Property Management and Investor Information: June 2009

We recently had a house flood when a valve behind the toilet busted in the middle of the night.  A call to the owner had to be made to tell them that the house had flooded and the cleanup costs would be considerable.

Of course, no one wants to make that call, to tell the owner the bad news.  

But, when the call is made, I think it should be as soon as possible and with as much information as possible.  The information should includle the initial known costs and the likely future costs to complete the repair.  It should also be noted that the repair and cleanup is a possible insurance matter.  That might soften the blow to the owners pocketbook.  

I think the best way to handle this is to put yourself in your clients shoes.  "Mr Owner, I know this is upsetting, and I am upset too.  I am sorry to have to deliver this news to you.  Here is how we can solve the problem"

Having the solution along with the problem will go a long way to making the call much easier to swallow.

I am used to getting blamed for all sorts of things.  The air conditioner goes out and it is my fault.  The house won't rent, it is my fault.  The rent check bounced, it is my fault.  I don't return phone calls, wait, that one actually would be my fault!  But, most of the time I get blamed and yet I am just the guy you can reach.

The newest thing to blame me for is a foreclosure.  Tenants think that we should know what is going on with the house payment at all times.  Well, most of our clients make their own house payment.  I collect the rent and send the proceeds to my client.  I do not make the mortgage payment in most cases.  

Often times, an owner goes into default with their bank only to recover and start making payments again.  The deal is that until the house actually becomes owned by the bank, it is owned by our client.  Until the bank takes ownership or enforces an assignment of rents, the rent must be paid to that owner or the tenant is subject to getting evicted.  

So don't blame the property manager.  Many times the first one to hear (except the owner) is the tenant when the house is posted with a Notice of Default.  Once the sale takes place there will be ample time for the tenant to negotiate a move from the property.  

Most of our clients come to us because they want to have their property managed to its’ best advantage. They know HomePointe will achieve the maximum market rent in the quickest time. They also know that HomePointe will get them good deals on maintenance and will not recommend unnecessary repairs. Finally they know HomePointe will be available to the tenant 24/7, pay the property’s bills and get them their proceeds in a timely manner. Peace of mind without having to be available for a very reasonable price.

Some potential clients do not have time to do all the work necessary to locate and screen for tenants, but still do not trust that a property manager, even HomePointe which rents to nearly 1,000 tenants a year, will do as good a job as they will. They think this because they know that their motives are only good, but the property manager may be just trying to earn a commission. This thinking is faulty since property managers build their reputation on their ability to screen and select qualified applicants. Just renting a house for a quick commission is not only unethical, it is bad for the business and its’ reputation.

In addition to this, possible Fair Housing violations are at risk for both the property manager and the owner that shares the screening and approval of rental applicants. HomePointe sets the standards for each property ahead of time. When a person applies to rent the property, they know what the standards are. HomePointe takes the application and verifies that the standards have been met. We check income, credit, and rental references and/or ownership history. If an applicant passes we rent to them. If an owner wants to have the final say, what will the owner be checking? If HomePointe has approved the application and the owner declines it, what will the tenant say? I think they have a good Fair Housing complaint. In reverse, if HomePointe declines the application and the owner approves it, what standard was ignored? Other declined applications may have a Fair Housing complaint.

For these reasons, HomePointe will not allow an owner to create a situation that may drag both HomePointe and the owner into a Fair Housing hearing and possible heavy fines.

HomePointe has been locating, screening, and selecting tenants since 1982. It’s the lease we can do! HomePointe, the place to be.

Effective immediately an REO Lender or buyer who buys a foreclosure must give a 90 Day Notice to Terminate any tenant where the lease is a month to month agreement.  It does not matter whether the buyer is an investor or owner occupant.  If the buyer is an investor the tenant can now stay until the end of any written lease they have.  

This applies to foreclosures of federally related mortgage loans or residential real property (FHA, VA, FNMA, FHLM).  

The law expires December 31, 2012.