Ask the Attorney – Crazy Judge

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:

There is what we consider a squatter in our rental house. The Judge considers him a tenant because he moved in and had the electric and water turned on in his name, unauthorized. We were told to go through the eviction process as if he was a tenant, which we did. At Court, the defendant lied under oath saying that he paid rent and did repairs to the house. He had no proof. He also said it was dangerous for him and his 3 babies to live there because the electrical breaker would sometimes shut off. The Judge ruled in his favor and said he could live there for the rest of his life if he chose to do so.

Can we move into our own house to do needed repairs while the squatter is there?
Thank you ever SO much!
Jacqueline, Texas

A: The judge said what? This is the most bizarre thing I’ve heard (this week.) So he said he paid rent. So he’s a tenant- with no lease. He gets a 30 day notice- then back to court.

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.

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5 Habits You Didn’t Know Were Essential for Landlording

1

There’s no such thing as landlord school.

Most landlords just do a little reading online and dive right in. Which is fine – but it also means many new landlords are ill-prepared for the work of being a successful landlord.

Far too many landlords fail to bring a level of professionalism to their landlording side gigs. Sure, this can lead to some irked tenants, but the person who suffers the most is the landlord — in the form of shoddy returns.

My partner and I teach a property management course to mom-and-pop landlords. Here, we again and again return to a few simple themes. Most of these themes revolve around prevention, discipline, and staying several steps ahead of the irregular-but-expensive events that ruin returns.

Here are five habits that landlords need to develop if they want maximum profits and minimum headaches!

Related: How to Be a Landlord: Top 12 Tips for Success

1. The Unflinching Enforcer Mindset

A few months back I analyzed whether you should keep your home as a rental or sell it when you move. The first thing I talked about? Whether you have the disposition and discipline needed to be a landlord.

Tenants will push against your boundaries. Your job as a landlord is to firmly and professionally defend those boundaries.

That means enforcing your lease agreement — to the letter.

Rent doesn’t come in on the first? Send an unofficial late-rent reminder. Rent doesn’t come in before the legally-mandated grace period ends? Send an official eviction-warning notice.

They still don’t pay after the required waiting period? File in court for eviction.

You’ll get sob stories, often with literal sobbing. Many people bend and give their tenants leeway — and then they give some more leeway.

If you do this, you train your tenants to believe that the rent is not their most urgent bill. So why would they ever pay it on time when they have other bills they need to pay in which excuses are not an option?

Enforce your lease agreement and your tenants will know that they can’t get away with whatever they want. They’ll know the rent is their highest priority because you will enforce the late fee and evictions.

If you can’t do that, you will lose all credibility with your tenants. You’re better off investing your money in a REIT.

2. The Discipline to do Recurring, Scheduled Work (Even When it Doesn’t “Feel” Necessary)

Landlords have monthly, semi-annual, and annual work they should be doing.

As we discussed above, every month you need to stay on top of your tenants about rent. Set reminders on your calendar if need be. Every six months, you need to inspect your rental units. Semi-annual inspections should be written right into your lease agreement.

It doesn’t feel urgent. It’s not a frantic midnight phone call about a burst pipe. So, most landlords don’t do it.

But again, it comes down to setting expectations with your tenants. Send a loud, clear message that you care about the property, you care about the lease terms, and (if you do it right) you care about the tenants.

Check that they don’t have unauthorized people or pets living there. Make sure they’re keeping the property clean. Confirm that they’ve changed the air filters.

And use that face time to build more of a relationship with your tenants: Ask about their jobs, their kids, their lives.

Then, every year, you need to raise the rent. Many landlords wring their hands and fret about it, but the alternative is allowing rents to fall below market value — then hitting your tenants with a too-drastic rent hike all at once.

Related: I Asked Landlords for Their Best Tips: Here Are 6 Recurring Secrets to Success

3. Budget Like a Business (Because You Are One)

As a landlord, you’re a small business owner, whether you think of yourself that way or not.

The expenses involved in owning a rental property are largely hidden, because they’re irregular (but big when they happen). Expenses like turnovers, repairs, vacancies.

Here’s what rental property cash flow looks like visually – smooth periods, interrupted by huge spikes in expenses.

What does that all mean for you as a landlord? It means you don’t want to be that chump standing there with his jaw hanging open asking: “How am I supposed to pay for this $5,000 roof bill?!”

Here’s how: by setting aside money every month for these potential expenses. In a word, by budgeting.

And while we’re at it,if you ever want to retire with your rental income, budget your personal finances too. What’s the point of all the hard work building (and managing) your rental portfolio if you’re just going to turn around and spend it all on new shoes and dinners out?

If you want to get ahead, both as a landlord and as a person, get comfortable (and disciplined!) with your budgeting.

4. Think Long-Term to Vanquish Vacancies

Turnovers are where most of the work and costs involved in being a landlord lie.

You’ll have to repaint the unit. Maybe re-carpet it. You’ll have to go through and fix all the little things that the outgoing tenants either messed up or just lived with. Then there’s the lost rent, even as you continue carrying the costs of owning the property.

In other words, you have to spend money that you wouldn’t have had to if the tenants had stayed.

Then there’s the stress and headaches and work of advertising for new tenants, coordinating with contractors, screening tenants, signing a lease agreement, doing move-in and move-out inspections, etc. It’s labor. If you have a property manager, they’ll charge you dearly for that labor.

Speaking of tenant screening, your goal is not fill the unit as quickly as possible with an acceptable tenant. Shift your thinking to the long term, and instead make it a priority to fill the unit with a high-ROI, low-maintenance, long-term tenant.

You want someone who will be low-impact and treat your property with kid gloves. Someone who will pay the rent on time every month so you don’t have to chase them. Someone who will stick around for the long haul so you don’t have to worry about all the costs and headaches involved in a turnover.

5. The Meticulous Mindset: Records, Documentation & Attention to Detail

I’m just going to say it: If you’re not the anal-retentive type, hire someone to manage your rentals who is.

You need to be exacting in your record keeping, your documentation, and your attention to detail. For example, did you walk through the unit before your renters moved in to document the condition with them? Did you both sign the condition statement? Did you take photos with timestamps of every room from every angle?

Then what did you do with the photos and documentation? Is it stored securely on your computer or in your file folder where you can access it at a moment’s notice?

I’ll stop beating this horse; you get the idea. Active landlording is not a good fit for the laid-back and leisurely. There’s nothing wrong with hiring a property manager if you don’t have this meticulous personality type – the important thing is the self-awareness to acknowledge the bad fit and outsource your property management.

You’re in Business — Be Professional

Effective landlords have effective habits, that revolve around thinking long-term and embracing minor headaches today to avoid massive headaches tomorrow.

Keep a friendly but professional distance from your tenants; they’re your clients. Set a budget for expenses like you’re a professional, because you are. Set recurring reminders on your professional calendar, and then follow through actually execute them!

Catching a theme here? The landlords who succeed are the ones who bring professionalism to their rental management.

And if you can’t be professional, hire a professional.

Source: Bigger Pockets

5 Things Successful Landlords Do That Help Them Sleep Easy

1Being a real estate investor and landlord has its pros, but there are times when it can be stressful, even overwhelming. And it’s in those moments that you have a decision to make: Let the stress eat away at you, or grab control of the situation.

Five Ways to Lower Your Stress and Get More Sleep

Sleep is an odd thing. We need it to function properly and feel good. But in order to get the sleep we need, we have to make healthy lifestyle choices.

According to a survey of more than 2,000 Americans, Amerisleep found a direct correlation between average sleep per night and average overall happiness. As the article explains, “The time difference is a relatively small one, with perfectly happy people getting only about 24 minutes more sleep per night than completely unhappy people, but even that little bit of extra sleep seems to make a big difference.”

Unfortunately, the stress of being a landlord can keep you up at night and prevent you from getting the sleep you require for health and happiness. You can get caught in a vicious cycle that will eventually wear you down.

If you wish to get more sleep at night – and enjoy the benefits that accompany it – you must lower your stress levels so you’ll have an easier time falling asleep and staying there. Here are five practical ways to do this:

  1. Get Organized 

It’s amazing what a little organization can do for you, mentally and practically. Every property you own should have a folder in a filing cabinet and/or your computer.

In these folders, keep titles, financing documents, loan applications, tenant applications, HVAC warranties, service agreements, receipts, copies of rent checks, etc. When all that is readily accessible, you don’t have to waste time tracking down lost documents.

  1. Take Preventive Measures

It’s much better to spend a little extra money on preventive measures than to be constantly stressed out over what could happen in an undesirable scenario. The best preventive measure you can take is to invest in adequate insurance.

If you’re renting out a property long term, you need to have a landlord-specific policy. You may also want to look at an umbrella policy to protect yourself personally in the event of specific calamities.

  1. Carefully Screen Tenants

You have to be careful about the tenant screening process, and make sure you adhere to the proper laws, but being selective on the front end will save you a lot of trouble later on. Good tenant screening involves more than a background check.

You should meet the prospective renters in person, ask the right questions, consult their references, and request a substantial deposit to ensure they’re serious.

  1. Automate Rent Collection

One of the worst parts about being a landlord is waiting on the rent checks to roll in. There always seem to be one or two problem tenants who don’t pay on time and come up with imaginative (or worse, repetitive) excuses for why the check is late. The best trick is to automate rent collection, so there’s less room for such problems.

  1. Hire a Property Manager

The more you remove yourself from the dirty, mundane, and monotonous tasks of being a landlord, the less stressed you’re apt to be. It’ll cost you a percentage of your monthly rent but hiring a property manager can be one of the best investments you’ll make – particularly if you have multiple units.

Say Goodbye to Restless Nights

When you’re stressed about your properties, tenants, and income, you may lie awake at night and fail to get adequate sleep. If you don’t get enough sleep, you’ll be unhappy.

When you’re unhappy, you’re more susceptible to stress and making unhealthy decisions. The easiest way to break this cycle is to gain control of your investments.

By staying organized, implementing smart preventive measures, carefully screening tenants, automating rent collection, and hiring a property manager, you can take charge and sleep well. Don’t put it off!

Source: nuwireinvestor.com

Landlords: These Are the 4 Types of Insurance You May Need

1The basics of becoming a landlord are straightforward: Buy a property in a promising neighborhood, fix it up, find tenants, and start charging slightly more than you’re paying in regular costs. But if you want to protect your assets and ensure you’re following every applicable law, things get more complicated.

Consider insurance. The right insurance policy should be able to cover any unexpected financial losses or massive expenses, protecting the profitability of your operation. It can also protect you from legal trouble. But what types of policies do you really need as a landlord?

Legal Requirements

Technically, landlords aren’t legally required to have any type of insurance. However, if you’ve taken out a loan on the home, you may be required by the lender that you have a basic homeowner’s insurance policy. Just note that a conventional homeowner’s policy may not protect you if you’re renting out the property to other tenants.

4 Types of Insurance to Consider

There are many types of insurance that you should consider:

  1. Building and property insurance. First, you’ll want a policy that protects your building and property from unexpected damage. Your building is the most significant portion of your investment, and therefore, your biggest financial liability. If something happens to it — such as a roof caving in or a destructive event from a tenant who lives there — you’ll want a comfortable policy that can cover the damages. Otherwise, you’ll end up paying tens of thousands of dollars, possibly compromising your profitability.
  2. Liability insurance. You should also have some type of liability insurance in place. Landlord liability varies depending on where you live, but for the most part, you’re responsible for keeping your property in a safe, livable condition. If one of your tenants trips and falls or hurts themselves while living in the property, they may have grounds to file suit against you. Liability insurance protects you from these events, covering your defense costs and compensating victims.
  3. Loss of income and business interruption insurance. Landlords may also be able to get a form of business interruption insurance, protecting them from possible interruptions to their stream of rental income. For example, if you’re injured and unable to fulfill your responsibilities as a landlord, you may earn compensation that allows you to keep things running. This type of insurance may also help you secure rental income from tenants who are unable to pay.
  4. Protection from specific threats. Property insurance doesn’t cover anything. You’ll want to read your policy closely and get coverage for other specific threats. For example, you might need a separate policy to protect your building from natural disasters like floods, hurricanes or earthquakes.

Landlord Insurance

If you’re looking for a comprehensive policy, you may be able to find a provider who offers collective “landlord insurance,” which offers coverage in several areas, including the four listed above. For the most part, these insurance policies are flexible; you’ll be able to pick the types of coverage and extent of coverage you need, so you can protect yourself from the majority of threats and still stay within your budget. If you’re interested in this type of insurance, it’s advisable to talk to an insurance agent, who will have more insight into the types of policies you need (and the total costs you might face).

Renter’s Insurance

It’s also important to note that your property insurance policy and liability insurance policy won’t protect any of your tenant’s possessions. For example, if leaky plumbing causes water damage to a tenant’s television, your insurance policy may not cover the damages (though it may cover you, if it offers liability coverage). For that, your tenants will need to get a renter’s insurance policy.

Conclusion

As a landlord, you aren’t required to have insurance, but it’s well worth the investment. At a minimum, make sure you have property insurance to protect your house and a liability policy to protect yourself in the event of tenant-related damage. Each new policy will only marginally increase your monthly premiums but may offer substantial additional coverage. So plan conservatively, and protect your investments as comprehensively as you can afford to. One enormous loss could be enough to negate any profit you’d otherwise stand to make.

 

Source: biggerpockets.com

Top 5 Mistakes Landlords Make with Their Investment Properties

1Managing an investment property is no easy task. It may sound like big money, but if you are not prepared it can turn into a huge money pit. As a landlord, you have a big responsibility to the property as well as the tenants. One small misstep could end up costing you valuable time, energy, and money. That is why you must make sure you do your homework before jumping in. Do as much research as possible. If you look up the latest real estate trends in the area or ask a local expert, you will be able to find enough information to help you make the best decisions when it comes to your investment property. Unfortunately, many landlords want to get started so quickly that they do not think before they invest. Here are the top five mistakes that landlords make with their investment properties:

1.Choosing the Wrong Tenants

This is one of the biggest mistakes you can make as a landlord. If you are renting your property out to a stranger, you must take the extra steps needed to make sure you get the best possible tenants in your property. If you do not know them very well, there are certain precautions you can take. Have them prepare the following:

a) Application Form: Have prospective tenants complete a written application form. This will include standard renter’s information such as names, numbers, employer, previous residences, income, etc. Each adult who will be living in the property would need to fill one of these forms out and minors can be added as well. They would sign that all the information they provide is accurate to the best of their knowledge.

b) Credit and Background Checks: Tenant screening is a great way to see how financially stable your prospective renter is. Credit reports often show if someone has been late on payments and the amount of debt they already have. A background check is very important, not just for your peace of mind, but also in consideration of the neighborhood. You would not want to rent the property out to a convicted criminal. It would compromise the safety of the area and could also bring down the property values.

c) Referrals: Asking for referrals from past landlords and current employer is a great way to go the extra mile in finding the perfect tenant. If the applicants have not be great renters in the past, then they probably would not move forward with their application if referrals are needed. A referral from an employer would also give you confidence that the tenant is gainfullyemployed and able to make a monthly payment.

2. Failing to Create a Thorough Lease Agreement

Creating a good lease agreement is where part of your research will come in handy. Many landlords will print the first form they see on the internet. Unfortunately, this form could be outdated and only relevant for a certain location. Make sure to find an application that has all your stipulations and current local regulations spelled out. Some tenants will comb through the entirety of the agreement to try to catch something that the landlord missed to exploit it. For this reason, it is very important that you create a thorough lease agreement. Be sure to add any rules specific to your property in an addendums section.

3. Lack of Communication

If you make yourself unavailable to your tenants, you are doing them and yourself a disservice. Your office should always be open and you should always be available by phone. Sometimes, home emergencies will come up and your tenants will need your ‘okay’ or your help to get the issues resolved. It can range from something small, like a door coming off its hinges, to something huge, like a flood or leak in the plumbing. The sooner you can get back to your tenants, the better for them and you. The longer you let an issue go, the more difficult it will be to fix a problem and the more resentment your renter could have for you. You want to make sure that your tenants have a good experience so that they are not criticalof you to future renters. This is especially important this day and age where you can review anything and anyone on the internet.

4. Setting the Rental Rate Too Low or Too High

Make sure you are setting the rental rate within the correct range for the property’s age and location. There is such a thing as setting the price too high and too low. If the rent is too high for the area or for how old the property is, no one will want to live there. The longer your home sits unoccupied, the more money you are losing each day. In the same vein, you do not want to set the rent too low. You may be able to get someone into the home quicker, but you could be leaving a lot of money on the table. The whole point in taking on an investment property is to make money. The best thing you can do is look at other rental properties in the area. Try to stick within the range of rental pricing you see in the neighborhood.

5. Delaying Eviction Process

If you do find yourself in the position of having to evict a tenant, try to get the process started as soon as possible. You can expect it to take about 30 days from start to finish, but many times, it is delayed because tenants will come up with excuses. As soon as you can tell there is a real issue, you should begin the process. The longer you wait to get it rolling, the longer it will take. The longer it takes, the more money you will be losing. It is important to note that the tenant is still legally obligated to pay the back rent owed to you. However, if a tenant has opted not to pay rent up until this point, you may be out of luck trying to collect it from them in the future.

Being a landlord is a tough role! If you avoid these common mistakes that most people make with their investment properties, you should have an easier go at it. The main thing to remember is that the more research and preparation you put into renting out your property, the more return you will see on your investment.

Source: realtybiznews.com

Service Animals and Small Business: What You Need to Know

1Businesses from airlines to restaurants to taxis are finding themselves in hot water due to their lack of understanding the rules governing service and emotional support animals.

It’s important that organizations – and especially, small businesses – know when and how to accommodate people with service animals to ensure that everyone has the safest and most pleasant experience with your company as possible.

According to the Department of Justice, service animals are classified, as a dog – and vary rarely, a miniature horse – that has been “individually trained to do work or perform tasks for an individual with a disability. The work task(s) performed by the dog must be directly related to the person’s disability.” A service dog can be trained to assist an owner with a disability with any number of task from helping someone who is blind navigate walking streets to picking up items for someone with acute arthritis to activating a life-alert button for someone who has epilepsy.

Service animals are not required to wear any type of vest or carry certification, so they may not always be easy to identify by just looking at them. Businesses can ask if a dog is a service animal and what work task they have been trained to perform, if it is not obvious. However, they are not allowed to demand any verification for the dog or inquire about their handler’s disability.

Service dogs are also protected under the Americans with Disabilities Act(ADA) and can accompany their handler to any public place – including office buildings, coffee shops and airplanes, provided they are under control and not a threat to others. Under the ADA, businesses must make “reasonable modifications” of their policies to accommodate trained service dogs. Companies can be fined for violating the rights of people with service animals.

A good way for businesses to think about service animals is as an extension of their owners. The dogs are trained to help their handlers with tasks they may be unable to perform alone. As such, businesses are not allowed to subject service dogs to any fees or restrictions that might apply to regular pets – such as cleaning or transportation fees. Hotels must also allow service dogs and their owners to stay in any room, not just “pet-only” rooms. Essentially, if a human is allowed somewhere, service animals are likely allowed there, too.

The rules become a bit more challenging around emotional support animals – also known as therapy animals. Emotional support and service animals are not one in the same. The role of an emotional support animal is to provide comfort to its owner and it is not trained to do any specific task. Any animal from a dog to cat or a bird or guinea pig can be considered an emotional support animal and are not covered under the ADA. These animals are considered effective in helping those who suffer from anxiety, depression or even PTSD.

To qualify, owners must receive an approval letter from a mental health professional that the animal provides a therapeutic benefit, and be able to provide that letter if a business requests it. Emotional support animals are allowed in the cabins of airlines at no extra charge and in any rental that falls under the Fair Housing Act, but that is the extent of what federal law requires.

Local laws vary for therapy animals, so it is best to check on the rules in your area before establishing your company policy. For instance, California has more extensive legislation protecting emotional support animals, but New York City isn’t so generous. For instance, in New York employers and landlords must make reasonable accommodations for support animals if you have proper documentation, but they can reject the animal if it poses a threat to the health or safety of others, or if the animal poses a danger of substantial property damage.

California creates three types of support animals with separate rules. The definition of a service dog and an emotional support animal are the same. But a psychiatric service dog is a dog trained to help a person with a mental disability. The tasks it is trained to do is waking someone with clinical depression and making them get out of bed, responding to a panic attack, or alerting an owner to erratic behavior if someone has a bipolar disorder. The protections for this level match those of a regular service dog.

If you do ever encounter a service dog or emotional support animal that is out of control – barking loudly, misbehaving or endangering the safety of other customers – it is perfectly acceptable to ask its owner to bring the animal under control. It is also acceptable to ask them to remove the animal if they are unable to control it. Just as you wouldn’t be expected to allow a human to behave erratically in your place of business, you are not expected to allow a service dog or therapy animal to act that way, either.

Source: businessnewsdaily.com

Is an Evicted Tenant Still Liable for Rent on the Remaining Months of a Lease?

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:

Thank you Mr Reno for taking my question. Once an eviction takes place, what is the status of the Lease Agreement as it pertains to lost rent? Is the evicted tenant still liable for lost rent for the remaining months of the Lease?
Charles, California.

A: Yes, yes, yes, the tenant is liable for the remaining months- but there’s a catch: Once you re-rent, you no longer can claim damages for lost rent. So you have to wait until you re-rent so you know how much to sue for.

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.