PropertyManagementMaven: August 2009

There are several non-real estate  "business" organizations that real estate professionals feel they must join in order to do business.....the Chamber of Commerce is one and the Better Business Bureau is another.

While I have not been a member of the Chamber of Commerce for over 20 years, I have never felt the need to join the Better Business Bureau.  In fact, I rarely see the BBB logo displayed at the businesses I patronize.

As a business practice, I do not respond to BBB complaints. It is WAY TOO EASY for disgruntled residents to complete a complaint form online with their side of the story.  When I receive these complaints, I file them and do not respond.  Sometmes the BBB follows up with a second request for my response which I again ignore.

A wise woman real estate broker explained her similar policy several years ago....as real estate professionals, we have numerous regulatory and trade organizations in our business....our state licensing board, our local Realtor association and our various trade associations such as IREM * all of whom have the knowledge and expertise to handle a complaint regarding a landlord-tenant issue and our licensing status.  The BBB has no such expertise and no regulatory authority.....by filing their complaint, the complaintant gets to VENT and RANT....good for them. 

By my responding to a BBB complaint, I would provide information to the complaintant which can be used in court AND rarely, if EVER, have I ever found that the BBB can resolve an issue or complaint to the benefit of a real estate professional.  

The first time I did respond to a complaint, I got a follow up phone call from the local BBB requesting my money in order to join their organization and receive a GOOD RECOMMENDATION from them for future inquiries.....it sounded like extortion to me so I declined to join.  Under further investigation, I checked to see what local real estate professionals were members * few and mostly newer ones * and what local retail businesses valued their membership. Again, very few.

Like advertising in the phone book yellow pages, I think that this is an unnecessary expense for most real estate professionals and monitoring our online reputations with Google and Yahoo alerts are a much better use of our time.

For the second time in 2 weeks, I have had prospects who want to view my rental homes show up LATE for their appointment because of their GPS.

Now I have BEAUTIFUL directions on my web site listings - directions from nearest large street/road with R/L turns AND there is a photo of the front of the house. Usually the wife has printed out my listings and the direction section is on the first page of the 2 pages.....meanwhile, the husband insists on using their GPS - either brought with them OR rented with their rental car.....1 prospect couple was sent down a dirt road to a new subdivision that does not have a name on it and the second couple was directed the WRONG way on a ONE WAY street * shorter, yes * but not exactly SAFE!!!

I've now added a suggestion to my confirming e-mail or phone call - print and use MY directions....play with your GPS, get to the property by my directions!!!

In some areas where the economy has not "stimulated", many tenants who rented as "singles" are approaching their landlord about taking in a roommate.....landlords who say NO face lost rent and a vacancy depending on their tenant's financial situation so having a policy to accommodate their tenants is a MUST.

Provide tenants with applications and require that their roommate complete it and return it to you.  Charge any application or credit check fee as appropriate.  Screen the applicant and if they pass, offer your tenant the option of approving them as an AUTHORIZED OCCUPANT under the current lease OR offer to re-write the lease and place them on record as a tenant who is jointly and severally responsible for the remainder of the lease term * I charge a fee for this lease re-write.

Option #1 allows your tenant to remain in control of the rented dwelling in case their new roommate does not work out.

Option #2 allows the landlord or property manager to now have 2 tenants on the hook for the rent AND responsibilities under the lease terms.

The security deposit at the inception of the lease remains the possession of the original tenant and the roommate should pay any deposit directly to the current tenant and they handle any disposition of the deposits between themselves.  The landlord/property manager is not involved until the end of the lease or the unit is entirely vacant so that an inspection can be conducted.

 

Although we are getting toward the end of our local (Central Va) rental season, there are more Craigslist listings without photos....many local property managers and landlords left with un-rented inventory are posting many listings at one sitting/day rather than taking the time to create a postlet HTML ad or even upload 4 photos to the regular CL rental listing.

Many indicate they don't want to deal with the SPAMMERS who take their property photos and cause them additional work by having to respond to callers on the SPAM ads and some do not have attractive photos since their residents are still in place.

Fortunately, I have had very few listings SCAMMED this season mainly because I am posting HTML from my website which has a watermark on the photos.....

Just like listings in MLS, real estate ads need photos!!! Take them when the property is vacant between tenants or when the property owner has vacated and the property is cleaned. 

 

RentRecoveryService, the largest and most aggressive landlord collection agency in the country. There are no advance fees or costs associated with our contingency based service.

OK * I'm going to give 10 of my oldest/stalest tenant judgements to Rent Recovery Service * www.rentrecoveryservice.com *  I won't have to pay any $$$ and hopefully they will get some bucks for my clients.

I already have the court judgements and have recorded them locally.  I have verified that my public lien/judgement is noted on their credit report and since many have left the area, I'm hoping the collection agency will get their attention as well as some $$$ .

My lease allows for an 18% interest on the judgement amount which the court has awarded in many of the judgements AND my lease has a $250 fee for me to file a "release/satisfaction" so between the interest and release fee - my owners should get a large part of the judgement awarded when funds are collected....

 

For rental property owners and landlords who think property managers are paid to collect their tenants' monthy rent check and little else, I divised this calendar several years ago so that owners can see that landlording is a hands-on/24*7/job and realizing it sooner rather than later is beneficial in being a success in the business.

January

prepare 1099s * mail by 1/30

copy tenant's Jan rent check

gather mortgage interest 1099

gather prior year tax info

 February

determine current market rent

determine property value

submit 1099s to IRS by 2/28

send tenant renewal notice

March

do full property inspection

determine interior repairs

put property on rental market

arranger spring HVAC servicing

April

update check-out procedures

update ext property photos

clean gutters

arrange for interior repairs

May

 spray trees/mulch scrubs

initiate web marketing

perform drive-by inspection

install FOR LEASE sign

June

verify tenant departure date

continue web marketing

perform drive-by inspection

perform check-out inspection

July

update property

update interior photos

continue/update web marketing perform check-in inspection

August

perform final interior repairs perform drive-by inspection

calculate tenant deposit return

organize new tenant lease file

September

update tenant contact info

perform drive-by inspection

arrange fall HVAC service

check property tax billing

October

provide tenant winterization info

perform drive-by inspection

schedule gutter cleaning

perform driveway/gravel repairs

November

perform roof inspection

perform driveway/gravel repairs

update insurance coverage

double check hoses are removed

December

verify tax assessment amounts

perform drive-by inspection

send tenant seasonal notice

archive prior residents' file

JANUARY *

 

An accordion file with monthly pockets for less than $20 will help at tax preparation time. For bills with personal and rental expenses, copy the invoice and put it in your rental file. Keep your year end mortgage interest, insurance, real estate tax statement as well as all repair invoices. Copy your tenant's January rent check for the bank information. Also pay attention to vendor payments in excess of $600 annually. Download IRS form W-9 from www.irs.gov and make sure that you have tax ID information for all vendors who are not incorporated......1099s must be mailed to service providers by the end of Jan and the IRS copy and re-cap form mailed to the IRS by the end of February.

 

FEBRUARY *

 

Check your property's re-sale value in February. Don't rely on your tax assessment statement for its value....ask a Realtor or check current comparable listings at www.mycaar.com.

 

This is the time to think about renewing your tenant's lease. Waiting until April or May will put you behind the curve in your re-renting efforts.

MARCH *

 

Now is the time to do a full property inspection - inside and out. When you give notice to your tenant, ask that any repair items be put in a note and left on the kitchen counter. Check for leaks, evidence of mold, carpet wear, tenant caused damage and any need for upgrades. Arrange for the HVAC system to be serviced. Shop for this service as there is a great difference in prices for this task. If your tenant is leaving, put your property on the rental market ASAP.

 

APRIL *

 

update exterior photos of the property. This is important in internet marketing so having good, exterior photos is a must. Arrange for the gutters to be cleaned and schedule for repairs and upgrades for when the tenant vacates.

 

MAY

 

* arrange for spraying of trees and scrubs as well as mulching of plants. If necessary, take additional exterior photos.

 

Write tenants about how to return property keys, provide property cleaning instructions, arrange to utility transfer.

JUNE *

 

Do a drive by inspection prior to the scheduled tenant inspection. Verify tenant's move-out date. Update your tenant check-out procedures.

 

JULY *

 

Update interior and perform repairs. It is advised to remove any wallpaper from bathrooms and kitchens that could cause moisture to be trapped and mold to grow. Replace old appliances. Remove washer and dryers that are old and which may break during the next tenancy. Replace Fluidmasters in all toilets and make sure faucets have no leaks. Check batteries in smoke detectors.

 

AUGUST *

 

In VA, landlords have 45 days to return tenant deposits and send an itemization of any deductions. Perform final interior repairs and organize your new tenant file with application on each adult, executed lease with any executed disclosures and copies of initial checks.

 

SEPTEMBER *

 

Update current tenant information with contact phone numbers and e-mail addresses. Arrange for fall HVAC service and perform a drive-by inspection

 

OCTOBER *

 

Provide tenant with winterization information - disconnect hoses from exterior faucets, place covers on in-window AC units, etc. Schedule gutter cleaning.

 

NOVEMBER *

 

Perform roof inspection as well as driveway/gravel repairs. Check property insurance coverage and update.

 

DECEMBER *

 

Verify real property tax assessment, do a drive-by inspection and send tenant a "seasonal" message.

 

 

I was not aware of this aspect of the real estate recession of the '70s; however, during this economy, there is a GREAT SELECTION of repair personnel in our area. 

Although our area has had a location in Angie's List for almost a year, in the past 5 years, I have had to look for good, quick cleaning services, and some specialty repair services * now they are walking in through my office door.....LITERALLY!

The ones who are faxing me flyers or are calling me asking for my e-mail address or fax number so they can send me information on their services are of no interest to me.  They are now starting to come to my office * there are 3 property management firms in 2 buildings in my office complex so this makes sense * and my being able to talk and discuss their services, prices and availability ARE worthwhile so I invite them in for a "chat".

The latest one came with a flyer in hand with their contact information including e-mail address and stressed that they could take work orders via e-mail.....I love them already!!!  If they treat my residents with respect and give me good prices and prompt service, their visit will be worth more than taking the easy way out - for both of us.

This is the condition of the mulched beds in a beautiful home that tenants vacated in July, 2008. I arranged for the beds to be weeded and mulched and sent the tenants the remainder of their security deposit within the 45 day time limit allowed under VA law. 

The tenants sued me for $1,200 and the general district court judge awarded them a $500 judgement against me (my corporation).  I appealed that decision and the trial was Monday, August 3rd. The tenants presented 45 minutes of testimony and documents  * I gave them a written reference and said they were OK tenants * I never told them they needed to mulch and weed (it's in their lease and resident handbook) * I did not give them a chance to come fix the yard (weed and mulch) * I failed to return their deposit within the 45 day period (I mailed and they received within the 45 days) * Yada Yada.....when they handed the judge my Move-Out Closing Statement the judge read the bottom of the statement and ruled in my favor - I was never sworn in and I never testified.  My attorney will write the release to get my "bond" of $500 returned to me and vacate the $500 judgement. 

This is the wording at the bottom of my Move-Out Closing  Statement.  By cashing the check for the remainder of their deposit, they agreed to the Offer in Compromise I was presenting to them.....HOORAY!!

This check/statement is tendered as an offer in compromise for the settlement and return of the security deposit held on the Tenant/Payee's tenancy. This offer does not waive, relinquish or diminish the right of the Agent or Property Owner to seek additional monies should the Tenant/Payee reject this offer in any way including but not limited to the filing any legal action with regard to Tenant/Payee's tenancy.

These people were originally represented by an attorney and then represented themselves at the appeal trial.

My suggestion is to have good policies and procedures in place; use a good attorney familiar with your state's landlord-tenant and contract laws; and to APPEAL any judgement when you know the lower court ruled inappropriately.