AAOA Blog

by Brett Furniss

I was talking to a prospective Charlotte property management client the other day and he had only one criteria he really cared about. He wanted to make sure that we placed a rental tenant into his home that had 700+ credit scores. That was it.

I told him I didn’t think that was a good idea; it would reject a lot of better suited applicants. He told me I was crazy (in so many words).

Well, let’s do the whole Benjamin Franklin pro’s and con’s thing. Then we can make an educated decision.

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Does racism threat justify lease breaking?

Rent it Right

by Janet Portman, Inman News

Q: We live in a multifamily community whose management assures us that they take their screening duties very seriously (the result, perhaps, of a crime committed by a resident a couple of years ago).

 Can we do so legally? –Bill and Janelle P.

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Rent it Right

by Janet Portman, Inman News

Q: When I screen potential tenants, I talk to their current landlord and their employer, ask for references, and order a credit report.Some of the landlords in town are also regularly looking on the Internet, to see if the applicant blogs, has a Facebook page, and so on.

One friend told me that when he looked at the Facebook page of an applicant he was about to rent to, he saw that the person is really into partying and drinking. My friend didn’t rent to him.

Should I be looking at Facebook pages, too? –David R.

A: Your question calls for two answers: a legal one and a practical one. From a legal point of view, should you be checking applicants’ Internet postings? And, from a practical point of view, is it a good idea?

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Premise liability is a landlord’s Achilles’ heel - and it can be a game changer.

Without insurance, one claim could very well end your rental property management days. These days, with verdicts routinely reaching into the  millions -even tens of millions,  if your insurance policy has exclusions or pay-out limits you may not be as secure as you think. 

To limit the risk of a premise liability claim, and to keep your premiums manageable, consider this:

Landlord Liable for Condition of Rental Property

As a landlord, you are responsible for the safety of your tenants and their guests.  This requires keeping the property in good working order. 

Frequently inspect walkways and staircases for wear, and repair them immediately – your top priority. One good rule of thumb:  make sure all repairs are done to code.  

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• Tries to entice you by offering to pay cash 

• Starts to negotiate before you show them the unit 

• Wants to pay the deposit in installments 

• Asks you not to call the current landlord because they haven’t given notice yet 

• Tries to flatter you or fast-talk about how perfect they are before you ask 

• Can pay you “just as soon as” tax rebate, new box of checks, settle insurance claim, next payday… 

• Hasn’t been at any one job for at least a year 

• Wants to barter repairs or other services for rent 

• “Forgets” to fill out a couple things on the application, can’t remember past addresses, reference phone numbers, etc. 

• Addresses on application, drivers’ license or car registration don’t match, or are not the current address given 

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Landlords must weigh convictions against tenant safety

by Robert Griswold

Q: After consulting your book, “Property Management for Dummies” and speaking with an attorney, I found a discrepancy in opinion involving tenant applicants with criminal records.

Your book said that I can deny a rental application submitted by a convicted criminal in order to protect my current tenants from having their items stolen.

However, the attorney I spoke with said a landlord can deny an application only if it’s based on bad credit and income history, even if the applicant has a considerable criminal history and is currently on probation for stealing and drugs. Has the law changed in the past few years?

A: While I’m not an attorney, some types of criminal convictions can provide very valid and legitimate grounds to turn away a prospective renter.

According to your question, the attorney said you can deny an applicant based not on criminal history, but only based on bad credit or income history. But that is not necessarily always true.

A convicted criminal could have good cash flow and may even have excellent credit, but that doesn’t necessarily mean they are not a threat to other tenants.

Having a consistent policy for conducting criminal background checks, and for rejecting applicants for specific types of convictions, such as violent crimes and property theft or damage, can be a good policy for protecting yourself and your tenants.

And you should ask your legal adviser about the types of convictions that may present good cause for rejecting an application, as this can be a tricky area for landlords who are trying to protect their other tenants and avoid violating the rights of the prospective applicant.

A convicted thief, as you describe here, may not be the ideal rental candidate.

Please note that arrests are very different than convictions, and someone who has had even numerous arrests may have been completely innocent of the crime or crimes alleged. An arrest is not a conviction or grounds to deny an applicant.

I believe that applicants with a history of certain violent or serious criminal convictions could present a reasonable basis for the denial of a rental application, while applicants with minor convictions in the distant past could be solid rental candidates.

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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.

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Rent it Right

by Janet Portman, Inman News

Q: We hired a management company to find tenants and collect rent at our rental in a nearby town.

Over the past two years we’ve had four sets of tenants; one broke the lease and we had to file evictions on two of them. The property is nice though the market is cool now.

We’re tired of the fast turnover — are we or the management company doing anything wrong? –Jose M.

A: It sounds like the company is filling your property too quickly, perhaps without taking the time to properly screen applicants. A management company will be tempted to find tenants fast because it gets a cut of every monthly rent check: The sooner it’s rented, the sooner the checks come rolling in.

In addition, the company gets a fee every time it has to show and rent the property. It doesn’t take a genius to see that frequent turnovers and minimal vacant months are in the management company’s best interests. If an eviction is necessary, you’ll pay the company extra to handle it (of course, you’ll pay a lawyer, too, but the management company won’t usually have any legal expenses).

Balance those interests against yours. You want minimal turnover and you want stable tenants whom you won’t have to evict. Those needs translate into patient, thorough tenant screening and the willingness to go without a tenant for a month or two or three until the right prospect comes along.

True, you’ll be losing rent, but that lost rent will pale when compared to another round of turnover costs a few months down the line, let alone the cost of an eviction. But your management company has no incentive to wait it out — instead, they’ll be anxious to place a tenant and begin taking a cut of your rent.

Truly professional companies recognize that the temptation to quickly rent a place with minimal screening is not ethical. Practically speaking, too, such practices will not enhance their reputation. In the long run, they’ll become known as outfits that don’t deliver quality tenants for their owners. Maybe it’s time that you switched management companies.

Talk to other landlords and find out who has had a good experience. The number of evictions they’ve had to file and whether they’ve had hassle-free tenants will tell the whole story.

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 

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