Texas Real Estate Commission Warns of Massive Leasing Fraud Scheme as Cases Pile Up

The Texas Real Estate Commission is warning real estate brokers, agents and owners to be on guard after discovering the most extensive wave of leasing fraud it has investigated in recent history, all of it centered in Houston so far.

The scams involve the use of fraudulent information, such as job history and credit reports, to secure rental properties on behalf of tenants. And unlike other recent scams to defraud landlords, brokers and agents are taking part in the deception in these cases.

TREC has already investigated dozens of cases and imposed punishments, including the revocation of sales agents’ licenses and administrative penalties. In the cases outlined by the organization, agents submitted false information on behalf of tenants, at least sometimes using names and identifying information that differed from the person actually moving into a unit.

Though TREC only deals with single-family rental fraud, a similar issue has arisen at commercial multifamily properties across the nation, hitting both high-profile commercial real estate investment trusts and people. Last year, Camden Property Trust CEO Ric Campo’s identity was stolen to rent an apartment in Chicago, causing his credit score to plummet.

Renters in places like Atlanta are using social media platforms including TikTok and X, the platform once known as Twitter, to learn how to live rent-free by applying with false information and permanently leaving the rental in the middle of the night before they face consequences, Bisnow previously reported. 

As of January, more than 70% of major apartment landlords had seen an increase in fraudulent rental applications in the previous 12 months. 

That kind of fraud likely goes hand-in-hand with what TREC is seeing in Houston, and for some of the same reasons, TREC Enforcement Director Michael Molloy told Bisnow.

“Why we saw this trend happening is probably due to economic factors,” Molloy said. “The pandemic increased rental rates, with inflation and then the lack of affordable housing … People were in need of housing and this type of fraud came more to the forefront.” 

TREC must rely on reports of fraud to start investigating, so it is on a significant delay, TREC Chief Investigator Roy Minton said. The activity the commission is warning about now began ramping up in 2019 and 2020, he said.

“I was surprised, as we got into this, that it was more extensive than anything I’d seen in my 11 years at TREC,” Minton said.

In one case TREC investigated, a Houston broker sponsored three sales agents who submitted fraudulent lease applications for at least 24 single-family homes between May 2022 and September 2022, according to a news release. After each lease was executed, someone other than the applicant moved into the property.

The broker in that case was formally reprimanded and fined $1K, while two agents had their licenses revoked and had to separately pay fines of $31K and $26.5K. A third agent’s license was placed on probated suspension, the release states.

It is a broker’s responsibility to supervise the agents who work for them as independent contractors, Molloy said. A broker is not required to view credit reports for rental applicants, as that falls under the landlord’s purview, but it’s good for everyone to be aware of the recent fraud and know what to look for, he said.

“We had these credit reports where the name of the applicant and the credit score was just in a slightly different font than the rest of the document,” Minton said. “So the agent representing the property owner could be more alert to look for those things.”

Brokers should meet with their agents to let them know what has been happening and advise them on best practices, he said. And though it can be difficult to step up and report suspected fraud, especially because TREC does not accept anonymous complaints, it’s important to do so to get bad actors out of the industry, Molloy said. 

While it’s possible that a small circle of individuals carried out these scams, it’s hard to know without more reports and awareness, Molloy said.

“That’s why we want to get the information out there to see if there’s any more people participating in this, to encourage individuals to file complaints so that we can look into it,” he said.

For landlords that only own one rental house, this kind of fraud can be devastating, Minton said. 

“Very commonly, you end up in a situation where rent is not paid for months, and the owner has to go through an eviction process,” he said. “By the time they get control of their house back, in many cases that I investigated, there was damage.” 

Source: https://www.american-apartment-owners-association.org/property-management/texas-real-estate-commission-warns-of-massive-leasing-fraud-scheme-as-cases-pile-up/?utm_medium=email&utm_source=rasa_io&utm_campaign=newsletter

The salary needed to afford rent

source: https://www.msn.com/en-us/money/realestate/the-salary-needed-to-afford-rent-in-america-s-50-largest-cities/ss-BB1lPGEd?ocid=msedgdhp&pc=ENTPSP&cvid=99f5e0436ff544b0afd8aa02df6fad78&ei=16#image=32

How to tell the Difference between Mold and Mildew

By Albany NY Mold LLC

You’re cleaning your home and find spots that may possibly be mold or mildew, but you just aren’t sure how to tell the difference. This is a common occurrence and understandably so, since both of them flourish in environments conducive to moisture and warmth. The main concern is that you are aware it could affect the health of you and your family, so getting rid of it as soon as possible is your goal. Here we will explain the differences.

What is the Difference between Mildew and Mold?

The easiest way to determine if what you’re seeing is mold or mildew is in its appearance. Mildew forms on surfaces and has a powdery appearance, with a tint of yellow or sometimes white or gray color. Mold, however, develops below the surface and when it makes itself visible by seeping through walls, wood, etc., it will be slimy or fuzzy with tints of black or green.

The Effects of Mold Vs. Mildew

Both mildew and mold are fungi, but mold is much more dangerous than mildew. It is common to find mildew growing near food in the kitchen, or clothing in the laundry that has been exposed to moisture for extended periods of time, basically destroying these types of items it comes in contact with. However, although it will develop in moist rooms around the corners of windows, mirrors, or even the tile floors, it will not cause long-term damage to surfaces. The presence of mildew may cause breathing difficulties, headaches and coughing, so disinfect to prevent health issues.

On the other hand, because mold is underneath the surface, it is much more difficult to clean up. Oftentimes, mold remediation treatments are necessary. The effects of mold can be long lasting and not only will it damage vehicles, buildings, homes, and entire structures; it can be harmful to your family. Mold has been linked to various health issues, which include migraines, depression, heart and respiratory issues, and inflammation. Some individuals have experienced allergic reactions to mold and suffer from symptoms such as sneezing or throat and eye irrigation.

How to Get Rid of Mold and Mildew

Another notable distinction between mildew and mold is getting rid of it. Mildew can be removed from surfaces by applying some elbow grease with a scrubbing brush and a cleaner designed to tackle mildew. However, mold is much more difficult. As stated earlier, mold occurs below the surface and because it is a fungus it will spread. Mold will cause damage to foundations and interior walls and the only reliable way of determining the extent of damage and ensure it is properly removed is to seek the advice of professionals.

Article provided by Albany NY Mold LLC – Albany NY’s Mold Expert
1-800-727-0806
https://www.albanymold.com/

When Squatters Strike: Why Squatting Is On the Rise—and So Hard To Solve

By Kiri Blakeley Feb 19, 2024

Atlanta attorney David Metzger recently got a call from a client in a tricky situation: She’d gotten engaged, moved in with her fiancé, and decided to rent out her house in Dekalb County.

The day her home was listed, moving trucks arrived and a woman moved in with two kids, one a baby.

The problem? The house had not yet been rented out.

Metzger’s client, who’d heard about the moving trucks from her former neighbor, had her property manager call the police. When they stopped by to check out the situation, the “renter” presented them with a fake lease, with a fake electronic signature.

Presuming this “lease” was legit, the police left.

Metzger and his client spent three months legally wrangling before they were able to remove the squatter in February 2024 (which he says was a relatively short amount of time).

Yet although the mother was removed by the sheriff’s department, Metzger is not aware of any criminal charges brought against her. In another case, he says that his client’s squatters were given 15 minutes to remove all their belongings and then allowed to drive off in their car.

Such stories—of squatters taking over vacant properties, costing homeowners thousands to evict—are becoming shockingly common today.

“This is a real problem,” says Metzger, an attorney at Williams Teusink. “It’s not getting the attention it deserves.”

Why squatting is on the rise

When Metzger began practicing in 2011, squatter cases were “very rare.” But starting in 2023, there has been an “explosion” of them.

“People came out of COVID lockdowns to find out rents were no longer $800 a month, but $1,800,” he says. “They’d say, ‘I can’t handle that.’”

Metzger adds that while squatting used to exist mostly in low-end properties and neighborhoods, he is now seeing it in “bigger, fancier” properties, including in new construction.

According to the National Rental Home Council, there are at least 1,200 properties currently occupied by squatters in the Atlanta area.

Flash Shelton, founder of Squatterhunters.com, which can be retained to clear a home of a squatter, says the situation has reached epidemic levels in Atlanta.

Metzger agrees that the law needs to take squatting more seriously.

“The people doing this know there’s no legal consequences,” he says. “They’re not likely to be charged with anything.”

Once police are presented with a “lease”—even a forged one—it is considered a civil, not criminal, matter, and they leave.

“The squatters know this,” says Metzger.

A new piece of proposed state legislation—HB1017, the Georgia Squatter Reform Act—would make it easier for owners to remove squatters by focusing on the illegality of fake leases.

Metzger, Shelton, and other property law advocates say this is a good first step.

“It’s frustrating because police are very hands-off,” Metzger says, “even though there is no such thing as squatters’ rights.”

How to get rid of squatters

To get squatters out of a property, Metzger uses a little-known Georgia state “intruder removal” statute that predates the Civil War.

“Most people don’t know about it,” he says. Under this statute, the property owner can execute an affidavit setting forth that the squatter is, in fact, an illegal intruder. Unless the squatter has a counteraffidavit, this gives the sheriff’s office the right to remove the squatter.

But it’s not always that easy. How a sheriff’s office responds to a squatter case can vary greatly by county. And squatters are geniuses at finding legal loopholes and how to drag out the process. Typical eviction methods can take a year or longer. Meanwhile, the property owner is on the hook for loss of income and legal bills.

The best way to not have to deal with a squatter is prevention.

According to Metzger, the vast majority of squatters aren’t moving in when homeowners are away on a two-week vacation. They’re doing it when a property is listed for rent. They scour real estate listings to learn which properties are sitting empty.

Since squatters target vacant properties, anything an owner can do to make a property look occupied would go a long way toward discouraging intruders. Photos in a listing could include a person, or even a dog (perhaps a big, don’t-mess-with-me-looking dog).

“Try to have a camera and security system in place,” says Metzger.

Normally, when police show up to confront a squatter, and the person claims they have a lease, there is no way to prove the person broke in. However, camera footage can do that. This would generally move the case from a civil one to a much more enforceable criminal one.

Coldwell Banker agent Cara Ameer in Florida agrees that cameras are a deterrent but warns to make sure they are placed securely, or squatters can simply block or remove them.

“We’ve all seen those stories of people removing Ring doorbells,” she says. She also suggests using timed or motion-triggered lighting to make a property seem occupied.

Metzger also suggests alerting neighbors that your property is vacant and asking them to get in touch if they see any unusual activity.

And never leave a key in a key box, which can be broken into. Leave it with a property manager.

If a squatter gets in? Do call the police but do not try to handle the squatter yourself, experts warn.

“Unfortunately, it is a legal game to play and you want to comply with what is required by the law to ensure a successful outcome,” says Ameer. “Don’t confront them or try to turn off utilities.”

With rents at all-time highs and little to no legal repercussions for the intruders, the squatting crisis is likely to get worse before it gets better.

“It can’t stay this way,” Metzger says. “Something has got to change.”

Source: https://www.realtor.com/news/trends/when-squatters-strike-why-squatting-is-on-the-rise-and-so-hard-to-solve/

For Many, The Modern American Dream Involves Renting

By The Editors  -April 9, 2024

More and more Americans are renters by choice as the modern American Dream involves renting rather than the desire to own a home.

By Virginia Love

While the American Dream might have included various components throughout the decades, one constant was the desire to own a home. For modern dreamers, however, that isn’t necessarily the case.

According to The New American Dream Report recently released by the property software management company Entrata, 41% of renters claim their American Dream has nothing to do with homeownership. In fact, 20% anticipate being lifelong renters, which represents a 33% increase from 2021.

The causes for this paradigm shift are wide-ranging, but it certainly includes the idea that skyrocketing home prices have made homeownership an unattractive option for many—even for those who can afford to take the plunge. In addition to the long-term financial commitment, property upkeep, taxes and insurance are stressors that can be avoided by renting. The report, based on a survey of 2,000 renters conducted in January, found that 23% of respondents enjoy the location flexibility provided by renting and 17% like the financial flexibility of not being tied to a mortgage.

Additionally, renting no longer carries the negative stigma of the past, when it was largely perceived as a necessity-based alternative for those who couldn’t afford a single-family home. The term “renter by choice” is more common in current times, particularly with a wide range of available rental homes with attractive amenities and an increased supply of single-family build-to-rent homes.

When you consider the price and commitment components of homeownership, contrasted with the convenience-based factors of renting, it helps underscore why homeownership is not as much of a standardized American goal as in the past. According to the study, 66% of renters say renting fits their current lifestyle more than homeownership.

Essentially, experiences and flexibility have become greater priorities to the modern American.

Preference a more prominent factor than money

 Some might make the counterpoint that it’s easy for someone to dismiss homeownership as a priority when it isn’t financially feasible.

But the perception that renters are too young or financially unequipped to purchase a home has become something of an outdated generalization. The study shows that 33% of renters say they could afford a home that meets their needs, but ownership doesn’t necessarily fit into their current lifestyle. Additionally, 25% of renters with credit scores 750 and above—those who could easily qualify for a home—never want to stop renting.

For many, renting also serves as a key component to their career paths. According to the study, 65% of renters are happy with the direction of their career and 35% believe being a renter gives them more career opportunities than being a homeowner. Additionally, a robust 63% of renters indicated that they have a similar or better quality of life than their parents at a similar age.

Other financial priorities

 The traditional notion of “I need to save to buy a house” doesn’t apply to many, as a sizable contingent of younger Americans are earmarking their funds for other financial priorities.

More than half of those surveyed (56%) say they’re currently prioritizing paying off debts rather than saving, and 43% prefer to have their savings in investments and retirement strategies rather than real estate, because they are easier to liquidate.

While homeownership does build equity where renting does not, the concept of having all of one’s income dedicated to a house is becoming an old-school thought process. Some renters are looking even further down the line with their funds, as 36% of renters prefer to invest in retirement as opposed to saving for a home.

For the majority of respondents, any discretionary money is dedicated to activities such as dining, travel and entertainment, such as concerts and sporting events. A sizable 74% indicate that they designate any extra funds toward these types of experiences. Nearly half of respondents—46%—say they have the financial means to pursue their hobbies.

Non-monetary benefits of renting

 While renting might often be more cost-effective than homeownership, many Americans also enjoy the social aspects of being part of an apartment community.

Renters also have the ability to use a property’s common areas to host their own visitors, which for many, is preferable to having a backyard.

Forty percent of renters have utilized a property’s communal spaces for social gatherings, and approximately one-third (34%) indicate that their friends or family visit at least once per month.

More than half of respondents (51%) say they enjoy the community aspect of renting, and many have fostered meaningful connections with their neighbors. To that end, 67% of renters have helped neighbors at their properties while 61% have had neighbors assist them.

In summation, homeownership no longer qualifies as a primary measure of success or fulfillment for many of today’s Americans—particularly younger generations. While a certain percentage of people will always be renters by default due to their financial situation, more and more Americans are renters by choice. That’s because flexibility, experiences and other financial priorities are increasingly more compelling than homeownership to many.

About the author:

Virginia Love

Virginia Love joined Entrata in 2019 as an industry principal. She is directly involved with marketing, product, and sales as a liaison from the industry to these departments. With nearly three decades of industry experience, Love has served on numerous multifamily committees and boards for industry organizations including the Atlanta Apartment Association, Georgia Apartment Association, National Apartment Association, National Multifamily Housing Council and Zillow Multifamily Advisory Board. She is a National Apartment Association Lyceum graduate.

source: https://rentalhousingjournal.com/for-many-the-modern-american-dream-involves-renting/

The Rise of Real Estate Scams: Marketing Rental Properties among Fake Listings

Introduction

As an industry, real estate is especially vulnerable to fraud. Through public records and the MLS, property data is readily accessible leaving genuinely available properties vulnerable to “seller impersonation fraud”. This presents the obvious danger of robbing renters of their money, minds, and shelter, and is incredibly damaging for a property rental business. With bogus listings effectively competing against their legitimate twins, income stolen from potential tenants is likewise stolen from the impersonated property. In the aftermath of a scam, there’s legal action to contend with, a sullied reputation to repair, and time taken away from finding the tenants you need. 

Other criminal opportunities come from would-be tenants in various forms of identity fraud.  Everyone, regardless of moral code and ethics, needs somewhere to live – and sometimes they scheme their way in. This article highlights the dangers of seller impersonation fraud to rental property owners, including the telltale signs, trusted studies and statistics, preventative measures and solutions.

The Seller/Renter Impersonation Scheme

The hard work for these bad actors is already done, between public records, the MLS, and property owners paying top-dollar for stunning, screen-shottable photographs. Tack on the convenience of working from home and the allure of high-yield transactions posing as deposits and applicant fees, and it’s no wonder “seller impersonation fraud” has become so common that the Secret Service Cybercrime Unit issued this advisory warning in 2023 – and the alerts are still sounding.

With seller impersonation fraud the main focus for the authorities, scams regarding rentals and pocket listings fly further under the radar. As far as scams go, unfortunately, FSBO and renter impersonation fraud is quite easy to pull off. Electronic communication is the convenient norm. Posting listings across several platforms is the norm too, disguising an “additional” Craigslist or Facebook Marketplace listing as due diligence and wide coverage. Rental application fees and deposits are common enough to not raise suspicion, as every property owner gets to make their own rules, to a certain degree. 

Some common warning signs of these scams are too-good-to-be-true listing prices for bait, 

The Stats and Studies

Cybercrime in real estate transactions is one of the fastest growing crimes in the U.S. Multiple recent studies and consumer reports have been published on these cases, how they’re reported and investigated, and how devastating the consequences can be. As with all scams, one of the most unfortunate issues is a lack of reporting. And the most infuriating issue is that scammers know this. Similar fraudulent crimes have gone drastically underreported in the rental space, but in light of new surveys and studies – more information on how this relates to multifamily housing and rental properties can be found here.

Here are some of the results from recent consumer reports and federal investigations regarding fraud in selling real estate:

• Only 3% of reported seller impersonation cases are accepted in the courts.
• Only 18% of stolen funds are recovered from seller impersonation scams.
• 25% of surveyed home buyers/sellers reported being targeted for real estate fraud in 2023.
• 5% of surveyed home buyers/sellers suffered losses to real estate fraud in the past three years.
• The median amount lost per victim exceeded $70K, whether it was buyers who lost down payments or sellers who lost their net proceeds.

• 22% of fraudulent communication in seller impersonation scams falsify real estate agents’ emails. 
• The FBI reported “business email compromise in real estate” impacted a total of 2,284 victims in 2022, resulting in $446 million in losses. 
• 60% of consumers report receiving little to no education regarding real estate fraud from their agents, title agencies, or attorney, according to surveys done by CertifID.
  • Failing to adequately warn clients of the possibility of scams is grounds for a lawsuit. In the 2018 case, Bain v. Platinum Realty, LLC, a Kansas court found a real estate agent and her brokerage liable after the buyer/plaintiff was sent false wire instructions appearing to come from the selling agent/defendant. The buyer lost $196,622. The jury and federal court ordered the brokerage 85% liable and repaid $167,129.

The Solutions

Identity verification prior to tours and applications is paramount to the security of your listing(s) and the people involved with managing them. 

• Biometric Identity Verification is one of the only ways to stay ahead of fraud prior to property tours. Real-time facial recognition checked against an official photographic form of ID is a stalwart guard against identity theft. “Tenant Screening” provided by most listing services cannot be considered fraud mitigation without identity verification.
• Self-Tour-based platforms additionally offer traditional, guided tours, but with the amplified security protocols required to facilitate Self-Tours. For example, an official form of photo ID must be provided and must match a selfie captured in realtime in order to create a working profile on the InstaShow app. With background checks passed and verified photo ID on file, users then face these facial recognition tests at the beginning of every scheduled tour.  

Use property monitoring services and devices. 

• Often provided for free, check your county recorder’s office to see if they offer property monitoring to be alerted of any suspected fraud in advance.
• Utilize search engine alerts such as Google Alerts to automate mentions of your address to be sent to your email.  
• Security cameras that offer constant surveillance are a baseline form of security. When paired to your property showing software, additional disturbance notifications and facilitated 2-way communication boosts security during tours and afterwards.
• Keep a “chain of custody” record, storing timestamps and identity information when locked doors are accessed. This documentation functions to help property managers track tour statistics, track the comings and goings of maintenance crews, and functions as airtight evidence in court. Modeled after police protocol for entering evidence lockers, the InstaShow application retains a chain-of-custody log automatically for each property.

Be on the lookout for your listing(s). Everyone thinks it won’t happen to them. 

• Regularly search for your listing on Craigslist and Facebook Marketplace. Just because your property has been filled, doesn’t mean scammers stop peddling the fake one; search your properties occasionally even when they aren’t on the market.
• Image search your main property photo for two reasons: First, it casts a wider net to locate fake websites or posts on other platforms. Second, Facebook Marketplace only scratches the surface of scams on Facebook. Posts (with or without images) in public Facebook groups, such as local FSBO or rental groups, will appear in search engine results.

If you find evidence of a scam, first record everything.

Take screenshots in case the page or post is taken down. File a fraud report immediately with local and state law enforcement and the FBI at IC3.gov.  It is not advised to reach out to the scammer, as it could alert them to the risk of being discovered and cause them to hide evidence, or instigate further danger and criminal behavior.

If a victim shows up thinking it’s move-in day, be kind

It’s probably one of the worst days of their lives.

Citations

CertifID. 2024 State of Wire Fraud Report. (2024). https://www.certifid.com/state-of-wire-fraud

Dittman Tracey, Melissa. Consumers: Agents aren’t warning us enough about scams. (2024, March 6). https://www.nar.realtor/magazine/real-estate-news/technology/consumers-agents-arent-warning-us-enough-about-scams#:~:text=Scams%20Are%20Rising%3A%201%20in,consumers%20became%20victims%20last%20year.

Han, B., & Han, B. (2024, February 5). Consumer education at the center of wire fraud mitigation efforts. HousingWire. https://www.housingwire.com/articles/consumer-education-at-the-center-of-wire-fraud-mitigation-efforts/

Tomb, Diane. With fewer sellers on the housing market, more scammers are impersonating them. (2023, September 22). Fortune. https://fortune.com/2023/09/22/fewer-sellers-housing-market-scammers-impersonating-fraud-real-estate-diane-tomb/

United States District Court of Kansas citation: See Bain v. Platinum Realty, LLC. (2018) https://ecf.ksd.uscourts.gov/cgi-bin/show_public_doc?2016cv2326-132United States Secret Service Cybercrime Investigations. (2023). Real estate scams. https://www.alta.org/file?name=Seller-Impersonation-Fraud

Conclusion.

Combating real estate scams demands a proactive approach centered on robust security measures and preventative strategies. Implementing biometric identity verification enhances protection against fraudsters, safeguarding assets and preventing financial ruin. By prioritizing these steps now and monitoring listings, property owners can significantly reduce the risk of falling victim to fraudulent activities.

Source: https://instashow.app/listing-scams/?utm_medium=email&utm_source=rasa_io&utm_campaign=newsletter

Evictions That Are Never Allowed

As a landlord or property manager, you most likely believe that you have a right to evict any tenant who has not paid their rent or who has damaged your property.

Think again. The Fair Housing Act and the Violence Against Women Act (VAWA) limit your ability to evict such wrongdoers.

According to the U.S. Department of Housing and Urban Development (HUD), “Landlords can often decide when it’s legitimate to try to evict someone. There are some situations, however, in which landlords do not have a legally acceptable reason to evict someone.”

Legal Reasons to Evict a Tenant

Before you know what you can’t do, it is helpful to know what you can do. Although landlord-tenant laws vary by state, there is generally some uniformity in certain areas.

As a landlord, you have the right to remove a tenant from the property for any of the following reasons:

• The tenant does not vacate the property once the lease expires.
• Your renters have caused damage to your property.
• The tenants stopped paying their rent or have otherwise violated the terms of their lease.
• You are selling the property.
• You are going to do extensive renovations to the property.
• You are denied access to the property.
• The tenant is subletting the unit when the lease or rental agreement forbids it.
• Criminal activity in the home or on the property.
• Breaking a rule in the lease.

“Just Cause” and “No Fault” Eviction

Retaliatory actions by landlords are illegal throughout the United States. This means landlords cannot increase rent, decrease services or attempt eviction in response to tenants exercising their legal rights, such as reporting housing code violations or participating in tenant organizations. 

As an example, California law restricts a landlord’s ability to terminate a residential lease, evict the tenant and retake possession of the property. When a tenant has lawfully occupied the residential property for 12 months or more, the landlord is prohibited from ending the tenancy without “just cause.”

In most California cases, “the landlord must first give the tenant written notice of the alleged violation. Then the landlord must allow the tenant three full days to correct the deficiency before terminating the lease. The landlord can proceed with repossession only if the tenant fails to correct it within the 3-day time limit.”

“Just cause” refers to situations where the tenant has failed or refused to comply with the lease or other tenant responsibilities imposed by law. For instance, HUD points out that evicting someone for failing to pay pet fees for their assistance animals is not a good cause for eviction under the Fair Housing Act.

“No fault” eviction is where the tenant has no control of the termination. No fault just cause includes the following circumstances:

• The owner is reclaiming the property as their personal residence.
• The owner is removing the property from the rental market.
• An order to vacate by a governmental authority having jurisdiction over the property.
• The owner intends to demolish or substantially renovate the premises within a short time.

In these no-fault situations, the tenant cannot stop the lease termination. However, the landlord is required to provide the tenant with relocation assistance. They must either pay the tenant a sum equal to one month of the rental price or waive the rent payment due in the final month of occupancy.

The Colorado House of Representatives recently passed HB24-1098, which would bar landlords in the state from evicting residential tenants or denying lease renewals without providing a cause. If a landlord carries out a no-cause eviction, this is considered the unlawful removal of a tenant and renters can use the landlord’s violation as a defense in eviction proceedings in court. HB24-1098 will move next to the Colorado Senate. 

Evictions That Are Never Allowed

According to HUD, landlords may not evict or threaten to evict someone based on the following grounds. Note that It does not matter that a landlord might have the right to evict a tenant for other reasons. If the eviction decision was based in part on one of these reasons, the landlord has violated the Fair Housing Act.

Landlords must comply with the Federal Fair Housing Act and additional state laws prohibiting discrimination against tenants based on the reasons listed below. It is illegal to evict or threaten to evict anyone for exercising their rights under the Fair Housing Act.

• Race
• Color
  • A landlord violates the law if they evict a Black tenant for unpaid rent, but not a White tenant who also has not paid their rent.
• Religion
• Sex (including sexual orientation or gender identity
• National origin (country of origin or ancestry)
  • Threatening to evict a tenant for not speaking English or for having an accent is typically national origin discrimination
• Disability
  • A physical or mental impairment that substantially limits an individual’s major life activity or bodily function, being regarded as having such an impairment, or having a record of such an impairment)
• Familial status
  • A landlord may not evict a family because a child joins the family through birth, adoption, a change in custody, because the tenant is pregnant or otherwise has plans to add a child to their household.
  • Landlords may not impose overly restrictive rules about what minors may or may not do in their housing and then try to evict the family for breaking those rules.

Even if someone is behind on their rent and subject to eviction, a landlord may not pick and choose which tenants to evict based on any protected characteristic. For instance, HUD points out that “if a landlord refuses to add a tenant’s domestic partner to the lease because the partner is in a protected class, this refusal and any related threat to evict is illegal.”

It doesn’t matter whether:

• The lease gives the landlord the right to determine who is in the household.
• The lease gives the landlord the right to evict for unauthorized occupants.
• There is some other reason for the refusal to add the partner allowed by the lease.

If the landlord acts for a discriminatory reason, it is not allowed. It may not be obvious that a landlord is acting because of a person’s protected characteristic, but there can be clues:

• Evicting someone because a building manager believes the tenant is LGBTQI+ is discrimination because of sex.
• Evicting a tenant because other tenants or community members have discriminatory preferences or have made discriminatory statements is illegal discrimination.

Retaliating against a tenant for refusing their landlord’s sexual advances is also a violation of the Fair Housing Act. The landlord may not use eviction as a threat to get sexual favors or sexually explicit photographs from the tenant. Such actions could expose a landlord to civil penalties as well as to criminal charges because it is illegal to evict or threaten to evict anyone who is exerting their rights under the Fair Housing Act.

HUD also reports that “Under the Violence Against Women Act (VAWA), a landlord may not evict or otherwise penalize any tenant for seeking out law enforcement or emergency assistance on their own behalf or on behalf of another person in need of assistance. These calls for help can be for any emergency, such as needing medical assistance and do not have to involve a domestic violence or sexual assault incident.”

Illegal Ways for Landlords to Avoid Eviction

In order to avoid the aggravation and expense of going through the eviction process, some owners will use self-help eviction methods by attempting to retake possession of their rental property through other means.

The following are examples of illegal self-help evictions that could lead to your tenant rightfully suing you and damaging your business:

• Changing the locks while the tenant still lives in the property.
• Removing the tenant’s property.
• Failing to pay included utilities, such as water, and cutting them off.
• Threats of any kind.
• Direct orders to leave.

In addition to self-help evictions being illegal, landlords can be ordered to pay the tenant actual damages, court costs and attorney’s fees. In addition, statutes in many states, such as Virginia, also allow for the tenant to remain in the home.

Eviction Laws for Mobile Homes

Eviction laws do not only cover traditional multifamily and single-family rental homes, they also apply to manufactured and mobile home parks. If someone rents both the space and the mobile home, they are treated as if they were an apartment tenant.

However, the apartment tenant can be evicted without good cause. If the person is a mobile homeowner renting a space in a mobile home park, the landlord can evict them from the park only for good cause. This is true whether the rental agreement is month-to-month or a fixed term. The landlord also may not shut off the utilities to force the tenant to move. Only a sheriff with a court order can physically evict a tenant.

A landlord would have good cause to evict a tenant from their mobile home park for the following reasons:

1. A landlord can start an eviction case by giving a 30-day written notice if the rent payment was late three times or more during the past 12 months. 
2. The landlord can terminate the lease if the tenant fails to pay a late fee for past due rental payments. The landlord may only charge a late fee if it is agreed upon in the lease. 
3. A landlord can start an eviction case if the tenant has not lived up to a condition of their rental agreement, such as not maintaining their space. They can also be evicted for breaking any other law or ordinance of the mobile home park.
4. A landlord can start an eviction case if a tenant was convicted of being a predatory sex offender.
5. The landlord can start an eviction case if they believe someone in the tenant’s household, including a pet, has seriously injured someone, threatened someone with serious harm, done substantial damage to someone else’s belongings or committed an “extremely outrageous act” in or near the mobile home park. 
6. A manufactured dwelling cannot be forced out of a facility just because of its age, style or size, but a tenant whose home is deteriorated or in disrepair can be given a notice of termination that gives the tenant at least 60 days to repair the home to meet reasonable park standards. 

Conclusion

While it’s not always obvious that a tenant is going to cause their landlord trouble, it is possible to minimize the risk by carefully screening an applicant before you rent to them. An AAOA tenant background check and tenant screening will alert you to any suspicious or irresponsible activity on the part of the prospective tenant over the last seven years. You can clearly see if they have any criminal judgments against them and how responsibly they have been paying their bills or if they have declared bankruptcy during that time.

As laws become more tenant-friendly nationwide, be very careful when handing over the keys for your investment property to a new renter. And remember, AAOA is ready 24/7 to help you.

Source:

https://www.american-apartment-owners-association.org/property-management/evictions-that-are-never-allowed/?utm_medium=email&utm_source=rasa_io&utm_campaign=newsletter

Renting, Pets, and the Gen Z/Millennial Mix; Are You Poised to Welcome Them?

U.S. homebuyers are facing monthly mortgage costs that are 52% higher than the average monthly apartment rent, according to a recent analysis by CBRE Research, a real estate and investment insight firm. Placing that number into sharper focus: monthly mortgage payments, including taxes, have risen by 70% since 2019.

Wow.

While that’s a staggeringly discouraging figure for the prospect of living the traditional ‘American Dream,’ it should be a rallying cry to apartment marketers everywhere. Not only is this an opportunity to create campaigns and strategies targeting the generations most impacted by this dynamic – Millennials and Gen Z, ages 18-44 – it also signals a broader opportunity to redefine the American Dream around renting as a more affordable, flexible lifestyle choice with fewer financial surprises.

What do current data tell us about these generational groups? Here are just a few significant points:

• 55% of young adults aged 18-34 believe purchasing a home is “much harder” than during their parents’ prime homebuying years. (Pew Research Center)
• One in three GenZ adults say homebuying is out of reach financially. (Freddie Mac)
• GenZ adults acknowledge the benefits of renting, citing flexibility (76%), being close to the “action” (65%), and less stress than owning (63%) as positives. (Freddie Mac)
• Younger generations are grappling with student loan debt (43% of Millennials and 28% of GenZ), making it harder to save for a down payment. (Bankrate)
• Home lenders have become extremely selective when extending mortgages to first-time homebuyers. (Chandan Economics)

What else do we know about these groups? Well, among other things, we know quite a few of them have pets. Gen X and Millennials/GenZ comprise 79.5% of pet owners, according to the Pet-Inclusive Housing Report. And they love their pets!

• GenZ and Millennials consider their pets when making a home purchase/rental decision up to 10 ppts more often than older generations. (APPA)
• The percentage of multi-pet households has risen steadily over the past several years, but this increase is almost entirely explained by Gen Z and Millennial households (as much as 18 ppts higher than older generations), which are also driving rental demand.
• The human-animal bond continues to grow significantly year after year across generations. (HABRI)
• Gen Z and Millennials take their pets to the vet more often than previous generations. (APPA)

It’s a great combination for the increasingly pet-friendly rental housing industry . . . prospective residents who will be renting longer, and who will be looking for rental housing that accommodates their pets. Since we know that pet-owning renters stay longer to begin with, this bodes well for the industry as rent growth slows, and the NOI boost from residents representing lower turn costs and vacancy loss should garner every savvy operator’s interest.

There’s yet another twist to this dynamic for operators who really want to turbo boost their ability to capture these younger pet-owning renters who are postponing/foregoing homeownership – and that is to allow even more pets by becoming truly pet inclusive. Typical ‘pet-friendly’ weight and breed restrictions eliminate a large component of this renter pool, and frankly, these restrictions are outdated and lacking supportive data. That’s not inclusive at all.

Most animal behavior authorities agree that breed is not a valid measure of whether or not a dog may display aggression; instead recommending that individual behavior is both a more accurate and safer method for determining restriction. Defining acceptable dog size as 30 or 40 pounds in a country where the majority of dogs are over 35 pounds also limits the renter pool and again, is outdated when you consider that only 9% of pet-owning units report damages, and those damages average only $210.

In a nutshell, Gen Z and Millennials are renting longer, have more households with pets, have more pets per household, and will only continue to grow as a component of multifamily renter households. Are you poised to welcome this growing market group? 

Source: https://www.multifamilyinsiders.com/multifamily-blogs/renting-pets-and-the-gen-z-millennial-mix-are-you-poised-to-welcome-them

What Does A Tenant Background Check Include?

Benefits of A Thorough Tenant Background Check

Background screening is a crucial step in the tenant selection process. In today’s competitive rental market, landlords and property managers need to take extra precautions when considering prospective tenants in order to protect themselves from loss of revenue and property damage. Knowing how to read and interpret background screening results will help you make the best decision possible for your properties.

As you know, one piece of information that should always be checked is a prospective tenant’s credit report  and rental credit check score. A good credit record means they are less likely to have issues with paying rent on time or damaging your property – both critical factors in renting out units. The higher the number , the better their history has been with debt repayment, which makes them more desirable as a potential renter.

But just as important in your decision-making process are the other   reports available to you. Each is designed to give you a more thorough picture of your applicant over the last seven years than their credit report alone can provide.

Nationwide Bankruptcies, Tax Liens and Civil Judgments

When a person or business cannot repay their outstanding debts, they can file with the bankruptcy court to seek relief from their creditors. Those creditors may or may not receive some or all of the money owed to them. A tax lien is a lien imposed by law upon a property to secure the payment of taxes while a civil judgment is a ruling against a defendant in a court of law. The judgment can arise from small claims, unpaid debts or property damage caused by negligence.

Until the major credit bureaus decided to eliminate bankruptcies, tax liens and civil judgments from credit reports a few years ago, a landlord running a credit check could see if their applicant had any of these problems in their past. Now, it is necessary to order a separate search for these important items.

Social Security Number (SSN) Fraud Check

Identity theft is a growing crime, so it is important you verify that your applicant is who they present themselves as. An SSN fraud search will comb through more than 19 billion public and proprietary records to verify potentially fraudulent identities.

State or Nationwide Eviction Search

The eviction search is one report you hope will come back marked “no records were found.” Unfortunately, this determination may not tell the whole story. Utilizing the applicant’s Social Security Number, the database is searched for eviction filings and judgments for the past seven years.

But only cases that went through the court system will appear on the report. The tenant may have been late with their rent payments and asked to leave by the landlord without going through the expensive steps of taking them to court. If legal proceedings were not filed and a judgment not rendered, it will not appear in the eviction search results. In addition, the fact that a record was discovered does not necessarily mean that the applicant was actually evicted from an apartment or was found to owe back rent. Many times, a lawsuit may be filed in error or deemed by the court to lack merit. Ordering a Previous Address Tenant History and a Landlord Verification report will give a much fuller picture of the applicant’s rental background.

Previous Address Tenant History (PATH)

Using the applicant’s Social Security Number, the PATH report searches consumer credit databases, telephone companies, city and state public records and over 100 additional data sources. The results will include all names associated with the Social Security Number, including aliases and phone numbers, reporting dates, the approximate year the SSN was issued and whether the individual is deceased.

In addition to possible addresses and in what county each address is located, you will learn how many jurisdictions they have lived in. If they have lived in more than one county during the last seven years, you might want to order additional County Criminal Searches.

An unusual number of reported addresses and/or phone numbers does not necessarily indicate anything negative. These sections often contain business/work addresses and phone numbers and other random numbers. Review them with the applicant to determine whether they are a true red flag.

State or Nationwide Criminal Search

The Fair Credit Reporting Act (FCRA) limits a criminal records search to the past seven years and includes all records where the individual was convicted. Arrests without conviction are not included. The search covers the Circuit, Municipal, Superior and/or District Courts and includes the most current and past felony and misdemeanor convictions as well as some traffic violations. The results will show the defendant’s name, any aliases, date of birth, county case number, charge and disposition. The databases are updated weekly or monthly depending on the jurisdiction. It should also be noted that criminal search results are subject to various laws which may limit or restrict the ability to display certain results.

Sex Offender Report

The sex offender search is similar to the criminal search and also goes back seven years. Results are for convictions only and do not include arrests. In addition to all 50 states and Washington, D.C., records are pulled from 150 American Indian Tribes, American Somoa, Guam, Northern Mariana Islands, Puerto Rico and U.S. Virgin Islands. The databases are updated monthly.

TeleCheck Check Verification

This report is important because it indicates whether your applicant has written bad checks. Check transactions that have been sent through the TeleCheck system are analyzed for bad activity. Checking account information is also examined. More than 374,000 business locations count on TeleCheck for their check acceptance services.

The company’s continually updated database includes more than 51 million bad check records. If your applicant has a history of passing bad checks, it will show up in the TeleCheck Check Verification report along with their full name, driver’s license number, its state of issue and whether they are approved for check acceptance. The prospective tenant’s driver’s license number or state-issued ID are used to prepare this report, so be sure to include it when you place your order.

OFAC, Terrorist Databases and Federal Jurisdictions Searched

The search results from the Office of Foreign Control (OFAC) can include some of the most serious national and international crimes, such as kidnapping, smuggling, identity theft and tax evasion.  Results are culled from the Federal and Interpol Most Wanted lists and include the past criminal record of the defendant and the seriousness of their crime.

Terrorist and narcotics traffickers are included in the OFAC search and results have their full name, date of birth, address, country and any aliases. It offers in-depth information on terrorist incidents, groups, trials, leaders and members. Updated monthly, these databases also include criminal convictions for counterfeiting, hijacking, mail fraud, embezzlement and more.

Whenever you are leasing out your home or an apartment to a tenant, it is vital that you perform a comprehensive background check. It can be tempting to only do the bare minimum and trust your intuition, but that is not enough. A thorough background check will help ensure that they are responsible people who won’t cause any problems for you or your other tenants in the future. The information provided with these reports can give you all of the details on what kind of person they are, so make sure to read them thoroughly.

https://www.american-apartment-owners-association.org/property-management/what-does-a-tenant-background-check-include/?utm_medium=email&utm_source=rasa_io&utm_campaign=newsletter

Is owning a home still part of the ‘American Dream?’ What to consider before deciding to rent or buy

ByCourtney Carpenter 

Friday, March 22, 2024 8:38AM

HOUSTON, Texas — Owning a home is a part of the “American Dream.” Right? That has at least been engrained in many of our minds.

With high home prices and interest rates, should some of us just give up on that part of the dream?

“I’m a Zillow queen. I’m always on there looking like, ‘OK. Well, what can I afford?'” prospective homeowner Chantel McKinney said.

According to HAR, as of February 2024, the average price of a home in the greater Houston area is $391,080, pricing many people out.

About 60% of Houstonians are renters.

So, should the goal in this day and age even be to own a home?

“I think as a millennial, the American dream of owning a home is kind of faltering when it comes to us,” McKinney explained.

McKinney said she’s saving now, so hopefully, she can afford a home soon. This is exactly what Sarah Mizell, a financial advisor with Cove Wealth Management, suggests.

“A lot of times, people are renting, and they want to buy, and they feel stuck renting, and that is a frustrating feeling. Simply overreaching and buying something doesn’t take that stuck feeling away,” Mizell explained.

Mizell said there are plenty of pros to renting. It buys you flexibility if you do need to move, and you are not on the hook when things break.

If you’re trying to decide whether to keep renting or to buy, here are some of the questions she suggests you ask yourself:

• How much should you spend on a home?
• How much do you have saved?
• How long are you planning to live in the home?

Your housing costs should be around 25% of your income. If you buy, that 25% should include your mortgage, taxes, insurance, any HOA fees, and about 1% to 2% of the cost of your home set aside each year for maintenance.

ABC13 did the math. On the average home here that costs nearly $400,000, you’ll end up spending about $46,000 a year on all of those expenses. That means to afford it, you would need a household income of about $183,000.

That’s of course, after you’ve forked over a lot of money for your down payment and closing costs.

Another important thing you should consider is how long you plan to live in the home. If it is less than three to five years, you’re probably better off renting.

If you don’t have the money yet and it is your dream to own a home, you don’t have to give up on it altogether.

“Get comfortable knowing where your money is going and then make one small tweak every month for the next year that moves you in the direction you want to go,” Mizell explained.

Mizell stresses having a budget, understanding it takes time to save, and making financial decisions that are best for your family, no matter what society says.

https://abc11.com/2024-real-estate-what-to-consider-before-deciding-rent-or-buy-home/14453144