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Seven Legal Details to Know About Evictions During The Coronavirus

On March 13, 2020, President Donald Trump declared a national emergency over the outbreak of the coronavirus (COVID-19), a public health emergency that has affected all 50 states, and in conjunction with the Centers for Disease Control and Prevention (CDC) issued a 30-day social distancing guideline for the states to follow. In response, most states have issued further directives to their citizens regarding social distancing, closures of nonessential business, limitations on travel, restrictions on evictions and foreclosures, and cleaning and disinfecting procedures. As these recommendations continue to evolve, landlords, condominium associations and property managers (collectively, Property Owners/Managers) have growing concerns over how the health, safety, security and privacy standards recommended by the CDC will affect the management and operations of their buildings. This article will list practical recommendations for Property Owners/Managers to implement during the COVID-19 event.

1. Understand Your Duty
The general rule of law is that Property Owners/Managers owe a duty to exercise due care for their residents’ safety, with condominium associations having the heightened fiduciary duty to act in the best interest of all of their residents. This duty is generally limited to the lines of ownership of the Property Owner/Manager, i.e., the areas under the Property Owner/Manager’s control. As such, it is important that Property Owners/Managers thoroughly read through their respective controlling documents (i.e., the lease, declaration of condominium or property management agreement) to determine what areas or services are under their control (i.e., elevators, pool, janitorial services, security, stairwells) and what obligations they have to their residents in maintaining these areas. Historically, as long as the Property Owner/Manager exercises due care in maintaining the common areas, courts will not impose further duties (unless the controlling documents state otherwise) on the them. In addition, the controlling documents may detail how additional costs for measures implemented in response to the COVID-19 event (such as cleaning and remediation costs) are shared between the Property Owner/Manager and the tenant.

After reviewing the controlling documents, it is important for Property Owners/Managers to be educated on their local laws and statutes to determine whether there are any additional responsibilities imposed or additional powers granted to them under state law. Most states have a landlord-tenant act, condominium act and/or not-for-profit corporations act that proffers guidance on the rights and obligations of Property Owners/Managers under state law. It is important to note that these statutes do not abrogate, but rather ratify, the common law. In addition, the state statutes can also give broader powers to Property Owners/Managers that are not outlined in their respective controlling documents.

Although the some states statutes were drafted with natural disasters creating property damage in mind, many of the emergency powers granted under the statute can apply to the COVID-19 event, again highlighting the importance of understanding the local laws and statutes of your respective states.

2. Stay Informed
With the ever-changing landscape on the federal, state and local levels, it is vitally important that Property Owners/Managers keep abreast of the directives and orders being issued that may affect day-to-day operations at their properties. Not only are these directives and orders important in helping Property Owners/Managers make informed decisions about next steps during the COVID- 19 crisis, such as whether to close the common areas or limit visitor access, they may also give additional powers to Property Owners/Managers to help protect their residents and their properties during the COVID-19 event.

Staying informed on the Property Owner/Manager level also allows the Property Owner/Manager to make faster decisions, disseminate information to its residents in a timely and effective manner, and ensure that they are complying with local laws. For example, most states impose requirements on Property Owners/Managers to comply with applicable building, housing and health codes.

Lastly, there may be restrictions on Property Owners/Managers related to evictions and foreclosures during the COVID-19 event. Understanding what those restrictions are and how they apply during and after the COVID-19 event will allow Property Owners/Managers to effectively assess the economic impact to their business and the appropriate measures to take to mitigate those risks. In addition, there may be federal, state and local financial relief efforts that Property Owners/Managers may be able to take advantage of to help soften the financial impact of the COVID-19 event.

3. Be Proactive
During these uncertain times, residents may look to Property Owners/Managers for guidance on how to maintain the property during the COVID-19 event. Informing residents that the Property Owner/Manager is aware of the COVID-19 event and is taking the necessary precautions to stop the potential spread of the virus throughout the building offers reassurance to residents and also prepares them for eventual closures of common areas or other emergency procedures that may need to be implemented. Other ways to be proactive include, but are not limited to:

  • Closing down common areas such as pools, clubhouses, tot lots, workout areas or any areas within the control of the Property Owner/Manager that may attract large gatherings.
  • Postponing community events until the spread of the COVID-19 virus is contained.
  • Communicate changes to building maintenance schedules, such as limiting requests to emergency repairs only or delaying nonemergency building maintenance for a reasonable amount of time.
  • Posting the CDC recommended guidelines and materials to educate tenants, employees and visitors about all suggested and mandated “social distancing” and “shelter in place” measures.
  • Thoroughly cleaning and disinfecting common areas to help stop the community spread of the virus.
  • Preparing an emergency response plan for the property.

Another way Property Owners/Managers can be proactive during the COVID-19 event is by being supportive of their residents. The COVID-19 event has been stressful on numerous parties, and emotions may be at an all-time high within the property. Maintaining an open dialogue with your residents and setting reasonable expectations about procedures and the Property Owner/Manager’s general ability to provide guidance during this time are essential to preserving the relationship between the Property Owner/Manager and tenants. In addition, open dialogue with tenants may allow Property Owners/Managers to be better informed about cases of COVID-19 on the premises.

It is important to remember that each state has privacy laws and regulations that must be adhered to, and protecting the privacy of each resident is paramount. Personal information regarding an infected individual should not be shared with other residents within the building, unless prior written consent is obtained. Property Owners/Managers may, however, provide residents in the building with a general statement that an individual on the premises tested positive for COVID-19 and include information on the procedures the Property Owner/Manager plans to implement to clean and sanitize the common areas of the building.

In all, following these three steps – understanding your duty, staying informed and being proactive – during the COVID-19 event may help Property Owners/Managers best address their concerns regarding managing and operating their properties in a safe manner.

4. Federal eviction moratoriums
A portion of the CARES Act that expired on July 25th, 2020 did require some landlords to observe a 120-day eviction moratorium. In other words, even if a tenant didn’t pay rent for 120 days, they could not be evicted legally if their apartment fell under certain conditions—one of which was if your property had been financed by a federally backed mortgage.

5. Local eviction moratoriums
Arizona, has extended its local eviction ban until October 31st, so regardless of any lapse in federal protection, Arizona tenants cannot legally be evicted, nor can their nonexempt property be seized. Therefore, it is very important to check with your local government to see what eviction protections are still in place.

6. Rent is not forgiven
Eventually, these eviction prohibitions will be lifted, and at that time tenants behind in rent payments will have to figure out how they are going to make payments going forward while at the same time taking steps to pay back rent. COVID-19 eviction prohibitions do not usually wipe out past-due rent balances, although local governments may introduce new regulations covering the handling of past due rent when the evictions bans do expire.

7. There is help available
The Arizona Department of Housing has set up a site with a self-assessment questionnaire. Certain persons can qualify for COVID-19 rental assistance by completing the questions and continuing with the assistance process. Check your state’s resources if you think your tenant might qualify for help.

While the CARES Act does offer some protection against negative credit reporting for certain late payments, late rent payments can affect a tenant’s credit score. Many landlords—especially those with only one or two units—generally do not report late rent to credit bureaus and most follow the typical landlord guide on the majority of issues with tenants.

Position Realty
Office: 480-213-5251

10 Laws All Landlords Need to Know

Dozens of federal, state, and local laws govern the residential rental industry and the landlord-resident relationship. All of these laws are important. The following calls to your attention ten important laws for you to know and follow when you’re a landlord.

The Fair Housing Act
The Fair Housing Act prohibits you from discriminating against applicants or residents based on any of the seven protected classes:

  • Race
  • Color
  • Sex
  • National origin
  • Religion
  • Handicap
  • Family status

The Fair Housing Act establishes only the minimum protections. States and localities may set additional protected classes, such as source of income — whether a person’s income is from a job, alimony, child support, unemployment, welfare, disability payments, and so on.

The Fair Credit Reporting Act
According to the Fair Credit Reporting Act (FCRA), you may use credit reports to evaluate rental applications. However, if you deny housing to an applicant based on information contained in the credit report, you must provide the applicant with an adverse action notice that includes the following information:

  • The name, address, and telephone number of the credit-reporting agency (CRA) that supplied the credit report, including a toll-free telephone number for CRAs that maintain files nationwide
  • A statement that the CRA that supplied the report didn’t make the decision to take the adverse action and can’t give the specific reasons for it
  • A notice of the applicant’s right to dispute the accuracy or completeness of any information provided in the credit report, and the applicant’s right to a free report from the CRA upon request within 60 days

The FCRA also comes into play if you want to report the nonpayment of rent to one or more CRAs. If you report a resident for nonpayment of rent and the resident cures the debt, you’re legally obligated to update the resident’s credit report to indicate that the debt has been cured.

The implied warranty of habitability
The implied warranty of habitability requires that landlords provide residents with living space that’s fit for human occupancy. To be habitable, living space must have heat when it’s cold, running water, a sufficient amount of hot water, plumbing and electricity that function properly, and so on. Landlords must also maintain clean and sanitary buildings and grounds — free of debris, filth, rubbish, garbage, rodents, and vermin.

If a rental unit is uninhabitable, residents have the right to withhold rent until the necessary repairs are made or, in more serious situations, terminate the lease.

Although your residents are responsible for repairing anything they or their guests break, you’re required to perform any repairs required to maintain fit and habitable living conditions, and you must complete the repairs in a reasonable period of time.

The mutual covenant of quiet enjoyment
Implied in every lease and rental agreement is the mutual covenant of quiet enjoyment, which grants all residents the right to the undisturbed use and enjoyment of the rental property. This covenant applies to you, as landlord, in two ways:

  • You’re not allowed to enter a resident’s unit whenever you want. You can enter in an emergency that threatens life or property, when you ask and the resident gives you permission, and to perform necessary inspections or repairs or show the unit to prospective renters or buyers (only after giving the resident sufficient notice).
  • You need to reasonably investigate complaints and potentially take action against any resident who’s disturbing his neighbors.

Your state’s security deposit rules
Every state has a security deposit statute that typically specifies the following:

  • How the security deposit is to be held — usually in an interest-bearing account in an in-state bank
  • What the security deposit may be used for — usually to cover unpaid rent, damage beyond ordinary wear and tear, and cleaning to make the unit as clean as it was when the resident moved in and sometimes to repair or replace the landlord’s personal property in the unit if that use is mentioned in the lease
  • When the unused portion of the security deposit must be returned to the resident
  • That the landlord provide an itemized invoice of any money deducted from the security deposit

Disputes over security deposits are common and frequently lead to the resident taking legal action against the landlord. To protect yourself, comply with your state statute, and take the following precautions as good business practices, even if it isn’t required under the applicable statute:

  • Have a separate interest-bearing account for holding security deposits.
  • Complete a move-in/move-out checklist to document the condition of the property at the beginning and end of a resident’s stay.
  • Take photos or video of the property to create a visual record of the property’s condition at the beginning and end of a resident’s stay.
  • Keep receipts for all repairs and cleaning required to prepare the unit for the next resident, even though you’re permitted to charge the resident only for damage beyond ordinary wear and tear, and cleaning to make the unit as clean as it was when the resident moved in.
  • Return the unused portion of the security deposit to the resident as soon as possible as required by state law.
  • Along with the unused portion of the security deposit, include an itemized list of all costs deducted from the security deposit.

The Residential Lead-Based Paint Hazard Reduction Act
The Residential Lead-Based Paint Hazard Reduction Act, in part, requires that landlords inform residents of the hazards posed by lead-based paint. If your rental property was built prior to 1978 (the year the EPA banned lead paint) you’re required by law to do the following:

  • Disclose all known lead-based paint and lead-based paint hazards and any available reports on lead in the property.
  • Give renters the EPA pamphlets “Protect Your Family From Lead in Your Home” and “The Lead-Safe Certified Guide to Renovate Right.”
  • Include certain warning language in the lease as well as signed statements from all parties verifying that all requirements were completed.
  • Retain signed acknowledgments for three years, as proof of compliance.
  • Housing that is exempt from this rule include the following:

  • Units that have no bedrooms, such as lofts, efficiencies, and studio apartments
  • Short-term rentals of fewer than 100 days
  • Housing designated for the elderly or the handicapped unless children live or are expected to live there
  • Property that’s been inspected by a certified inspector and found to be free of lead-based paint

State-required disclosures
In addition to the federal lead-based paint disclosure, many states require that landlords disclose one or more of the following:

  • Environmental hazards, including periodic pest control and herbicide treatments, toxic mold, asbestos, radon gas, bedbug infestation, and methamphetamine contamination
  • Recent flooding or location in a flood zone
  • Security deposit policies and procedures
  • Nonrefundable fees, such as a pet fee, where such fees are allowed
  • Smoke detector location and maintenance requirements
  • Nearby military ordinance, such as a US Army base
  • Smoking policy
  • Landlord’s or property manager’s name and contact information
  • Any shared utility arrangement

Your state’s Landlord Tenant Act
Nearly every state has a version of the Landlord Tenant Act, which defines the rights and obligations of the landlord and the tenant (also known as the resident), legal remedies for breach of contract, possible defenses to legal actions, and much more. To find your state’s landlord tenant act, search the web for your state’s name followed by “landlord tenant act” and click one of the links that looks promising. If that doesn’t work, track down your state’s official website, and search that site specifically for something like “landlord tenant” or “residential rental laws.”

Eviction rules and procedures
If you need to evict a resident, turning off electricity, gas, and water to the unit to compel the resident to leave is illegal. You must follow your state’s eviction rules and procedures, which typically require that you perform the following steps:

1) Check your state’s landlord tenant act to find out whether you have legal grounds to evict the resident.

2) Give the resident reasonable notice of your intent to file for eviction, including the reason you intend to do so and, if required by state law, the time the resident has to address the issues.

3) Wait until the morning after the deadline specified in your notice, and then file for an eviction hearing at your county’s courthouse.

4) Assuming you prevail in court, wait until the day after the court’s deadline for the resident to move out, and if the resident hasn’t moved out yet, call the sheriff to evict the resident.

Failure to follow your state’s eviction process could result in your losing your case. The resident may end up living in the property for some time, perhaps without paying rent. In addition, the resident may be able to file a legal claim against you in civil court and force you to pay damages, legal fees, and penalties.

Mitigation of damages
When a resident breaches a lease, for example by moving out three months into a one-year lease, the resident is obligated by the contract to continue to pay rent. However, you can’t just let the unit remain vacant for nine months. You’re legally obligated to take steps to mitigate (lessen) the resident’s losses. In this example, ways to mitigate the damages include:

  • Accepting a replacement the resident recommended to rent the unit for the months remaining on the lease, assuming the recommended replacement qualifies
  • Advertising the unit to find a new resident, screening applicants, showing the unit to qualified applicants, and so on

Gather evidence of your attempts to re-rent the property, such as advertisements, records of applicants you screened, and dates on which you showed the property to qualified applicants.

4 Common Eviction Mistakes Landlords Make

When renting out a property you own, it is only natural to want to make the most money and incur the least expense. Unfortunately, for some landlords, this leads to cutting corners in the legal department; a potentially very costly mistake. The following are a few common mistakes landlords make during the eviction process and what you can do to avoid them:

Self-Help Eviction
The single biggest mistake landlords make (particularly those who have never rented property before) is engaging in what is known as a “self-help eviction.” The logic goes something like this: “I own the property, so I should be able to change the locks/move the tenant’s things out/turn off the utilities/harass the tenant into paying or moving/etc.” Unfortunately, this is not the case. By allowing someone to take possession of the property under a lease agreement, you have given them certain rights in the property. The only way to legally extinguish those rights is by a court order. Attempting to coerce a tenant to move out or pay rent by changing locks or switching off utilities, or simply putting the tenant’s possessions outside is likely to lead to a confrontation with the police and a very unpleasant loss in court.

If you are trying to remove a tenant from the property, the only legal way to do that is by filing an action for eviction in the courts and obtaining a proper court order. Even then, the order requiring the tenant to leave the property is usually delivered by law enforcement and, if the tenant refuses to leave, is also enforced by the police. The landlord should not be involved.

Aside from the fact that self-help eviction is illegal and could expose you to civil liability to the tenant, even if the tenant is behind on rent), this conduct can actually be very dangerous. After all, you are messing with someone’s home, and that can cause a violent, instinctive reaction. Showing up unexpectedly and telling someone they have to get out could easily result in violence, which is another reason why law enforcement is typically responsible for delivering the bad news after a lawful eviction.

Inadequate Notice
The second biggest mistake in tenant evictions is failing to give proper notice. Most states have landlord-tenant laws that contain an actual form that should be used to notify a tenant that they must either pay or leave or you will file a lawsuit to evict them. This is sometimes called a “Notice to Quit” or in other states it may simply be called by the number of days the tenant has to pay or leave the property, like a “Three Day Notice.” Generally, before you can file for an eviction, you have to provide the tenant with such a notice to give them an opportunity to cure the problem or leave the property and, should they fail to comply, only then can you file your action to evict.

In other cases, you must provide notice when a lease is going to terminate. For example, if someone signed a one year lease, and you are near the end of that year and do not wish to renew, you usually have to provide the tenant with adequate notice of that intention. Otherwise, the tenants can “hold over” indefinitely, provided they pay their rent. It is only if you give adequate notice and then the tenant holds over that you will be entitled to seek an eviction.

No Evidence
Finally, many landlords forget that even an eviction proceeding is adversarial in nature and requires the landlord to carry the burden of proving its case. For example, you will likely need a copy of the lease agreement, evidence of a failure to pay or other breach by the tenant, evidence of providing proper notice under the law or the lease agreement, and if you are also suing for damages you will need evidence of the actual damage caused by the tenant. Failing to provide this evidence to the court could result in you having to start your case all over again and the tenant getting to spend weeks or months more in your property, possibly without paying you any rent.

Not Hiring an Attorney
Of course, the biggest mistake of all is assuming you know what you are doing if you do not. Most attorneys handling tenant evictions offer reduced rates given the usually very quick nature of these proceedings. Take advantage of this, particularly if it is your first eviction, to make sure you have acted properly as the landlord and that the eviction goes smoothly. Otherwise, you could end up not only having a non-paying tenant in your property for months while you figure out what you need to do, but you could even end up owing money to the tenant.

5 Reasons Not to Return a Tenant’s Security Deposit

When a tenant moves into a rental property, he or she will pay the landlord a security deposit in addition to first month’s rent. This deposit will typically be returned to the tenant at the end of the lease term, as long as the tenant follows all the terms of the lease agreement. Learn five reasons a tenant may not be entitled to the return of their security deposit, in whole or in part.

5 Times a Landlord Does Not Have to Return a Tenant’s Security Deposit

Each state has specific security deposit laws landlords and tenants must follow, including the reasons you can keep a tenant’s security deposit. However, here are five of the most common reasons a tenant should not expect their security deposit to be returned.

1. Breaking or Terminating a Lease Early
If a tenant breaks their lease, the landlord can keep all or part of the security deposit necessary to cover the costs associated with this breach. Again it will depend on the wording of your lease and the particular landlord-tenant laws in your state. If you have included an early termination clause in the lease the tenant signed, they will have to abide by these terms.

An early termination clause could read something like this, for example:

“If the tenant terminates the lease prior to the one year lease agreement or does not give 30 days’ notice prior to move out once the lease has gone month-to-month, the tenant is responsible for rent owed for the remainder of the lease. The landlord will deduct the amount owed from the tenant’s security deposit. If the security deposit does not include sufficient funds to cover the amount owed, the tenant is responsible for paying the additional money owed to the landlord for the remainder of the lease.”
You may also be able to charge the tenant the court costs or attorney fees necessary if you have taken legal action against them.

2. Nonpayment of Rent
Most states will allow you to keep all or a portion of the security deposit when the tenant does not pay their rent.

Nonpayment of rent is considered a breach of lease.

When a tenant does not fulfill their contractual obligation to pay their monthly rent, you are usually allowed to keep the portion of this security deposit necessary to cover the lost rent.

3. Damage to the Property
Another reason you may be able to keep a tenant’s security deposit is because they have caused damage to your property. Damage is different than normal wear and tear on the property. Here are some examples of each:

Normal Wear and Tear:

A few small nail holes in the walls from hanging pictures
A few small stains on the carpet
A small amount of mildew forming in grout lines in the shower tiles
Dirty grout
Tarnish on bathroom fixtures
Loose handles or doors on kitchen or bathroom cabinets
Reasonable amounts of dirt, dust or grime on the floors, walls, or appliances

Damage:

Multiple/large holes in the walls
Huge stains or holes in ​the carpet
Extensive water damage to hardwood floors
Missing outlet covers
Missing or damaged smoke or carbon monoxide detectors
Cracked kitchen or bathroom countertop
Broken bathroom vanity
Broken windows
Broken doors
Keys not returned at end of tenancy

4. Cleaning Costs
Under normal circumstances, you cannot make deductions from a tenant’s security deposit to cover normal cleaning costs.

If the cleaning necessary is excessive, and not the result of normal wear and tear, you may be able to keep a portion of the tenant’s deposit.

For example, if a tenant leaves one bag of garbage in the apartment, it is unreasonable to try and charge the tenant a portion of their security deposit to cover your labor. However, if the tenant has left trash all over the apartment, food in the refrigerator, and numerous personal belongings throughout the property, then yes, you may be able to keep a portion of the security deposit to cover your expenses, as the tenant has not left the property broom-swept clean.

Another example would be if a tenant had an animal that used the carpet as a toilet. You would be able to charge the tenant for the cost of cleaning or, if necessary, of replacing the carpet.

5. Unpaid Utilities
A tenant may not be entitled to the return of their deposit if they have not paid their utility bills. You may be able to keep a tenant’s security deposit to cover any utilities they have neglected to pay and were required to pay as part of their lease.

4 Ways to Spot a Problem Tenant

When renting a property to someone, unfortunately, you have to be a little judgmental. As a part of your job, you have to be attentive to people’s characteristics and background/history in order to determine if they are the best candidate to rent your property to. Most of the time, a majority of the people you may come across to rent to are decent and good candidates that will end up not being of any trouble at all. While this may be the case, however, this doesn’t mean that you won’t encounter a prospective tenant that could be a problem at some point in your career.

Dealing with someone who shows interest in your property but also displays signs that they could prove to be problematic in the future is not easy by any means. Despite this, if you pay close enough attention, you’ll be able to spot the signs early enough which will ultimately make the process easier. If you are a landlord/property manager nervous about detecting the signs of potential problem tenant, check out my five warning signs below!

Before we delve into how to spot the signs, first, it’s important to recognize what the laws are regarding you, the tenant and your jobs. Lindsey Schober of Zillow makes an important note, stating, “Each state and municipality has unique laws and ordinances. Make sure you have a clear understanding of your landlord rights and responsibilities, tenant rights, and the basic workings of specific notices and eviction procedures. Work with an attorney to set up your policies and procedures.” Once you have a decent understanding of your rights as a landlord as well as the rights of any of your tenants, you will not only feel more confident about the selection process, but you will also feel better about handling a tenant in the case they pose a significant problem.

Now that you have an understanding of your rights and responsibilities, you can easily spot these five problem signs of a potential tenant:

1. Payment History/Credit: One of the determining factors when renting a property to someone is having a decent or good credit score. Though it may be unfair at times, many property managers and landlords use credit scores as a means of determining whether or not a tenant can be reliable in their payments and responsible while living in your property. A warning sign of a bad tenant can be a hesitancy to conduct a credit score or a credit score that shows a history of late payments. According to the staff at Upad, if you think you may have a problem, “Speak to the tenant and ask them if there’s a problem and remind them that the rent should always be paid by the due date. However, if you get a couple of late payments in a row, you should ask them directly if they’re having difficulty with the rent and discuss how you can sort this out.”

2. Friend/Family Member: You may be asking yourself, “what could be so wrong about having a friend or family member as a tenant?” Having a friend or family member as a tenant isn’t an instant horror, however, it can be dangerous. Have you ever heard of the phrase, “don’t mix family and business”? Well, there is a reason why that phrase exists. Unfortunately, in some cases when this happens, it becomes hard to uphold your status as the landlord and makes it harder for you to keep your relationship separate. In the long run, try to avoid this so you ultimately don’t ruin a relationship!

3. Criminal History: Background checks are wonderful things; they tell you anything you could want to know about a possible tenant to help narrow down your selection process. If a prospective tenant has a criminal history that makes you uncomfortable, in a majority of states, you can deny them based on their past criminal offenses. However, in states like California, you cannot discriminate against those who have been convicted of nonviolent crimes, according to Erin Eberlin of the Balance.

4. False Contacts: In almost all cases, most landlords/property managers ask for at least one or a few references to help in evaluating a tenant. Most people do not have a problem with this, however, those who can potentially be problem tenants may provide false contacts like friends or family members to pose as references to make themselves look better. To combat this, Chris of LandlordTalking notes, “One of the best ways to avoid this scam is to ask for multiple landlord references, including the current landlord. Come up with some preliminary questions to ask the contact during the interview. What will seem like small talk may actually tip you off to a fraudulent reference.”

While the process of evaluating a tenant may be difficult and exhausting, to notice the signs of a potentially bad tenant will only prove to help you in the long run. As always, good luck!

Position Realty
Office: 480-213-5251

Five Steps To Avoid Illegally Evicting Your Tenants

One of the biggest risks related to owning investment properties is dealing with an eviction. If a tenant doesn’t pay rent, the simple answer is to evict him.

To a seasoned investor, however, it’s never that simple. Actually evicting a tenant is an extremely complicated and expensive process, and one that should always be avoided.

An eviction is an official legal proceeding, complete with a formal process that needs to be followed exactly in order to have your tenant move out and relinquish the property back to you. Failure to follow your state’s laws on a legal eviction can result in delaying the eviction date, losing a court hearing or owing the tenant money.

Rental property owners will benefit from understanding the legal eviction process in order to protect themselves from breaking the law should they ever go through the process. I also hope to instill the idea that addressing an issue with a bad tenant takes a lot more energy than simply evicting him. I want all investors to understand the importance of finding good tenants and sticking to the lease terms, so you can minimize the risk of dealing with an eviction.

Let’s first take a look at the difference between an illegal and a legal eviction.

An illegal eviction involves:

• Changing the locks.

• Putting your renter’s belongings on the curb or in the garbage.

• Threatening the tenant with an eviction or increased fines.

• Turning off utilities or other services.

A legal eviction includes:

• A court order.

• Official notices.

• Appropriate communication.

• Adherence to state laws.

• Patience.

What Is An Eviction?

An eviction is a lawsuit, sometimes known as an unlawful detainer lawsuit, that a property owner files against a tenant in order to regain possession of a property. Once an eviction lawsuit is filed with the court and a judge rules in favor of the eviction, the property owner can work with law enforcement to remove the tenant by an agreed-upon date per the eviction ruling.

In order for a property owner to win an eviction ruling, the property owner must prove that the tenant violated a lease term, that he gave proper notices to the tenant to fix the violation and that the proper eviction process was followed.

Reasons To Evict A Tenant

A tenant can lawfully be evicted for:

• Failure to pay rent.

• A lease violation (like illegal use, subleasing, unauthorized pet, etc.).

• Damaging the property.

• Threatening the safety of other tenants, neighbors, the property or community.

• Breaking other local housing laws, as outlined in the lease agreement.

A property owner cannot evict a tenant because of personality clashes, minor disagreements or annoying behaviors. If you establish a reasonable need to evict a tenant, you should act immediately and follow your state’s guidelines for a legal eviction.

The Eviction Process

Here is a general overview of the standard eviction process:

1. Establish a legal need to evict a tenant:

Tenant violates a lease term, like failing to pay rent.

2. Notify the tenant:

Landlord provides an official notice to Cure or Quit to the tenant. A Cure Or Quit Notice notifies the tenant of the violation and tells the tenant to either fix the violation within a certain amount of time (cure) or move (quit). This notice should be taped to the door and mailed via certified, first-class mail. You will need to prove in court that you did your best to notify the tenant of the potential eviction proceedings.

In some cases, a property owner or manager can file an eviction with the courts without giving the tenant time to remedy the problem. Such is the case if the property or other people are in immediate danger.

3. File with the court:

If the tenant does not fix the violation outlined in the notice and does not voluntarily move out, the landlord can proceed with filing an eviction lawsuit.

After filing an unlawful detainer lawsuit with the local courthouse, you will receive a date for your eviction hearing and the court will notify the tenant of the summons. Depending on which state you live in and how busy your local courthouse is, this hearing can be anywhere from one week to a few months from your filing date. If it takes a few months for your eviction date, you have to let your tenant continue to live at the property until a judge rules otherwise. Often, a tenant will not pay rent during this time. If this is the case, let’s hope you have a good lost rent policy with your landlord insurance provider.

4. Court hearing:

At the court hearing, you will need to provide proof of the reason for eviction, and that you gave the tenant an official notice to cure or quit. It is also a good idea to bring copies of the lease, rent payment records and records of all communication you have had with the tenant.

If the judge rules in your favor, you will be able to move forward with an eviction by contacting your local law enforcement to escort the tenant out on an agreed-upon date, if needed.

5. Regaining possession of the property:

On the date determined by your eviction hearing, you will officially regain possession of the property. You are allowed to change the locks and proceed with managing any abandoned tenant property per your state’s laws at this time.

As you can see, moving forward with a legal eviction involves a lot of time spent dealing with your local courts. You have to be patient with the court’s timelines and rulings. You also must keep all your communication with your tenant professional during this time, which can be challenging if you are frustrated with your tenant’s behavior.

Evictions are risky because of the unknown timeline from the filing date to the date a tenant will actually be required to leave the property per the court order. The time and money associated with moving forward with an eviction demonstrate the need for approving only the most qualified tenants for your property, minimizing the risk of eviction.

Position Realty
Office: 480-213-5251

Is It Time To Hire A Property Manager For Your Rental

It’s a question that arises sooner or later for most landlords: “Should I manage my own rentals, or outsource the work?”

Keeping on top of rental maintenance is vitally important for any landlord. But for most, it’s not exactly something they enjoy. After all, being on call 24/7 for any repairs and maintenance issues that arise can get tiring after a while, even for the most resilient landlord. Then there’s the issue of time. While in the beginning, doing cleaning, painting and small plumbing jobs might be fine, once you’ve got a few rentals under your belt you’ll quickly find that management can escalate into a full-time job. No wonder 62% of landlords in one recent survey claimed that maintenance was their biggest pain point.

If you find yourself struggling to fit it all in, hiring a property manager is something that may have crossed your mind. But is outsourcing your property management always the best solution? When does it make sense to go it alone, and when should you think about bringing someone else on board?

If you’re on the fence, here are a few questions that can help you determine whether a property manager is the best option for you.

Do I have time to manage my property?

If you’ve reached a stage where you dread answering the phone because you don’t want to deal with yet another tenant maintenance request, it may be time to outsource.

In my line of work, I see it all the time: landlords running themselves ragged, trying to do it all. They have a few properties, but instead of creating passive income streams for themselves, they’ve simply acquired another job — a full-time one at that.

Don’t let your dream of owning rental properties become stifled because you can’t afford to put any more hours in at your properties. Instead, consider outsourcing to a reputable rental management professional who will be able to oversee the properties in your stead.

Do I want to expand my rental property portfolio?

If your goal is to own five, 10 or more rental properties, outsourcing is the fastest way to get there. This is especially true if you’re finding that maintenance and repairs are starting to keep you from high-level tasks like finding and assessing new investment opportunities and properly overseeing your property portfolio.

Will I invest in markets outside of my local area?

While many landlords start out with properties in their own hometown, if you’d like to grow your portfolio, you may wish to take advantage of up-and-coming markets or opportunities that are better than what’s available in your own backyard. However, being a long-distance landlord can bring its own set of unique challenges, even for experienced landlords.

If you’re thinking of investing in an out-of-town property, hiring a professional property manager who will be your eyes and ears on the ground can free you up from the stress that’s often associated with long-distance landlording.

Will a property manager help me be more profitable?

Finally, is hiring a property manager a financially smart decision? If you have one or two local properties, it might make more sense to oversee them yourself. But often, professional landlords find that hiring a property manager to oversee their rentals enables them to invest in more properties than they’d be able to otherwise, helping to maximize returns.

Finding A Reputable Property Manager

Much of your rental property’s success is contingent on how well it’s managed. For landlords who are thinking of outsourcing management or maintenance, finding a reputable and qualified professional is crucial.

Be sure to do your research upfront. Read online reviews. Ask for referrals. And, much like conducting an interview, ask your prospective property managers qualifying questions to ensure you end up with a great match. Here are a few questions you should ask:

1. How much experience do you have?

First, you’ll want to ensure that you find a professional who’s experienced and knowledgeable — one with a proven track record of success. Consider asking how many rental units they are currently responsible for. A low number could indicate that they’re new to the game, or perhaps struggling.

2. How do you structure your fees?

Concerns about cost is one of the main factors that keeps people from outsourcing. And naturally, this should be one of the first questions that you ask. Generally, monthly fees are either fixed or a percentage of the rental yield, often 8-12% of the monthly revenue. Optional packages and additional services could impact the cost, though, so make sure you’re aware of their fees before you commit.

3. Are there any fees when the property is vacant?

If you find a company that charges you while the property sits vacant, be careful. Property managers should have an incentive to keep your rental occupied, and if they’re being paid regardless, then that incentive goes away.

4. How do you screen tenants?

Any property manager worth their salt will not only screen tenants thoroughly, but also have airtight policies and procedures in place to ensure that they do so in a way that’s in compliance with the Fair Housing Act.

5. What’s your average vacancy rate?

Reducing vacancy times is key to maximizing your returns. A reputable property manager should know their average vacancy rates, and will be more than happy to inform you of them. Anything within the two- to three-week window is outstanding.

At the end of the day, the decision to outsource comes down to your personal preferences and investment goals. While first-time landlords can certainly benefit from the cost savings of doing their own work, for experienced landlords, offloading the day-to-day tasks to a professional is something that often makes sense. Many landlords find that it’s a pivotal turning point in their investment career — the decision that’s responsible for allowing them to reclaim their time and focus on growing their investments.

Position Realty
Office: 480-213-5251

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