Why Renters Insurance Matters for Landlords

1Do you know someone who owns a house and doesn’t have homeowners insurance? Most likely, you don’t. That’s because if someone has a mortgage, their lender requires the home is insured. Which makes sense. If the house burns down, the lender’s money goes up in smoke.

 

In the world of renting, renters insurance is just as important, but few people understand exactly why.

 

Let’s start with the basics. Renters insurance protects renters and landlords.

 

For starters, renters insurance covers a renter’s personal belongings, something a landlord’s property insurance doesn’t cover. Without renters insurance, a renter would have to pay to replace everything stolen in a burglary or damaged by a fire. Renters insurance will also cover the cost to replace a stolen bicycle or laptop, even if the theft happens someplace other than home.

 

It also protects renters from liability if they accidentally damage their place. If a renter accidentally starts a kitchen fire or overfills the bathtub, with renters insurance they won’t be liable for the damages, even if they damage a neighbor’s place.

 

What many people don’t know is that the liability coverage benefits landlords, too. Without renters insurance, a landlord could be responsible for the cost of damages and repairs if their renter accidentally damages the property.

 

It’s important that renters carry renters insurance. Just like mortgage companies require homeowners insurance, most landlords require renters insurance in their leases. If possible, landlords should verify that renters have a current policy.

 

With renters insurance, both renters and landlords can relax knowing they’re covered. That means less stress all around!

 

Source: huffingtonpost.com

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Ask The Attorney: Tenant Threatening to Sue

ask-the-attorneyThe Landlord Protection Agency®presents John Reno, Esq.,a highly experienced Landlord – Tenant attorney based on Long Island, NY.

Q:  Dear Mr. Reno:

I had a tenant who vacated and did not clean the home and there was close to $1,400.00 in damages which he refused to pay. I had 21 days to return his security deposit and I completely forgot because I was so overwhelm with the work that had to be done to the home. He sent me an email reminding me that I was late. I apologized to him and told him I would it send right out. He preferred to pick it up. His $3500.00 security deposit was minus the cleaning and the damages. The next day he spoke with a Lawyer and he threatened me with legal action and that he was entitle to a full refund of his security deposit. He took no ownership for his actions. I did return the remaining deposit because I had no time to go to court.

He rented the place for 3 years and he did not qualified to rent the home per our Property Management Company. I gave him a chance. I also told him before all this that if was to leave before the end of the lease I would only charge him for the days he will be there.
I would like to have my portion returned to me. Can you help me.

Regards,
Albert C., Clayton ,CA

A: You have won a no expense paid trip to small claims court to sue for your $1400 plus whatever. Good luck.

Legal Disclaimer
The Landlord Protection Agency’s “Ask the Attorney” column is for informational purposes only. The questions answered by Mr. Reno on this site do not constitute an attorney – client relationship and are not to be considered legal advice. Not all questions will be answered and some may appear in the LPA Q&A Forum.
The Landlord Protection Agency recommends that you seek legal advice before using any of the material offered on this web site, and makes no guarantee on the effectiveness, compliance with local laws or success of any of the material offered on this web site. The Landlord Protection Agency is not engaged in rendering legal advice.

Landlords: Are Your Contractors Licensed?

1

Maintenance contractors are important members of every landlord’s team. It’s imperative to hire a professional for issues that could harm the integrity of the rental or the safety of its tenant occupants. It’s also important to verify the contractor is licensed, has liability insurance and provides worker’s compensation coverage for its employees. Why? Insurance covers workers that are injured on the job. You might be telling yourself as a landlord, “That’s not my problem, that’s the contractor’s problem.” Unfortunately, that’s not the case. If an uninsured contractor gets hurt on a landlord’s property, the landlord could be held responsible for all medical bills and other financial hardships realized by the injured contractor. Most state licensing agencies require proof of both insurances for licensed contractors in order to remain licensed. Using an unlicensed contractor won’t save a landlord money in the long term. Proper licensing is important for a landlord to avoid liability and litigation.

Today, one of our brokers snapped this photo of two contractors working on the exterior of a townhome across the street from one of our managed properties. We certainly hope this landlord and their property manager hired a licensed and insured contractor.

Smart Landlord Policies for Pet-Friendly Property Rentals

1Want a surefire way to increase tenant demand for your rental? Take down the No-Pets Allowed sign.

The decision about whether to allow pets is a tough one for many owners, and there are no right or wrong answers. But some surveys show that nearly 75 percent of renters own pets. That’s a huge pool of potential tenants to turn away.

Tenants who find a welcoming home for Fluffy are also more likely to stay longer, which can reduce vacancy time. For owners renting their property as an investment, being pet-friendly makes good business sense.

But allowing pets isn’t always the right answer for owners renting out a home they plan to return to. For owners who have pets themselves, allowing renters to keep a cat, dog or goldfish will likely make leasing the home faster and easier. For those who haven’t had pets, keeping the rental pet-free is a reasonable choice.

According to a recent survey by Apartments.com, 9 out of 10 renters said deciding where to live hinged on the landlord’s pet policies. Seventy-two percent of renters said they owned pets.

Protecting Your Property When Allowing Pets

How can you avoid the dog that barks day and night and chews the cabinets, or the kitty that favors the closet floor over a litter box? Finding responsible pet owners is key to protecting your property and neighbors’ sanity.

The Humane Society suggests that landlords check references on both the tenant and their animal, including calling prior landlords, the veterinarian and neighbors to ensure the animal behaves and won’t cause serious damage.

The organization suggests owners limit the number of pets allowed in each unit and approve pets on a case-by-case basis, rather that create limits based on size or breed. The Humane Society recommends creating a pet policy that outlines acceptable pet behavior and requires that all pets be licensed, up-to-date on vaccinations and spayed or neutered.

Deposits and Fees

Beyond policies, landlords often charge extra deposits, fees or pet rent to limit risk and cover the cost of additional cleaning or wear and tear animals can cause to the unit, building and grounds. In the Apartments.com survey, nearly 80 percent of renters said they had to pay a fee or deposit for pets, with more than half paying $200 or more per year.

Be aware of what’s customary in your neighborhood plus local laws when deciding how much of a fee or deposit to charge.

D.C. law does not require that you rent to tenants who have pets. Service animals for people with disabilities are an exception. Under Fair Housing laws, landlords must allow service animals, even if a property is pet-free, and may not charge extra fees or deposits.

Whether you decide to allow pets or not, advertising your policy and targeting tenants most likely to appreciate your decision will help you find the perfect tenant faster.

Source: hillnow.com

Are landlords required to install new flooring for disabled tenants?

1Question: I am a property manager at a low-income apartment complex. Last year, a tenant in a wheelchair told me that she needs the carpeting in the unit changed because her wheelchair gets caught in the fibers, making it difficult for her to move forward. We understand that we have responsibilities to accommodate people with disabilities, so we replaced the carpet with laminate flooring. The project cost us over $1,500.

Now another tenant who uses a walker brought us a doctor’s note saying that she also needs laminate flooring. I have seen her around the property talking to the tenant whose floors we did, so I know they are friends, and I know that’s where she got the idea to make this request. Do we have to replace the floors in her unit as well? What if all the tenants want new floors?

Answer: What your tenants have asked for is a reasonable modification — a structural change that gives an occupant with disabilities full enjoyment of the premises.

Although housing providers generally do have to allow reasonable modifications needed by persons with disabilities, tenants must pay for these modifications themselves unless the housing provider receives certain kinds of federal financial assistance. In that case, the housing provider has to pay for the modification unless doing so would create an undue financial and administrative burden.

The fact that you are a low-income housing provider and paid for the first modification may suggest that your complex does receive some form of federal funding, but you should discuss the matter with someone familiar with the funding at the complex and the requirements connected to that funding.

Neither the fact that the two tenants are friends nor the fact that you replaced the flooring in the other unit at your own expense changes your responsibilities under the law. This new request should be evaluated on its own merits: If the tenant has a disability and if the modification is necessary to allow her full enjoyment of the premises, then you must permit the modification.

This is true for every tenant who makes the request, regardless of how many there may be. But remember, of course, that if the tenant must pay for the modifications, the financial burden of replacing the flooring falls on the tenant, rather than on you. And if you do receive federal funding, if and when the cost of replacing the carpet with laminate flooring for multiple tenants rises to the level of an undue financial burden, you may not be required to grant further requests.

A final note, if the tenant would have to pay for the modification herself but cannot afford to do so, she may be able to get assistance from a nonprofit or charity. Contact a local disability rights agency to see what programs might be available in your area.

Source: latimes.com

HUD Issues New Guidelines On The Use of Criminal Records In The Rental Screening Process

1On April 4, 2016 the U.S. Department of Housing and Urban Development (HUD) dropped a bombshell on owners and managers of residential rental properties in the U.S.

HUD’s Office of General Counsel published a 10 page guide entitled “Guidance on Application of Fair Housing Act Standards to the Use of Criminal Records by Providers of Housing and Real-Estate Related Transactions.”

This guide essentially changes the rules as we currently know them with regard to rejecting a rental applicant based on their prior criminal history. I highly recommend that all of you read the document itself — many times in fact — as this is a very important change and this issue is not going to go away.

This Policy Is Applicable To All Landlords

HUD’s guide applies to ALL HOUSING PROVIDERS. I repeat, this new policy applies to all of you. Some landlords assume that when the see “HUD” that it only applies to federally subsidized housing and public housing. Sometimes that is true, but not in this case. HUD is the federal agency that investigates allegations of fair housing (discrimination) violations. HUD investigates discrimination allegations against all landlords not just landlords of section 8 properties. So this guide published by HUD applies to all of you market rate/conventional housing landlords as well.

Disparate Impact

In order to understand HUD’s view on the use of a person’s criminal history in the screening process you have to understand something referred to as “disparate impact”. In essence, “disparate impact” means that a landlord can have a facially neutral screening policy that is applied equally to everyone but it can still be discriminatory if its use results in a disproportionate impact on a member of a protected class.

HUD’s guide includes lots of statistics that show that across the U.S. African-Americans and Hispanics are arrested, convicted, and incarcerated at rates disproportionate to their share in the general population.

As a result of these statistics, if a landlord considers and applicant’s criminal history (arrest and/or conviction) as part of the screening process, that landlord may be discriminating against African- Americans or Hispanics based on their race and/or national origin (both of which are protected classes under Fair Housing laws).

So even if your screening policy on its face is not discriminatory and even if you are applying it evenly you may still be discriminating based on race and/or national origin, because your policy affects African-Americans and Hispanics more than others.

Substantial, Legitimate, Nondiscriminatory Interest

So does this mean that a landlord cannot take into consideration a rental applicant’s criminal background at all? The answer is both “yes” and “no.” HUD states that a landlord may not be discriminating based on race or national origin if his/her screening criteria with regard to the criminal history of an applicant can be proven to be “necessary to achieve a substantial, legitimate, nondiscriminatory interest of the [housing] provider.”

What the heck does that mean?

There is no easy definition or explanation of this phrase. Whether a landlord’s screening policy with regard to an applicant’s criminal history is “substantial, legitimate, and nondiscriminatory” will depend on many specifics. It could depend on the facts of the crime or how old the conviction is or the exact wording of the criteria or how the criteria is applied etc. etc. And it is helpful to keep in mind that one Fair Housing investigator’s interpretation of the phrase may be different than another’s. And one judge’s view may be different than another’s.

HUD has tried to further clarify this phrase by boiling it all down to the following statements:

  • A landlord must be able to prove through reliable evidence that his/her policy or practice of screening based on criminal history actually assists in protecting resident safety and/or property.
  • Merely relying on generalizations or stereotypes that anyone with a criminal history poses a greater risk than a person without such a background is not sufficient.

Prior Arrests

HUD states that if a landlord rejects a rental applicant because of one or more prior arrests — that have not resulted in a conviction — that the landlord’s policy cannot meet the burden of having a “substantial, legitimate, nondiscriminatory interest.” Translation: if you are doing this, you are discriminating.

HUD states that “the fact of an arrest is not a reliable basis upon which to assess the potential risk to resident safety or property posed by a particular individual. For that reason, a housing provider who denies housing to persons on the basis of arrests not resulting in convictions cannot prove that the exclusion actually assists in protecting resident safety and/or property.”

So landlords may no longer consider whether a rental applicant has been arrested unless that arrest resulted in a conviction.

HUD does not come out and say this but it would seem to me that by logical extension a landlord also can not deny an applicant who has a criminal case that it still pending (since there has not yet been a conviction).

So the applicant that has a pending “first-degree homicide” charge or a “sexual assault of a child” case that is still winding its way through the criminal justice system or is on appeal – cannot be rejected based on that fact alone.

I understand the whole “innocent until proven guilty” viewpoint, but do you think this will comfort your longstanding tenant that has minor children living with her when a middle-aged white guy charged with “sexual assault of a child” is allowed to move in next door to her because his case has not yet gone to trial and therefore he has not yet been convicted?

Oh just wait, it gets even better.

Criminal Convictions

HUD also states that a landlord that imposes a “blanket prohibition” on any rental applicant with a “conviction record — no matter when the conviction occurred, what the underlying conduct entailed, or what the convicted person has done since then — will be unable to meet this burden.”

Translation: If you deny any and all applicants because they have a criminal conviction you are violating Fair Housing laws and therefore discriminating based on race and national origin, even if you apply that criteria evenly against everyone.

HUD goes on to say that even if you have a more tailored policy or practice that excludes individuals with only certain types of conviction you still must prove that your screening policy is necessary to serve a “substantial, legitimate, nondiscriminatory interest.” There that pesky phrase again.

HUD recommends that any landlord that wants to consider an applicant’s past criminal convictions as part of the screening process must at a minimum consider the following:

  • The nature and severity of the crime, and
  • The amount of time that has passed since the criminal conduct occurred.

That is the only guidance that HUD has given us. The rest is for you to figure out. And if you don’t handle things properly you may get investigated or sued for discrimination.

Exception: Illegal Manufacture or Distribution of a Controlled Substance

There is one point of clarity. The federal Fair Housing Act does contain a section that states that the taking of an adverse action against a person who has been convicted for illegally manufacturing or distributing a controlled substance as defined in section 102 of the Controlled Substances Act (21 U.S.C. 802) will not be discriminatory. So a landlord is still free to deny a rental applicant if they have ever been convicted of manufacturing or distributing a controlled substance.

Conclusion

What really frustrates me about this whole thing is that landlords are now being told that they must consider a applicant’s criminal convictions on a case by case basis. For years we have been told by HUD that the best way to avoid discriminating against someone is to treat everyone the same; your screening criteria must be “objective” and not “subjective. But now HUD seems to be saying that is no longer appropriate.

Now HUD is telling landlords that they will need to become social workers and therapists and try to determine if an applicant who was convicted of a crime in the past has been rehabilitated or not.

Think of the time and effort that will be required for a landlord to travel to the courthouse to review the criminal case file to determine all of the facts surrounding the crime, all of the events that led up to the person engaging in the criminal conduct, the individual’s past, to review any pre-sentencing report to see what the evaluator thinks about the defendant etc. None of this information is available on CCAP. You will only get this information from the actual file. Or are you just supposed to listen to the applicant’s version of the facts of the conviction and believe them?

It appears to me that HUD might actually be hoping that landlords decide their is too much risk involved in denying any applicant based on their past criminal convictions (except for the conviction for manufacturing or distributing controlled substances – see above) and therefore they should all be accepted.

Landlords will now need to try and determine what convictions might be considered “directly related to the safety of your residents and your property” and hope their interpretation is correct or else risk being investigated and/or sued.

Tristan R. Pettit, Esq.

Source: petriestocking.com

Tristan is a shareholder with the law firm of Petrie+Stocking and focuses his practice in the area of landlord-tenant law representing landlords and property management companies throughout Wisconsin.

What Landlords and Property Managers Need to Know About the Americans with Disabilities Act

1In recent years, there has been a proliferation of “drive-by lawsuits” involving the Americans with Disabilities Act (“ADA”). Such actions typically involve a plaintiff’s lawyer cruising around town with a disabled individual in search of retail properties whose premises are in violation of the ADA. Indeed, these lawsuits are so prevalent that 60 Minutesrecently dedicated a portion of its Sunday night program to the topic.

Each year, drive-by lawsuits result in the filing of thousands of lawsuits by a relatively small number of individual plaintiffs. Ironically, oftentimes, these individuals have suffered no actual harm and can recover little or no monetary damages. Nevertheless, landlords and property managers may be required to undertake costly remediation efforts. The lawyers filing such suits recover attorney’s fees (sometimes with a kick-back to the individual plaintiffs as compensation for their time).

Even worse, these lawsuits—or even the mere threat of a lawsuit—may constitute nothing more than “shake-down” operations and are frequently resolved with the plaintiffs receiving a quick monetary settlement without the requirement that any remediation actually be undertaken. Currently, there is a push in many jurisdictions to pass legislation requiring notice and an opportunity to cure before the commencement of legal proceedings. Unfortunately, such efforts have thus far been largely unsuccessful.

Compounding matters is the fact that the consequences of non-compliance with the ADA can be severe. Potential outcomes might include mandatory injunctive relief (i.e., a court order requiring a property owner to fix the problem), the landlord’s payment of attorney’s fees—both its own and the plaintiff’s—civil penalties, and negative publicity. Further, because ADA lawsuits frequently involve no actual harm to the plaintiff, general liability insurance policies likely will not cover these expenses.

Fortunately, ADA compliance problems are preventable. Violations usually result not from an intentional indifference to the needs of disabled persons but, instead, from the lack of proper policies, procedures, and practices regarding accessibility. Having effective policies in place can go a long way toward avoiding the expense associated with ADA lawsuits. Further, implementing effective policies doesn’t have to be difficult; it simply requires being conscientious about identifying barriers to access to parking, entrances, restrooms, etc.

So, what does the ADA require? Businesses that are “public accommodations” (e.g., restaurants, shopping centers, office buildings) must provide accommodations and access to persons with disabilities that is equal or similar to that available to the general public. Owners, operators, lessors, and lessees of commercial properties are all responsible for ADA compliance.

New construction and elements of buildings altered after January 26, 1992, must comply with ADA standards to the maximum extent feasible. But this does not mean that older buildings that haven’t been recently renovated are “grandfathered in.” Indeed, even for existing facilities, landlords and property owners must remove “architectural and communication barriers” that are structural in nature when it is “readily achievable” to do so. Examples of such modifications include widening doorways to ensure wheelchair accessibility, retrofitting restrooms, and adding access ramps. A modification is “readily achievable” when it is easy to accomplish without much difficulty or expense. This standard will often depend on the nature of the proposed modification and the resources of the party responsible for implementing it.

Who is liable for ADA violations? Owners, landlords, and tenants can be jointly and severally liable in the event of non-compliance. Significantly, a landlord may not shift liability for ADA compliance to its tenants. Certainly, the parties’ lease may shift the cost of remediation to the tenant, but such a provision does not serve to exculpate the landlord from liability. Landlords, as owners of “public accommodations,” have an independent duty to comply with the ADA and can therefore be liable for ADA compliance on property leased to and controlled by its tenants. Further, tenants are not subject to liability for violations in areas that are not under their exclusive control, such as common areas. Additionally, some courts have held that landlords cannot shift the financial responsibility for ADA compliance to architects and builders because to do so defeats the purpose of the ADA.

How does this affect property managers? Although property managers may not have direct liability for ADA compliance, their actions, as agents of the landlord, can have significant consequences. For example, in a recent Pennsylvania case involving the Cracker Barrel restaurant chain, the court certified a national class action lawsuit covering any person who had visited any Cracker Barrel location nationwide and who had encountered barriers to access. Certainly, there had been no finding that every Cracker Barrel location suffered from ADA violations, but the court nevertheless found that Cracker Barrel’s property managers had evidenced a systemic failure to inspect accessibility standards overtime. Thus, the acts and omissions of property managers can have far-reaching ramifications for landlords.

What about landlords who acquire existing properties? Landlords in the business of acquiring existing properties should take ADA compliance seriously. Due diligence should focus not only on the financial aspects of the transaction but on ADA compliance, as well. Failure to do so risks buying not only the property, but a lawsuit, as well. To minimize the risk of purchasing a non-compliant property, purchasers could (a) require that sellers correct any ADA violations as a condition of closing, (b) demand that a portion of the purchase price be placed in escrow until ADA compliance can be confirmed, or (c) negotiate a reduction in the purchase price so that the purchaser can implement remediation efforts itself.

ADA compliance is of critical importance. By recognizing the risks associated with non-compliance, and by implementing policies and procedures designed to ensure equal access to all, owners, landlords, tenants, and property managers can minimize the risk and expense associated with preventable violations.

Source: jdsupra.com