Ask Lucas 027: A Property Management Q&A Marathon
Q&A Summary:A recording from our latest live Q&A webinar. Listen to Lucas Hall answer over 20 questions about landlording and property management.Landlordology and Ask Lucas are brought to you by Cozy.
30 Jun 2016
Ask Lucas 022: Tenant Screening in Less than an Hour?
Summary:Francie from Indiana asks about my methods to screen tenants quickly and effectively. Quality tenant screening requires reviewing lots of documentation and talking to other landlords. Learn how I do this in 1 hour or less. Full Transcript:Lucas: Hi and welcome to the 22nd episode of Ask Lucas. Today we’re talking about how I screen tenants in one hour or less. Yes. It’s possible. I’m Lucas Hall from Landlordology and Cozy. This is a bite size Q&A show where I answer your questions about landlording and property management. I have some big news for you guys. This week, Cozy released a background check product which means that, not only can you get credit reports … full on credit reports with all the data and the score, through Cozy. But you can also get background checks which cover; evictions, and national, and criminal, and terrorist watch lists, and sex offender databases. You can get all of that for free by using Cozy.There really is no catch. Cozy still makes money. They make their money on the applicant who pays for those reports. Then they make enough on that that they can actually give away rent collection for free, which is a nice bonus. That got released this week. Now you can request background checks in addition to your credit reports. This week’s question is from Francie, who appropriately asks how to screen tenants quickly and effectively and still get really high quality tenants. Let’s hear what she has to say.Francie: Hey Lucas. My name is Francie and I’m calling from Gary, Indiana. I heard you say that you can screen an applicant within one hour. Usually, it takes me several hours, even several days, to get all the information I need. How can you do that so quickly and still get the great tenants? Thanks for your help. ByeLucas: Hey Francie. Thanks for your question. Your comment suggests that you might have read my tenant screening guide in which I do talk about how I spend only about an hour on each applicant or group of applicants. Props to you for doing that because there is a step-by-step guide in there and it’s really helpful. I will answer this question with that in mind. Basically, you are absolutely right. I don’t spend any more than an hour. I love doing tenant screening. I have a passion for finding high quality tenants. I like to claim that I have a little gut feeling about bad tenants that usually ends up being proven right. What I do to find high quality tenants with the least amount of work is that I require all of my applicants to submit a credit report and a background check when they submit the application. I don’t tell them to go get those on their own, because they will forge them. They will Photoshop a credit report and they will come up with a background check from a company I’ve never heard of. What I do is I use Cozy’s online applications. With full disclaimer, Landlordology is brought to you by Cozy. I am an employee at Cozy. But even if I wasn’t, I would still use it because the tools are awesome. I’m a landlord. I was a landlord before Cozy and I’ll be a landlord after Cozy. The online applications are standardized. They are easy to use and a tenant can fill it out on their phone. What I do is I … In the system, I require that they pay for and authorize a credit check and a background check that Cozy does automatically when they submit their application.When I get an email that says, “Hey. You have a new applicant. Here’s their application”. The credit report and the background check are included. It’s right there and I can just look at it. I don’t have to go back and ask for more information and then wait for all 3 or 4 of the applicants in the group to get their act in gear or come back from vacation to handle it. It’s just all there and done. I don’t even have to spend time on them until I have all the information. I do end up showing them, typically. That’s about 75% of the time. Tenants want to see a place before they actually rent it. Every once in a while I’ll get an out-of-state person who doesn’t care. The pictures are great and they’ll rent it site-unseen. But most of the time, they want to see it. I’ll spend maybe half an hour showing them a place. Then, maybe 10 minutes on the phone with them doing a pre screening before that. Add it all up. Between the review of the credit report and background check, and the application, and then calling former landlords, which is probably 20 minutes of time … calling and leaving voice mails and talking to people. Add it all up. It’s about an hour. It’s not one consecutive hour, but it’s about an hour. I can live with that. I follow all the steps. I have my standards for credit scores and convictions. If they pass, they pass. I’ll know about everything within an hour.I hope that helps you. I hope that you’re able to find some really high quality tenants in the future. I know that if you require credit reports and background checks with the application submission, then your process will improve. I know, for me, I’ve reduced the amount of time per group of applicants by about 3 hours. I think that you’ll see a definite improvement. For me, it was the simplest way to cut back the most amount of time, with the least amount of effort. I still get high quality tenants because, quite honestly, if they have evictions or really horrible credit or a ton of debt, I’ll know right off the bat. I don’t even have to bother with calling past landlords because I can rule them out within a matter of minutes. It won’t even take the full hour. Thanks again for listening. Take care and happy landlording.
16 Jul 2015
Ask Lucas 021: Why Don’t You Collect Last Month’s Rent?
Summary:Ryan asks about last month’s rent, and why Lucas doesn’t ever collect it. Is there a better way to provide security against a tenant who abandons the last month’s payment?Full Transcript:Lucas: Hey, what’s up, everyone? Welcome to the 21st episode of Ask Lucas. Today we’re talking about the pros and cons of collecting last month’s rent. I’m Lucas Hall from Landlordology and Cozy, and this is a bite size Q&A show where I answer your questions about landlording and property management. If you have a question, just leave a recorded message on asklucas.com and I’ll answer it in this podcast. Today’s question is from Ryan, but first let me tell you a little bit about Cozy.If you’re like me, you’ve struggled to find software that works well for your rental business. If you manage your own properties, there’s no better system than Cozy. I think it’s truly the best way for landlords to manage their own properties from application to move-out.With Cozy, you can collect rent online, accept online rental applications, screen your tenants, and order easy to understand credit reports. It’s simple, and the best part is it’s completely free. No other company on the planet let’s you process online rent collection and screen your tenants for free. Check it out. Get Cozy at Cozy.co.Now welcome Ryan.Ryan: Lucas, in one of your recent posts you listed that you do not require tenants to pay the last month’s rent, or you don’t recommend it. Just wondering why that is?Lucas: Hi, Ryan. Yes, you are absolutely right. I do not collect last month’s rent from my tenants and I don’t really think it’s a good idea for other landlords generally speaking. Let’s get into some of the ideas on why last month’s rent really isn’t a good idea, though it is a very common practice. First, it generally complicates things. It overly complicates things in my opinion. Tenants have a hard time understanding it. I think that they generally get the idea it’s like if I pay rent now I don’t have to pay it later. It’s something that they easily forget. Based on my experiences, I think that over 50% of tenants who have paid last months rent in the beginning typically forget about the fact that they did so, and then come last month, they just pay their rent like normal because they either set it up on autopilot or they just forgot. Then worse, I think probably about a quarter of landlords who collect last month’s rent probably forget, too. Suddenly they’re collecting that last month rent from the tenant and then they had forgotten that they even deposited something maybe a year or two or three years ago. It can get lost very easily. Two, it’s restrictive. In many states, including Massachusetts as an example, a landlord has to use last month’s rent for, surprise surprise, last month’s rent. You can’t use it for anything else. Let’s go through some scenarios.Let’s say you have a tenant and a landlord, and the tenant forgets that they paid last month’s rent and then pays the rent like normal. Let’s say it’s $1,000. Let’s say the landlord had originally first month’s rent, last month’s rent, and security deposit, so they had all that. Then now it’s time for the tenant to move out and they’re fully caught up on rent. They don’t owe anything. They even double paid last month because they forget, but they did about $2,000 in excessive damages to the property. Because the landlord collected last month’s rent, he can’t use it for any sort of damages. The landlord would be stuck having to refund that last month’s rent and then using the full deposit to cover a portion of the damages, and then turning around and having to sue the tenant in small claims court for the other $1,000 which he just refunded. Because he collected it as last month’s rent, he couldn’t use it for any sort of damages. I think that’s just crazy. Some states actually have laws about that. Then further, there’s a ton of states that have laws about commingling deposit money. If you collect a security deposit, you can’t put any other money in that account with it. You could take that last month’s rent and put it into your operating account for your business because it technically is rent money, but what happens and what I see happen almost on a monthly basis with landlords that I talk to is that they forget. I shouldn’t say that they forget that they collected it, but they forget that it’s in there. They have to replace the roof or the AC and they just move along and they spend the money. When last month’s rent finally comes about, they don’t have it in their account and their confused. They have a record of collecting it but it’s not there. Related: How to Handle Security Deposits ProperlyIt makes for difficult accounting practice. One thing I do say is that if you are going to collect last month’s rent, make sure you set up an extra bank account for just that money so you don’t spend it, or have a really good accounting system or a really good savings account to cover you in that type of situation. Another thing to consider is what do you do when you have a rent increase. A lot of landlords don’t think about that or they only deal with short-term rentals, or maybe even a year or less, so there’s not much of a rent increase. Ideally as landlords we want to have long-term tenants. We want tenants who are going to stay for over one year, maybe two, three, four, five years, and make it easy on ourself so we don’t have to completely turn these places over every year. Then ideally, you want to raise the rent when you need to to cover any other increases. If the tenant pays last month’s rent in the very, very beginning of their lease and then over the course of, let’s say, three years, their rent goes up an extra $100, oftentimes the tenant just thinks this last month locked me into that rate. That’s not true. That just means that at the time it was $1,000, let’s say, but now their rent’s 1,100. You have to top off your rent. You have to go back to your tenant and say, “Hey listen, you paid last month’s rent but you have to pay an extra $100 to make sure it equals your current month’s rate.”Tenants, they don’t like that. They don’t like paying an extra $100 in the middle of a month when they weren’t planning on it. It doesn’t give them a warm and fuzzy, and then they associate that feeling with you as a landlord, because there really is a better way and they just don’t get why they have to deal with this. They may understand the concept but it just doesn’t leave warm fuzzies with them. Now let’s talk about what we can do in lieu of collecting last month’s rent. There might be a better option. What I do and what I recommend other people do is that they actually collect more of a security deposit. The good news is that in most states you’re allowed to collect two or three or maybe infinite amount of security deposit, really whatever you could get away with and whatever your market will allow for. There are certain states that do have restrictions on it. In fact, most states do have somewhat of a statute on it. Hawaii says that you can only collect one month’s worth of rent. Michigan, it’s only one and a half. Generally speaking, I find that consistently across the board it’s about two months rent, maybe three months rent, if there’s a statute at all. There are a few that restrict it less than two, but definitely go check out our state law pages on Landlordology to determine what your state says about this. Now you can check that out at landlordology.com/state-laws. Now if you can just collect two months worth of deposit, then you don’t have to worry about last month’s rent. You can use that deposit money to cover any unpaid rent or any fees or any damages that they incur. You don’t have to be restricted and bound by the fact that last month’s rent can be used only for last month. You can use a deposit to cover that last month’s rent if they skip out on it, or you could use it for $2,000 in hardwood floor damage that they caused when their dog chewed it up. It opens up the floor to being more flexible and gives the landlord the ability to compensate him or herself for the damages, just plain and simple. The only thing you really do by collecting last month’s rent is you bind yourself. You restrict what you can do, and it doesn’t really get you anything. Because if you wanted to collect essentially two months worth of rent in a security deposit and last month’s rent, you can just do that through a security deposit. To the tenant, it doesn’t matter. They’re still paying the same dollar amount either way. They don’t care. Further, with a security deposit you can actually tell the tenant, “Hey, this is fully refundable minus any excessive damages. If you just had normal wear and tear, you get this whole thing back.” They love that. All of the tenants, when they start out they think I’m going to return this place, they have good intentions, I’m going to return it in the way it was delivered to me and I’m going to even take really good care of it. When that’s true, then great; give back the whole deposit. If not, if something happens and they lose their job or they need to take off and they just skip out on the lease, then you can use that deposit money for actual damages, whether it’s financial or material. I hope that helps. That’s why I don’t collect last month’s rent. It’s just too restrictive and too complicated. My state allows me to collect up to two months worth of rent as a security deposit. As long as I don’t call it rent and as long as I label it as deposit, it keeps me covered. That’s what I do. I hope it helps you. Thanks a lot, Ryan. Bye.
18 May 2015
Ask Lucas 026: What are the Best Digital Signature Tools for a Rental Lease?
Summary:Blake from Maryland is wants to sign a lease with a remote applicant who is currently living in Texas. Will a digital signature hold up in court and what are the best tools to digitally sign a lease?Resources Mentioned: HelloSign – Free for 3 docs/month, available on iOS, Android, Web CudaSign – From $1/month, available on iOS, Android, Web, Mac SignEasy – From $5 for 10 docs, available on iOS, Android, Web DocuSign – From $10/month, available on iOS, Android, Web, Windows Full Transcript:Lucas: Welcome to the 26th episode of Ask Lucas. Today we’re talking about digital signing tools. Today’s question is from Blake in Maryland, and he wants to sign a lease with a tenant who is currently out-of-state. I’m Lucas Hall from Landlordology and Cozy, and this is a bite sized Q&A show where I answer you questions about landlording and property management. If you have a question just leave a recorded message on asklucas.com, or call us, leave us a voice mail and I’ll try to answer it in this podcast. Landlordology and Ask Lucas are brought to you by Cozy. Cozy is the best property management tool for landlords and managers to screen their tenants and collect rent online. I use it myself and it personally helps me manage my rentals all the way from application to move out. The best part is, it’s completely free. That’s right, you heard me right. It’s completely free. There’s no other company on the planet that lets you process online rent payments, order credit reports, and even in-depth background checks at no cost to you. Simply put, Cozy delivers peace of mind to over 100,000 property managers, landlords, and renters in every city in America. Check it out for yourself at Cozy.co. That’s C-O-Z-Y-.C-O. Now let’s hear from Blake in Maryland.Blake: Hi Lucas. My name’s Blake and I’m about to be a first time landlord for my home that I own in Maryland. I’m active duty military and I’m moving to Fort Bragg, North Carolina and will be renting my house out. I’ve found a possible renter that is moving here from Texas who is also military. I had a few questions regarding Maryland law and digital signing, or mailing and using the Postal Service possibly to sign leases. Can’t really find a whole lot of documentation to read up on it myself so I found the ability to ask you a question directly. Thought maybe you might have some insight for me. I know with my realtor that I’m working with purchasing a house in North Carolina, we used something called DocuSign to digitally sign leases, any sort of agreements that way. I was wondering if you know if that would hold up in court should I need to take somebody to court for breaking a lease or what have you. If you could please give me any insights you might have. I really appreciate it. Thank you.Lucas: Hey, Blake. Thank you for your question and thank you for your pursuit of Landlordology. I have been in almost every type of lease signing situation you can imagine, so I’ll try to help you out as best I can and tell you what I’ve done, and what your options might be. To recap for our listeners, you have a place in Maryland that you own and that you currently live at, but you are moving to North Carolina and you’re renting out your home. Makes sense. A lot of people do it. That’s a great idea, and I wish you the best of luck. I think it’s a great idea. Luckily you have someone in Texas who wants to rent your place in Maryland, but because that person is in Texas, you can’t get together with him or her and sign that lease. So what do you do? Right? This is a problem that a lot of people face. It is so common because people travel a ton. They move around for military. They move around for jobs. They move around for any reason. They oftentimes aren’t going to be at the new rental until they first move there. It’s too expensive to fly, or it’s too far to fly, or it’s just not worth it to do a lease signing. So what do you do?Well, let’s talk about the different ways to sign a lease. The obvious one is you get together. This is one of my favorite. You call the person up. You say, “Hey, let’s meet at Starbucks. It’s great to see you again.” Or, “It would be great to see you again. I’ll buy you a cup of joe and we can sign this lease and go over it.” I think that’s awesome because you get to review the lease with the applicant. You can go over every clause. You can let them ask questions, answer them, and walk through it. But that’s not possible always. In your case definitely not. The other way is to mail it. You send it and then you put little sticky tabs on where you want them to sign. They look at the paper, they sign it, and they mail it back to you. That’s okay. I honestly don’t think it’s a wise decision to do that simply because you’re adding upwards of 10 days possibly in mail time, transfer time, transportation time, to get that letter back and forth, and it’s just unnecessary. What I suggest, and if you don’t have access to that applicant right there in your town, or city, and you can meet with them at Starbucks, then do a digital signing tool for sure. It’s one of my favorite methods of doing remote signings. I have a couple of tools that I really like. Let me start out by saying, to answer your question, digital signing tools and digital signatures are certainly 100% legal. With that said, I’m not a lawyer, nor is this legal advice, but I will tell you that it will hold up in court according to the E-sign Act of 2000. It’s an act that Congress passed on June 30th, I believe, of 2000. It basically says that any sort of electronic signatures are weighted just as heavily and just as strong as any sort of physical signature. It’s an act that was written to help promote e-commerce, and to help promote transactions across state lines. I think it was great that they did that. They did it back in 2000, so it’s got 15 years under its belt.Next, now that we know that digital signings will actually hold up in court, what kind of tools are out there for you to use? You know, ever since that act was signed all these tools have popped up on the web. You can find a couple dozen of them just by typing in “digital signatures” into Google. I’ll tell you my favorites. My favorites are my favorites because I use them for leases. They work well for that industry. They may not work well for other industries, but for rentals and leases they absolutely do.My first and foremost favorite is a company called HelloSign. It’s hellosign.com. What they do is, they give you a 3 signings a month for free. It has some amazing integration with your Google account. You can actually save those pdf documents, or other forms of that file, to your Google Drive, or Google Docs account. You can share it that way too. Pretty neat integration and it’s free, and it works well. I’ve never had a problem with a tenant who didn’t understand how to use it. It was just very point and click. A 5-year-old could do this is the impression that I got when getting feedback from my tenants. It was just so easy. HelloSign is my favorite. Again, it’s free.My next favorite is a company called Sign Now. I think it was re-branded to CudaSign because a company called Barracuda bought them. CudaSign, C-U-D-A-S-I-G-N, .com. They’re also really fantastic. The company before CudaSign, it was called Sign Now and it just did a really great job. Really simple. Has a little more features than HelloSign, but that’s about a dollar a month, so we’re not talking about a lot of money. It’s $12 a year. That’s really great and it’ll save all the documents for you. You can go back and look at those. It’s just really easy. They also allow you to have multiple signatures, multiple signers, as well does HelloSign. They also do that. You could have 6 tenants on a lease and 1 landlord. You could even set the order in which they would sign it, which is pretty neat.The next one is called SignEasy. That url is getsigneasy.com. That’s a little more expensive at about $5 a month, but still we’re not breaking the bank. It’s comparable to both HelloSign and CudaSign. Then, last but not least, is kind of the industry leader. That is Docusign. You mentioned that earlier, about that’s how you were dealing with your realtor and that’s what they used. A lot of brokerages and attorneys, or law offices, use DocuSign because it is just, it has a ton of features. It has all kinds of red lining features, and it can go back and forth to multiple parties, and then you can correct things. It’s really a fantastic tool, although it can be kind of expensive. I’ve seen anywhere from $10 a month, upwards to $50 or more, depending on what kind of account you’re looking for. The reason I don’t use DocuSign is because it kind of feels like I’m killing a fly with a cannon. It just has all these extra features I don’t need. I really just need something that’s free or a dollar, and it just lets me sign documents with tenants from wherever they are. Those are my 3 favorite tools. Digital signing is a legitimate form of signing a lease, and it will act as a legitimate signature, a legally binding signature. Every state has their own e-sign law in addition to the federal level law that I mentioned earlier, that act that was signed in 2000, so you do want to check with Maryland, or North Carolina, or wherever. I guess it would be with Maryland because your house is there. Check with those, that locality, or even that city it might be in to see if there’s anything else added onto that e-sign act, but generally speaking, it’ll work well for you. I suggest check out those tools. Again, those tools are HelloSign, CudaSign, SignEasy, and DocuSign. Thanks man. I hope that helps you and good luck with your rental. I have a feeling you’ll do well. If you’re asking these types of questions you’ll do well. Keep in touch.
1 Dec 2015
Most Popular Podcasts
Ask Lucas 013: Should I Include Utilities in the Rent Price?
Summary:Amy is wondering if she should include the cost of utilities in the overall price of rent, or manage them independently and then bill the tenants separately. Lucas discusses the options and provides a third (and better) alternative.Full Transcript:Lucas Hall: Hey, what’s up everyone? This is Lucas Hall from Landlordology and Cozy. Welcome to the thirteenth episode of Ask Lucas. It’s a bite sized Q & A show where I answer your questions about landlording and property management. The way this works is very simple. You can leave a recorded question on landlordology.com/ask-lucas and I’ll answer it in this podcast.Today’s question is from Amy, but first, I want to tell you a little bit about Cozy. Cozy is an online rental management tool designed for landlords like you and me. I think it’s the best way for landlords to accept online rental applications, screen those tenants, order credit reports on them and then automatically, securely collect rent online. That last part is totally key because automation personally has changed my life in how I manage my own rentals.The best part is, Cozy is completely free. That’s right, completely, utterly free. There’s no monthly fees, no transaction fees, no fees for properties. There’s no minimums, nothing. It’s completely free for landlords, so get Cozy at Cozy.co Now let’s hear from Amy.Amy: Hi! My name is Amy and I’m a landlord in Tampa, Florida. I have a new lease with a new tenant coming up pretty soon and I want to build in some of the utility expenses related to the property. I’m not sure how to approach this. Should it just be a fixed amount in the lease or should I bill them monthly, separately?Lucas Hall: Hey, Amy! It’s great to meet you. Thanks so much for your question. That is a valid one definitely for landlords because I myself have considered that question multiple times with a bunch of my properties and every time I renew a lease or look for new tenants on a property that I partially manage utilities, I consider what my options are.The way I look at it is there are three options or three possibilities that every landlord should consider when pricing their rental and then also managing the utilities. One is do you just build it in? Do you manage the utilities yourself and then build it into the rent and then it’s just an all-inclusive deal for the tenant, which is a pretty sweet deal for them, I think. Number two is do you add it on separately, so you have your rent price and then on top of that, you have some sort of mandatory utility fee that they have to pay, whether that’s a fixed price or a variable price, depending on what the bills are that month. Number three, do you make them pay for it? Do you tell them that they have to manage utilities themselves and put the utilities in their names?Now, let’s talk about all three of them really quickly in a little more detail. Number one, do you build it in, right? Do you build in that utility fee into the rent? The pros is that it makes it very simple to manage your relationship with the tenant, but the cons are that it is often harder to find a tenant because your rent or your property will look like it’s more expensive than other comparable properties, even though it’s really not.Other people might be advertising their property at, let’s say $800 for a two bedroom in your area, but yours is $1000 simply because you’ve got the utilities built in. On Craigslist or on Zillow or wherever you’re marketing, it’s not easily distinguishable whether or not the utilities are built in or not, so it’s usually in the text of the advertisement and not necessarily in the header or in that summary price. That will often hurt you or make it harder for you to find a tenant in the beginning.I usually don’t try to build it in if my property is a premium property like it usually rents for the higher side of what the comparable listings are going for. Maybe I have granite countertops and a spa-like bathroom or something that just adds those extra features and so it does come at a higher rent, but I don’t want to build in that extra fee or those extra utilities because it will raise it even higher and put that delta between the other properties and make it even greater.Number two, do you add it on separately? That’s the other feasible option, I think and that is where you basically just tell the tenants that here’s the rent price and then here’s the utility price and you owe them both to me by the first of the month or whenever your rent is due.I do this myself when the utilities are very difficult to manage, for whatever reason. Perhaps the house takes an oil delivery or some weird water bill or something where it’s just I can’t get it in their name and so I manage it myself and then I charge them a flat rate or a monthly fee. I actually prefer the flat rate because it just balances everything out and they know what to expect and they can budget that into their finances and so there’s never any surprises, but it does take a little bit of extra front work for you to figure out what the average is per month over the year.Then number three, which is my personal favorite and that is just to make the tenants pay for the bills themselves and to put the bills in their names. If at all possible, as a landlord, I prefer and recommend that people actually get the bills out of their name and put it on the tenant. Sure, they’ll gripe and complain and say why would you make me sign up for cable and internet? I’m only going to be here for a year and it’s well, yeah, that’s a year. That’s a year I don’t have to manage the cable bill myself.There’s no reason why it should be in your name unless perhaps the water and sewer company forces you to put it in your name as the homeowner, but oftentimes, you can just mandate it in the lease that the tenants have to sign up for these accounts themselves. The other perk of doing that is if they don’t pay their bills, the cable company’s going to go after them and not you.With that said, I think it is wise to actually monitor the bills and so every once in awhile, especially towards the end of the lease, just check in with those companies and just say, hey, I’m the homeowner. Is there a balance, especially ones that could put liens on your property such as a water and sewer bill. Anyway, I hope that helps.In summary, try to get the tenants to put the bills in their names, but if not, then I would suggest not making it inclusive of the rent, but rather advertising what the rent price is and then somewhere in the body of the advertisement and when you meet with them in person, tell them that there’s a utility fee of X dollars every month as well in addition with the rent so that they’re not surprised when they sign the lease nor does it keep them from showing up on the property to see how great it is.Thanks again, Amy. I hope that helps. Have a great day.
20 Oct 2014
Ask Lucas 024: Do I Have To Fix That Window?
Summary:Leah is asking about a landlord’s responsibility to fix issues that might affect habitability verses cosmetic issues.Full Transcript:Ask Lucas, episode number twenty-four. Lucas: Hey, what’s up everyone? Welcome to Ask Lucas. I’m Lucas Hall, from Landlordology and Cozy, and this is a bite size Q&A show, where I answer your questions about landlording and property management. I am a landlord. I live it day-to-day. I love helping people, and I love talking about landlording. I know. It’s a funny combination, right?Today we’re going to talk about a landlord’s responsibility to fix issues that might affect habitability versus cosmetic issues that don’t. Habitability, that’s a tough one. I always stumble over that. Anyway, if you have a question, just go to AskLucas.com, and leave a recorded message, or call us with the phone number that’s on the site and leave a voicemail, and I’ll try to answer it in this podcast.Today’s question is from Leah in Boston, and she has a very unusual situation, but it does strike a chord in me. It touches on basic landlord responsibilities, which I think is critical for everyone to understand.If you’ve listened to the show before, you know that landlordology is a free service, provided by Cozy, and Cozy is an online property management tool that helps landlords and managers screen their tenants and collect rent online. The best part is, it’s completely free. It really, really is free. It’s what I use to manage all of my own properties, and I love it, and it’s truly saved me hundreds, if not thousands, of dollars every year, because I switched over to Cozy.One of the perks of listening to Ask Lucas is that sometimes I will fill you in on happenings before they come to pass. For example, soon, Cozy is going to be releasing a new set of features. One of the most common feature requests that we get from managers is that they love using Cozy for rent collection, and they want to do more with it. They actually want to use it to collect one time fees, like late fees, or utilities, or parking charges, or storage fees, or anything else that might come up during the rental period. As a landlord, I completely agree. I would totally use that, too. Guess what? In the next week, Cozy will be adding these features as part of its newly redesigned lease ledger. If you’re not familiar with what a lease ledger is, it’s the central point of tracking all the finances and the accounting pertaining to that lease, so that relationship between a landlord and a tenant, and what that lease balance is. That lease ledger is critical to get right, and we have spent the last twelve months really refining it and tweaking it so that it’s extremely useful, and extremely accurate, and extremely to the point.I’ve seen the mock-up of it. I’ve seen the test. It’s awesome. It’s simple to use and easy to understand, and, honestly, we’ve looked around. There’s not another tool out there that displays it and makes it as easy to understand as what we’ve just done. No more complicated spreadsheets, no more outdated software that wishes it was a spreadsheet, but keep your eye out for that announcement on Cozy’s website. It’s really a game changer, and, again, Cozy’s completely free, so check it out at Cozy.co. That’s C-O-Z-Y.C-O. Now let’s hear from Leah in Boston. Leah: Hi. My name is Leah, and I’m from Boston. I have a tenant at will, who has a month to month lease, who is now complaining about a hole in a stained glass window. She’s lived here for about two years before she started complaining. The tenant is living in an apartment that I grew up in, with that same hole in the stained glass. I left the apartment well over twenty years ago, but my dad continued to live with that same hole until he died four years ago. I’ve completely remodeled the apartment, everything except for the stained glass, and she is paying way below market rent. She would never find an apartment like this for the rent she pays. Anyways, when she first started complaining last year, I told her I grew up with that same hole, and my father has lived with that same hole, and the apartment is as is. She responded that it is my responsibility, the landlord, for all windows and yadda, yadda, yadda. Since it’s now fall, I decided to look into it today, and found out, surprisingly, that the cost to fix that quarter size hole is eighteen hundred dollars. My question is, can I tell her that I’m not fixing the hole, and if she can no longer live with it, she should move. I’d love to take the apartment, hole and all. Thanks, guys. I hope you can help me with my question. Leah: Hi, Leah, and thank you for the question. Welcome to the show. I am excited to answer it, because it does touch on basic landlord responsibilities, and so let me just recap for the audience. We have a tenant in your house. Lived there for two years, and has just now started to complain about a quarter size hole in a stained glass window, and that hole has been there for over twenty years, and has not caused a problem in that time, but all of a sudden, now it’s a big issue. Let’s talk about your options. I think your question was, do you have to do something about it, and you went ahead and got a quote, and that quote was eighteen hundred dollars, which doesn’t surprise me at all, because stained glass windows are sometimes very complicated and very fragile, or fragile, as I like to say. With that said, it’s difficult to swallow that pill. Eighteen hundred dollars for a quarter size hole in something that’s been there for twenty years. I don’t think so. What do you do about it? I think it’s important to distinguish between two types of situations. One is whether or not that window is an outward facing window, exterior window, otherwise. If it’s an exterior window, and there’s a hole in the glass, then potentially the house is not sealed from the elements. It’s tricky, because, yeah, a quarter size hole is not that big. A squirrel is not going to go through that, but maybe a little mouse could, and definitely cold air, and rain or snow, or anything else could potentially get in. It just makes the house uncomfortable. If that’s the case, then you probably should do something. I do know that most counties do have laws that state that a landlord is responsible for sealing the house, reasonably sealing the house. That means all the windows have to shut correctly. Sometimes they even make you have screens on the windows, every window that opens, and so there are usually specific laws about that, and they don’t ever like to see holes in things, whether it’s doors, or windows, or screens, just because bugs get in and cause infestations, and it gets nasty. If you do have the window, and it’s between two interior rooms, like sometimes there’s a decorative stained glass window that separates a living room and a dining room, then you don’t have to do anything about it. Seriously, that’s just a cosmetic issue, and it’s not hurting anybody. As long as it’s not super sharp, then there’s no reason to touch it. I would say if it’s an interior window, I would just tell the tenant, “Hey, listen, the cost is eighteen hundred dollars. I gave you a courtesy of getting an estimate. I’m not fixing it. End of story. You’re on a month-to-month lease. If you don’t like it, you can leave. That’s just how it is, and if you cause a lot of major issues for me with this, if you continue to cause issues for me, I’m just going to terminate your lease and find somebody else who is not such a pain in my side.” That’s harsh, but I think it’s ridiculous that she’s complaining about this thing that she’s lived with for two years, if it’s not an exterior window. Going back to the exterior window, if it is, then I think you should try to fix it. I’m not saying you spend eighteen hundred dollars, but what you should do is talk to a window person, or a glass manufacturer, or somebody, or even just get a handyman, to cut either a small piece of glass that’s the size of the broken area, and seal it around that broken area, so that the light still comes through, and it’s clear glass, and it doesn’t affect the color of the stained window, or go ahead and get a larger piece of glass that fits into the actual frame of the stained glass window, and put it on the exterior side. I think that’s a great solution. A single pane of glass, even thick glass, is only going to cost you somewhere between twenty and forty dollars, and then to seal it in, you just need some window caulk or window glaze. It’s something that any handyman could do in a matter of maybe thirty minutes, and now you have that seal. The weather’s not getting through, and it’s not affecting the color of the window at all. I think that’s a great solution, and not only are you making the tenant happy, or at least silencing the tenant, I should say, you are, also, sealing up your house better, so it will create a better environment for everybody, and prevent water damage later on, and protect the window, too, from outside forces like baseballs or anything else that might potentially damage it. I hope that helps. That’s a crazy situation, and I wish you the best. I hope that your tenant just doesn’t cause you any more issues on this. Good luck, and hopefully you’ll get your apartment back some time soon. Take care.
16 Sep 2015
Ask Lucas 011: What’s in the Move-In and Move-Out Letters?
Summary:In this episode, Bo asks about move-in / move-out letters. What kind of information do I list in my welcome and departure letters?Learn more about the move-in / move-out process in The Landlord’s Guide to Tenant OnboardingFull Transcript:Lucas Hall: What’s up everyone? This is Lucas Hall from Landlordology and Cozy. Welcome to the 11th episode of Ask Lucas. It’s a bite-size Q&A show where I answer your questions about landlording and property management. The way this works is very simple. You can leave a recorded question on landlordology.com/ask-lucas and I’ll answer it in this podcast. Today’s question is from Bo. Before we tune in let’s hear about our sponsor.Ask Lucas is brought to you by Cozy which provides property management software for landlords like you and me. I think really it’s the best way for an independent landlord to accept rental applications, screen their tenants or their credit reports and then automatically collect their rent online. That last part is really key because automation personally has changed my life in the way I do rentals. I use Cozy to self manage all my properties and I highly recommend it. Get Cozy at cozy.co.Now let’s hear what Bob has to say.Bo: Hey Lucas. I love your webpage. I’m learning a lot. I’m really curious what a welcoming letter looks like for a new tenant and what the letter looks like when you’re sending one away.Lucas Hall: Hey Bob, thanks for your question. I love the way you asked that because move in move out times are traditionally some of the most stressful for landlords and you just seem like it rolls right off you, so congratulations for that.The question is an awesome one. I really, really love that you asked it because I have a couple of templates that I use, which just make the process a whole lot easier. There are two letters. As you mentioned there’s a move in letter and a move out letter. The move in letter is given to the tenants before they’re going to move in or right as they’re moving in, and it just tells them what they can do to make the transition smoother and then the same goes for move out.My favorite of the two is the move in letter because it’s an exciting time and they’re pumped to be there. I try to leverage that and just feed off of it. For example my move in letter usually starts with one or two paragraphs at the top that just say, “Hey, welcome, I’m so excited you’re here. I take great pride in being a proactive landlord and I want you to know you can call me at any time whether that’s for a maintenance request, or you’re just concerned about something, or you have a question about where the closest Red Box is. Feel free to call me.”Then I go on to actually list out a lot really important information about the house and the neighborhood. The information that I list in the welcome letter is the property manager, which would be me or any other people who really have a regular interaction with the house. I don’t use any other property managers. I do it all myself. But if I did hire a property manager I would list that person as well as maybe a sibling or something if I had them do a lot of work at the house.Also I list an emergency backup. In this case it’s my wife. I just put down my wife’s name and her phone number and say, “Hey, if you can’t get ahold of me and there’s an emergency, call her.” But I also very boldly say, “If there’s a real emergency you call 911 first and then you call me.” The policy is if you ever have to call 911, call me second, tell me what happened within privacy rights. Tell me what happened, but make sure you get the help that you need first.I also list all the important utility information about the house. I literally just go through in bulleted format, all the details like trash, cable and internet, electric, heating, gas companies, water and sewer, all that, and I’ll put the name of the company, the phone number, and a URL where they can go to set an account with those companies.Comcast is the only service provider at a lot of my properties. I say, “Hey, listen, they usually have a two-week waiting list. If you want to get it early why don’t you set this up two weeks before you move in. That way you have cable and internet on day one of your move in and you don’t have to wait a while.” I’ll give little tips like that.But then on top of that I also tell them useful information about the property such as where certain utility shutoffs are like the main water shutoff or the main circuit-breaker for the house. Those are all key things that they need to know in case something happens. What else? Tell them where the smoke detectors are and the carbon-monoxide detectors, and if there’s any fire extinguishers where those are and how they can be accessed, or how the batteries can be replaced.I also mention a few key things about the lease such as when the rent is due, which they should already know, but sometimes it’s been a few weeks since they looked at the lease and they forget. So I just remind them, and I tell me what the late fees are, and then how to pay that rent.As I mentioned early I use Cozy to pay rent, so all my tenants by this point should have their account setup and the security deposit is already paid through Cozy. They don’t even have to worry about that. It’s all automated.The next part is I list all of the local websites or local information centers where they can really learn about the neighborhood. I feel like somebody who moves in and gets to know the neighborhood quickly is going to be a happier tenant. I list local papers, local schools, where the local courthouse is, although that might be not a great idea if they wanted to sue me. But I just show them where they can get city or county alerts. A lot of counties have text messages that go out to their citizens and you can sign up for that.Then lastly I actually print out a Google map and I take a sharpie and I just circle where all the key things are, so where there is a hardware store, where there’s a safe way or a grocery store, and where the police station is and the fire station, and where maybe some good restaurants are. That way if they really have no idea about the area, they can then instantly figure out how to get pizza.That’s it for the welcome letter. I usually try to actually give them a physical copy of this. I usually leave it maybe on the kitchen, on the counter top or something, somewhere obvious for when they move in. But hopefully I’ve also given this to them either at the lease signing or a few weeks prior to so they can set up things like cable and internet beforehand.I tend to try to leave all my tenants some sort of little welcome package. My favorite type of welcome package costs about 10 bucks and what that is a roll of toilet paper, a roll of paper towels, a little tiny hotel size bar of soap, and a clear plastic shower liner so that they can just get by on day one of moving.Related: Bathroom Essentials on Move-In DayAll those things put together plus this nice little welcome letter, or maybe even a little tiny card that you say, “Congratulations, thanks for your tenancy. I’m glad you’re here.” All that put together really makes a great first experience, and then you’ll reap those rewards for the entire year just because you set it off to a good tenant.Next I want to talk about move out letters and what is in mine. My move out letter is actually very simple. I only list about seven things that they have to do. However the actual documentation is quite long and I’ll tell you why later.First, I give them general instructions. I try to keep it very formal and straight and I say, “Thanks for your tenancy. I’m sorry to see that you’re leaving, but here are the things you have to do. Number one, cancel all the utilities. So if any utilities are in your name, make sure you cancel those utilities as of the last day of tenancy,” I’m sorry, “the last day of your lease,” which is often the last day of tenancy but not always.Oftentimes tenants will move out 15 days early and they’ll shut the power off when they move out and then you have 15 days of no electricity in the house which can lead to frozen pipes and other issues. Anyway, I tell them, “You have to keep the power on and make the last day of all your utilities the absolute last day of your lease.”Next, I’ll tell them that you have to clean the house. It’s very important. You have to return the house to the condition that was when you moved in, which I have a move in section form that they filled out, which you can actually include that as part of your welcome letter as well, but I’ve also, usually I’ll staple that to our lease or you give it to them separately in an email and just say this is what you’ve got to do. But anyway, you’ll have that in the move in letter or move in inspection form that you can compare the condition to and then document any damages. Just let them know that they will be charged for damages that they caused and they’re responsible for cleaning up.Number three, I told them very specifically to remove all their trash and their treasures. A lot of times a tenant, especially in group houses where they’re younger and they’re transitioning a lot they’ll say, “Oh, I didn’t really need that futon so I just thought I’d leave it for the next tenants.” It’s like, “No, no, no. I really don’t want your dirty futon and neither do the new tenants, so please call the city and they’ll come pick it up, or hire a trash guy to come take it away. That’s your expense. If you leave it, I’m going to hire somebody for you and then deduct it from the deposit.”Four, I tell them to return keys. This is critical because oftentimes they just forget. They have it on their key chain. It’s been there for a year. They don’t think about it. Sometimes they’ll leave without the key to lock the door and then leave which is silly. I tell them how many exterior door keys were provided when they moved in. So if I gave them six I tell them, “Hey, I gave you six keys. You need to turn them in to me.” B, I tell them how many door keys if there are any doors like interior bedroom doors that have locks, I’ll tell them exactly what keys were involved there.Number five, I will tell them about the final inspection. You’ll have to check your state laws which you can do at landlordology.com/state-laws and find out if there are any rules around doing a move out inspection. In my state I’m only responsible for just performing the inspection and then itemizing those damages and sending them to them to review. But oftentimes other states like California require you to do a pre-move out inspection, and then tell the tenants what to fix, and then you’ll do a final move out inspection.Anyway, I usually tell them about this inspection and tell them, “Hey, you have the right to be there if you want to. Just let me know if you’re interested. Otherwise I’m going to do it this day or this time and if you show up, you show up. If not, don’t worry about it. But just know that I’m going to be inspecting the premise.”Then number six, I tell them in bold please contact the United State postal service and tell them about your forwarding address. So if you don’t forward your address I’m not going to do it for you and your mail will probably be thrown away by the new tenants. So make sure that you do that. They can do that at usps.com, and I think it might even be a small fee if they do it online, maybe a buck or two. Then if they don’t want to pay that, which surprisingly some people are that thrifty, then they can go to the post office and fill out a little form.The last thing I tell them is to please make a list of anything that’s broken. This is key because if there really is a broken window or something that might require me to contact a repairman they might be busy, or maybe a tree fell down in the backyard and they didn’t tell me, I might need more than a few days to schedule that and get it taken care of. So anything they can tell me beforehand would be greatly appreciated.Going back to my second item on that list was I tell them to clean the house. I don’t just tell them to do it. I actually provide instructions on how to. I discovered a long time ago that many of my tenants who are anywhere from 22 to 28, because I have a lot of after college students, they don’t really know how to clean. It’s not necessarily their fault because they just never had to in the past, but they’re starting to grow up and they’re starting to take responsibility for their lives, and part of that is cleaning. I figured I don’t want them to experiment or learn on my property. I want them to know.The only way I can ensure that is to actually make a bullet list for them which says you have to vacuum the carpets, and you have to clean the windows with Windex, or you have to clean the oven with a little chemical called Easy-Off. These are things you can buy at the grocery store but I specifically say what would be a great tool to use. Another one is Mr. Clean Magic Eraser. It works wonders on getting scuffs off walls.These are things that a 25-year-old may not know. I tell them, “Hey, you have to remove smudges, and you have to clean the oven, the fridge, and all the appliances, even the light fixtures. Replace all the batteries out of the smoke detectors. Clean all the storage out of the storage units. Clean the deep freezers. Clean out the lint trap in the dryer.” Yeah, I try to make a list of everything I can think of and basically give it to them. I figure if they do 50% of it, that’s great. But the bottom line is that they’re responsible for returning that property to the condition it was when they first moved in. I emphasize that.Lastly, I’ve said lastly three or four times, but lastly if there are any personal pieces of belongings or furniture that I have in the house, whether it’s decoration like picture frames, or a couch, or a dining table or something, if there’s anything that belongs to me, I just tell them what those things are so that they don’t take them by accident, or intentionally, or that they don’t throw them away because I told them to remove all their trash and their treasures and sometimes they don’t know any better. I list those out to make sure that they don’t throw it away. If they do throw it away then I can say I warned you and please compensate me for that 1910 dining room table that you just tossed.I think that’s it. That’s a very long-winded answer to a very short question, but I really appreciate you bringing it up. If you have any more questions, be sure to just leave a comment, or hit me back up on Ask Lucas. Thanks a lot. Have a great day.
11 Sep 2014
Ask Lucas 014: What Makes a Room a “Bedroom”?
Summary:Larry from Massachusetts asks about the rules and regulations to create a bedroom or sleeping space in a basement or attic. What requirements help make a room into a “bedroom”?Full Transcript:Lucas: Hey, what’s up, everyone? This is Lucas Hall from Landlordology and Cozy. Welcome to the fourteenth episode of Ask Lucas. It’s a bite-size Q&A show where I answer your questions about landlording and property management. The way this works is very simple. You can leave a recorded question on landlordology.com/ask-lucas, and I’ll answer it in this podcast. Today’s question is from Larry in the Boston area, but first, I want to tell you a little bit about Cozy. Cozy is an online rental management tool designed for landlords like you and me. I think it’s the best way for landlords to accept online rental applications, screen their tenants, order credit reports on them, and then automatically, securely collect rent online. The last part is really key because automation has personally changed my life and how I manage my own rentals. The best part is Cozy is completely free for landlords. There’s no monthly fees, no transaction fees, no minimums, nothing. No other company on the planet lets you process online rental applications and payments for free. Get Cozy at Cozy.co Now, let’s hear from Larry. Larry: Hey. I live in Massachusetts. I manage some property around Boston area and other areas in Massachusetts. I’m having a hard time getting specific answers from building department about if it’s legal to have bedrooms in an attic or a basement. I’m a little clear on the basement aspect; you have to have two egresses and generally you have to have it permitted to be allowed for sleeping space. However, it seems a little different with attics. It seems that if it has a direct stairway down to the floor below, even if it’s just one stairway and it has a window big enough for someone to go through, then it’s okay to have people sleeping up there, but there seems to be some kind of gray area around it. I want to find out if anyone knows, has better answer to that. Thanks. Lucas: Hey, Larry. Thanks for your question. We’ll start off his answer with saying that each county or city usually have their own rules and regulations about what is permitted in basements and attics in terms of living or bedroom spaces. The best place to find this information is actually call your local county or city building inspection or building code enforcement office. Basically, just call them up and say, hey, listen, what do I need to do to convert my attic or basement to a living space or a bedroom and what are those codes? Perhaps your place might be grandfathered in if it’s old enough, but there still would be some recommendations in order to quality. Generally speaking nationwide, I can give you some tips. These tips are ones that I’ve seen that are pretty consistent across the board for basements. There typically has to be two forms of egress in a bedroom, meaning one is typically the door that they use to close off the bedroom. Then the other one is a window of some sort or possibly another door. If it is a window and the window is below ground level, perhaps in a window well, let’s say, there has to be some sort of a ladder outside that window that allows the tenant or resident to climb out of the hole to get out in case of emergency. Also, there has to be a ceiling height minimum. In a lot of cities that are older, basements are maybe only six feet tall or less, and that wouldn’t suffice for a bedroom, so they have rules that say that it has to be seven feet or perhaps even eight feet tall. In that case, you’d have to dig out your basement to lower the floor level in order to meet that minimum. Also, many times in basements they’re damp or they don’t have proper drainage through a sump pump or maybe the walls are leaking. If there’s a moist environment or improper drainage or the sump pump does not work correctly, then that would disqualify the basement as well from being a sleeping space. Also, I think just general good practices are a bedroom really isn’t a bedroom unless it has proper ventilation, has smoke detectors, CO detector within fifteen feet of the bedroom and a closet space. That doesn’t necessarily have to be a built-in closet space, but it could be a large wardrobe or something that you might provide those tenants. Then also privacy. It has to be able to get shut off. Perhaps you might be renting out your entire basement and it’s one giant room. As long as that room can be shut off, then that would be a private space. Otherwise, they have to have doors. It can’t just be a corner of a room. In terms of attic spaces, I’ve actually never converted an attic space. I haven’t had the luxury of having a cool attic space that I could convert to a tenant room, but my brother did. He’s up in Jersey and he went through this process with the city and found out that only a percentage of the floor space and the square footage could actually be converted and finished in the attic. That’s to allow for certain ventilation, flows of air, and to help with the heat management in the house. They could only convert, I think it was seventy-five percent of their attic into finished sleeping areas and the rest of it had to be kind of storage or just left open. There also has to be a typical ceiling height minimum as well in an attic. You can imagine that some attics are pretty short. Then two forms of egress. This is often where you’ll see large ladder scaling systems built in the side and that would help somebody escape from a multiple-story house. Then also, it’s a very good idea to make sure that that top floor has an open stairwell with a railing. It would not qualify as a sleeping area if you have a trap ladder door to get up there. That’s just ridiculous. It has to be reasonable. Definitely check with your local authorities and make sure that you’re following the rules that are specific to the county that the house is in. Otherwise, you’re just shooting blind. I hope that gives you some guidance. Thanks a lot. Have a great day.
29 Oct 2014
Ask Lucas 012: Are Online Rental Applications More Secure than Paper Applications?
Summary:In this episode, Cynthia asks about Cozy and is concerned about online security. She is also wondering if she needs to collect paper applications when using Cozy.Full Transcript:Lucas Hall: Hey, everyone. This is Lucas Hall from Landlordology and Cozy. Welcome to the 12th episode of “Ask Lucas,” a bite-sized Q & A show where I answer your questions about landlording and property management. The way this works is very simple. You can leave a recorded question on https://www.landlordology.com/ask-lucas, and I’ll answer it in this podcast.Today’s question is from Cynthia, but first, I want to tell you a little bit about Cozy. Cozy is an online tool designed specifically for landlords like you and me. I think it’s the best way for an independent landlord to accept rental applications, screen their tenants, order credit reports, and then automatically collect their rent online. That last part’s really key because automation personally has changed my life and the way I do rentals. I use Cozy to self manage all my properties, and I highly recommend it. Get Cozy at cozy.co, and now let’s hear what Cynthia has to say.Cynthia: Hi, Lucas. It’s Cynthia. I’m a new landlord. My son is moving out of our property. I’m going to use Cozy, but I’m worried that maybe people won’t feel that it’s a place they feel comfortable, so am I going to have to have paper along with sending them to Cozy to apply? Thank you.Lucas Hall: Hey, Cynthia. Thanks for your question. That’s really great that you’re getting ready to turn your property into a rental property, and congratulations on that. Yes, Cozy is very different from the normal application process and even different from a lot of other property management softwares out there. This is not intended to be a Cozy commercial. Landlordology is owned and operated by Cozy, and it’s just a resource that we created to give back to the community in which we belong, but to answer your question, when you fill out a property with Cozy, you get a little application link, and so that link is a unique URL that is tied to that property, and then you can either email that link to a tenant, or you can share it on a social media network like Facebook or Twitter.You can basically tell the tenant, “Fill this out, and then I’ll get your application“, it’s so incredibly simple and all the applications for that property get dumped into one dashboard so that you can view them against each other and see which might be the best tenant and even view the total income for a group to see how that compares and what those ratios are. It’s very useful, but as far as not feeling comfortable with filling out the application, I would question what specifically are they dealing with or what are you concerned about? For example, the things that I can think of is maybe a tenant might not want to fill out an online application, thinking that, “I’m not really sure who this is going to,” and “Is it secure?” And “What kind of data do they ask for? Do I really want to give them all that information?” All of these are valid concerns and for the tech-savvy user, rightfully so. Tenants and landlords should be concerned about identify theft and what people are doing with their information, so what you can tell them is that Cozy has bank level security, and we encrypt everything. The rental application goes straight through a secure connection to your dashboard, and you’re the only person that’s going to be able to see it.Even so, the rental application does not ask for a Social Security number, and Cozy does that on purpose. Identify theft is at a all-time high. It’s 2014, and it’s the Number One crime in America, and contrary to popular belief, the Social Security number is not needed to screen your tenants, and the reason for this is because all the major credit bureaus have, in fact, changed their methods of collecting to reduce identify theft, and they don’t require a landlord to actually input their Social Security numbers. The only companies that do require a Social Security number to screen a tenant are third-party screening companies that require you to then fax that information over to them, and the reason they need it is because they have no legitimate business in the property. They’re just a hired help, and they’re not the owner not the tenant, and so the credit agencies and credit bureaus have gotten around this by setting up systems, which Cozy uses. Actually, Cozy flag-shipped the technology with Experian to make this happen. You can tell them all this, but it still may not alleviate their concerns, so what I would do is ask them to fill our an application after they view the property and after they really do express that they are interested and they want the place. Yes, you can send them the link beforehand, and then they can fill it out before they even get there to hopefully pre-qualify them, but they don’t know who you are at that point.After they view the property, they’ve met you once or twice, and they’re comfortable that you, in fact, own the property, and that you do really have a place to rent that they can take. That mitigates a lot of their concern and by that point, the online application is just a minor concern. Try to solve it from a lot of standpoints. It’s not just the application that’s the issue. It’s really the big picture and whether or not you’re a fraudster. I hope that answered that question. The last one you had was just about keeping paper applications or paper documents in coordination with what you do on Cozy and so, Cozy lets you collect online rental applications, screen those tenants and then, in fact, collect your rent online, and so anything that has to do with that aspect of it doesn’t have to be on paper, and you don’t have to track it.Now, a lot of landlords still want to do paper leases and have this physically signed. I think that’s a great idea. I actually use a lot of documents, signing tools online to get my leases signed, which is just as legitimate, but I understand that some people want a physical signature, and I actually encourage people to meet with their tenants as you sign the lease, just to reinforce the clauses that are in the lease and then sign it there to try to give it that sensation and that emotion of legitimacy that goes along with the contract. You might have a paper lease, and you might have paper notices that, if you choose to send out physical notices to somebody saying that you’re going to show up later, tomorrow to fix the sink or something, but all of those documents, you can digitize and send them to the tenant in an email or keep online at various document management sites. I know Cozy’s working on a product where they’re actually going to let you upload documents and be able to share that with the tenant in the dashboard, so when that gets launched, you’ll have that option as well. No, you don’t need keep paper rental applications, and you don’t need to keep anything related to that tenant screening capability because even if you do order credit reports, they’ll be in Cozy. I hope that really helps you and good luck with this next situation, and I know Cozy has a great customer support team, so if you have any questions along the way, feel free to give them a shout. Thanks again. Bye.
17 Sep 2014
Ask Lucas 023: Should I Add an Unqualified Applicant to an Existing Lease?
Summary:Lindsey from Iowa asks about adding a very, very unqualified roommate to an existing lease. What are her options and what would I do in this situation?Full Transcript:Lucas: Hey, everyone. Welcome to the 23rd episode of Ask Lucas. I’m Lucas Hall from Landlordology and Cozy, and this is a bite-sized Q&A show where I answer your questions about landlording and property management. If you have a question, just leave a recorded message on asklucas.com, or call us and leave us a voicemail and I’ll try to answer it on the show.Today’s question is from Lindsey in Iowa and she is asking about adding a very, very unqualified roommate to an existing lease. Lindsey used Cozy, and so should you. But what is it, right? Cozy is an online tool that helps landlords and property managers screen tenants and collect rent online. It’s super easy to use, and it’s completely free for landlords and managers. There’s no other product out there that does that.I’ve been ordering credit reports for the last 10 years on applicants, and the credit reports that Cozy delivers are by far the prettiest and most complete that I’ve ever seen. In fact, just last month because of Cozy, I was able to catch an applicant who had lied about a previous bankruptcy. It probably saved me months, I would say. Months of late rent, vacancy, and a lot of stress because I probably would’ve had to evict that tenant.If you want to save time, a lot of money, and countless headaches, try automating your rental business with Cozy. Do what I do. Again, it’s completely free. Sign up at cozy.co. That’s C-O-Z-Y dot C-O.Alright. I’m excited to welcome Lindsey to the show.Lindsey: Hi, this is Lindsey. I’m a landlord from Des Moines. My question is regarding adding a roommate to a current lease agreement. We just started our first rental property early in August and our two tenants would like to have a third tenant join them. My concern is that after this tenant filled out the application, did the credit and background checks on Cozy, she’s less than desirable as far as minimal rental history, terrible credit score of less than 590, two small accounts are in collections that are less than $500 each, and she just recently her own hair salon.If we were looking at her as a single candidate, we absolutely would not extend her a rental offer, but how would you proceed in our current situation? Do we discuss her shortfalls with her and leave it at that, or say no she cannot live there, or do we discuss then request confirmation of understanding from the group as a whole that their lease is joint and several and they will all be held accountable for the full monthly rent, regardless of if she is able to pay or not.We’re still learning as we go, so we would appreciate any input you can give. Thanks.Lucas: Hey, Lindsey. Thanks for the question. Thanks for calling in, and congratulations on getting your first rental property up and running. That’s super exciting. I know that when I was first getting started, I felt really unsure during that first couple lease periods because I didn’t know what I was doing. I felt like I was trying to learn as fast as I could, but it wasn’t fast enough. But it does sound like you’re asking all the right questions and you’re taking the right steps. I want to encourage you there. Keep going strong, because I’m sure you’ll be fine.To try to answer your question, it does sound like you have a really, really bad tenant, or should say applicant on your hands and you’re trying to decide what to do with her. To recap, you have two existing tenants and they want to have a third roommate, probably to help with the rent, and she may or may not be a friend of theirs already but it doesn’t really matter either way. She has a very horrible credit score. I think you said it was 590, and 590 is not great and the majority of America has a better credit score. I would guess that her bad credit is probably due to the two items that are in collections right now. By the fact that she has a 590 means that they’ve probably been in collections for a while or she’s had other issues besides those two, so they’re not recent issues that just popped up. It sounds like she has a history of not really being responsible financially.I think the fact that she has two $500 items in collections means one of two things. She’s either just kind of lazy with her finances or she’s defiant in some way. I think anybody could probably come up with $1000 if they had a yard sale or they sold some furniture or they borrowed it from a family member. It’s really not that huge amount of money, but the fact that it’s gone to collections is kind of worrisome.Anyway, with that said, it doesn’t really matter. I’ll say it again. It doesn’t really matter what her financial situation is. You do want to make sure that she’s not a recurring criminal or just got out of jail for some grossly violent crime or even the fact that she’s had past evictions because that could be an issue later. From a financial standpoint, it doesn’t matter. She is jointly and severally liable for the entire lease with the other two roommates.What that means is that it’s like the Three Musketeers. It’s all for one, one for all. She is responsible. The other roommates are responsible. If one of them falls short, if she decides she just doesn’t want to pay anymore, the other two roommates have to pick up the deficiency and they still have to pay the full amount of rent. It doesn’t matter that she didn’t contribute her portion.I would have a conversation with her and just ask about some of the issues that you found on the screening report, see if her story matches up with what you see on the reports. If there’s a couple bankruptcies there and she says she’s never had a bankruptcy, then either she’s lying or the report’s wrong. Chances are, the report’s not wrong.I would also tell her, just point-blank, that you’re going to have to have a conversation with the other two roommates to let them know that you would not have qualified her independently. However, because of the joint and several liability on the lease that they are still responsible for her nonpayment of rent just in the same way that they would’ve been responsible for each other if one of the two existing roommates didn’t pay rent, and that they are taking on that liability in order to have you.As long as they’re okay with that, then I would just create an addendum to the lease and I would say, “We’re going to add you and it’s going to be under the same terms and conditions that they were under.” A simple addendum is a one-page document with the names of the current tenants, a reference to the existing lease by date, reference exactly what those dates were and that you can cite it, and then say what you’re changing about that lease. In this case, it would be to add that third roommate.You would then add that third roommate by name on that document and have everybody sign it. As soon as it’s signed, then it’s a ratified contract and she can move in. You just carry on like normal. You can accept rent from her if you’d like or you could still collect it from the other two through Cozy. However you want to do it, that’s up to you. The fact is that they’re now considered one entity. As long as the other roommates are okay with her bad financial choices, I wouldn’t care either as their landlord.Hope that helps. Good luck to you. I know that you’re going to be a success and keep me posted. Thanks.
11 Sep 2015
Ask Lucas 016: What are the Rules for Entering and Showing an Occupied Property?
Summary:Michael from Fresno, California is a new landlord, and needs to show his property to a prospective tenant. Can Michael showcase the property while the dwelling is occupied by a tenant, and what are the rules for giving proper notice?Tools Mentioned: CozyFull Transcript:Lucas: Hey, everyone. This is Lucas Hall from Landlordology and Cozy. Welcome to the 16th episode of Ask Lucas. This is a bite-size Q&A show where I answer your questions about landlording and property management. If you have a question, just leave it as a recorded message on landlordology.com/ask-lucas and I’ll answer it in this podcast. Today’s question is from Michael from Fresno, California, but first, let me tell you a little bit about Cozy.Cozy is an online rental management tool designed for landlords like you and me. I really do think it’s the best way for landlords to collect rent online, accept online rental applications, screen their tenants, and then order credit reports. It’s super easy to use and my tenants absolutely love it. The thing I enjoy about it most is that it sets up automatic rent payments for my tenants, so they can’t forget. In fact, 99% of my incoming rent is on time thanks to Cozy making it automatic. The best part is Cozy is completely free for landlords. That’s right, it’s really, really, really free for landlords. I used to use another system that charge me about $40 a month to have the same rent collection and screening tools, and Cozy does it for free. I switched over, and now, I’m a lot happier because I can take my wife out on nice dates a lot more often. Check it out. Get Cozy at Cozy.co. That’s C-O-Z-Y-dot-C-O.Now, let’s hear from Michael.Michael: Hi, Lucas. It’s Michael from Fresno. I have a lease ending in about six weeks. My tenants don’t want me to show the place, but I want to have showings too so I can get someone in there as soon as possible. How soon can I start showing the place and what rights do I have? This is my first time renting a place and I don’t know what’s normal. Thanks a lot.Lucas: Hey, Michael. Thanks for your question. It’s really great to hear from you. I think we met at the expo in San Mateo last year, so it’s good to hear that you kept up with landlording. I do want to say that I’m excited for you because you’re about to go through your first tenant turnover and it is super stressful the first time you do it, but it’s not that bad. You’ll figure it out and I’m here to help. After you do it one time, you’ll be able to do it pretty easily from here on out as long as you just set a clear process on how to handle things. With that said, let me get started.Your main question was really about how to show the unit to a prospective tenant or applicant while you still have a tenant living in the property and what are your rights there and how do you exactly go about doing that. I think that is an awesome question because we all have to deal with that, especially turnover. The answer to that is not simple. First of all, it varies by state. Since you’re in California, I’ll let you know what the rules are for that and you can find these laws in California Civil Statute 1954, I think, subsection A through D, possibly. Basically, what it says in California is that a landlord is allowed to enter the property in order to make repairs, decorations, alterations or anything else that has been agreed to by the tenant or even some things that just need to happen because it’s a repair issue, but also not only just a landlord entering but the people who actually make those repairs are allowed to enter with proper notice. A landlord can also enter in cases of emergency, which does not need proper notice, and then a landlord can also enter surrendered or abandoned premise without proper notice, and then enter due to a court order like an eviction judgment or something, they can enter for that too.I want to go back to the proper notice. In California, what is presumed to be reasonable notice is actually 24 hours. It goes on to further state that it needs to be in writing and then what is considered acceptable is if you deliver it by paper to their doors, slide it under the door, slide it in the door, or give it to them in person, or if you mail it, assuming that you don’t have any sort of tracking mechanism on it, six days prior to the intended entry would be considered proper notice if you’re mailing it, so that you give the mail six days to get there, which is more than enough. It doesn’t go on to say whether or not email is acceptable. Please don’t take this as legal advice, but what I found in the courts is that oftentimes, the judge will just look at the tenant and say, “Did you know that he was coming?” If they say yes, regardless of how it was delivered, if they say yes, then that’s considered being notified. I guess other judges might just typically or might actually have an issue with it and say that it has to be by book, but that’s a risk you have to take, I guess.Anyway, back to the point, once you give proper notice, then you can go in. A tenant cannot keep you out unless they have some really, really good reason like they fear for their bodily harm or they have a right to suspect you’re doing some sort of criminal activity. If they just don’t want you in their house, that’s not acceptable because you’ve given proper notice. It’s your house. It’s your property. You’re allowed to go on it to do and conduct business.If the tenant gives you a hard time about that and actually starts harassing you, then you can just say, “Hey, we’ll call the police” or “We’re going to let the cops handle it and figure out what’s going to happen from here.” Oftentimes they’ll just step aside and let you in. I’m sorry that you’re in that situation or that you think you might be. In order to show the house, I actually think that you should do something that I call the landlord’s open house. What that is where you pick a day, like a Saturday afternoon and tell your tenant, “Hey, listen, I’m going to show the property from 1 to 4 on Saturday. It’d be great if you would just kind of catch a movie somewhere and just disappear for like four hours or three hours and just clean up before you go and that’d be great.”What you do is, starting on Monday that week, you post a bunch of listings and actively try to market it and then start scheduling showings for Saturday afternoon. When you start to get confirmed showings, you schedule them back-to-back. One at 1:30, one at 2, 2:30, 3, 3:30 and literally plan about 20 to 30 minutes for each showing. That’s it. What that does is not only does it utilize your time well and it respects the tenants’ personal space, but it also creates the sense of urgency among the applicants that do show up and they pass each other as they come and go and they get a sense that there is this buzz about the property. I’ve actually had a lot of success doing that. Most of the time, I can get a place rented in one weekend just by doing that method.It’s also sometimes delivered multiple deposit checks in one afternoon for me. Obviously, I don’t cash them all, but I use it to hold the property until I pick one of those three applicants. It’s worked well, so I’d give that a try. If you don’t have a lot of interest and you’re just getting onesies, twosies every few weeks, then just call up the tenant and say, “I’m coming by on Thursday afternoon at 6:00.” As we said earlier, if you and the tenant agree to your arrival, let’s say you do call them up and say, “Can I come by at 6:00?” and they say, “Yeah, that’s fine,” then that does constitute proper notice.I hope that helps. Good luck to you, Michael. You’re not alone at this and I’m here to help. If you want to learn more about California state laws, go check them out on Landlordology. It’s landlordology.com/state-laws and then from there, you can click on the State of California and learn a whole lot more about notices and grace periods and what to do for evictions and things like that. They actually have the direct links to the statures. Again, good luck to you. We’ll do this together and I’m sure you’ll be great. Thanks and have a great day.
18 Mar 2015
Ask Lucas 020: Does the 3-Day Right of Rescission Apply to Rental Contracts?
Summary:Jill from Key West, Florida was promised an apartment but it was rented to someone else instead. She’s wondering if the landlord has the right to cancel the agreement with the other tenant within three days, and then sign a lease with her.Full Transcript:Lucas: Hey everyone! Welcome to the 20th episode of AskLucas. That’s right the big 2-O. Today we’re talking about the 3-day right of rescission to cancel a lease. I’m Lucas Hall from Landlordology and Cozy and this is a bite sized Q&A show where I answer your questions about landlording and property management. The way this works is very simple. If you have a question just leave a recorded message on asklucas.com and I’ll answer it in this podcast. That’s big news because we actually bought the domain asklucas.com to make it a whole lot easier to remember. So, today’s question comes from Jill, but first let me tell you a little bit about Cozy.If you’re like me you’ve struggled to find software that works well for your rental business. If you manage your own properties there’s no better system than Cozy. I think it’s truly the best way for landlord’s to manage their own properties from application to move-out. With Cozy you can collect rent online, accept online rental applications, screen you tenants and order easy to understand credit reports. It’s simple and the best part is it’s completely free. No other company let’s you process online rent collection and screen your tenants for free. So check it out. Get Cozy at Cozy.co.Now I would like to introduce you to Jill who comes from Key West Florida. Let’s hear what she has to say.Jill: Hello Lucas. My name is Jill and I’m in Key West, Florida and I’m actually supposed to be a tenant. I made a verbal agreement with the property manager on the phone that yes I will take this property. I will rent it, and I’ll come by tomorrow afternoon to pay my first, last, security whatever was needed. Then the next day I got a text messages saying that somebody else showed up and they rented to him on the spot. Is it possible for them to void his lease and let me lease it instead? I think it’s been 3 days. They signed it on Wednesday. I have the money in my pocket. I’ve been totally excited about renting this property and I’m just wondering if there’s like an exit way for the landlord or property manage to void the lease with the other guy so I can rent it? Thank you so much.Lucas: Hey Jill. I want to give you a huge welcome because technically you were the first tenant that we’ve taken a question from on the show. It’s not that we haven’t had others call in, but it’s just that your question is so pertinent to the landlord/tenant relationship that I thought it warranted bringing up on the show. Thanks again for asking it. Let’s get into this.Generally speaking when someone mentions a 3-day rule where you can cancel a contract they’re usually referring to the 3-day right of rescission which is a common law found in most state statues. However, what that generally means is that the receiver of the goods or the receiver of the contract such as the tenant or the buyer of goods or services they usually have 3 days to change their mind. After they sign that contract they can get out of it within 3 days if they provide written proof or some sort of written explanation that they are terminating the contract. However, that’s a big fat however, it usually only applies to really aggressive industries and things like gym memberships or time shares or vacation clubs or other kinds of good and services that might come to your house. Like window installation sales companies or siding companies or asphalt refinishing companies or pool refinishing companies, anybody that wants to sell you on something that’s multiple thousands of dollars and comes into you home and tells you how bad your windows are and then sells you on a twenty thousand dollar window package.Anyway, this rule, this 3-day right of rescission is generally supposed to protect consumers who bought something who maybe didn’t necessarily go out looking for it. That’s why timeshares are such a big deal because this applies because you typically go in for some sort of bonus like a free plane ticket to anywhere in the world and then you get sold on a twenty thousand dollar timeshare. Anyway, it’s there to protect the consumer. I’ve never heard and I’m not a lawyer, so take this with a grain of salt. I’m not a lawyer and this is not legal advice. I’ve never heard of that actually applying to a standard landlord/tenant lease. Generally speaking because they are usually longer term contracts or even if they are month to month it’s not like you were suckered into it. A tenant usually goes out looking for that.Since you’re in Florida, I actually went and found a brochure published by the Florida Bar Association, floridabar.org, and it’s a little brochure they have on legal and binding contracts. There is actually a paragraph in there that describes, contrary to what many believe there is no automatic right of cancel to a valid contract even if done within 3 days. Only certain types of contract come with a 3-day right of rescission such as health club contracts or some sales of goods or services made out of your home, which is exactly what I was just saying. It goes on to say, in order to cancel such a contract you must give written notice of cancellation to a seller within 3 business days of signing your contract. A lawyer would be able to tell you if a particular contract comes with such a right to cancel. Basically, they are saying it doesn’t exist unless it’s some sort of aggressive contracting scheme, and even then you need to talk to a lawyer. So that’s the gist for Florida.Now as it pertains to your particular situation, I’m really sorry you missed out on that apartment. It sounds like you were getting really excited about it, and I feel for you because I’ve actually been in that situation where I went to sign a couple contracts and they’d signed it a few hours before. The basic gist of it is that money talks. Money and action talk. When you want something you have to go after it.For a landlord, I can speak as a landlord. I’ve been a landlord for about 10 years and handled hundreds of tenants. Every time I have a new opening or a new vacancy I usually get one or two people who fully commit. They say, oh I’m coming by tomorrow and I’m gonna drop off my first month’s rent, and then I never see them again. They never show up. I can’t get ahold of them on the phone, and they basically just drop off the face of the earth and it’s because they are shopping around and they find 4 or 5 other places they like. They’re trying to decide and they try to hold all of them because they don’t know what they want. They finally pick one and they never talk to the other apartments again. This is a classic scenario of where a bird in the hand is better than two in the bush from a landlord’s perspective. He may have three other people who actually committed to it and said, I’ll take it. I’ll come by tomorrow, but there was one guy who actually showed up and said I’ve got the money right here and I’m wiling to sign a lease right now, so he took it.I think my advice generally speaking to anyone who’s looking for an apartment is if you find one that you like don’t wait. Drive over there right then and there or if they are about to close, you know the leasing office has hours let’s say, be the first one in the door the next morning. Be waiting there while they’re going to open the office, and say I’m here. Here’s my money. Though I think that the leasing agent should have maybe given you a change to remedy the situation and come by because he promised it to you verbally. That verbal commitment wasn’t really a legally binding contract because there wasn’t a signed lease and there wasn’t any money involved yet. Maybe the best case scenario and at least what I would have done is I would have called you and I would have said, hey listen I’ve got someone here and who’s interested in the one I promised you. If you can get here in 15 minutes to sign this lease then I’ll give it to you, but if not I’ve to go with the guy who’s willing to commit.With that said, as far as I know there is nothing that you can do to force the landlord to terminate that contract and then choose you as a tenant. It just doesn’t work that way. That’s the whole point of why the landlord signs that contract with the tenant to solidify that agreement, and as long as the tenant has paid all the money that he or she is supposed to and that lease is signed then they are stuck with each other. Now, both the landlord and the tenant could mutually terminate the agreement together if it’s a decision they make and they are both in agreement about it, but one of them can’t force it on the other. That’s the point of signing a lease.You could go to the landlord and say, hey listen I’m so sorry I missed this if that person backs out just know that I will be waiting with a pile of cash to give you so give me a call if that happens, but otherwise just let me know if you have another unit available. I hope that this helps. I’m sorry that you missed out on that apartment and I hope that you find another one hat you like a lot. Next time you find one make sure that you even give a holding deposit when you first see the apartment. As soon as you know that you want it put some money where your mouth is and say this is mine. I claim it. I call dibs on this apartment here’s the money to prove it. Thanks again for your question and better luck next time. Bye.
13 May 2015
Ask Lucas 015: Handling Abandoned Personal Property and a 25-year-old Desk
Summary:Sue has a tenant who is leaving behind a 25-year-old desk. What does she need to do in order to prepare the unit for the next tenant, while complying with laws on abandoned person property in California?Full Transcript:Lucas: Hey, what’s up everyone, this is Lucas Hall from Landlordology & Cozy. Welcome to the 15th episode of Ask Lucas. It’s a bite size Q&A show where I answer your questions about landlording and property management. Just leave a recorded question on landlordology.com/ask-lucas and I’ll answer it in this podcast.Today’s question is from Sue, but first, let me tell you a little bit about Cozy. Cozy is an online rental management tool designed for landlords like you and me. I really do think it’s the best way for landlords to collect rent online except online rental applications, screen their tenants and then order cart reports. It’s super easy to use and my tenants absolutely love it. The thing I enjoy about it most is that it sets up automatic rent payments for my tenants, so they can’t forget. In fact, 99% of my incoming rent is on time thanks to Cozy making it automatic. The best part is Cozy is completely free for landlords. Seriously, there’s no monthly fees, there’s no transaction fees, there’s no minimums, there’s no fees per unit or based on the number of units we have. Really, it’s free. There’s no other company on the planet that let’s you process online rent payments for free. Get Cozy at Cozy.co, that’s C-O-Z-Y dot C-O. Now, let’s hear from Sue. Sue: Hello Lucas, my name is Sue. I have a rental property in California that is a small Victorian house divided up into rooms. There are four tenants. Each rent a room for counseling. One is moving out and moving down into another office. The tenant has asked me to remove the desk when she moves or she’s going to leave it there. I do not know anything about the desk. As far as I know, she’s been using the desk for 25 years. The former owners may have given it to her or left it there for her to use. What I would like to know is is it my responsibility to remove that desk if the following tenant does not want it or should the tenant that’s leaving that room, that office, are not renting anymore remove that desk? Thank you for your help. Lucas: Hi Sue. Thanks for your question and it’s really great to meet you. If I understand you correctly, you have one tenant moving into in to another one of your units, but the person who’s moving out has a desk and that desk has been there for 25 years and you’re not really sure what to do with it or even if you have to do anything with it. Let me tell you my opinion. Generally speaking, a landlord is responsible for prepping the unit when a new tenant moves in. I can understand why the new tenant would want that desk to be gone. However, you now have to figure out whose desk it is. If it came as part of a furnished unit with the previous tenant from 25 years ago, then you need to treat it like our furnished unit and that desk I guess is yours as the owner of the property. Once we kind of established that the desk actually belongs to you, then it’s your responsibility to get rid of it if the new tenant doesn’t want it. You don’t have to sell it. You don’t have to trash it. You could store it somewhere or even put it in a different unit. Perhaps, if I’m wearing your shoes, I would actually contact all the other business owners in my building and see if anybody else wanted it. Maybe I could provide them with the desk so that it wasn’t that expensive for me to take care of.However, if in fact it is the previous tenant’s desk and they’re trying to pawn it off on you, then you have to follow the laws on abandoned personality property in California which are actually quite lengthy, so I’m not going to read them to you here, but basically, you can go read them in California Civil Code 1965 as well as 1980 through 1991. You can find those linked on landlordology.com/state-laws and then click on California.You can handle that abandoned personal property multiple ways and one of which is to notify the tenant and let them know that you’re going to trash it or store it or sell it. They have a chance to argue with. However, if they have already said that they don’t want it but they’re not willing to get rid of it, then you can typically skip the notice period as long as you have something in writing already and then get rid of it. Usually at their own expense. If you have a security deposit from them, you can use part of that to cover your damages to dispose of it or sell it or whatever.I hope that helps Sue. Good luck with it and hopefully you’ll be able to get rid of the dust pretty easily. I know that I, in the past, when I’ve had to deal with abandoned personal property and it was okay for me to sell it or get rid of it, I usually just find some junk mover or even an antique dealer sometimes who will come and take our way because they can sell it. Don’t hesitate to go ahead and take some pictures if you have time and throw it up on Craigslist. Seriously, Craigslist sometimes is the best way to get rid of even nice stuff because people will come with trucks and take it away and you may even make a couple hundred or even a few thousand dollars if it’s a really nice desk. I’m not a lawyer. Please don’t take this as legal advice, but use the links to the statutes that are on landlordology.com to do a little more research, because I know that you have some required language that you must put in the notices that you give out. I think that’s in Civil Code 1984. Check that out and good luck to you. Thanks for the question. Bye.
10 Mar 2015
Ask Lucas 029: Are Bedbugs a Landlord’s Responsibility?
Summary:Gwen from London is asking about her obligations to eradicate bedbugs from her rental in New York City. The bedbugs appeared after the tenant moved in, and she suspects the tenant brought them in to unit. What should she do?Landlordology and Ask Lucas are brought to you by Cozy.Links Mentions: Cozy How to Deal with Bed Bugs at Your Rental Property – Landlordology Landlord-Tenant State Laws and Regulations – Landlordology State Bedbug Laws – NCSL Bedbugs and Tenant’s Rights in NYC – NYC Government Transcript:Lucas: Hello and welcome to the twenty-ninth episode of Ask Lucas. Today, we’re answering a question from Gwen, who’s calling in from London; very jealous that you’re there. She is asking about bedbugs and who is responsible for getting rid of them. It’s a great question, and as many of you know, if you’ve been a landlord for the last couple of years, that bedbugs have taken the country by storm. They are very difficult to get rid of, and a lot of states have passed laws about it. We’re going to discuss that today.I’m Lucas Hall, and this is a bite-sized Q and A show where I answer your questions about landlording and property management. To participate, it’s very simple. If you have a question, just leave a recorded message on AskLucas.com or call us and leave us a voicemail and we will try to answer it in this podcast if it’s applicable to a larger audience.Before we get started, I wanted to tell you about our sponsor. Ask Lucas is brought to you by Cozy. Cozy is modern property management software that you can use to screen tenants with full credit reports and background checks and collect rent online. It is truly simple and it’s completely free, and it is the company behind Landlordology. I use it to self-manage all of my properties, and my tenants completely love it. Check it out for yourself. It’s Cozy.co. Now let’s hear what Gwen has to say.Gwen: Oh, hi Lucas. My name is Gwen. I’m actually calling you from London, but I have an apartment in New York. I wanted to ask you about bedbugs. I have a tenant who is brand new. She moved in, and very, very shortly after, reported to me that there were bedbugs in the flat. Now, before she was there, I had tenants for a very long time, and they never had any problems. Actually, I had stayed there for a week right before her tenancy started and I didn’t have any problems. But now it looks like I’m going to spend thousands of dollars to treat these bedbugs. Can you tell me more about what my obligations are?Lucas: Hey, Gwen. Thanks for your question. Yes, bedbugs are a huge issue in New York City. In fact, according to Terminex and the number of calls they receive, it is actually the third most dense area in the United States for bedbugs. It is a major issue, but there are over a thousand different providers in New York City that will handle and mitigate this problem for you, so you have a lot to choose from, and there is hope.To date, there are about twenty-two states that currently have some sort of regulation about bedbugs. Really, the answer to your question is your obligations depend on your state laws. I hate to say that, because they’re going to be different in each state, but in New York, specifically for you, unfortunately, the landlord is always responsible. That is just in New York. It could be in other states, too, but I know specifically in New York, the landlord is always responsible. That’s just something that New York City decided to make that law, and it’s actually under the Housing and Maintenance Code, sub-chapter two, article four, that says the landlord is legally obligated to eradicate the bedbugs regardless of really what caused it.But if you are one of the other states, you know, for others listening, if you had bedbugs and you don’t live in a state that regulates it or requires a landlord to actually deal with the issue, then you can ask yourself a couple questions. One, for example, make sure that it actually is bedbugs. Sometimes a tenant will call and just say, “Hey, I’ve got bedbugs,” but in fact, it could be fleas or roaches. Sometimes they don’t know what a bedbug looks like, and so roaches sometimes look similar. Make sure that you’re actually dealing with bedbugs before you spend thousands of dollars on a service technician.Two, consider how they got there. Look at the situation and say, okay. You know, Gwen, in your case, you know there weren’t any bedbugs there before the tenant moved in, but then they happened to just show up. You didn’t bring them in. The house was actually clean, or the flat was clean and bedbug-free before the tenant moved in. You look at it and you say, “Okay, well where’d they come from?”When a technician actually comes out, you might want to have a conversation with the technician and just say, you can do it over the phone or whatever, and just say, “Hey, listen, can you try to diagnose the source of this problem?” Oftentimes, they’ll say something like, “Oh, yeah. I found a nest of bedbugs underneath their luggage or in their luggage,” or something like that. Clearly, they picked it up from a property or hotel that they were visiting recently on travel, which is actually the way that bedbugs typically spread, is they travel through suitcases and through moving. People who travel a lot for work, they’ll bring them home in their suitcase, or if you moved from another property that had bedbugs, they’ll come in the furniture or come in the clothes or something like that.You certainly want to deal with, perhaps, the source. If you are in a state that does not regulate bedbug eradication and you can prove that the tenant brought it in, then you can actually charge the tenant for the bedbug remediation. That’s really important to know because it can be super expensive. Chances are, the tenant probably won’t want to pay for it, but you can either send them a bill for it or you can hold it from their deposit at the end of the lease and deal with it that way.If you’re not sure or you can’t prove it, then you really should just take care of it as a landlord. That is because, as a landlord, you are offering the implied warranty of habitability. That is a clause or a obligation that is just built into every single lease, whether you write it in there or not. It means that they have a safe place to live. If it’s got a lot of bedbugs, then it’s not a safe place to live.If you’re unsure about what your state laws are, you can actually go check out the National Conference of State [Legislatures 00:06:00]. That’s a website called ncsl.org. They have a bedbug page that actually goes through the actual laws for bedbugs in the twenty-two states that have regulated it so far. You can also check out Landlordology.com/state-laws or Landlordology.com/bedbugs and we’ll tell you a lot more information about this issue and what you can do about it.I hope that answers your question. Again, unfortunately for you, you just have to deal with it because you’re in New York, but anyone in a different state might have some better luck at being able to mitigate that cost back to the tenant if it was the tenant’s fault. Thanks again. I hope the situation improves, and that you can get rid of this easily. Take care. Bye.
4 Nov 2016
Ask Lucas 019: Can I Split Utilities by the Number of People in Each Unit?
Summary:Danielle asks a follow-up question to episode 18. Wouldn’t it be better to split the utilities by the number of people in each unit, rather than square footage, and what are the pros and cons of doing so?Full Transcript:Lucas: Welcome to the 19th episode of Ask Lucas! I’m Lucas Hall from Landlordology and Cozy, and this is a bite-sized Q&A show where I answer your questions about landlording and property management. If you have a question, just leave a recorded message on landlordology.com/ask-lucas and I’ll answer it in this podcast. Today’s question is from Danielle, but first, let me tell you a little bit about Cozy. If you’re like me, you’ve struggled to find software that works well for your rental business. If you manage your own properties, there’s no better system than Cozy. I think it’s truly the best way for landlords to manage their own properties from application to move-out. With Cozy, you can collect rent online, accept online rental applications, screen your tenants, and order easy-to-understand credit reports. It’s simple and the best part is it’s completely free. No other company on the planet lets you process online rent collection and screen your tenants for free, so check it out. Get Cozy at cozy.co.In this week’s episode, Danielle actually has a follow-up inquiry about last week’s podcast where Elise asked about utilities and how to split that up properly among an apartment building or a multi-family building. Danielle’s question is very good because it simplifies it, but also inquires about the risks and the pros and cons of splitting it up by person. Let’s hear what she has to say.Danielle: Regarding your subject on utilities for multi-family buildings, you’re stating, and I’ve already researched, that the law only requires to divide it by the square footage. However, if you have five people living in one unit, and you have another one person living in another unit, it’s hardly a fair or just amount for the person in a one unit to pay an equal share for someone who has five people living in the same square footage. Wouldn’t it be more reasonable to divide the usage by number of people and then, if there’s five people living in one square footage, then they get it times five, versus the one person that’s living in the same square footage on their own?Lucas: Hey, Danielle. Thank you, thank you, thank you for asking that question. That is a great follow-up to last week’s question. Just to recap, what you’re asking is “Wouldn’t it be more fair and more just to divide the water bill, or the utilities, by the number of people in each unit?” If you had two units, let’s say a duplex, and one side had one person and the other side had five people, wouldn’t it make more sense to make the larger side pay for 5/6 of the utility bill while the other guy only pays for 1/6. To answer your question, yes, that will work, and that can be a very fair way to do it, assuming that the tenants agree to that in the lease.However, I personally try to steer away from that for a number of reasons.Here are the downsides to doing it that way. One is it takes the attention away from assigning a percentage of the utility to a unit by a finite number like square footage, and then it puts it on the actual people. Whenever you start focusing on the tenants themselves and their living behavior, their traits about them, then you also start getting into areas where they could possibly interpret that as discrimination. I will say that familial status is a protected class in terms of discrimination, which means that you can’t discriminate based on the number of people or the number of people in their family. However, there are occupancy limits in each county, so a county government will, in fact, say that you can only have two people for every bedroom, or four people that are not related in a unit in its entirety. There are those limits, but assuming that these tenants are within the occupancy limits, you can’t really discriminate based on family size.So, what happens? Let’s go through some scenarios here. What happens when you have the one person and the five people and you’re making the assumption that each person is using an equal portion of the water. Well, that is rarely ever true. I have a group of tenants who are all roommates. There’s five people in the house, and every single time I go over there to repair something, I never see them. They’re completely gone. They’re young professionals. They work from seven in the morning until nine at night. They take showers at the gym. They don’t even have a dishwasher. They rarely, rarely, rarely ever eat at the house. They’re always eating out and they travel a lot. So, they actually use less water than a guy I have in a studio. They’re not shared units in a multi-family building, but in that particular situation, those tenants are using less water than a single person in another unit. It’s just because of their patterns and their behavior. To take it a step further, let’s say they do have a duplex and there’s five in one, what happens when that single person gets married and then his wife moves in? It makes sense that maybe his bill would double almost, but what happens when nine months later they have twins? Now they went from one to four in a matter of about nine months. I guaranty you that those twins aren’t going to use as much water as an adult. Together they might use a quarter. They take baths and that’s about it. It’s hard to assign a price to a person. When you start getting into numbering people, that’s when you start to get into shady areas and situations where you are going to have to make judgment calls that could easily be interpreted as discriminatory. That’s what I want to stay away from.Another negative to pricing it by person is that it encourages the tenants to hide things from you. I personally care most about getting every adult that’s in the unit on the lease. I want to make sure that they are documented, that I have an application for all of them, and that I know who they are so that I could potentially sue them if I needed to. If they know that their utilities are going to spike if they have another person, then what motivation is there to show you? Their attitude is going to be, “Well, hey, I’ll just try to hide it, but if I get caught, then we’ll just add them to the lease and I’ll deal with it then. Until then, maybe I’ll get a few months out of it that I don’t have to pay extra utilities.”What happens if in-laws come to visit for three weeks? Perhaps they’re allowed to in your lease. Maybe three weeks is okay as a guest. Do they have to pay three times the utility if mom and pop come? These are all things that you have to consider. If you don’t consider it, the other people in the other units will consider it for you. They’ll call you and they’ll say, “Hey, Johnny just had his in-laws in town for a month. Shouldn’t my utilities go down?” It’s a nightmare to handle. In addition to the complaints, you’re also going to have administrative issues. Not only do you now have to track everybody that’s coming and going, which is fine, I need to know that too. When you start getting into an eightplex or a twenty-unit building, you really have to stay on top it. If you want any shot at keeping these utilities in track, you need to know everything. Then you have to adjust your calculations every single month based on the number of people. If there’s any people that are kind of hiding in the woodwork where you don’t know about, you need to track them down and decide, “Am I going to charge them or are they on the lease? Are they not on the lease? What’s happening there?” It really just becomes and administrative nightmare.Those are the reasons why I don’t do it that way, but I suppose if it was a small duplex, and it was a very obvious split, and everybody was okay with it, then I think that would probably be the most fair. It just gets into other issues that I’d rather not touch. I still think square footage is the best way to handle it because that number does not change. It’s a finite number and you can always count on it. You can do that calculation or create that spreadsheet once and then just pop in the utility bill price into your spreadsheet and get the calculations, so you don’t have to tweak it every month. I hope that helps. Thanks again for your follow-up question. Please know that I am not a lawyer. I’m just an experienced landlord who’s happy to help and give my opinion. If you’re looking for legal advice, you definitely need to talk to a lawyer because that’s what they do. Anyway, thanks again. Have a great day.
6 Apr 2015