eventually get his money from the landlord's carrier, but only if the landlord chooses to involve the insurance company, and only if they settle or Sam wins in court. That's a far cry from saying that the landlord's insurance will "cover" damage to the tenant's property caused by the landlord's carelessness. The bottom line: It's a lot easier to have your own coverage and let the insurance companies sort it out.

Q: The lease I've been asked to sign has an odd clause concerning attorney's fees and costs in case there's a lawsuit. It says that the loser will pay the winner, but only up to $1,500. Is this legal? --Geoff S.

A: Lawsuits between landlords and tenants can arise over the meaning and implementation of the lease, or over issues that aren't covered by the lease. A lawsuit over the landlord's retention of the security deposit is an example of the first kind; a tenant's claim that the landlord charged her more rent because of her race is an example of the second.

Whether your landlord's attempt to limit the loser's liability for court costs and fees will hold up depends on the kind of lawsuit at issue, and on what your state law has to say about the matter. Let's take a look at each situation.

Lawsuits over the lease

Some landlord-tenant disputes arise when one side claims that the other isn't abiding by the lease terms, or is implementing them in a way that is contrary to the spirit of the lease. For example, a landlord might claim that a tenant is failing to take reasonable care of the property, in violation of the lease clause that requires such care, and terminate accordingly. The tenant contests the ensuing eviction lawsuit, and one side wins. In this situation, your lease's cap on the loser's liability might hold up, as long as there's no state law or policy that would lead a judge to strike it down.

But suppose the lawsuit is over the tenant's use of a rent-withholding remedy, which was followed by the landlord's decision to take away the tenant's parking privileges. The tenant, claiming unlawful retaliation, sues and wins. Will the cap be applied? That depends on whether the anti-retaliation statute itself requires the loser to pay the winner's costs. When retaliation is involved, many statutes include this type of provision.

For example, California law specifies, "In any action brought for damages for retaliatory eviction, the court shall award reasonable attorney's fees to the prevailing party if either party requests attorney's fees upon the initiation of the action." (Cal. Civil Code § 1942.5(g).)

The statute in Illinois does not provide for these fees (765 Il. Comp. Stat. § 720/1), but Texas law does (Tx. Prop. Code Ann. § 92.333).

So, if your state's anti-retaliation statute requires the loser to pay reasonable fees, but the loser's attorney fees exceed $1,500, will a court uphold the lease's attempt to vary the statutory rule? It depends. Sometimes, courts allow landlords and tenants to vary the rules, but often they don't.

For example, courts won't uphold a lease clause that relieves a landlord of the duty to maintain fit housing.

Lawsuits that arise independently of the lease

Now, suppose you're dealing with a legal spat that does not have its origin in the lease, such as a discrimination lawsuit. It's doubtful that a hearing officer or a judge would apply a lease clause that attempted to limit the liability of the losing party. Often, the antidiscrimination statute itself specifies that the loser will pay.

And from a practical point of view, such a limitation would limit the number of cases brought to challenge illegal landlord acts, which is not what state legislators want.

Here's the problem: Imagine a winning tenant whose attorney has billed for many thousands of dollars, as is common. If the losing landlord is responsible for only $1,500, the balance will have to come from the winning tenant. If the award to the tenant in the lawsuit is modest, the lawyer could end up with most of it. Knowing that this may be how things turn out, tenants may be discouraged from bringing such suits, which is not what legislators intended when they wrote laws proscribing discrimination.

For this reason, a court might refuse to apply a lease clause that limits the loser's liability for the winner's fees.

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Article from www.tenantverification.com

Renting Scams

There are everywhere. Craigslist is a popular hot spot thought there are others out there. 

I had someone use one of the apartments in my complex as a part of their scam. It wasn't exactly the most comfortable position to be in. There are some obvious warning signs
1.bad or choppy english
2. owner out of country
3. no one able to let you check it out
4.no questions about your background
5. price sounds too good to be true

6. The ask you to western union the money

1. Let me say as a landlord I'm going to write any emails as professionally as possible, because it is a business transaction. You want to sound like your taking this seriously and know what your doing. 

2.Owner out of country should be a big warning sign. Most landlords who are too far away to manage their property hire property managers for a reason. Generally for things like showing the apartment, taking care of issues and maintaining the property.

3. Either way you should always be able to view the place before you rent it. Even if it isn't this kind of scam there is always a risk renting before you see the place. 4. Another thing to look out for is lack of interest in things like criminal record, credit and other background information. Any decent landlord is going to be looking for this, shoot many applications now ask you to sign off to allow tenant screening. I've been usingwww.tenantverification.com for years to do mine. Only someone who doesn't care what happens to the property would bother to look into your background. Definitely should set off warning bells.
5. If it sounds too good to be true it probably is.

6. If you send that money be prepared to never see it again. There are far safer ways to pay.

BedBugs

48-hour bedbug rule may not fly

Posted 03/29/2012 by Janet Portman

Q: I've just signed a lease that has a clause about bedbugs. It says that I must report any evidence of bedbugs in my apartment within 48 hours of seeing it, and that if I don't, I'll be responsible for the cost of getting rid of them.


The lease also makes me agree to inspection without prior notice, when the purpose is to check for an infestation. Are these legal provisions? --Marcus D.


A: Like many landlords, your landlord is getting serious about detecting and getting rid of bedbugs. He may have had trouble in the past with tenants who had the problem but failed to report it.


Some tenants think they can handle it on their own; some are afraid of retaliation if they inform the landlord; and some are just in denial or too embarrassed to bring it up. The consequence of delay is often a building-wide infestation, which is a huge problem for other residents and the owners.


Your landlord's idea of holding you responsible for eradication costs if you fail to report an infestation within 48 hours is similar to a provision in a bill being considered in Iowa, House Study Bill 520.


That bill goes quite a bit further, however: Tenants who fail to report bedbugs will be responsible for building-wide remediation. The Iowa bill also provides that a tenant who doesn't report an infestation within seven days of moving in is acknowledging that the unit is bedbug-free.


Interestingly, the state's attorney general has come out against the bill, pointing out that its provisions remove any incentive for landlords to act on their own. And expecting every tenant to recognize an infestation may be asking too much if tenants are not aware of the telltale signs of bedbugs.


It's one thing for legislators to change the rules. Judges will enforce these changes unless there's something seriously wrong, public policy-wise, about the new regime. But your landlord is trying to change the rules on his own, without any help from the Legislature. And here is where your landlord may have a problem.


First, what about that "no bugs within 48 hours, it's bedbug-free" acknowledgement? Presumably, if an infestation appears one week into the tenancy, the landlord can argue that it's the new tenant who introduced them.


Consequently, the landlord will argue, the tenant should pay the remediation costs. But this reasoning ignores a fact of bedbug life: These hardy creatures can go dormant and live on for months, without a source of food, then spring to life when food (a tenant's warm body) appears.


In other words, bugs in a vacant apartment may well simply hang out for a while -- more than 48 hours after the new resident moves in -- before becoming active. Their activity does not mean that the new tenant brought them with him.


Second, the provision that allows for no-notice entry to deal with a bedbug problem may run afoul of your state's access laws. Most states regulate how much notice a landlord must give before entering, though all allow entry in case of an emergency.


A bedbug infestation, albeit nasty, is not an emergency at the level of leaking gas or billowing smoke. If your state has notice requirements, asking you to waive your rights to notice so that the infestation can be addressed will violate your state's law.


Q: I need to break my lease to take a job in another city. My lease says that I will be responsible for the landlord's costs to ready, advertise, show the unit, and screen any replacement. Is this legal? --Rich S.


A: When tenants break a lease without legal justification, they are still responsible for the rent for the balance of the lease term. However, many states require landlords to use reasonable efforts to re-rent the unit; once a new tenant moves in, the original tenant's responsibility ends.


In all states that impose this "duty to mitigate," if the landlord fails to take steps to re-rent, the tenant is off the hook. On the other hand, if the landlord is able to find a new tenant only at a lower rent (perhaps the market has cooled), the tenant remains responsible for the difference.


Whether the lease-breaking tenant is also responsible for the landlord's costs to re-rent is not so clear, however. A few state laws say so directly.


For example, Washington allows landlords to collect their "actual costs" of finding a new tenant (see Washington Revised Statute Section 59.18.310). Arizona effectively allows the same thing, by declaring that the security deposit of a tenant who abandons the rental is forfeited, to be applied to "any accrued rent and other reasonable costs incurred by the landlord by reason of the tenant's abandonment" (see: Arizona Revised Statute, Section 33-1370).


Some states simply don't address the issue. Others give vague directions: For example, California allows landlords to recover from the tenant, in addition to lost rent, compensation for "all the detriment" caused by the tenant's breach (see: California Civil Code Section 1951.2).


So, whether your landlord can stick you with re-renting costs will depend on your state's law on the subject. If there is no clear answer, you might try arguing against having to pay those costs this way: The landlord would have incurred re-renting costs had you stayed until the end of the lease term, and you certainly would not have been responsible for them at that time.


Why should you pay now, simply because the costs are hitting several months earlier? To say that it's part of your punishment for breaking the lease without justification won't fly. People who back out of contracts are expected to pay for the actual damages they cause, not to pay penalties.


But that's not to say that your early departure did not cause damages besides the loss of the rent. There is a fair way to measure your landlord's damages: His early re-renting efforts meant that he spent money several months earlier than he had planned. For those months, the money he had to lay out was not in his bank account, earning interest.


That lost interest is a true measure of his damages. In addition, he's had to devote staff and personal time to a chore that he expected would arrive later; he may be able to put a reasonable monetary figure on the value of postponing what he and the staff would otherwise have been doing.


Taken together, these are the landlord's true damages caused by having to find a new tenant sooner.

article from www.tenantverification.com