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 Tip #32: Form, and Substance
Landlords spend lots of time and money perfecting their lease agreements, and without a doubt a lease is important.
 However, it’s the information in the Rental Application that you rely on in deciding whether to hand over your keys to an applicant, and it’s that same information that determines whether you will be able to collect any debts or damages if things go badly.So, it’s important to have a solid, modern, up-to-date rental application form. EZ Landlord Forms offers a free online one. We toured the EZ site to see if their application was all it was cracked up to be.
Here’s what we discovered:
The Rental Application is free. It comes ala carte, with other related forms offered.
You need to set up a free account on the EZ site. That requires a name and email. The site promises not to sell your info.
The Application is easy to download or print. (One of us had to save it to a file first to open it.)
The form is set up to print out and fill in by hand. This is perfect for multiple residents. It is modern, including a space for an applicant email, and cell phone. There’s ample space for references. It is easy to read and understand.
EZ offers a live chat line. We didn’t try it out, but it looks handy!
Once you’ve created your free account, you can come back sometime and test out the EZ Lease Wizard for creating a state-specific, custom lease. There’s a feature for you to store all of your custom leases on your account. There is a cost for the Lease Wizard.
This system has the added benefit of allowing you to email forms to your Internet savvy tenants — which is just about everyone these days!
EZ offers discounts on forms to AAOA members.
See last week’s Landlord Quick Tip.
Do you have a quick tip to share with other landlords? Please email our editor at kim@joinaaoa.org.
American Apartment Owners Association offers discounts on products and services for landlords related to your commercial housing 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.
From “Don’t Make These Mistakes When Screening Tenants From Abroad” by Bill Gray
Screening possible new tenants who have recently come from another country can be challenging.  Even those who may have been in the U.S. for some time may be a challenge — if you are not judicious enough to very carefully read what they have submitted on their application.1. Dates: When most Americans write a date, they normally put it in month/day/year order. In other countries, however, often the month and day are inverted so that dates are printed day/month/year. The American military also uses a dating system that shows day/month/year. Also be aware that the numbers themselves may look different than the way you are accustomed to seeing them. Many other countries put a hook on the bottom of a ‘9’ or a line through the middle of a ‘7.’ Since several types of screening reports are matched to birth dates, you can understand that entering the wrong date could hinder your ability to receive complete data about your applicant. I prefer a rental application that clearly asks for the day, month and year. 2. Hyphenated names and spelling: Other than possibly nicknames, most of us print or write out our name the same way every time. Not so in some other countries. Often the name is hyphenated to combine the maternal and paternal names; others may use a combination of the married and maiden name. The way the name is written is sometimes dependent upon the purpose for writing their name. Always ask for a U.S. or international driver’s license to verify the name spelling. Also make a copy for your records. If your prospect does not have a driver’s license, a visa is better than nothing. Not only are numbers often written differently, many times letters are also written differently by applicants who may have learned to write English in another country.
Make sure you go over the application with your prospective tenant so that you are very clear on the dates and how everything is spelled. If you do this, you will increase the possibility of purchasing a much more accurate tenant screening report. Copyright 2009 Bill Gray
Bill Gray is a tenant debt collection specialist, which makes him a tenant screening specialist. For tenant debt concerns or tenant screening questions, email him at Bill@thelandlorddoctor.com.
Visit Bill Gray’s blog at TheLandlordDoctor.com.
See How to Screen a Tenant Who Doesn’t Have a Social Security Number See our seven part series, Vital Tips to Increase Your Debt Collection. 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. From “Green Property Management for Property Managers, Landlords: 3 Tips for Preventing Pest Infestations” by Niman Singh Property Management: Household Pest Infestation Prevention
Pests make a residential rental property look poor and can cause major physical damage to property. Besides that, tenants can have health problems due to pests.
 Property managers and landlords can take precautionary steps to prevent pests from entering the property and becoming a problem.By involving tenants in preventing pests, property managers and landlords can avoid wasting time and money on treatments and repairs for pest infestations. By dealing quickly with pest infestations property managers and landlords send a strong message to tenants which results in tenant having high satisfaction with the residential rental property resulting in lower turnover.
Pests need critical elements to survive: food, water and shelter– and so by taking these three simple steps, pest infestations can be controlled and prevented: 1. Starve them out: Make sure that food is not easily accessible or left out. Keep a tight light on trash and empty it often. 2. Dry them out: Make sure that leaky pipes, faucets, etc are fixed immediately and water spills are cleaned immediately. 3. Keep them out: Pests like rodents and roaches love cracks and can squeeze out of anywhere. Seal all openings and cracks around pipes, windows, sinks, etc. Engage your tenants in preventing and managing pest infestations. Provide them with this brochure from EPA to help them follow simple steps in preventing infestations. Download by CLICKING HERE Tenants can get more information about pest management from EPA website by clicking here Property Managers and Landlords can get more information about pest management from EPA website by clicking here Niman Singh is with TReXGlobal, the makers of SimplifyEm Pay Rent Online and Property Management Software.
American Apartment Owners Association offers discounts on products and services for landlords related to your rental housing investment, including rental forms, tenant debt collection, tenant background checks, insurance and financing.
Find out more at www.joinaaoa.org. To subscribe to our blog, click here by Michael Monteiro
Depending upon where your property is located, parking may be a major consideration or something that you rarely think twice about.
For example, if your property is situated in a rural area or a quieter neighborhood, chances are that providing parking to tenants—whether it’s street parking or on-site parking—isn’t something you actively consider.
 If, however, you are a property manager in an area where parking is scarce, it’s a whole different ballgame.Following are some tips for making the most of parking.
1. Have a parking policy. First and foremost, if you do provide tenants with parking, make sure that a parking policy is included as part of your standard lease.
Think of parking spaces as an extension of your tenants’ units. Just as they are renting a unit from you, so are they renting a parking place and, therefore, certain rules, regulations, and expectations should apply. If you provide additional “guest” spaces on your property, make sure that rules and regulations for them are included in your lease as well. Finally, if you live in an area where weather conditions or other specific events may affect parking, include specific instructions for such conditions in your policy. For example, if you live in an area where it snows frequently, make sure that any affect it may have on your parking policy is explicitly stated.
2. Determine whether you can charge. Depending upon the neighborhood your property is located in, parking may or may not increase the rental value of your units.
If, for example, you live
 in a safe area where street parking is readily available, chances are that providing tenants with parking spaces will add little or no value to your property in terms of rental rates.If, however, you live in an area that is unsafe or where parking spaces are scarce, on-site parking may well afford you with an opportunity to raise your rent.
If you are not already charging tenants who have parking spaces additional rent, be sure to check out the going rates for comparable units with parking spaces the next time a unit becomes vacant. You may just be able to increase your income. 3. Get credit even when you don’t charge. Even if your situation does not afford you the opportunity to charge higher rental rates when a parking space is included, be sure that you are advertising your parking space as an amenity rather than a basic. You never know what could make the difference between a potential tenant choosing one unit over another, and a parking space could definitely provide you with an edge over the competition.
4. Rent unused spaces. If you live in an area where parking spaces are a particularly valuable commodity or have fewer tenants than you do parking spaces, don’t let that space go to waste! Rent out your unused parking spaces, even if it is to a non-tenant. Particularly in dense, urban areas, each parking space can generate up to $200 additional income per month. Best, of all, we bet it will be the easiest unit you’ve ever had to maintain!
Depending on your situation, parking may be a welcome source of additional revenue or a great way to appeal to potential renters. Be sure to make the most of your property’s parking. Michael Monteiro works for Buildium LLC, maker of online property management software and landlord software for professional property managers, condos and homeowner associations (HOAs) and is author of the The Buildium Property Management Blog. See The Right Way to Handle Subletting. 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.
Rent it Right by Janet Portman, Inman News Q: I’m renting an apartment to two college kids. I’ve got their parents on the lease as guarantors. When I collected the security deposit, it came as Does the fact that the parents have paid the deposit mean that I have to include them in the move-out inspections? Does it give them the right to contest my use of the deposit money, including any deductions I might make at the end of the tenancy? Can they take me to small claims court, instead of or with their kids as plaintiffs? I’m worried because one of these parents is a lawyer. –Henry H. A: Even if all four parents were lawyers, I doubt that they’d succeed if they tried to assert the tenant rights that you mention. By furnishing the security deposit (or even paying the rent, for that matter), these parents have indirectly given their children a gift, or at most a loan. Unless you agree that these gift-givers or lenders can have a seat at the landlord-tenant table, the parents are out of the picture, legally speaking. There are lots of situations where parents (or others) pay the bills but don’t enjoy the rights that traditionally come with their purchase. For example, many parents pay college tuition, but this does not entitle them to view their children’s academic or other records, nor does it entitle them to attend class! Parents often pay insurance premiums for their kids, which insurance companies are happy to receive. But parents don’t have the right to start using the pediatrician as their primary care physician; they’ll need to purchase or rely on their own health insurance for their own medical needs. In the world of commercial leasing, however, the rules are somewhat different. There, the “parents” (to the landlords, in this case) are often banks that have lent landlords the money to buy a building. The bankers want to make sure that the landlord doesn’t do anything that might jeopardize his ability to repay the loan. To protect their investment, the banks insist on being part of every leasing transaction. The banks often review the leases and take other steps to make sure things work out as planned. It’s conceivable that your tenants’ parents could insist on a similar arrangement, getting you to agree in a lease provision, for example, that they will be notified of any inspections and any deductions you intend to make from the deposit. But that’s about as far as they could go. Even if you wanted to, you probably cannot give them the right to take you to court on behalf of their children because the right to sue — called “standing,” in legalese — is something the legislature, not a private party, confers. Because the parents are not technically your tenants, they also don’t have the legal rights granted to tenants by state law, including the right to sue a landlord. Your answer to the parent who expects that his check-writing will entitle him to assert his child’s tenant rights should be a polite, “I don’t think so.” One would hope that instead of trying to figure out how to intervene in future disputes with their children’s landlord, parents might consider spending that time educating their kids in the rights — and responsibilities — of being a tenant. If the student-tenant doesn’t get the picture, and loses some of that deposit to well-founded deductions, he can think of this as yet another college class — Hard Knocks 101. 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, Can Landlord Charge Pet Rent?
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.
Is Specialized Housing For You?
by Michael Monteiro
Particularly if you own a property in an urban area or near a university or
 center of business, many specialized tenant markets are just waiting to be captured. Specialized property management may be just the solution you’ve been looking for to decrease vacancies and guarantee steady rental income.
When considering just a few of your options below, be sure that you take your property, location, property management style, and goals into consideration.
Section 8 and low-income housing Essentially, the Section 8 program provides low-income individuals with government-assisted rent. Generally, tenants pay approximately 30 percent of a unit’s rent and the government pays the remaining balance directly to the tenant’s landlord.
In such a scenario, the Department of Housing & Urban Development (HUD) will determine the unit’s fair market rate (FMR) and the landlord is not allowed to charge the tenant anything over this amount. While it is up to you to choose whether or not to participate in Section 8, keep the following points in mind:
You will be subject to property inspection to ensure you meet HUD’s Housing Quality Standards.
You will not be able to charge a Section 8 tenant more than FMR.
Regardless of your state’s laws, you cannot evict a Section 8 tenant without judicial action for eviction.
But it’s important to bear in mind that these tax credits apply only if you adhere to the rules and regulations that determine who can live in your building and how much they can be charged. Not abiding by the rules that are set forth can result in a whole lot of headaches, not to mention economic loss.
Despite the red tape that can come with low-income housing property management, there is a large pool of renters in need of low-income housing. If your property is in an appropriate situation, low-income property management may be a good solution for you.
Student housing College students can be a landlord’s best friend or worst enemy. The problems with renting to students are fairly straightforward. Generally speaking, you’re dealing with younger renters (many of whom may be living on their own for the first time).
With this in mind, you may be more likely to experience noise and upkeep issues. Because of the school schedule, you may also find yourself turning apartments over annually or having to deal with sub-lets during the summer months.
But there are some very real positives when it comes to renting to students as well, most of which are financial. If you are living in an area that houses a college or university, chances are you will have a more dense renting population than you would otherwise. This means that—for at least nine months out of the year—students offer a very real way to keep your vacancy levels low. Also, while students may not inherently have a lot of income (or any at all), when a parent or guardian co-signs the lease, in most cases that monthly check is just as reliable as it would be under any other circumstances.
Sure, you may have to be a bit more hands-on than you would otherwise be when it comes to running student housing. But the bottom line is, they offer a nice steady flow of income. Corporate housing More likely than not, managing corporate housing is fairly different from any other kind of property management you’ve done to date. First of all, you’ll be dealing with a company rather than an individual tenant.
In most corporate housing situations, a company will rent out one or more rooms in a property, with the understanding that one or more of their employees or
 clients will occupy this space over the duration of the rental term. The way this actually works out may vary from having one stable tenant for a year at a time to having a cast of different tenants in and out on as little as a daily or weekly basis.
The good news here is that signing a lease with a corporate entity allows property managers to feel relatively secure that payment issues will be avoided. There are not necessarily downsides to this scenario, just things to consider that make this situation different from renting to an individual such as: assuming the responsibility for furnishing the unit; the potential inability to build a relationship with the tenant or screen for undesirable tenant behavior; and, in some cases, the knowledge that you will not necessarily have a tenant occupying the unit at all times to immediately alert you when repair and upkeep issues crop up.
If you are looking for ways to decrease vacancy rates and generate more income, remember: There are always ways to think outside of the box when it comes to property management. Before you undertake one of these (or any other) specialized property management endeavors, just make sure you have carefully thought out the pros and cons and are well versed on any specific tax considerations or rules and regulations that may apply. Check out the Buildium Blog for more property management resources. Michael Monteiro works for Buildium LLC, maker of online property management software and landlord software for professional property managers, condos and homeowner associations (HOAs) and is author of the The Buildium Property Management Blog. See The Right Way to Handle Subletting. 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.
Land contracts are here again? What is a “private” sale and are these legal? –Bill A.
DEAR BILL: I suspect what your friend is referring to is something called a “land contract” or “land sales contract.” Given the lack of financing in the jumbo loan market, this may a viable option for some sellers in this market. Land contracts were used extensively in the early 1980s, when home mortgage rates jumped to over 18 percent. All land contracts involve having the seller carry part of the financing. Since 35 percent of all homeowners own their property free and clear, seller financing can be an attractive option for those who must sell. When the seller finances the sale, there are normally no points or fees. This saves the buyer money. The deeds and other documents work in the same manner as in a transaction where there is bank financing. Unlike other types of financing, though, in a land contract the title normally does not transfer to the new buyer until the purchase price is paid in full. (Some states require the title to transfer after a certain percentage of payments have been made.) The deed transferring the title doesn’t record until this payment threshold has been reached. When the rates went sky high in the early ’80s, creative financing became the order of the day. Many sellers had low-interest-rate loans. It was common practice for buyers to assume the existing financing. This could be through a direct assumption that the lender approved or it could be through what was known as a “wraparound” or “all inclusive deed of trust” (AITD). Here’s how wraparound mortgages work: Assume that a property sold for $200,000 and there were two loans on the property — a $100,000 first mortgage at 5 percent and a $20,000 second mortgage at 8 percent. The buyer puts down $20,000. The seller could wrap the existing mortgages and give the buyer an AITD. If the current bank interest rate was 14 percent, the seller might charge 12 percent for the AITD. This was a great deal for both the buyer and the seller. The buyer gets an interest rate that is 2 percent less than the current market rate. The seller would make an additional 7 percent annual interest on the $100,000 first mortgage, 4 percent on the $20,000 second, and 12 percent on the additional $60,000. Since the seller was only loaning $60,000 out of his pocket, the total interest of $15,000 per year represented a 25 percent return on the actual amount borrowed. Needless to say, the banks weren’t thrilled with this situation. Congress passed regulations so that the banks could stop borrowers from assuming or wrapping a loan without the lender’s permission. If the seller wrapped the loan without the bank’s consent, the bank could enforce the “due on sale” provisions by foreclosing. To avoid the due on sale provisions, the next wave of creative financing involved land contracts. Since the original owner is still on the title and is continuing to make payments, there was no way for the bank to know that a sale had taken place. The normal structure was to have the buyer make payments directly into an escrow account. The escrow then made the payments to the lender on the original seller’s behalf. The lenders eventually caught on to this strategy and started checking to see whose names were on the utilities. Many sellers then opted to keep the utilities in their name and simply increased the monthly payment. So is this still a viable option today? Land contracts are legal in most states. In fact, if you lived in California and you bought your home through Cal Vet in the ’80s, your purchase financing would be based upon a land contract. The buyer holds legal possession and occupies the property. For sellers in today’s market who own their property free and clear, a land sale contract could be a desirable way to sell their property. The reason is that if the buyer defaults, the buyer forfeits the right to purchase the property. There are definitely pitfalls to land contract sales, though, as it may be challenging to remove a defaulting buyer from the property. And buyers may have trouble receiving a marketable title even after making all of the payments to the seller. The seller can place a provision in the land contract that in the event of a buyer default, the past payments the buyer made are converted to rental payments. Once the buyer defaults, the owner can file an eviction notice. This is much faster and easier than going through a foreclosure proceeding. But because of the complexity of this type of sale, you will need a real estate attorney to make sure all the provisions are drafted correctly. The more interesting issue that your question raises is whether a seller can wrap an existing mortgage in today’s environment. Virtually all loan documents have “due on sale provisions.” Today, the banks are struggling to keep pace with the huge number of defaults, foreclosures, and short sales. The real issue is whether they would elect to foreclose on an owner if the payments are current. Personally, I would be reluctant to embark on the steps it would take to hide this from the lender. On the other hand, if the seller owns the property free and clear or receives enough money from the downpayment to pay off the existing loans, a land contract could help a seller close a property that might not be able to qualify for traditional financing in today’s market. Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of “Real Estate Dough: Your Recipe for Real Estate Success” and other books. You can reach her at Bernice@RealEstateCoach.com and find her on Twitter: @bross. Copyright 2009 RealEstateCoach.com See another Bernice Ross feature, How to Buy a Lucky Property.
Thanksgiving Dinner on the run
A woman called in find out how long it would take to roast her turkey. To answer the question, the Talk-Line home economist asked how much the  bird weighed. The woman responded, “I don’t know, it’s still running around outside.”
Tofu turkey? No matter how you slice it, Thanksgiving just isn’t Thanksgiving without turkey. A restaurant owner in California wanted to know how to roast a turkey for a vegetarian menu.
Size matters
Then there’s the time a lady was picking through the frozen turkeys at the grocery store, but couldn’t find one big enough for her family. She asked a stock boy, “Do these turkeys get any bigger?” The stock boy replied, “No ma’am, they’re dead.”
American Apartment Owners Association offers discounts on products and services for landlords related to your commercial housing 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. A Dozen Reasons to Be Thankful (that I burned the turkey)!
Salmonella won’t be a concern.
Everyone will think it’s Cajun Blackened. Uninvited guests will think twice next year. Your cheese broccoli lima bean casserole will gain newly found appreciation. Pets won’t pester you for scraps. The smoke alarm was due for a test. Carving the bird will provide a good cardiovascular workout. After dinner, the guys can take the bird to the yard and play football. The less turkey Uncle George eats, the less likely he will be to walk around with his pants unbuttoned. You’ll get to the desserts quicker. You won’t have to face three weeks of turkey sandwiches. Source: Craig Boldman and Pete Matthews, authors of Every Excuse in the Book: 714 Ways to Say “It’s Not My Fault.”
American Apartment Owners Association offers discounts on products and services for landlords related to your commercial housing 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. by Robert Griswold
Q: I have been renting a house to three college students and their lease is up soon. However, I just learned that only one of the original students on the lease is still there. He does not plan to renew the lease and I am wondering what to do with the security deposit.  How do I make out the refund check for the security deposit? Do I divide the security deposit into separate shares and send out checks to each of them? Or do I send one check to all three names? I am concerned that the one remaining tenant will claim he is entitled to all of the deposit back and then I will be sued by the other tenants.
I am in a bind as I have no idea where the other two tenants are currently living.
A: You should make the check payable to all three tenants listed on the currently valid lease. So unless the vacated tenants have given you a written statement releasing any interest they have in the security deposit, you should make the refund check payable to all three named tenants. You do not have any information on the current whereabouts of the other two tenants, so your only option is to mail the check to the address of your rental unit. It is likely that the current tenant will be the one who receives the refund check, but any challenges the tenants face in negotiating the check are their issues not yours. It is possible that you will be provided with the current contact information for the other two tenants before sending the refund check. In that case, I would suggest you still send the check to the property address and also send a copy of the check and the final accounting of the security deposit to the other tenants so they would be aware of the status of the deposit. 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, Partial Rent Payments Spell Trouble.
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two checks, in equal amounts, from each set of parents. 
While there may be some similarities, low-income housing is not the same as Section 8. Rather than receiving rental income from the government, property owners who run low-income properties are eligible for the 
DEAR BERNICE: I live in Colorado. I was talking to one of my friends who lives in California. He has been hearing about “private” sales out there, especially in the higher price ranges where financing is hard to obtain. 
No one will overeat.
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