Property Management and Investor Information: March 2008

My wife and I sold our own house last week and moved a few blocks away.  We laughed that during the move we could never quite get everything out.  I must have taken the "last" load about 10 times in the last few days. 

On the morning escrow was closing I went up to our house one last time.  I noted that the garbage cans were in the street and had to be moved up the driveway and into the back yard.  They were still on the street from the latest pickup.  The amount of room in front of our house was very tight so a parked my car partway on the sidewalk as I was only going to be there a couple of minutes to move the cans and take a quick look inside 

I moved the cans and went inside.  For some reason I looked in the dishwasher and found some dishes.  That made me nervouse so I opend every drawer and cabinet and found a few more cups and a pot. I then went upstairs and in our hall bath found some makeup that my daughter had left.  In my old bathroom I found some junk in my wife's drawer.

I got all the stuff gathered and walk outiside with the LAST LOAD just in time to see a police officer driving off.  He had just written me a ticket and put it on my windshield for parking with a tire on the sidewalk.  This was at 7:30 AM! 

My final walkthough cost me $35.00!

There are a lot of reasons why a tenant might try to break a lease.  Some may be valid and require the landlord to allow this to happen.  One example is a military transfer.   But, most sitiuations are simply a choice, like a civilian job transfer or promotion, don't like the neighborhood, school change, and the like.

A landlord must protect themselves in these situations and enforce the lease.  One way to do this is with a clause in the lease so the resident is aware of what will happen ahead of time.  Here is HomePointe's clause:

34.  Resident agrees that if they must vacate the property prior to the expiration of this agreement, Resident will be responsible for all costs associated with locating a replacement Resident.  These costs include but are not limited to all advertising, leasing fees at property managers regular current rate, and costs of signage.  Resident is also responsible for all rent and other charges until replacement Resident has signed a new lease or the lease expires.

In addition, the resident would be responsible for returning the property in the same condition as when they started the lease.  It is the landlords responsibility to try and mitigate the loss that the tenant might incur by breaking the lease.  For instance, the landlord should ask for the same or less rent from the next tenant.  They should also work to find a new resident, even if they bill the current resident for the costs of advertisement.

In a previous post I printed the Pet Policy we currently use at HomePointe Property Management. 

I also want to mention that in addition to having a Pet Policy/Pet Agreement, you should also charge some additional security deposit for the added risk of allowing the pet.  The nuance is that you should not call that extra deposit anything other than Security Deposit.  In fact, keep the deposit you charge a separate item from the pet agreement.

The reason is that if the tenant gets rid of the pet, you do not want to have to refund a portion of their deposit mid tenancy.  Also, upon move out, you want to be able to use the total amount of all the deposit money for whatever you deem necesssay to cover the problems.  If you designated a portion of the deposit as Pet Deposit, you might have to give some deposit back if there was no pet damage, even if the tenant owed you money for rent at the time of moving out.

So keep the deposit amount separate from the pet agreement.  There should be no such thing as a pet deposit, just more security deposit.

If you are renting property you need to consider what your pet policy is.  Did you know that approximately 60% of the population has a pet?  If you do not take pets, you are instantly reducing your pool of tenants down to 4 out of 10 people!

We normally suggest that our clients allow one pet with an extra deposit paid of at least $500.00.  In addition, many dog breeds are never allowed (see below for the policy and breeds). 

If I can rent a property a month quicker by taking a pet, I think our client is better off.  Beside, pets don't screw up, tenants screw up.  So with a good reference and the right pet, it may make sense to take one.

Here is the policy I use at HomePointe.  You can see the entire agreement at http://www.homepointe.com/ and click on Owner Services.

25..._____ If initialed, Resident agrees to PET POLICY, OTHERWISE NO PETS ARE ALLOWED.

Description of Pet(s) (Type, Size, Weight, Color, Name): (Pet Desc)

Whereas Resident desires to keep a pet/pets in the premises and this agreement herein, and this rental agreement prohibits the keeping of said pets without the permission of Owner, NOW THEREFORE, in consideration of the rental reserved herein and on the mutual terms and conditions and covenants of the rental agreement herein, the Owner does hereby grant to the Resident permission to keep the aforementioned pet/pets at the premises subject to the following terms and conditions:

     a.  That the pet/pets will not be permitted to cause any discomfort, annoyance, nuisance or in any way to inconvenience or cause complaint from any other resident or neighbor and Resident does hereby covenant that upon receipt of notice from Owner of a complaint by another resident or neighbor, that action will be taken immediately to remedy the cause of the complaint to the satisfaction of Owner.

     b.  The aforementioned pet/pets will not be permitted to freely traverse the carpeted areas of the building in any way, or to commit any damage or nuisance in any part of the demised premises or elsewhere in the building; Resident agrees and covenants to be financially responsible for any and all damage, loss or expense arising out of keeping the pet/pets at the premises.

     c.  Resident further agrees that aforementioned pet/pets will not be permitted outside Resident's premises unless restrained by leash.

     d.  For failure or breach of any of the terms and conditions set forth above, Owner reserves the right to revoke permission to keep the pet/pets at the premises and to terminate the rental agreement herein.

     e.  Resident shall not keep any pet with any vicious or dangerous propensities.

35.  The following dog breeds are not allowed on the premises at any time:  Pit Bulls, Alaskan Malamutes, Rottweilers, Akitas, Chow Chows, American Staffordshire Terriers, Doberman Pinschers, Boxers, German Shephards, Great Danes, Siberian Hunkies, Wolf-hybrids, Perro de Presa Canarios and any dog that has any of the above breeds in their lineage.  If a dog has a history of violent behavior, it is determined to be a dangerous dog no matter what its pedigree and it is then not allowed on the property.

Your rental agreement should not be without a lease clause that instructs the resident how to deal with mold.  Mold is still a problem in that some residents don't know where it comes from and how to prevent it.  Also, there are attorneys out there that want to make your life miserable, so having a good mold clause is a good first step in preventing problems.  Here is the one we use at HomePointe:

21. Mold Notification:  It is the Owner/Landlord's and Owner's Agent objective to maintain the highest quality living environment for any and all Residents.  You are hereby notified that mold can grow if the premises that you rent is not properly maintained and ventilated.  If moisture is allowed to accumulate in the dwelling, it can cause mildew and mold to grow.  It is important that all Tenants regularly allow air to circulate in the premises.  It is also important that tenants keep the interior of the premises clean and that you promptly notify the Owner/Owner's Agent of any leaks, moisture problems, and/or mold growth.  The following are possible causes of indoor moisture problems:  Humidifiers, steam from cooking, wet clothes on indoor drying lines, leaky roofs or windows, house plants, shower/bath steam and leaks, constant running water/plumbing leaks, and backed up sewers, overflows, or flooding.

Tenant is responsible for maintenance of the premises in a manner that prevents the occurrence of the existence of mold or mildew in the tenancy premises.  Tenant agrees to uphold this responsibility in part by complying with the following list of responsibilities. 

1. Tenant shall keep the premises including but not limited to all counter and floor surfaces, windows and window sills, free of dirt and debris that can harbor or foster mold.
2. Tenant shall immediately report to Landlord any water intrusions, such as running faucets, roof leaks, plumbing leaks, drips, sweating pipes, or discoloration of walls and/or ceilings.
3. Tenant shall immediately notify Landlord of overflows from bathrooms, kitchen, or laundry whether overflow was a result of the condition of the premises or from Tenant accident or misuse.
4. Tenant shall immediately report to the Landlord any mold growth whatsoever on any surface inside the premises.
5. Tenant shall allow the Landlord to enter the premises to inspect and make necessary and/or agreed upon or desired repairs. 
6. Tenant shall use bathroom fans, if available, in their units while showering or bathing, and to report to the Landlord any non-working fan.  If a fan is not provided in your bathroom(s) you shall use the window for ventilation of steam during and after showers, bathing, and use of water.
7. Tenant shall use exhaust fans whenever cooking, dishwashing, or cleaning.  Tenant shall leave on or open the ventilation until all steam, whether in bathroom or other areas of the home, is gone.
8. Tenant shall use all reasonable care to close all windows and other openings in the premises to prevent outdoor water (ie. Rain, sprinklers, etc.) from penetrating into the interior unit.
9. Tenant shall clean and immediately dry any visible moisture on the surface of windows and/or window frames as well as on any other surfaces including personal property.  As an example, due to weather conditions inside and outside some homes, the interior surface of windows and surfaces may "sweat" or become moist due to excessive use of water in the home, laundry being permitted to dry inside, cooking, etc.  This water should be removed from the surface of windows immediately such that if the Landlord inspects the premises, no accumulation of the dirt and debris at the bottom of windows and on window sills should ever be seen.
10. Tenant shall immediately notify the Landlord of any problems with the air conditioning, if any, or heating system problems that are discovered by Tenant.  Further Tenant shall immediately report both verbally and in writing any potential mold causing conditions to the Landlord or the Landlord's authorized Agent.
11. Tenant may not have more than three (3) houseplants inside the residence.  Any and all houseplants must be placed on top of a waterproof container that will prevent water seepage onto the surfaces below.
12. Not less than every other week, Tenant shall inspect beneath cabinets, vanities, sinks, closets, and areas near indoor plants to ascertain whether there are any leaks or excessive moisture.

The State Chapter of the National Association of Property Managers is holding its State  Conference later this month.  Property Managers from all over California and from around the country are coming to Sacramento, CA to this fantastic educational event.  If you are a single family property manager this is the event for you.  Learn how to streamline your business, earn more income, make your clients happier your life sane.  Check it out. 

BENEFITS, OPPORTUNITIES, NETWORKING

JOINING: CAA's Legislative Day on Wednesday, March 26th
 
MARKETING: Profit by Publicity Author Edward Segal will be our keynote on Thursday, March 27th

CALIFORNIA STATE DRE Supervising Auditor Tom Cameron will give us all the DRE updates and important tips, Friday, March 28th

LEADERSHIP:  West Coast Leadership Training immediately following our
Become involved, this is the training you will not want to miss, leadership for life 

DESIGNATIONS: NARPM National Instructor Suzanne Cameron,  MPM class Personnel Procedures & Employee Relations and Past NARPM National President Sylvia Hill, MPM, RMP will be teaching the RMP class  Habitability Standards & Maintenance taught by Past National President and CALNARPM's first Past President Sylvia Hill

LEAP with your CALNARPM colleagues in "Leaping to New Heights" at the 2008 California Conference and Tradeshow.

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 I do not believe there is a correct answer to this question. 

The traditional way is to answer the phone from the prospective renter, qualify them, and make an appointment.  HomePointe used to do that and on occasion we still do.  As we grew it became increasingly difficult to handle the many calls we received and make any sense out of showing the many vacancies we had, one at a time.

We decided to publish our showing schedule four days in advance both on the internet and verbally on our voice mail system.  We then just show up at each vacancy at the appointed time and let anyone come see the house.  You can see our showing schedule at www.HomePointe.com and click on Residential Rentals. 

Advantages of this method:  No phone tag.  No discrimination issues since there is no qualifying conversation before the showing.  No activity means the property is probably overpriced.  Since we show once during the week and once on weekends, all vacancies get seen by staff to make sure they are secure and show well.  One showing may have mulitiple prospects.  We can parade through a neighborhood and show up to 4 houses in an hours time and prospects can see them all.  We average 2.5 showings an hour counting drive time.  With each property having a voice mail box and message, we do not have to talk to any prospective renters repeating the same information over and over, the recording does it.  Everyone gets the exact same information.

Disadvantages:  Appears to be non personal.  Prospects do not get to pick the time to show. 

Another way to show that I do not do is to loan the key out with ID and a credit card.  Prospects have to come to the office to get the key which can be a problem.  This probably only works in Mayberry. 

The City of Sacramento has created a Rental Inspection Program.  All rental units in the city will be charged a $28 annual fee and will be subject to annual inspections.  There is a self certification element to it as well.

All owners that do not live within 35 miles of the city must have a local contact once the program starts.  HomePointe plans to offer a way for owners to use our company as their contact.  More on that soon.

New fee schedule:

Annual fee   $28 per unit

Re-scheduling fee  $80.00

Re-inspection fee  $150.00

Late penalty fee  $20% of amount due.

I am not aware of the start date yet.

More information will be made available soon.

HomePointe was recognized for its efforts in locating a suitable home for the Bravo Family late last year. 

This is a tragic story of a father of seven children that shot and killed his wife and then himself.  He left behind seven children, the oldest being 19 year old Cristal Bravo.  Her siblings are Jose, 17; Sergio, 16; Daisy, 15; Gasmin, 11; Yaretzi, 7; and Jonathan, 5. 

With little money and no rental history, the Bravo family asked a family friend, attorney Tony Manzanetti for help.  Tony called the California Apartment Association who call HomePointe.  With the help of a willing owner, Cydney Bradford, who owns a home in Elk Grove and lives in Tennessee, an agreement was made.

HomePointe continues to monitor the home and so far so good. 

This was a situation that was very difficult for all sides, but it was the right thing to do.  Hopefully the Bravo family will be able to stay together and rebuild their lives.

Donations can be made to:

The Bravo Family Trust

c/o Staci Bettis or Tony Manzanetti

8333 Vintage Park Drive, Sacramento,  CA  95828

Email:  Bravo.Family.Trust@gmail.com

With the internet and all the photos it has become more common for prospective renters to want to rent a property "site unseen".  This used to happen once in a while before the internet, but it is more frequently requested now.

Of course, the problem with this is that once they do see the property they suddenly get real interested in the cleanliness, the paint job, the carpet, etc.  I wonder why they did not care about those things before they signed the rental agreement. 

Sometimes I think this happens because they want to get out of the deal. 

My policy is to never take a deposit unless the party doing the renting has been inside the property.  That way no one is surprised about the cleaning, etc.  Of course, a few slip through the cracks, and they make for lots of headaches.