AAOA Forum | AAOA - American Apartment Owners Association

Welcome to the AAOA Forum, where we discuss the the topics our members want to hear and want to talk about. We like to take an active roll in the online community to help our members learn and help educate landlords new and old. We encourage you to participate and join in our discussions. Thanks.

Landlord Forum

Widow Needs to Convert Home, Office Into Rental

Editor’s Note: We received this query from a member who would appreciate your help. Please share your advice by leaving your comment below:

“I have a large 2 story house, 3500 SF. My late husband and I had a remodeling company and worked on the first floor. The house was single story and built to commercial standards in the 50’s with center block walls and a concrete roof. My late husband built the 2nd story in 1999. He was a general contractor and new the potential of the house.

He passed away in January of this year. I have closed the business as he held the state license, and the knowledge, and construction in our city is basically dead. I have a huge mortgage on the house. I am turning 2 offices into bedrooms, one with a small “desk” area and walk in closet, the other room is smaller with a small closet. I am adding a shower to the bath downstairs.

I am hoping to rent these rooms out with common areas: kitchen, living room, dining room, another desk area, and possibly laundry room downstairs. I am adding a door at the bottom of the stairs and plan to live upstairs.

I have rental property next door, but haven’t done anything as in renting in my home before. Is there anyone out there who can give me tips about this set up, house rules, etc?

I am halfway through the renovations and am researching what I should/need to look for in a prospective roommate/tenant. Also I am in a residential zoning district.

I am not changing the foot print of the house as I will not have a stove/range upstairs.”

Please share your thoughts below.

For questions about our blog, email our editor at kim@joinaaoa.org.

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.

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Tags: landlord+forum, landlord+blog, apartment+owners, landlords+helping+landlords, property+management+advice, real+estate+forms, landlords

Posted by Kim Ezzell on 07.02.2009. 6 Comments »

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Parking Perks for Disabled Tenants

by Janet Portman, Inman News

Q: We just rented an apartment in a condominium complex. We chose it because it’s accessible for my wife, who uses a wheelchair.

We were amazed when the condo owners’ association told us that we cannot have a close-in parking spot for our exclusive use.

Instead, they’re suggesting we use a visitor’s spot, which is wheelchair accessible, for pick-up and drop-off, and park permanently in the unit’s designated spot.

This spot is far away, on a slope, and next to a pillar — totally unsuited for wheelchair use. Is this legal? –Tom and Sally G.

A: If you were renting in an apartment complex, the answer would be a sure and swift “no!” Apartment communities must give disabled tenants close-in parking if they need it in order to live comfortably and safely on the property. This rule will trump any policies to the contrary, such as a “first-come, first-served” approach to allocating parking spots. If giving a disabled tenant a close-in parking spot means that someone else more senior will be delayed, so be it.

But your situation is a bit different. The condo you’re renting is part of a common-interest development. Typically, residents of these developments own their homes plus an undivided proportional interest (as tenants in common) in the common areas, such as the parking lots and recreation facilities. Condominium associations’ master deeds usually provide that the condominium’s parking spaces are for the non-exclusive use of unit owners. Your association may think that assigning you an exclusive, dedicated parking space would violate the deed provision and take away from the other tenants’ rights to use all of the common areas. If so, this type of change would require a material amendment to the master deed and approval by a specified percentage of the unit owners.

All of this is well and good, but for one thing: Even if the condo association is reading the deed correctly, the federal Fair Housing Amendments Act may still trump. The condo association cannot enforce any aspect of the master deed that, on its face or as applied to a particular situation, violates federal law. (Gittleman v. Woodhaven Condominium Ass’n, Inc., 972 F.Supp. 894 (D.N.J. 1997).) This proposition isn’t so new — it was the basis for using civil rights laws to invalidate the “whites only” provisions that used to appear in some master deeds. No matter what the master deed says, you are entitled to a dedicated parking spot by virtue of the superior authority of the federal fair housing law.

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 Dislike, or Discrimination?

For questions about our blog, 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.

Tags: Fair+Housing+Act, landlords, landlord+forum, landlord+blog, apartment+owners, apartment+associations, real+estate+forms, landlord+tenant

Posted by Kim Ezzell on 07.02.2009. CLICK to Leave a Comment »

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Refinancing Applications Down 30%

The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending June 26, 2009.

The Market Composite Index, a measure of mortgage loan application volume, was 444.8, a decrease of 18.9 percent on a seasonally adjusted basis from 548.2 one week earlier.

On an unadjusted basis, the Index decreased 18.5 percent compared with the previous week and decreased 7.4 percent compared with the same week one year earlier.

The Refinance Index decreased 30.0 percent to 1482.2 from 2116.3 the previous week and the seasonally adjusted Purchase Index decreased 4.5 percent to 267.7 from 280.3 one week earlier. The Refinance Index is at its lowest level since November 2008.

The four week moving average for the seasonally adjusted Market Index is down 9.2 percent. The four week moving average is unchanged for the seasonally adjusted Purchase Index, while this average is down 15.2 percent for the Refinance Index.

The refinance share of mortgage activity decreased to 46.4 percent of total applications from 54.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 4.3 percent from 4.1 percent of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.34 percent from 5.44 percent, with points increasing to 1.12 from 0.99 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.81 percent from 4.93 percent, with points increasing to 1.04 from 0.92 (including the origination fee) for 80 percent LTV loans.

The average contract interest rate for one-year ARMs decreased to 6.52 percent from 6.54 percent, with points increasing to 0.13 from 0.11 (including the origination fee) for 80 percent LTV loans.

See our feature, The Top 10 Commercial, Multifamily Lenders.

For questions about our blog, contact our editor at kim@joinaaoa.org.

To subscribe to our blog, click here.

Tags: real+estate+financing, real+estate+forms, refinancing, landlords, landlord+blog, landlord+forum, apartment+owners, apartment+associations, landlord+associations

Posted by Kim Ezzell on 07.02.2009. CLICK to Leave a Comment »

Filed under: AAOA Forum, Financing

Alternatives to Traditional Financing

by Bernice Ross, Inman News

Despite all the information in the press about a thaw in the availability of mortgages, many highly qualified borrowers are still having a difficult time obtaining financing. This is especially true if you own a more expensive home.

What can you do when either you or your house is not a good fit for “traditional” financing?

Because of the tight credit market, a host of new alternatives to traditional financing are starting to emerge. If you are having trouble locating the right loan for your situation, here are just a few of the resources to consider:

1. Credit unions. Unlike banks and mortgage companies that sell their loans on the secondary money market, many credit unions actually keep the loans they make in their own portfolio. (The secondary money market purchases bundles of loans from lenders. These loans must meet specific guidelines such as those set by FHA, Freddie Mac and/or Fannie Mae. Once the primary lender sells the loan, the lender is now in the position to make another loan to a new borrower.) If the credit union does not sell the loan on the secondary money market, they can set their own loan requirements.

2. Seller financing. Did you know that approximately one-third of all property owners in the United States own their property free and clear? Given the low rate of interest being paid for savings accounts and for government securities such as T-bills, an increasing number of sellers are electing to carry part or all of the financing on their sale. This can be a win-win for both the buyer and the seller.

3. Private financing. “Hard money” loans have been around for years. For example, you might have a first mortgage for $80,000 and a second mortgage that you took out for $150,000 to do a major remodel. Your house is now worth $500,000 with only $230,000 of loans. You would like a third loan of $75,000 on your home to help your mother receive the long-term medical care she needs. In this scenario you have three different options.

Your first option would be to apply for a cash-out refinance from a traditional lender. Most traditional lenders, however, are unwilling to make third mortgages, even though you may be highly qualified. A second approach would be to apply for a new first loan on the property for $305,000.

A different alternative is to seek a private source to obtain a loan. These loans are called “hard money” loans as differentiated from “purchase money” (loans placed on the property at the time of purchase) or “refinance” (loans generally made through a traditional lender where the lender pays off the existing loans and replaces them with a new first or second mortgage).

“Hard money” is more likely to be from a private lender. Because these loans are much riskier, the interest rates and the fees are usually higher than they would be for more traditional financing. In virtually every case, it’s better if you can qualify through a traditional lender as opposed to obtaining a “hard money”

4. Private investment group for jumbo short sales. The mortgage crisis has hit owners of expensive properties especially hard. The situation for those facing a short sale on their property is exceedingly difficult. Jumbo loans are difficult to obtain. A new, well-funded group of investment specialists has put together a new program to help owners with mortgages greater than $750,000 and where the owner owes more than the property is worth. Their goal is to help these owners out of their current situation with as much of their credit and dignity intact.

For properties that qualify, the investment group goes to the mortgage holder and negotiates a short sale. The investment group is the buyer. Because the group may have multiple loans from the same lender, they have much better leverage than a single individual in getting the short sale approved.

If you have decent credit, you do have options. Review each choice carefully, discuss the tax consequences with your CPA or tax attorney, and then make the best decision for your personal situation.

5. Online resources. Zillow.com offers an online mortgage tool allows you to shop anonymously for both conforming and jumbo loans. Users can enter a loan amount, the property location, and a credit score (if you don’t know it, the site provides a link to determine your credit score). The system then sends your request to their 4,500 members.

This approach provides an apples-to-apples comparison in terms of interest rates and loan fees. The fees you see quoted are the fees you will pay. Each lender can also see bids made by other lenders. As the buyer, you decide which lender you want to contact. It’s important to note that if you don’t have great credit, you may not receive any bids.

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.

See more on Real Estate Financing.

For questions about our blog, contact our editor at kim@joinaaoa.org.

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Tags: real+estate+financing, credit, real+estate+investing, hard+money+lenders, real+estate+forms, apartment+owners, landlords, landlord+blogs, landlord+associations

Posted by Kim Ezzell on 07.02.2009. 1 Comment »

Filed under: AAOA Forum, Financing

Decking Choices Abound

Pros and Cons of Woods, Synthetics

by Paul Bianchina

Deck railings

If you’re thinking of a new deck or perhaps rehabbing your old one by replacing those worn deck boards, you have no doubt noticed that you have a whole lot of choices these days.

Natural wood, treated wood and synthetics abound, with some pros and cons to each choice.

So here’s a basic rundown on some of things you might want to consider when making your selection.

Also, remember to ask about fasteners when you make your decking choice. Some types of both natural and synthetic decking materials require specific fasteners to prevent staining, “mushrooming” around the screw head, and other possible problems, so be sure to select the right fastener for the job.

WOOD

Until relatively recently, natural wood was the only option you had for a deck. Today, even with all the choices, wood is still extremely popular, and it has lots of things going for it.

First of all, no synthetic deck board, no matter how well designed and engineered, can match the natural beauty of real wood. The warmth, color and grain variations found in wood enhance a deck, and seem to flow more readily into the outdoor surroundings. Wood is also a nice material to work with. It cuts and machines easily, and is easy to fasten.

On the downside, there is no denying that wood requires some maintenance to keep it looking nice. To keep that new-deck appearance, a deck stain or other treatment should be applied at least every other year. Even if you want to allow the wood to weather naturally to the soft gray color that most wood takes on after a few years, you need to apply some type of moisture and UV protection to help keep the wood from prematurely deteriorating.

When selecting wood for use on an exterior deck, you want to select one that is both weather- and insect-resistant. There are several good choices, with cedar and redwood being the most common and the most affordable. At the upper end of the price spectrum, other beautiful, long-lasting deck woods include mahogany, teak and plantation-grown South American hardwoods such as Ipe (also called ironwood).

Another choice for decking is pressure-treated lumber. Pressure-treating woods such as fir, hemlock, and pine will greatly improve the wood’s resistance to weather and insects, so it lasts considerably longer. The treatment process gives the wood a green or brown tint, which some people find attractive and some don’t. And while this is still natural wood with all its inherent grain characteristics, there are also small slots at regular intervals along the face of the wood where the treatment chemicals are injected.

SYNTHETIC DECKING

Within the last decade or so, the number of synthetic decking materials on the market has exploded. Synthetic decking, like wood, has some advantages and disadvantages that you need to look at carefully before making your final choice.

Synthetic decking is made from different types of materials, depending on the manufacturer, but is basically a mixture of plastic and wood fiber. The material is pressed and formed into boards, and during the molding process the face and sometimes the edge of the board is given a wood-grain appearance. Synthetic decking materials are available in several different grain patterns that range from fairly heavily embossed to almost smooth, as well as in a variety of different colors. Some types look remarkably like natural wood, while others retain more of an "imitation wood" appearance. Virtually all synthetics can be cut and machined with normal woodworking tools.

One advantage that synthetic decking has over wood is a reduced amount of maintenance. However, that does not mean that once the material is installed, you can just forget about it. In fact, synthetic decking was touted as being “maintenance free” when it first came on the market, but those claims proved to be a little optimistic.

Today, you will see synthetics marketed with terms more along the lines of "low maintenance," and that’s really a more accurate description. The decking needs to be washed periodically to remove dirt and dust, and many types are prone to staining from grease, oil and other materials. As such, it’s a good idea to use some type of protection under and around barbecues and other cooking areas.

Many synthetic decking materials are also subject to color fading over time, especially in areas with high UV concentrations. Prior to selecting a synthetic decking material, be sure that you take the time to see a couple of actual decks that have been in place for three years or more, so that you can get a better idea of how the material holds up over time.

Remodeling and repair questions? E-mail Paul at paulbianchina@inman.com.

See Paul Bianchina’s feature, Deck Railings Become Fun and Exciting.

For questions about our blog, contact our editor at kim@joinaaoa.org.

To subscribe to our blog, click here.

Tags: DIY+home+repair, real+estate+forms, landlords, landlord+associations, apartment+owners, landlord+forum, real+estate+investing

Posted by Kim Ezzell on 06.29.2009. CLICK to Leave a Comment »

Filed under: AAOA Forum

Landlord Quick Tip

Quick Tip #10: It’s What You Don’t See That Hurts You

Last spring we ran a post concerning a tenant’s death from carbon monoxide.

That death prompted a new law in Colorado requiring that landlords and property owners maintain adequate carbon monoxide detectors.

This trend is affecting many states and several have passed similar laws recently. To see if your state now requires carbon monoxide detectors in your rental property, check out this website.

Even if there isn’t a state or local law that requires detectors, landlords should still install carbon monoxide detectors to avoid potential injuries and any resulting legal liability. Carbon monoxide deaths have occurred from leaks in new appliances and in newly constructed homes.

Detectors are available at your local hardware store.

For more, see carbon monoxide poisoning.

See last week’s Landlord Quick Tip.

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Tags: carbon+monoxide+poisoning, real+estate+forms, landlords, landlord+associations, landlord+forums, landlord+blogs, tenant+death, apartment+owners+associations, apartment+owners, real+estate+investments

Posted by Kim Ezzell on 06.29.2009. CLICK to Leave a Comment »

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How to Sail Through Your Next Eviction

by Michael Monteiro

Ship compass For obvious reasons, most landlords dread evicting tenants. But for as stressful as evictions can be, there are a number of things you can do to increase your chances of a positive outcome.

Following are some tips to keep in mind should you find yourself in a position where evicting a tenant becomes necessary.

1. Have Sufficient Reason
First and foremost, it’s absolutely imperative to ensure that the law recognizes your reasons for eviction as valid (be sure to check your specific state and local laws before beginning any eviction).

Despite the fact that it’s your property, tenants have rights too and any deviation from what is required by law may ultimately result in a lot of legal grief.

Generally, valid reasons for eviction include continuous lack of payment (eviction does not usually result from a single month’s missed rent), the end of a lease term, or a broken lease clause.

2. Know Your Eviction Time Lines
Although you may be tempted, it’s never okay to move a tenant’s belongings out of his apartment without serving the eviction through proper channels, all of which require a certain time frame that will be dictated by state or local law. Also, make sure that the grace period included in your rental agreement (the time the tenant is given to pay you in full) has passed.

But once you’ve carefully ensured that you are following the proper procedures, do make sure that you stick to the time lines imposed on the tenant in question. Mike Brewer of the M Brewer Group explains that in the course of overseeing thousands of multi-family units in various parts of the country over the past 15 years, he has seen many landlords trip up by “not following through with the consequences put in place. For example, you agree to accept a promise to pay from a resident and when they fail to follow through, you make another arrangement … or worse, you do nothing. Given the length of time it takes to get through the eviction process, it is best to apply consequences in a timely fashion.”

3. Be Prepared for Court Proceedings
Many eviction cases end up in court, so be sure that you are prepared. It’s important that you have all the background documentation necessary to prove the validity of your case. Remember, although your property is under question, the eviction process involves the removal of someone from their home so courts are sometimes sympathetic with the tenant.

4. Record Keeping Pays Off
Unfortunately, it’s often impossible to predict when things are going to go sour with a tenant—if it were, evictions wouldn’t be necessary in the first place. Keeping meticulous records for all of your tenants by using property management software or a similar organizational tool is the best way to guarantee that if you do find yourself in a legal battle, your case will stand up in court. Recording payments, complaints, and maintenance and repairs made to all units ensures that you will be able to make your case. Brewer says, “The biggest hurdle I have seen time and time again is failure on the manager’s part to have the necessary paperwork in place. It sounds cliché but it’s true: dotting your Is and crossing your Ts during the move-in process is paramount when it comes to evicting a resident.”

5. Keep Your Cool
This may sound like a peripheral point, but remaining calm and rational during the eviction process is critical. This is a legal matter and any emotional outbursts or actions may come back to haunt you down the line. If you feel that you are unable to do this, communicate with your tenant only through writing or through a third party. Brewer advises, “Many times our innate sense is to treat people we are evicting with a ting of selfish satisfaction. I think the main thing to keep in mind is that you are dealing with an emotionally-loaded situation and to the extent that you can preserve one’s dignity, you come out ahead.”

Of course, the best way to deal with evictions is to do everything in your power to make sure they never happen in the first place. Says Brewer, “Education at move-in is everything. I hesitate to overuse the term emotionally loaded but, at the same time, move-in day is laced with just that. We displace a lot of information on our new residents and eviction is usually not one of the topics. What I would suggest is to include some dialog along the lines of, ‘If you find yourself having a tough time paying rent, come and talk to us early about your options.’”

Michael Monteiro works for Buildium LLC, maker of online property management software for landlords, professional property managers, condos and homeowner associations (HOAs) and is author of the The Buildium Property Management Blog.

Check out the Buildium Blog for more property management resources.

See our feature, 3 Easy Ways to Botch an Eviction.

Tags: tenant+eviction, landlord+tenant, landlords, landlord+associations, landlord+forums, landlord+blogs, real+estate+forms, property+management+software, property+management+tips, apartment+owners

Posted by Kim Ezzell on 06.29.2009. CLICK to Leave a Comment »

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Smart Remodel, Big Returns

Upgrade tips for bed, bath and beyond

by Bernice Ross, Inman News

DEAR BERNICE: We’re planning on remodeling our two-bedroom, one-bath house and were wondering what upgrades will produce the best return on our investment. The house needs a new kitchen, and another bedroom and bath. We also thought of putting in a pool. Where should we begin? –Andy K.

DEAR ANDY: A common misconception about upgrades is that they always increase the value of the property. Upgrades normally make a house more saleable (i.e. easier to sell.) They don’t necessarily increase the property value. For example, assume that you upgrade your property with cherry cabinets and green granite countertops. You sell the home to someone who wants white European cabinets and black countertops. Your upgrades made your home more attractive to more buyers, but in this case, the upgrades are not worth much if the buyer intends to tear them out. When deciding what to upgrade, the smart decision is to upgrade your home for your own enjoyment.

You will obtain the biggest return from your investment if you add the extra bedroom and bath. Increasing bedroom and bath count is one of the smartest ways to increase property value. It also makes your property more appealing to a wider variety of buyers.

As a rule of thumb, increasing square footage increases value. There are some exceptions, however. For example, if most of the homes in your area are 2,000 to 3,000 square feet and you do an addition that makes your home 4,500 square feet, chances are you have over-improved the property. This means that your property is worth less than 4,500-square-foot houses that are surrounded by houses of similar size. The smaller homes in your immediate vicinity would drag your value down.

In terms of return on investment, pools are tricky. Do most of the homes in the area have pools? If so, adding a pool would make your property more comparable to the other homes in the area. On the other hand, many people don’t want the upkeep or risks associated with having a pool. Others may prefer to have a nice backyard where they can create the perfect garden.

Be sure to protect yourself by carefully investigating any contractors prior to hiring them. Does the contractor hold the appropriate licenses to do work in your city? Use Google to search the contractor’s name and company. Also search sites such as Yelp. Ask for references and contact them. If possible, go see the contractor’s work firsthand. Finally, it’s also smart to obtain at least three bids. If a bid is too good to be true, be wary.

If you’re feeling confused (which is what I felt when we were facing a major remodel on one of our houses), you may want to explore a company such as ServiceMagic.com. They screen contractors prior to adding them to their database. You can read reviews as well as obtain estimates. After reviewing bids from four ServiceMagic general contractors, we chose one who did an outstanding job on our remodel. Again, no matter whom you interview, carefully investigate their reputation and their work before giving them a deposit.

See our feature, Save Money on Remodeling.

For questions about our blog, contact our editor at kim@joinaaoa.org.
To subscribe to our blog, click here.

Tags: home+repair, DIY+home+repair, real+estate+investing, real+estate+forms, landlords, tenant+background+checks, landlord+associations, apartment+owners+associations

Posted by Kim Ezzell on 06.29.2009. CLICK to Leave a Comment »

Filed under: AAOA Forum

Landlord Gives Easter Bunny the Boot

Would you evict a tenant over a marshmallow ‘Peep’ pyramid?

One Colorado landlord was faced with this dilemma.

The tenant was asked, but refused to take down an edible Easter decoration that she displayed in the common interior hallway outside her apartment door.

The display remained for two and a half weeks after Easter.

While the tenant claimed she had the support of her neighbors to maintain the decorations, the landlord feared the display would attract insects and otherwise prevent him from keeping the building safe and sanitary.

The tenant received a notice informing her that the display violated terms of her lease.

After the tenant’s continued refusal to take down the sweet-tasting display, the landlord did it for her.

In retaliation, the tenant refused to pay her May rent. The landlord filed an eviction action for failure to pay rent.

The tenant has retained an attorney and is challenging the eviction proceeding in court.

See our feature, Landlord Struggles to Evict Tenant’s for Over-Exposure.

For questions about our blog, contact our editor at kim@joinaaoa.org.

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Tags: landlords, landlord+tenant+disputes, apartment+owners, apartment+owners+associations, landlord+associations, landlord+forum, landlord+blog, real+estate+forms, tenant+background+checks, evictions

Posted by Kim Ezzell on 06.25.2009. 2 Comments »

Filed under: AAOA Forum

Landlord Wants to Offer Discount in Lieu of Interest on Security Deposit

Rent it Right

by Janet Portman, Inman News

Q: My local landlord-tenant ordinance requires that I pay interest on tenants’ security deposits.

The ordinance doesn’t specify how the interest should be paid.

To make things simple, I plan on giving tenants a credit once a year on their rent for that month.

Is this a good idea? –Judith J.

A: A few states, and several cities, require landlords to pay interest on tenants’ deposits, and many of these laws and ordinances do specify how those payments should be made. Some allow landlords to do as you suggest, and others require landlords to pay interest directly to the tenant.

Because you have a choice, consider paying the interest directly to the tenant instead of accepting less rent. Practical considerations underlie this advice.

First, your check provides a clear and easily found written record that you did indeed pay the interest owed. Having that readily available will be handy if a dispute arises over whether you followed the law.

Second, suppose your tenant fails to pay the rent and you need to serve a notice to “pay or quit”? If the amount of rent you demand does not take into account any interest owed, you may find your tenant fighting the notice on the grounds that it incorrectly states the rent (when these notices fail to demand the exact amount of rent due, a judge may find that they are deficient, which would end your lawsuit and make you start over). To prevent a tenant from raising this defense, you could attach a check for the interest owed to the pay or quit notice … but why not simply pay by check in the first place?

Landlords who are not legally required to pay interest on deposits might consider doing so anyway. You’ll gain a marketing edge and score big with your tenants. From their point of view, it isn’t fair for landlords to be making money on the deposit.

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.

See Janet Portman’s feature, Poor Housekeeping Could Cost Tenants.

To subscribe to our blog, click here.

Tags: landlords, landlord+tenant+law, landlord+associations, apartment+owners+associations, real+estate+forms, tenant+background+checks, apartment+owners

Posted by Kim Ezzell on 06.24.2009. 1 Comment »

Filed under: AAOA Forum

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Landlord Forum

Parking Perks for Disabled Tenants

Refinancing Applications Down 30%

Alternatives to Traditional Financing

Decking Choices Abound

Landlord Quick Tip

How to Sail Through Your Next Eviction

Smart Remodel, Big Returns

Landlord Gives Easter Bunny the Boot

Landlord Wants to Offer Discount in Lieu of Interest on Security Deposit