Identifying a Truly ‘Green’ Rental

Rent it Right

by Janet Portman, Inman News

Q: I’ve been looking at a brand-new apartment complex that advertises itself as a “green community.”

When I asked the leasing agent about what that meant, she could only point to the recycling bins and the use of high-efficient outdoor lighting. This seemed pretty paltry to me.

Are there standards that an owner must meet before being able to claim “green” status for a building? –Max M.

A: In the past it was onsite laundry facilities, then cable TV access, then Wi-Fi. Now, it seems that “green” is the newest amenity that apartment owners hope will set them apart from the competition. But unlike those earlier upgrades (either there was a laundry room or there wasn’t), being “green,” or energy efficient, isn’t so easy to measure in a residential building.

Commercial buildings and single-family homes can be measured against the Leadership in Energy and Environmental Design (LEED) program, but no green building standard existed for apartment communities until January 2009, when the National Green Building Standard was approved by the American National Standards Institute.

The first question to ask that leasing agent is whether this complex was built using methods, materials and designs that approximate the new standards. If the complex was designed and built using green approaches and materials, the next question is whether the property is run with “greenness” in mind.

You’ve been shown two green practices — recycling and efficient lighting — but these are only the tip of the environmentally conscious iceberg. To be truly green, this property should practice overall energy- and water-saving techniques, use cleaning compounds low in volatile organic compounds (VOCs), and have low-emission equipment, among other things. To encourage individual tenants to conserve, utilities should be individually metered.

Finally, a successful green building depends on the behavior of the individual tenants. Those who refuse to recycle or who use phosphate-rich compounds or inordinate amounts of water will sabotage management’s efforts to go green. This is where things can get tricky.

To require green practices among tenants, landlords need to write “green compliance” clauses into their leases. If they are to mean anything, these clauses must be enforceable, putting tenants who don’t comply at risk of termination and eviction.

But how does a landlord monitor the brand of soap or amount of water tenants use without violating their rights to privacy? Hopefully, the promise of a green environment (and the premium that many tenants will pay for such a living situation) will attract only those who are eager to conform to the program, making enforcement all but unnecessary.

Janet Portman is an attorney and managing editor at Nolo. She specializes in landlord/tenant law and is co-author of “Every Landlord’s Legal Guide” and “Every Tenant’s Legal Guide.” She can be reached at janet@inman.com.
Copyright 2009 Janet Portman

See Janet Portman’s feature How to Negotiate a Lease Buyout.

American Apartment Owners Association offers discounts on products and services for landlords related to your real estate investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing. Find out more at joinaaoa.

To subscribe to our blog, click here.

Posted by Kim Ezzell on 09.28.2009. CLICK to Leave a Comment »

Filed under: AAOA Forum, Going Green

Landlord Quick Tip

Tip #23: Build a Tenant File Checklist

Whether it’s doing your taxes, collecting unpaid rent, filing an eviction, or defending a lawsuit for injury or discrimination, what you have — or don’t have, in your files will decide the outcome.

Here’s a good way to organize your tenant files, so you are sure to have the information you need, when you need it:

The signed, completed application

Kudos if you calendar 90 days before move out — so you can take steps to retain your tenant before they start to look around.  Remember not to shelve files where there’s unpaid debt — you have years to collect it.

Did we leave anything out?  What else do you keep in your tenant files?  Comment below if you have more suggestions.

Last week’s Landlord Quick Tip

Do you have a tip to share with other landlords? Contact our editor at kim@joinaaoa.org.

American Apartment Owners Association offers discounts for landlords on products and services related to your rental investment, including real estate forms, tenant debt collection, tenant background checks, insurance and financing. Find out more at www.joinaaoa.org.

To subscribe to our blog, click here.

Posted by Kim Ezzell on 09.28.2009. 2 Comments »

Filed under: AAOA Forum

Loan Shoppers: Their Own Worst Enemy?

Many clueless when it comes to mortgage disclosures

by Jack Guttentag, Inman News

For many years, the Federal Reserve and other federal agencies with responsibility for formulating required disclosures of financial information were tone deaf.

They decided on the information borrowers should have without ever asking borrowers what they wanted and without testing to see whether the information the agencies had selected for them was useful or even understood. For this they were much criticized, and rightly so.

But this has changed. In recent years, the Federal Reserve in particular has gotten religion, and their latest proposals to reform the Truth in Lending Act are replete with references to the results of consumer testing. Many of the Fed’s proposals are the direct result of listening to consumers.

In a recent article on Federal Reserve proposals for amending the Truth in Lending Act (TILA), I commented favorably on a proposal for early disclosures designed to encourage borrowers to shop alternative loan providers. Most of the mandated information that lenders now provide borrowers need not be placed in their hands until days after they have submitted an application, which in most cases is too late to help in shopping. Consumers rarely disengage from a lender once they have submitted an application.

The proposed new disclosures will be required at the point of application. This is a great idea, if it is properly implemented. Proper implementation means that the information lenders must submit at the point of application will help consumers select from among loan providers. Stated somewhat differently, the information must reveal differences between lenders that will cause borrowers to prefer one over another.

My previous article criticized the Fed’s proposed questions because they all applied to mortgage types or options, e.g., “Can my interest rate increase?” Since all lenders would answer them the same way, such questions would be useless to borrowers trying to select among different lenders. They would just add to the pile of useless paper.

After my article was published, Fed sources responded to my critique. They told me that their proposed disclosures were the direct result of giving consumers the information that the consumers questioned by the Fed said they wanted.

I was not surprised to hear that the consumers queried by the Fed requested information that would not help them. I have been fielding questions from borrowers for 12 years, and learned early on that the information they seek from me often is not the information they would have sought if they had understood their situation better.

What surprised me was that the Fed accepted it as their charge to give consumers the information the consumers said they wanted, even when it was clear that this information would not help borrowers shop alternative loan providers.

When a consumer asks me a question that I suspect is not relevant to his situation, I give back the information that, if my suspicions are right, causes him to reformulate the question. Helping people realize what the right questions are is a critical part of what we call “education.”

Truth in Lending should be educational, too. It should provide information that consumers will recognize as relevant to their situation when they see it, even though they did not realize its relevance when they participated in a Federal Reserve focus group and were asked what they wanted to know.

My critical article offered seven questions that would help borrowers select from among different lenders because they applied to important lender policies. One of them was, “Do you allow your loan officers to charge ‘overages’ — a price higher than the price the lender will accept?”

Of course, very few consumers on their own would mention overage policy as something they would like to know about, simply because they are not aware that such practices exist. My experience has been that once consumers become aware of overages, it jumps to the top of their concerns.

Requiring lenders to answer the question would create such awareness, which means that the disclosure would have educational value and would help borrowers in selecting loan providers. My other questions were of the same type.

In sum, the Fed seems to have swung from ignoring borrowers completely to slavishly giving them the information they say they want, even when that information is not going to help them.

Of course, if the Fed followed my practice and used its own judgment to select the information that would help borrowers, it would be criticized by others for being paternalistic, arrogant, and out of touch. There is a middle way, however: the Fed can select the information it believes will be useful, and then test it with consumers to see if it will work.

I am hopeful that the Fed will do this before issuing final rules. The Fed’s proposals are just that — “proposals” — and before they finalize them they promise to consider comments from all interested sources, including me.

The writer is professor of finance emeritus at the Wharton School of the University of Pennsylvania. Comments and questions can be left at www.mtgprofessor.com.
Copyright 2009 Jack Guttentag

See Jack Guttentag’s feature Avoiding Mortgage Rate Lock Problems.

American Apartment Owners Association offers discounts on products and services for landlords related to your real estate investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing. Find out more at joinaaoa.

To subscribe to our blog, click here.

Posted by Kim Ezzell on 09.28.2009. 1 Comment »

Filed under: AAOA Forum, Financing

U.S. Retirement Patterns Shifting

Boomers are warming up to colder locales

by Steve Bergsman

When I was writing a column about the growing popularity of mountain locations for second homes, in the course of my research I called Teri Lester, a Realtor at Gateway Land and Development in Vail, to find out what was going on in that famed Colorado ski area.

We chatted for a long time about what was going on in Vail, and one of the things on her mind was the amount of retirees that were moving to her area.

I was a little surprised because my parents moved to Florida in the 1960s and stayed there through the retirement years, while I have lived in Arizona for decades, and both hot-weather states have been known as Meccas for retirees. Somehow this translated in my mind to the conclusion that people retire to warm-weather locations partly because they are tired of the cold and spend their winters digging out of snow.

Whew, was I out of touch!

While the escape-the-winter blues is definitely a key rationale for some retirees to move, it certainly isn’t a motivation for others. Where people retire and why that particular location was chosen is much more random and will get even more so in the future as the Baby Boom generation slouches toward its retirement years.

“One of the things we are going to see with the Baby Boom generation, partly because it’s such a very large pool of people, who are very diverse and a bit more independent thinking, will be more people venturing into new places to retire,” notes Ron Manheimer, who until recently was the director of the North Carolina Center for Creative Retirement at the University of North Carolina at Asheville.

Manheimer retired from his job after 21 years but he’s not heading to some condominium in Florida to play golf. He’s formed a new consulting firm called The Manheimer Group.

The Sunbelt has traditionally been the most attractive group of states for retirement, Manheimer explains, “but there is a big range within that region, and where people go depends on how much warm weather they want and how often they want it. We find there is a whole segment of people who like the change of seasons — they don’t want to live in a place that is always hot.”

When I was talking with Lester, I asked, “When did Vail become a retirement location?”

It was a slow build but it’s been going on for a while, she told me, “and every year it gets bigger.”

What happens in a place like Vail is that families come to ski the area when the parents are in their 40s or 50s and they like it so much they decide to come back in retirement.

“They sell their homes back from wherever they are from and buy something bigger so their children or grandchildren can come to visit,” Lester says. “Even if they know Vail, they are surprised to find there are so many things they can do here when they retire.”

As yet there are no retirement communities in the Vail area, but there are golf resorts. “This is an active lifestyle place, and retirees are integrated throughout the Valley,” she says.

As I looked into this mountain option for retirement, I saw that places such as Lake Tahoe in California’s Sierra Nevada mountains are making a push to also attract this population segment, but the ski areas outside Salt Lake City in the Wasatch Range are not.

Probably no mountain area has been more aggressively seeking retirees than the Appalachian mountain regions of Georgia, North Carolina and Tennessee. By mid-decade, Georgia and North Carolina had consistently held the fifth and sixth positions among the top-receiving states of all 60-and-over migrants, and Tennessee usually comes in about eighth, reports William Haas, a University of North Carolina, Asheville, professor of sociology working at the North Carolina Center for Creative Retirement.

The first three states are still Florida, Texas and Arizona — all relatively flat and known for moderate winters. The fourth state is California, which reports some very interesting, if not unique, data points. For the 60-and-over migrant crowd, the state shows a large number of people moving in but an even larger number moving out, so it actually loses more of the retired migrant universe than it gains.

Florida remains the No. 1 state for retirement migration. Yet its once-dominant position has been sliding for the past three decades. According to the 1980 census, reports Haas, Florida garnered 26.3 percent of all 60-and-over retirees who moved out of state. That number fell to 19.1 percent by the 2000 census, and hit a low of 12.5 percent in 2007.

Even more importantly, Florida is beginning to act a bit like California. People move there after retirement but don’t stay put like they once did.

In 2007, Florida hosted 69,506 retired migrants, according to Haas’ data, while 60,156 moved out, for a net increase of just 8,894 retired souls. In comparison, with far less in-migration Arizona showed a net retiree influx of 19,131 people; Texas netted 14,929; North Carolina pulled 8,894; and Georgia garnered 5,459.

Of the top 10 states in terms in-migration of the 60-and-older group, Arizona and North Carolina on a percentage basis captured the best record of keeping them down on the golf home.

So where are baby boomers going to retire in the decade ahead? The answer: almost everywhere.

Do not expect traditional retirement patterns to repeat, cautions Manheimer. “When the economy improves and things pick up where they left off, there will be heavy interstate migration of retirees to places much more diverse than anything we’ve seen before. It used to be the top 10 retirement states would grab 50 percent of all interstate retirement migrants. Not any longer.”

Steve Bergsman is a freelance writer in Arizona and author of several books, including “After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade.”
Copyright 2009 Inman News

See Steve Bergsman’s feature Capped ARM’s a Good Financing Alternative.

American Apartment Owners Associationoffers discounts on products and services for landlords related to your real estate investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing. Find out more at joinaaoa.

To subscribe to our blog, click here.

Posted by Kim Ezzell on 09.28.2009. 2 Comments »

Filed under: AAOA Forum

Cashing in on Vacationers

More owners renting out primary home to meet demand

by Tom Kelly, Inman News

It was only for eight days, yet it was a first.

The retired couple at a remote mountain lake had just rented out their waterfront cabin — once the family getaway and now serving as their primary residence — for the first time in the 42 years they have owned the property.

Instead of leaving the place vacant when they went to their niece’s July wedding in upstate New York, they pocketed $1,600 tax-free dollars.

According to the most recent HomeAway Vacation Rental Marketplace Report, the couple is not alone. Approximately 15 percent of vacation-rental owners have rented their primary residence to travelers, and the practice is becoming more common.

A weakened economy, along with heavy demand for accommodations during popular short-term events like the presidential inauguration and the Super Bowl, have persuaded owners to move out and dust off the welcome mat for eager renters who have come to town.

“With an increased demand for accommodations and limited hotel rooms during major events, HomeAway is seeing more homeowners renting their primary homes to travelers to make a little extra money,” said Brian Sharples, HomeAway’s chief executive officer.

According to the Internal Revenue Service, owners can derive tax-free income from renting a home or getaway, provided it is rented out for 15 days or fewer and they don’t claim any of the tax deductions typically allowed on rental property such as for depreciation or maintenance. Once the 15-day threshold is reached, a different set of tax laws comes in to play.

The survey also revealed that 31 percent of owners surveyed had the same number of bookings and 31 percent had a higher number of bookings this summer than a year ago.

Forty-seven percent of the owners participating in the study charged guests the same rental rates as they did in 2008, while 16 percent had higher rates this summer than the same time last year. Seventy-six percent of owners who offered renter incentives this summer plan to do so again in the upcoming seasons.

The quarterly report found that second-home owners, including those who purchased homes for personal use, only plan to use their homes fewer than 50 days a year.

About 12 percent of the owners surveyed say they are considering purchasing, or have already bought, another property this year. Of those who have bought or are considering buying, nearly half (46 percent) were motivated by a drop in home values and the ability to generate income by renting to vacationers.

HomeAway, based in Austin, Texas, operates several online owner-rental sites including HomeAway.com, VRBO.com, VacationRentals.com, Holiday-Rentals.co.uk, OwnersDirect.co.uk, FeWo-direkt.de, Abritel.fr and Homelidays.com. Homeaway.com is the company’s flagship site and hosts a global inventory of about 180,000 properties.

It purchased VRBO.com, a pioneer in the online advertising of for-rent-by-owner properties, in November 2006 and continues to run the site as an independent brand. Approximately 85 percent of the site’s 125,000 properties are based in the U.S.

The prime summer rental months of July and August seemed to be peculiar in many ways, especially in a shorter length of stay; the economy was the assumed culprit. (Fifty-four percent of HomeAway owners reported that the economy was the reason they needed to rent their vacation home to cover costs more now than in the past.) Long-term renters who planned ahead often got a break on traditional rates.

Alfred and Emily Glossbrenner, authors and consultants who self-published the popular vacation-rental book, “How to Make Your Vacation Property Work for You,” said vacationers waited longer into the summer season this year to make their plans. The couple, who also run an informative Web site (fullybookedrentals.com), have long suggested that potential long-term renters approach owners during their down time to inquire about the best possible rates.

If you are interested in getting away, or are a potential landlord attempting to gauge market rental rates, some of the more popular U.S. vacation rental sites are VRBO, Great Rentals, A1Vacations and CyberRentals. Each has its own advantages and features.

Tom Kelly’s book, “Cashing In on a Second Home in Mexico: How to Buy, Rent and Profit from Property South of the Border,” was written with Mitch Creekmore, senior vice president of Stewart International. The book is available in retail stores, on Amazon.com and on tomkelly.com.
Copyright 2009 Tom Kelly

See Tom Kelly’s feature Empty House May Cost More To Insure.

American Apartment Owners Association offers discounts on products and services for landlords related to your real estate investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing. Find out more at joinaaoa.org.

To subscribe to our blog, click here.

Posted by Kim Ezzell on 09.24.2009. CLICK to Leave a Comment »

Filed under: AAOA Forum

FHA Has New Rules

by Howard Bell

The FHA has often been the lender of last resort.

It doesn’t have the same stringent lending requirements that other lenders have and it only required 3% down and light on junk fees as well.

If you didn’t have a 20% down then the FHA was likely on your short list of lenders. FHA as well as Freddie Mac and Fannie Mae had an unspoken political mandate to make home ownership affordable to those with less than perfect credit or resources.

This is a small part of why it all backfired, Congress did want the American Dream to trickle down and risk was taken in part because of a political mandate to democratize home ownership.

For the first time in 75 years FHA will tighten up its lending structure. They are the first time home buyers answer to a prayer until now. But now FHA is staring at five million mortgages and significant losses as home prices continue to go south. Unable to control their losses coupled with the expectation that home prices will continue to fall through at least the first half of 2010, they instituted more restrictive rules to limit risk.

New Rules

Better Risk Management

1. Lenders will have to show a net worth of one million dollars up from 250,000.

2. The down payment requirement has increased from 3% to 3.5% 3. Mortgage insurance premiums have increased 4. Banned the use of third party DPA’s. This amounts to almost 15% of outstanding loans in the FHA portfolio

Condos Beginning  January 1, 2010

If you have a condo to refi with a FHA insured loan it just got tougher.

1. Ineligible properties include, time shares house boats and multi unit condos where:

a. Less than 50% of the units are owner occupied or sold to owners that do not intend to live in the unit.

b. No more than 15% of all units can be in arrears of HOA fees

c. Projects with 3 or less units may have only one encumbered with FHA insurance

d. For or more units can have up to 30% FHA insured, no more

e. No more than 10 percent of the units may be owned by one investor.This will apply to developers/builders that subsequently rent vacant and unsold units.

f. FHA insurance will be unavailable when properties are within 1,000 feet of a highway, freeway, or heavily traveled road; 3,000 feet of a railroad; one mile of an airport; or five miles of a military airfield

Market Impact on Condos

Certainly cant be a boost for Condo sales. This is a direct hit to evaluation, since less people will be able to finance. That translates into less sales and it will hurt the entire transaction chain from developers to real estate agents, , from condo insurance to lenders. More downward pressure, we did not need. But the FHA has been a key player buying up 23% of all new mortgages. Clearly with home prices expected to continue to retreat, FHA is cutting its exposure and trying to limit losses.

Congress is not looking for another taxpayer bail out.

Taxpayers might be a little tired of that.

Howard Bell PFP CCRM is the founder/editor of Your Property Path.com, featuring over 450 articles on property management, Your Property Path SF, trade talk for the San Francisco real estate industry, Your Property Path News Brief, snap news updates and real estate market info, and Your Property Path Amazon Store. Howard is a property manager in San Francisco and holds a certification in financial planning.

See Howard Bell’s feature, Get Your Property Rented Faster.

American Apartment Owners Association offers discounts on products and services for landlords related to your real estate investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing. Find out more at joinaaoa.

To subscribe to our blog, click here.

Posted by Kim Ezzell on 09.24.2009. 3 Comments »

Filed under: AAOA Forum, Financing

AC Outage Could Bring Rent Strike

by Robert Griswold

Tenant displaced from unit fights for compensation

by Robert Griswold

Q: Our son is renting a condo in an area where it gets very hot in the summer. Two weeks ago, he came home from work to find that his air conditioning unit was not working. It was after hours on Friday evening and he tried to reach the property management agency to have them check it out, but no one was in so he left a voicemail message on their answering machine. They have no emergency number and the office is open only Monday through Friday from 9 a.m. to 5 p.m. The temperature reached nearly 110 degrees that Saturday and Sunday.

My son was inconvenienced — he couldn’t stay in the rental unit because the heat was unbearable. We watched his dogs for him and he spent the weekend at a friend’s house and went to work from his friend’s house. He was able to reach the property management office on Monday and they came right out to fix the air conditioning unit that same day.

He called them on Tuesday to talk with them about his inconvenience and the disruption to his life. He is trying to get compensated for having to spend time away from the place he was renting, having someone else take care of his dogs, and the physical and emotional strain of not being able to live in a home that he is paying to rent.

The property management company said not having air conditioning did not constitute an emergency, not even when it is 110 degrees. They claim that they actually do have an “on-call” person that regularly checks the answering machine throughout the weekend. But because their air conditioning company charges extra on weekends the earliest his air conditioning unit could have been fixed was on Monday, and that is what they scheduled.

He feels very strongly that he is entitled to significant compensation because his air conditioning unit ran for six hours straight to get the condo down from 96 degrees to 82. What are his legal rights? Can he withhold his rent for next month? Should he hire a lawyer? Maybe he should simply move out?

A: Clearly you and your son are very passionate about this issue and there is no doubt that he was inconvenienced. With temperatures over 100 degrees it can be very uncomfortable without the benefits of air conditioning. However, air conditioning is not automatically a required element of habitability in all areas, including some areas where it can get very hot at certain times of the year. So I would suggest he contact a local landlord-tenant attorney to see if there are some local laws that the attorney feels are applicable.

But let me offer a perspective as a property manager for the last 30 years, including many years in areas that can be very hot especially in the summer. I think your expectations may simply be too high.

The fact is that air conditioning units can and do go out on a Friday evening. Some landlords and property managers think that is when a disproportionate number of these types of problems seem to occur. Most repair personnel work Monday through Friday, and the few that may be willing to work on weekends or evenings will charge 1.5 to two times the usual labor rates, which are already quite high.

Thus, it isn’t reasonable to expect that an air conditioning unit that just happens to go out on a Friday afternoon could not be repaired till Monday. I understand the high temperatures and the impact on his personal living arrangements, but I think the response to this complaint by the landlord was very reasonable.

These things happen and unless you can show that the landlord was negligent and his failure to properly perform maintenance caused the air conditioning unit to break, then you have to understand that it takes time to respond to these situations.

In cases where such an outage constitutes an emergency — such as a threat to health or safety — the landlord may be required to make immediate repairs or to reimburse the tenant for emergency repairs. Again, check with a legal expert on applicable laws.

It may be appropriate for his landlord to offer him a rent credit for his inconvenience for the two or three days that he was without air conditioning. But your ideas of withholding next month’s rent or moving out seem to be overreactions.

We all face these types of inconveniences in daily life. Who hasn’t had a delayed airplane flight that led to missing a connection and completely disrupting one’s plans? But does that mean the passenger is entitled to a full refund? I know with my health insurance plan it can take days to get in to see someone and in the meantime I am in pain and have to limit my activities. But I certainly can’t refuse to pay my next month’s premium just because they couldn’t see me immediately. I can cancel my health insurance policy or vow to never fly on that same airline in the future, but moving out over this incident also seems to be adding to your son’s inconvenience.

I suggest your son sends a polite letter to the property management firm outlining the inconvenience and ask for a rent credit for the two days that he was without air conditioning.

This column on issues confronting tenants and landlords is written by property manager Robert Griswold, author of “Property Management for Dummies” and “Property Management Kit for Dummies” and co-author of “Real Estate Investing for Dummies.” E-mail your questions to Rental Q&A at rgriswold.inman@retodayradio.com. Questions should be brief and cannot be answered individually.
Copyright 2009 Inman News

See Robert Griswold’s feature Landlord Too Lax on Noise Enforcement.

American Apartment Owners Association offers discounts for landlords on products and services related to your rental investment, including real estate forms, tenant debt collection, tenant background checks, insurance and financing. Find out more at www.joinaaoa.org.

To subscribe to our blog, click here.

Posted by Kim Ezzell on 09.24.2009. 4 Comments »

Filed under: AAOA Forum

Identifying a Truly ‘Green’ Rental

Rent it Right

by Janet Portman, Inman News

Q: I’ve been looking at a brand-new apartment complex that advertises itself as a “green community.”

When I asked the leasing agent about what that meant, she could only point to the recycling bins and the use of high-efficient outdoor lighting. This seemed pretty paltry to me.

Are there standards that an owner must meet before being able to claim “green” status for a building? –Max M.

A: In the past it was onsite laundry facilities, then cable TV access, then Wi-Fi. Now, it seems that “green” is the newest amenity that apartment owners hope will set them apart from the competition. But unlike those earlier upgrades (either there was a laundry room or there wasn’t), being “green,” or energy efficient, isn’t so easy to measure in a residential building.

Commercial buildings and single-family homes can be measured against the Leadership in Energy and Environmental Design (LEED) program, but no green building standard existed for apartment communities until January 2009, when the National Green Building Standard was approved by the American National Standards Institute.

The first question to ask that leasing agent is whether this complex was built using methods, materials and designs that approximate the new standards. If the complex was designed and built using green approaches and materials, the next question is whether the property is run with “greenness” in mind.

You’ve been shown two green practices — recycling and efficient lighting — but these are only the tip of the environmentally conscious iceberg. To be truly green, this property should practice overall energy- and water-saving techniques, use cleaning compounds low in volatile organic compounds (VOCs), and have low-emission equipment, among other things. To encourage individual tenants to conserve, utilities should be individually metered.

Finally, a successful green building depends on the behavior of the individual tenants. Those who refuse to recycle or who use phosphate-rich compounds or inordinate amounts of water will sabotage management’s efforts to go green. This is where things can get tricky.

To require green practices among tenants, landlords need to write “green compliance” clauses into their leases. If they are to mean anything, these clauses must be enforceable, putting tenants who don’t comply at risk of termination and eviction.

But how does a landlord monitor the brand of soap or amount of water tenants use without violating their rights to privacy? Hopefully, the promise of a green environment (and the premium that many tenants will pay for such a living situation) will attract only those who are eager to conform to the program, making enforcement all but unnecessary.

Janet Portman is an attorney and managing editor at Nolo. She specializes in landlord/tenant law and is co-author of “Every Landlord’s Legal Guide” and “Every Tenant’s Legal Guide.” She can be reached at janet@inman.com.
Copyright 2009 Janet Portman

See Janet Portman’s feature How to Negotiate a Lease Buyout.

American Apartment Owners Association offers discounts on products and services for landlords related to your real estate investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing. Find out more at joinaaoa.

To subscribe to our blog, click here.

Posted by Kim Ezzell on 09.24.2009. CLICK to Leave a Comment »

Filed under: AAOA Forum

What’s Wrong With My Furnace?

When heat comes on, lights go dim

by Paul Bianchina

Q: We recently moved into a home with electric forced-air heat. In the winter, every time the furnace kicks on, the lights in the house dim for a nanosecond. Is this something that can be addressed or fixed?

Before we moved in we had to replace the electrical panel (it was made by a company that went out of business years ago because their panels were known to start fires), and I’m wondering if there is something associated with that we can correct. Any help before furnace season starts is greatly appreciated! –Lea


A: The dimming of the lights is caused by a voltage drop that occurs during the startup phase of the furnace. When your thermostat calls for heat, the electric elements in the furnace begin to heat up before the furnace motor kicks on, a process called “heat anticipation.” It’s set up that way so that the furnace fan doesn’t blow cold air through the ducts before the furnace itself heats up. So when you hear the furnace kick on, that’s actually the sound of the fan motor starting up and activating the fan itself.

A couple of possible problems come to mind: The wires leading to the furnace may be too small, or you may have a loose or corroded connection. There should be two circuit breakers on the furnace itself, and they may be loose or faulty. It’s also possible that the furnace motor is going bad, or that you have some problems with the fan, the belts, or other internal furnace parts that are requiring an excessive amount of electricity in order to get turning.

Given the fact that the panel was replaced recently, you definitely want to have an electrician come out to inspect everything — the new panel, the circuit breakers, wire sizes, connections (including the connection to the utility company wires), grounding, etc. All this should be covered under the one-year warranty from the electrical contractor who did the work. I would also strongly recommend that you have the furnace checked and serviced by a heating company that deals with your particular brand of furnace.

One other thing: Since the electrical panel was replaced recently, your local building department will have a record of the permit. I would suggest that you obtain a copy of that, and make sure that the installation was inspected and approved and that the inspector didn’t note any problems.

Remodeling and repair questions? E-mail Paul at paulbianchina@inman.com.
Copyright 2009 Inman News

Posted by Kim Ezzell on 09.21.2009. 1 Comment »

Filed under: AAOA Forum

Energy Upgrades May Earn You Rebates

by David Lowe

Farmer’s Almanac is predicting below average temperatures for 75 percent of the country.

Here are five things owners and landlords can do to get ready and reduce their utility bills — and they are easier to do now when it is still warm than wait until winter. 

Caulk and seal all windows and doors. Ensure their is no outside air leaking into the house. Also, add insulation to your attic and crawl spaces.

Change your air filters. 

Posted by Kim Ezzell on 09.21.2009. CLICK to Leave a Comment »

Filed under: AAOA Forum, Going Green, Make Extra Money