In this week’s episode, Podcast Host, Property Manager & Business Owner, Andrew Schultz, discusses how best to deal with a rude tenant. If you find it impossible to have a civil conversation with your renter, you’ll want to listen in.
If you have a tenant with a million and one excuses for why their rent is always late, you may be left to question, can late fees be included with rent? Find out in this episode.
Have your spotless tenants turned a bit messy? Here’s what to do if your tenants stop keeping up with your rental property.
Listen below!
Show Notes
Andrew (00:00:01):
All right, and we are live. Welcome everybody to the July, 2023. Ask Me Anything Session brought to you by Rent Prep. We’re gonna go ahead and add Josh Ongaro onto the stream. Josh is going to be helping by moderating the discussion today. Josh, how are you,
Josh (00:00:16):
Andrew? I’m doing good. Back in back and ready for, for another edition of the ama.
Andrew (00:00:23):
Good. Glad to hear it. I am just checking our live stream here and it looks like we are good to go. We do not have the same tech issue that we had last month, <laugh>, so we think we figured out what the issue was with that. Sorry for everybody who was tuned in for our June ama. We wanted to be live for that one, but we ended up having to upload after the fact this month. We are live though, and it looks like this stream is pretty healthy here, so we should be in pretty good shape.
Josh (00:00:46):
Good. Yeah, that was we’ve, we’ve had a couple issues throughout the last couple months, but I think, I think we’ve we’ve been able to solve ’em and at least got, get the got the AMAs in the past posted to the, the rent prep for landlords Facebook community and the YouTube channel. So I think, I think we’re good. Our, our audience has learned to, to live with live it, live with us as we learn, learn these new systems. You
Andrew (00:01:13):
Could have told me that my collar was half up on the one side of my shirt before we started the livestream. That would’ve been, I
Josh (00:01:18):
I couldn’t really tell. It’s, it’s all dark <laugh>. It’s
Andrew (00:01:21):
All No, I know. With the, the dark background background. Yeah, exactly. Couldn’t
Josh (00:01:25):
Really tell, so, alright, well, why don’t we, why don’t we jump right into it? No,
Andrew (00:01:30):
Yeah, let’s get into this. No
Josh (00:01:31):
Messing around today.
Andrew (00:01:32):
A lot of, a lot of questions this month. I don’t know if some of these might have been carryovers from June or not, but we have, we have quite a few questions kind of in the queue here this month, so we’ll generate into it and kind of get the ball rolling here. And then if anybody is watching live, obviously you could certainly ask questions in the chat. I don’t know as though we’ll necessarily get to those. We typically have a lot of questions pre, pre-set up here, but if somebody is watching and they have a question or a comment or something like that, go ahead and drop it in and we will try to, try to bring those in as time goes on here.
Josh (00:02:02):
Yeah, I will, I will do my best to, to balance, balance both sets of questions here. But yeah, I do believe we have some spillover from the last day I may, which we were not able to answer. So let’s start right here from a form submission question from Veronica. Okay. My husband and I are on, on title for our rental property and plan to manage the property together. Does that mean that we both are required to be listed on the lease as landlord or is, or is it okay if only one of us is listed if he plans to travel for a few months and I am on am and I am able to get a tenant while he’s out of town, is there some kind of document that he can sign to acknowledge that he agrees to the property being rented if it is necessary for him to be on the lease?
Andrew (00:02:55):
Mm. I wish there was a state included in this one. It might not even matter to be honest with you. So if you’re both on title for the rental property and you plan on managing the property together I would say that you both should be on the lease. Both names should be on the lease. Whenever we have a, a property that has multiple names on title, we always put all names that are in title on the lease. And then we have to have the, well, actually our, our management agreement allows us to sign on behalf of our clients. But and if there’s multiple owners, there should be multiple signatures on the, on the, you know, the lessor side of the, of the equation. You could probably get like a power of attorney signed or something like that. And this is something that, again, it’s probably gonna depend on the state you’re in because marital property, marital properties looked at completely differently.
Andrew (00:03:40):
So it might be a situation where if it’s a piece of marital property, you both own it 50 50, maybe you don’t even need a power of attorney because you’re married. But that would probably be a question that you would run by an attorney and just say, Hey, this is what we’re trying to do and why, what paperwork do we need to have in place in order to make sure that everything is legit? Yeah. But yeah, I would think that either you would either do like a power of attorney if you need one and you may not even need to do that depending on what the, the laws are with regards to marital assets and stuff like that in your state.
Josh (00:04:08):
Cool. All right. Let’s let’s roll to the next one. Let’s do a question from Natalie. Natalie asks, I have a tenant in Indiana who has a contract move out date of July 31st and has not found new housing, isn’t planning on leaving on time, and someone else is under contract to move in August. What can I do?
Andrew (00:04:34):
This is a sticky one, man. This is exactly like, this is the reason that I don’t do move out July 31st, move in August 1st, you leave yourself absolutely no time for turnover. You leave yourself no time in the event of a situation like this. I mean, even if this tenant moved out on July 31st, you might walk into that apartment and find out that they painted right the entire apartment, dark black and you have to go through and repaint the apartment. So for that reason, we specifically do not do like
Josh (00:05:08):
What type of lag? Yeah. What do you do for, for like a lag time in between or like a, a lead time?
Andrew (00:05:14):
It depends on how much work we know we’re gonna need to do to the unit. Yeah. So in New York state, we do have the ability to go in and do a pre-inspection prior to the end of the tenancy. And as a matter of fact, there’s some, there’s some rules regarding the, the tenant can actually request it between seven and 14 days prior to the end of their tenancy. And then they have the right to correct anything that you, that you’re looking to deduct from their deposit. You have to give ’em a letter basically telling, Hey, this is the results of the inspection. These are the four things that we’re gonna hit your security deposit for. There may be more things because we couldn’t see all the walls and this, that, and the other. So for a situation like that, like we generally know how much time we’re gonna need, but we might not know how much time we’re gonna need until we’re pretty close to the end of the tenancy.
Andrew (00:05:55):
We don’t as a rule market our apartments until they’re ready to go on market. So it’s not a situation where we’re trying to get a place ready in time for a new tenant to move in. We’re not doing a pre-lease necessarily unless it’s a unit that is in, you know, pristine shape and we know that we’re gonna be able to get in there and it’s only gonna need to be cleaned and then it’s gonna be ready for the next person. But even still, we always leave, we always leave some lag time there because there’s always something that needs to be done in a unit. And it’s always much easier to work in a unit before a tenant moves in then once they’ve moved in. So
Josh (00:06:28):
Here, here’s a question for you. If you, and I just thought about this. If you go into the property before the lease is over and you notice an issue mm-hmm. <Affirmative>, has there been a situation where it’s been an issue where you don’t want the tenant to correct, say they do damage that you don’t necessarily know they would be responsible to fix or they would mm-hmm. Fix it the right way? Right. Has there been situations where you’ve told them like, no, you, like you can’t fix this. Like, I’m gonna have, I want to have a verified contractor go in and fix this. Are you allowed to do that? Kind of, how does that work? So
Andrew (00:07:05):
By state law, we have to give the tenant a list of items that we’re looking to deduct from their deposit. And they have to be given the opportunity to correct those items. And I’m trying to pull up a, I actually just went through our move out workflow. We’ve been updating a lot of our processes over the last few months and now I’m trying to find my move out checklist form. Gimme one second here cuz I wanna see how I have it worded on there.
Josh (00:07:32):
Yeah. I’m thinking about like, like a major appliance. I could understand like, you know, pinhole in walls and stuff like that, but maybe like, you know, an appliance gets broken or, and, and you don’t technic you don’t trust or don’t have a way to verify who the, the contractor was that fixed it and then it leads, they get out of there, you give ’em their money back. Yeah. And they’re, they’re off, they’re off free.
Andrew (00:07:54):
No, you’re exactly right. It’s, it’s a situation where you necessary don’t necessarily want a tenant to go in and repaint a room because they could cause more damage by sloping paint on the carpet or the hardwood floors or whatever the case may be. But the way that the law is crafted here in New York state, we don’t necessarily have that as a yeah. We basically have to give them the, the ability to correct it. We do have in our move out checklist, like the, the pre-inspection that we send out I’m sorry, the post inspection letter that we send out, that the work has to be completed by a licensed and insured contractor. And that we need to have a copy of their insurance documents on hand prior to them starting the work. And we can also help you with the work at whatever the hourly rate is and stuff like that.
Andrew (00:08:39):
Yeah. Realistically speaking, if a tenant has somebody come in and they do slapshot work, we’re just gonna redo the slapshot work and then charge the tenant for having to redo the work that they did just before and after photos is probably what we would do there and say, you know, we understand that you made an attempt to make a repair here, but your repair was substandard or didn’t meet code or whatever the case may be, is kind of how we work with it. Gotcha. We haven’t had that pop up yet since that law kind of went into effect. That was all part of H S T P A back in 2019 where they added in the new restrictions on on all that stuff and it hasn’t turned into an issue yet. But I can definitely, it’s poorly worded. The way that the legislation is written is very poorly worded and I could absolutely see a tenant arguing something like that, but at the end of the day, the, the statute does say that the thing needs to be returned. The, the unit needs to be returned back to the condition it was in when they moved into it. Got it. Minus reasonable wear and tear. So if they don’t give it to us, even if they hired somebody to do the work, sorry, you just paid somebody to do work that we just had to redo, we’re still taking outta your deposit.
Josh (00:09:39):
No, that makes sense.
Andrew (00:09:41):
I don’t know, did we actually answer Natalie’s question? I kind of went off on a rant
Josh (00:09:45):
There, <laugh>. Hold on.
Andrew (00:09:46):
As far as, yeah, as far as what Natalie should do here, I would say, number one, talk to your outgoing tenant and find out when they’re going to be out and then talk to your incoming tenant and let them know, hey, we not be a, we may not be able to, you know, complete your move-in. We may not be able to complete your move-in in a timely fashion because we have a tenant that hasn’t moved out yet. We actually do have a, lemme see if I can pull up a copy of my lease here real quick. Cause we do have language in our lease with regards to not being able to deliver a unit at the time that we were planning on. And
Speaker 3 (00:10:30):
Occ,
Josh (00:10:30):
Let’s see.
Andrew (00:10:37):
I’m sure this is fascinating for some people who
Josh (00:10:39):
Yeah. Waiting for us to pull stuff up.
Andrew (00:10:43):
Well, but I’d rather give people the, the better the better answer really. Let’s see, roof and termite alert. Scroll back down here. Roof and termite alert. That’s another good one. Don’t ever let people put holes in your roof for satellite dishes.
Josh (00:10:56):
<Laugh>,
Andrew (00:11:05):
If due to labor, trouble pandemic, government order, lack of supply tenants active neglect, neglect, blah, blah, blah, blah, blah, landlord is delayed or unable to carry out landlord’s promises or agreements, supply any services to be supplied or see make any required repair. The lease shall not be ended or the tenant’s obligations affected landlord shall be excused from performance. No, that’s the wrong section. Hang on. We’re dragging this on. Let’s continue to move forward and I’ll see if I can
Josh (00:11:40):
Find that. You’re you’re good. And while, while you were searching, searching so diligently for that, I actually, I wanted to pull this up while I was thinking about damage to damage to a rental property. I just had, I’m gonna share my screen. Let me know if you can see it. I just had a buddy send me this photo. He was swatting a, he was swatting a fly with a mm-hmm <affirmative> paper towel in a, in a buffalo apartment that he’s renting and they’re, they’re very old houses in, in north Buffalo area. And he went to <laugh>, he went to slap the glass with it and completely put his hand through the, through the window of this rental property and ended up actually cutting his hand pretty good wide open. But he is he is now on the hunt for fixing this and this, this, that last question where we got off on a tangent just kind of, kind of made me think about this, but yeah, he he shattered the glass pretty good there. <Laugh>.
Andrew (00:12:39):
Yeah, that’s that’s a nasty one too. He is lucky that he didn’t wind up with a lot more severe cut on his hand or something like that cuz those Yeah, he, those older windows can really do some damage. The plate glasses, you know. Oh yeah.
Josh (00:12:50):
Oh yeah.
Andrew (00:12:50):
And actually I just found the section of the lease that I was trying to pull up, so I’m gonna see if I can do a screen share here if it’ll let me.
Andrew (00:13:00):
There we go. Landlord shall make reasonable effort to have the premises ready on time. Circumstances beyond landlord’s control could cause delay 10 degrees and landlord’s not liable for damage if the premise is not ready at the time stipulated on the application. In the event of a delay, rent shall be abated on a daily basis until the tenant is given possession. If landlord’s not able to deliver premise within seven days after the date promised, then tenant may elect in writing to terminate the lease after such termination. Tenant is only entitled to refund of deposit and any rent paid landlord will not be liable for any consequential damages. The tenant incurs, if any, as a result of a termination of the lease. Rent abatement or lease termination does not apply if delay is for cleaning or repairs that don’t prevent tenant from occupying the premises. So essentially what we did here was set it up such that if we can’t deliver the apartment on time because of a situation, basically exactly like what Natalie’s dealing with here we just abate the rent on a day-to-day basis until such time that that tenant is able to move in.
Andrew (00:13:58):
And if it’s a drawn out situation that goes longer than a week, the tenant, we’re not gonna hold somebody hostage while we wait for somebody else to move out. They’re more than welcome to terminate their lease and move on and find a different place. So it’s I knew I had languaged my lease, I was just trying to find it. We just went through today as part of doing the the lease update and the move out condition, sorry, not the move out condition. The move out checklist letter that we did we’re kind of going through and updating a lot of processes and those were two processes that we just updated and I knew there was something in there, so I wanted to make sure we got the correct language on that.
Josh (00:14:31):
No, that’s, that’s good. Mm-Hmm. <affirmative> glad we were able to find it. Okay, let’s let’s push forward. I’m gonna grab a Facebook question here. Let’s change it up a little bit. This one is a question from Kristen. So Kristen asks, she’s looking for some guidance. I know I screwed up. So be kind. I’m renting out a house. I require a one year lease minimum that prospective tenants tell me they want, and then a prospective tenants tell me they want a two year lease, that’s fine. We meet to sign a lease. They now want a two month lease just in case their dad buys an apartment complex. Mm-Hmm. <affirmative>, I’m not pleased, but some rent is better than no rent. So regrettably, regrettably, I agree with the stipulation. They need to give me 30 days notice when they leave. Mm-Hmm. <affirmative>, they say, they say their dog lives at their parents’ home down the road, but ask if he can come play fetch with the kids without paying the pet deposit.
Josh (00:15:30):
I say fine, as long as the dog is in a permanent fixture and does not enter the home. Mm-Hmm. <affirmative> this week I drive by and I see a dog kennel installed onto the garage. The garage. Manor Manor, yeah. Yeah. Man door and the dog is living there full-time in the garage, my repairman visits and they tell him the dog, the dog run they installed is temporary. They are putting in a permanent one later. So telling the, literally telling the repair man that they’re putting in a, a permanent dog dog home right there I’m thinking about telling them I’m not renewing their lease. It ends July 31st and giving them 30 days to vacate. I don’t wanna argue about the dog. I just feel like I’ve been, and I, not a question she got cut up here, but I think it’s just I’ve been overly kind or overly understanding about most situations with this.
Andrew (00:16:23):
I I think she’s, I think she’s right. I think that’s probably the best way to handle it. I would Well, and we’re in July now too. I think this might have been a question that was a rollover from last month.
Josh (00:16:33):
Yeah. Yeah, I think it was.
Andrew (00:16:35):
I would do exactly that. I would terminate the lease, give ’em their 30 days notice. I would also issue a lease violation letter for the dog and the dog kennel. Because obviously neither one of those are permitted. Even if you were allowing the dog to come over and play fetch with the kids in the yard or whatever, it’s escalated past that point now, right? Like now you have a permanent or a semi-permanent fixture that this dog is now using and it’s just gonna, this is gonna, those situations is just gonna continue to escalate unless you deal with it. I probably would’ve said, I probably would’ve stopped and, and pumped the brakes at the they wanted to sign a two year lease and now they wanna sign a two month lease. I probably would’ve said, sorry. No, I’m not. And from my perspective, once you somebody moves into an apartment, that apartment has to go through a turnover process when they move out. Even if it’s just cleaning and a little bit of light paint touchups, there’s still a cost to that and a time to that and to sit and screen somebody for a two month lease. I, it’s, I’m not in the business a medium term rental. So I mean, maybe other people would have a different opinion on that, but for where I’m sitting sure. It makes no sense to do a two month lease at all ever. What’s your I would not
Josh (00:17:41):
Have
Andrew (00:17:42):
Jumped into that situation. Your,
Josh (00:17:43):
What’s your thought on the tenant wanting a, what, what’s the benefit to the tenant with a two year lease?
Andrew (00:17:50):
You know, I wonder if they were, we actually have another question. I don’t know if it made it onto the list for today or not, but there was a question that was asked about a tenant requesting a three-year lease. And it’s one of those situations where, first of all, it’s state dependent. Some states actually have a maximum that you can have for a residential lease term. So that’s something you gotta look into first and foremost. A lot of times if you have somebody that knows that they’re going to be in a certain place longer term, they wanna secure their housing for a little bit more of a longer period of time kind of locking in their, their rent rate and locking in the home so that they know they have it and stuff like that. This can be a real double-edged sword though, because if you end up with a tenant from hell, then you are now locked into a long-term lease with that tenant.
Andrew (00:18:35):
And yes, you can probably find ways to get out of the lease by issuing lease violation letters and this and that and the other thing. But depending on the state that you’re in, if you have a two-year lease, you may be in a real nasty long-term situation with a tenant that you don’t wanna deal with. So I, generally speaking, don’t recommend longer term residential leases. Honestly, our leases are one year and if somebody approaches us during their lease term and they need to break their lease for something, we give some strong consideration to it because at the end of the day, the goal is for the property to be rented by paying tenant. And if we have a tenant that approaches us and says, I can’t pay the rent anymore because I lost my job, I can’t pay the rent anymore because I need to move across the country, holding that person to a lease that they’re not going to be able to afford, rather than just letting them outta the lease and finding a new tenant.
Andrew (00:19:28):
Like take the deposit, charge the tenant for the rent and security right. Until you get a new tenant in place, which is what you’re supposed to do in New York and just move on, like get a new tenant that’s going to be a performing member or a performing a performing tenant in your property. That’s the goal at all times is to have performing tenants in your, in your rental properties. So I don’t understand dragging somebody through, like even even when we get to a point where we’re getting ready for like a non-payment eviction, a lot of times we’ll give our non-payment tenants one last chance to just move out before we go that route in the form of a cash for keys. Or if you remove, you know, if you’re out by the end of the month, we’ll give your deposit back in full or whatever.
Andrew (00:20:09):
Just to try to avoid going through the, the court process and the, the whole thing. Like it’s by the time you go through and do the service and the court process and the delays and everything associated, it’s sometimes it’s two, three months before you get to a set out. Yeah. And at that point you’re better off just doing a cash for keys, getting control of your asset and yeah, it sucks. Yeah, you’re gonna pay some money, but you would be better off doing that and getting rid of a tenant that’s not going to work for you and putting a tenant in that is gonna work for you. It’s one of those things where you have to swallow your pride and there are a lot of property owners that are bad at that. So yeah, some people will do it and some people won’t.
Josh (00:20:43):
I think, I think obviously going when the tenant brings up going from a two year lease to a, to a two month lease lease, a monthly lease like that, like what happened that to me right away is something’s going on and then it’s
Andrew (00:20:55):
Such a massive red flag, like something something changed drastically in their situation.
Josh (00:21:00):
Yeah. And you know it, and it looks like Kristen was, was being nice letting him have the dog on the property, made it clear she didn’t want the dog in the property. And then, and then the tenant goes and is, is telling the repair man that, you know, they plan to put a permanent fixture right off the, off the garage for the pet. So well, and
Andrew (00:21:19):
So like ar lease, if you install, so you put a, a rack in your closet, like a really nice closet rack, technically that’s a fixture now that belongs to the house. You don’t get to remove that and take it with you when you move out, which is why most tenants don’t do things like that. Mm-Hmm. <affirmative> this exact same situation that would come into play, you now have a temporary structure that’s been built or attached to an exist structure which they intend to remove and build another new structure. How much damage are they causing to the garage that it’s being attached to? How much damage are they causing running stuff around in the yard to build this new dog? How much damage are they causing to the yard? Just having a dog that’s contained to a run that can only move back and forth, you know, 20 feet or whatever. There’s, there’s definitely gonna be some property damage on this. I would say the the fastest thing that you can do would be terminate this lease, give ’em the notice, tell ’em to get out of there and, and be prepared for them to not leave. Because this sounds like the type of situation where these tenants are gonna stay and be a real thorn in their side until you go through the eviction process. Yeah.
Josh (00:22:20):
Or,
Andrew (00:22:21):
Or until their father finds an apartment complex and they can move their dog to the apartment complex. Everybody will love that.
Josh (00:22:26):
Yeah. <laugh> Yeah. I’m interested to see what what Kristen ended up doing here.
Andrew (00:22:32):
<Laugh>. Yeah.
Josh (00:22:33):
But, alright, let’s, let’s move on. Let’s go back to the form submitted questions. Let’s do one from, let’s do this one from Mason. Mason asks, what is the best way to define guest on the lease contract and says California to protect landlords from additional residence?
Andrew (00:22:55):
Oh, gimme one second. I’m just grabbing my lease again cause I wanna see how we have it worded. And obviously I’m not in California. Their laws are California’s crazy man.
Josh (00:23:06):
<Laugh>
Andrew (00:23:07):
Guests
Josh (00:23:12):
From additional residence. Yeah. And I’m, I’m obviously, I’m guessing Mason has had an experience where, where there has been a couple tenants and they seem to have people that have been staying at the property for much longer than maybe what, what a guess would be a guess would be classified as. So I’m, I’m curious to, to see what the lease I, I remember my leases back in the day. I I can’t remember the actual verbiage on them.
Andrew (00:23:47):
Yeah. So I just popped it up on screen. Yeah, there you go. So you, so this is, this is the section of our lease where we list additional occupants. So like minors under the age of 18. And maybe if you have like an older, an older person living in the home that’s non-contributory yeah, we would put them on the additional occupants line. By no means may tenant allow any additional persons to occupy the premises beyond limit proposed by the law. Tenant agree to assume all responsibility for actions taken by any person entering the property. Landlord will hold tenant solely responsible for all damages to property or for violations against this rental agreement. Immediate family may occupy the unit for up to 30 days without penalty. And I think that that is a state statute. Yeah, actually we’ll go ahead and look to the top part of that tenant agrees to use the premises for residential living purposes only.
Andrew (00:24:31):
No business may be run from the property premises by occupied by tenant and his or her immediate family. And by the occupants listed below, that’s where these lines commit for the additional use. If person’s not listed on this agreement, occupy the premises, an additional round of $150 per occupant will be charged for such occupancy during each month or fraction of a month that the party occupies the apartment. So, and, and actually all parties are subject to approval by management. That’s a nice thing to have in there as well because then in theory we should be doing credit and background checks on anybody who’s, who’s moving into an apartment.
Josh (00:25:04):
So. Right. And then I remember, I can’t remember the actual date, but I, I believe there was specific language in my, a couple of my old leases where it was like, if it is a non-family member, they cannot, they cannot be at the residence for more than like seven consecutive days. It, it was very, it was very weird. It was a, it was a lease that I had out in Rochester. Mm-Hmm. But it was like, family members can stay for this long, which was much longer. Yeah. And then it was like, oh yeah regular and this was kind of like a, a college house lease, so mm-hmm. Maybe it, it had something to do with that. It was a little bit more specific, but yeah. Non-Family members, I think it was like, it might have been three or it might have been three days. They, they weren’t allowed to stay exceed that limit for staying over, but I, yeah, I can’t remember. That might not even be allowed.
Andrew (00:25:51):
Yeah. I think that our lease this, I think this is one of the sections that was updated when we did our lease renewal, because I remember there being a day in there like a number of days and it was shorter than 30. I know that the family thing is is up to 30 days by state statute, but yeah, they, I’ll have to go back and look at that. I wanna say it was like seven days, or 14 days is what we had written into our, our lease previously. But I would honestly, I would’ve to double check that and see what the statute is in New York. I mean, in answer, answer mason’s question, you first need to sec check your state law and find out what the guidance is in your area. And I’m sure that California has something stipulated cuz it’s the state of California.
Andrew (00:26:29):
And then as far as the language goes, I mean, I I just call them, you know, additional persons or additional parties, something along those lines. I wouldn’t refer to them as guests. I would refer to them as additional parties or whatever the case may be. And that’s, that’s how we’ve handled it. It’s really hard to prove a situation where somebody is staying for longer than what they should be. Where you have someone that’s living in a unit that is not supposed to be living in the unit, like a short of hiring someone to sit in front of the house and watch it 24 7 or putting cameras up such that you can see everybody that enters and exits the home and their comings and goings. It’s a real, real challenge to prove anything like this. And I think that it’s oftentimes a gigantic waste of time. And I understand like we do have a duty to protect other tenants in the building and we should be running credit and background checks on anybody that’s living in units and things of that nature. But this is one of those situations where it’s incredibly, incredibly difficult to truly monitor and react to a situation like that because everybody’s gonna have a story. Oh, it’s, you know, it’s just my, my friend, he’s gonna be here for a week, he’s on vacation and this
Andrew (00:27:40):
Yeah. It’s what, it’s, it’s one of those things that’s incredibly diff you could literally spend your entire life just trying to chase stuff like this around as a property manager, if you’ve got more than say 50 doors, I guarantee you if you have more than 50 doors, you probably have illegal occupants. There’s no doubt in my mind. Yeah. I’m not saying that. Like, it’s just a fact of life. It’s very easy for somebody to say, oh, you can come stay here for a couple days after a breakup, and then six months later that person is still there, but they’re not on any of the paperwork, so.
Josh (00:28:09):
Right. No, that’s a tough one for sure. All right, let’s let’s jump into a Facebook question. I like this one from Max. This was interesting. So Max ask or he says, I hired this new plumber to install a new hot water tank. Mm-Hmm. <Affirmative>, his younger helper is alone with me while he’s trying to disconnect it and tells me I don’t like an or he doesn’t like an audience, I don’t need people watching me. How would you respond that that one’s <laugh> one’s interesting.
Andrew (00:28:42):
It’s, it’s a little weird. That said, I, generally speaking, don’t stand around watching the tradesmen do their job. Like if I’m hiring somebody, it’s because I have the faith and confidence that they’re gonna go out and do the job to the best of their ability. Right. If they’re licensed and they’re insured, then I really should have no concern over their ability to do the job. Right. So I don’t, like, I don’t follow them around. Like, if a tenant is home, then the tenant can sit there and watch them if they want. But realistically speaking, I don’t know of anybody who really likes to have somebody staring over their shoulder the entire time that they’re working, whether it be being micromanaged in an office or having a customer stand, you know, in the kitchen while you’re working under their sink or whatever the case may be. Yeah. No one enjoys being micromanaged and if you hired a competent traits person, you shouldn’t have to micromanage the job. You should be able to check the after results and mm-hmm. <Affirmative> make sure that they achieved what you were trying to get them to achieve.
Josh (00:29:37):
Yeah. And this, this sounds like just maybe a little bit of anxiety for like, trying to source a first time contractor or maybe you don’t have that relationship yet mm-hmm. <Affirmative>. So it just seems like, you know, I, I’m with you. I think Andrew, I think, you know, once you trust your, once you trust your contractors and all that, like mm-hmm. <Affirmative> until they, until they prove you wrong, you know, you, you keep pushing forward. So I’d be, I’d be interested to get an update on, on where where Max is at, where Max wound up, how the hot water Yeah. How the, how the tank ended up going or if, if they Right. Continued with the job.
Andrew (00:30:09):
Well, and it’s, we’re at a point where like we have vendors that we allow to go to tenants properties when the tenants just at work or whatever, like if the tenant gives permission to enter. We have guys that we’ve been working with for so long that we trust them to be in tenant properties without one of us standing around with them. Like, we just have that inherent trust and they have insurance. So like even if something was to go down, in theory, their insurance would cover them. So in the 14 ish years that I’ve been doing property management, I think we’ve only had maybe two accusations, and both of them were discredited pretty quickly. If you’re working with reputable people, you generally speaking don’t have these problems. That said, it doesn’t take much for someone to get sticky fingers as they’re walking through a place. So I guess it’s ultimately a decision that you need to make for your business as to your level of comfort. Do you stand over the guy’s shoulder while he is putting in a new faucet, or do you let him do his job and go check on it after the fact? And Right. More often than not, we, we let our guys just go out and do the jobs that they’re supposed to be there to do. We trust them. That’s why we hired them.
Josh (00:31:16):
Right. Yeah. Okay. I think that’s good. All right. Let’s do, let’s do another Facebook one here. This question is from Andrew theoretical question. You find good tenants sign a one-year lease and the house starts off clean, new paint, new carpets, new appliances, et cetera, et cetera. Let’s say you go there to do a check in six months and the house is very Oh, and caps dirty. Mm-Hmm. <affirmative>, greasy, kitchen appliances, fingerprints on walls, et cetera, et cetera. Here’s my question. What can I really do about it if I can’t? I, I can’t call them swabs. I can’t tell them they need to hire a house cleaner. I can’t start cleaning it myself. What, what do you do about it other than not renew a lease, a lease when it runs out?
Andrew (00:32:05):
I would send them a lease violation letter and basically tell them that they are not keeping up the covenant in their lease with regards to cleaning.
Josh (00:32:16):
Yeah. Yeah. And
Andrew (00:32:18):
It agrees to keep the premises and if applicable, the basement and garage in a clean and orderly manner. And when vacating the premises, it’ll be left free of debris and in broom clean condition, including exterior and interior of all appliances, cabinets, closets. I wanna say that we also have some language in here about being a good neighbor and making sure that your place is not disgusting.
Josh (00:32:41):
Yeah.
Andrew (00:32:43):
But that might have actually come out when we did the Yeah. Tenant responsibility. Good housekeeping is expected of everyone. Tenant agree to keep quarters clean and insanitary condition. The tenant agree not to permit any deterioration or destruction to occur while they’re occupying the property. And then it goes on to talk about making sure that you take your garbage out on time and and stuff like that. Yeah. But yeah, good housekeeping is expected of all tenants and if we have a situation where somebody is, you can’t necessarily expect someone to keep their home to the same level of clean that you may keep your home to. Everyone has a different level of what they feel is acceptable when it comes to having a clean home.
Andrew (00:33:21):
Yeah. That said, if they’re in a situation where there is food left all over, there’s grease on the stove that you can scrape off with a putty knife. There’s situations where you’re gonna wind up with mice or rats or whatever because they’re simply not taking care of any aspect of the cleaning of the home. At that point, I would say, yeah, it’s time to step in and send a letter and say, you need to clean. If you don’t clean, we’re gonna terminate your tenancy and then you’re gonna be responsible for all of the cleaning that we have to do after you move out. Sometimes. Yeah. We’ll take, you know, take the, the prompt and start cleaning. Others will take that as a massive, massive insult. Most people probably fall somewhere in the middle. Mm-Hmm. <affirmative>, it’s a tough one because like I said, nobody, you can’t really tell somebody you don’t want a home to be hazardous ever, but you can’t, like, there’s a difference between clutter and filth is I think what I’m really driving at. Yeah. and clutter can be hazardous if it turns into a hoarding situation. So yeah, definitely something that you need to keep in your lease and definitely something you need to keep on top of.
Josh (00:34:24):
Yeah. Non-related, but sort of related. I remember my first ever rental property, so very, the first ever one I rented mm-hmm. <Affirmative>. I was very inexperienced as a tenant. Like, I, I was excited to get into a place, like it was a five bedroom, like three story house out in Rochester mm-hmm. <Affirmative>. And we had moved in and like the place was supposed to be cleaned by the landlord mm-hmm. <Affirmative> and have a service go in there and all that. And we got in there and the police was, police was absolutely filthy. We had to like, pull the fridge apart. There was like black, there was mold in the fridge. We had to soak, soak everything in these tubs. And, and one of the things we, we never took pictures, which is very not a good move, I would say. We never, we were so inexperienced that instead of like making a point about it, making a stink about it, it was our first property.
Josh (00:35:16):
The whole place was, was just disgusting. And I know this doesn’t really relate to the que to the question, but it just made me think like from a, I know landlords will will take their, and the property managers will take photos of the property before. Right. But like, as a tenant too, word of good advice, take photos of the property as you move in there mm-hmm. <Affirmative>, like document that, save that, and every property from there on out, I made sure I made sure that I was, I was taking taking photos and Absolutely,
Andrew (00:35:45):
Absolutely. Making sure everything
Josh (00:35:45):
Was kept how it and returned to the tenant or to the landlord and the condition that it was.
Andrew (00:35:50):
Well, and it’s, it’s staggering how many tenants don’t think to take photos. Like, if you see me walking around taking photos of stuff, you should probably be walking around taking photos too, because I’m not gonna lose my photo set. Yeah. So like, we’ve had instances where, and honestly like, I would say this happens more often than not, where we’ll have a situation where we’ll have a good set of move-in photos from when the tenant moved in and they’ll go to move out and they won’t clean. The most common things are they won’t clean the inside of the stove and they won’t like wipe it out the inside of the cabinets. Mm-Hmm. A lot of times you still find cabinets that have crap left in ’em.
Josh (00:36:24):
Yeah.
Andrew (00:36:24):
So we charge for that stuff cause you have to, somebody has to clean that stove and every single time we’ll get a tenant screaming about that stove was clean, blah, blah, blah, blah, blah. And I’ll just send ’em the inside picture from before and the inside picture from master after and say, what part of that looks clean? And more often than not yeah. They drop it right then and there. Yeah, that’s probably one of the most common things. Rip screens stoves, refrigerators and cabinets that haven’t been cleaned up. Those are probably the most common things that we see when we go in to do turnover, repairs as far as like tenant billable type stuff.
Josh (00:36:58):
No, that makes sense. But yeah, it was definitely definitely a lesson learned for me as I I think I, I’m not kidding. We might’ve spent, we might’ve spent close to like six or seven hours, like as a group of five guys getting the property to a condition where we even felt it was, it was good to go. And that was just, you know, inexperience of being a tenant. Mm-Hmm. <affirmative> and, you know, not, not great landlording, but it is what it, it is what it is. You learn from it. So
Andrew (00:37:26):
Yeah. Student, student housing, landlords get away with a lot, <laugh> a lot. A lot. Yes. It’s scary what they get away with.
Josh (00:37:34):
Yeah, for sure. All right. Let’s let’s jump back into the form submission questions. And let’s go to, let’s go to this question from Claire. If I write it in the lease as such, can fines and late fees be considered rent and therefore grounds for eviction after being given three days to cure? I have a tenant that refuses to pay late fees. For example, he said he put the rent and the outgoing mail at work, but then his colleague forgot to put the basket of letters in the mailbox. So it is not his fault, et cetera, and says, I am not, I am not paying the late fee. All
Andrew (00:38:20):
Right. So, sorry, I’m trying to scroll and see if I could find that question on my page here too. There we go. Found it. Confines and late fees be considered rent and therefore grounds for eviction after being given three days to cure. It’s gonna depend on your state. Different states have different rules and what can and cannot be considered additional rent. So that’s something that you’re gonna want to talk to. Probably an attorney that knows landlord tenant law in your state to get the true answer on that. Cause we don’t have a state listed here, so I’m just not sure Yeah. What state you’re in. So if you are in a state where, you know, late fees and damages and fines and things like that become additional rent, that’s a really good position to find yourself in because if they don’t pay it, then they haven’t paid their rent and you just start a non-payment eviction.
Andrew (00:39:05):
So I would say if you’re in a state where that’s allowable, that’s a, a good position to find yourself in. And you need to make sure that your lease stipulates that these things can be considered additional rent, whether it be a late fee or damages or whatever it needs to be in your lease, such that unless it’s in state statute, it needs to be in your lease such that, you know, if this late fee goes in after three days, it becomes additional rent, whatever the case may be. So the way that we are set up with our lease, essentially we apply our, the payments that come in to the oldest charge on the ledger. So if somebody didn’t pay their may rent and it’s July and they make a rent payment, it’s not going on their ledger for July, it’s going on their ledger for May, because that’s the oldest possible charge.
Andrew (00:39:50):
Same thing with late fees. So if somebody sends me their may check in July, they now have may, may late fee June, June, late fee July, and today’s July 17th. So July late fee mm-hmm. <Affirmative>, we’re going to apply that rent check to May. So now they send us a check for June. Okay. Right. We’ll say that it’s mid-July, they send us their check for June, or they send us another, they send us another rent check. We’re gonna apply that for first to the may late fee, cuz that’s the oldest charge and then to the June rent. So now they still have a remainder on their June rent plus their June late fee plus all of July. So it always applies to the oldest possible charge on the ledger moving forward. Right. And more often than not, if you have like a repair charge or something like that that’s getting thrown in the mix then you are going to be in a situation where you have a month or so of unpaid rent and at that point I would just start the nonpayment eviction. Yeah. But yeah, that’s definitely one that you’ve gotta look into your state statutes on to see if they allow for, whoops, see if they allow for the conversion of charges to additional rent.
Josh (00:40:56):
Yeah. Good. All right, let’s go.
Andrew (00:40:59):
And also to the, oh yeah, before we jump away from that, you had mentioned he said he put the rent in the outgoing mailbox at work, but then his colleague forgot to put the basket of letters. Listen, it’s your responsibility to make sure your rent is paid. Right. So if somebody mails rent, we go by the postmark date on the envelope. But if somebody, you know, is, is making a rent payment online or whatever the case may be, it’s the, that the payment was made. So if you mail something and you mailed it late and it didn’t get postmarked until after the rent was due, you still owe that late fee. You know, we’ll take it back as far as the postal date, the postmark date, because that’s when it’s out of your hands essentially. Right. but it’s still, still considered due if your late fee, I’m sorry, it’s, you’re still going to get a late fee if you end up mailing it on the sixth or seventh of the month for instance.
Josh (00:41:46):
Yeah, that makes sense. Okay. Let’s do another Facebook question. This one is from, or this is a form question actually this one is from s Shah. All right. So Shah says, my tenant is very rude to speak with while I try to be as objective slash respectful as I can. He has on one or two occasions paid the rent late. Everything is paid so far a hundred percent. The property is being used very aggressively and there is some damage due to that reason so far. The cost of repair would be close to one month’s rent, but I made the mistake of leasing for 22 months. So they have one more year. I have also incurred a cost of about $200 so far for the copay on my home warranty service request as they had put a loose screw into the garbage disposal and flooded the bathroom on another occasion. Police explicitly states that the owner is only responsible for wear and tear repairs, but I did not pursue this, but I did not pursue this. Mm-Hmm. I strongly believe they would not pay the last month’s rent and ask me to adjust the security deposit strictly prohibited by the lease. My intent is not to open a costly legal battle and let the lease expire, at which point I will sue them for all the repairs and charge them in a fair and honest manner after getting the home checked out.
Andrew (00:43:25):
So there’s a lot in here.
Josh (00:43:29):
Couple, there’s a couple things going on in here.
Andrew (00:43:30):
There’s a couple things going on in here. So if a tenant is causing, we’ll start with the first one, which is the property being used very aggressively and there being some property damages, a result if a tenant is causing damages to your unit, repair the damages and send the tenant a letter indicating that they’re now responsible for the cost of that repair. Yeah. every state’s a little bit different as to how you go about, you know, back billing a tenant and you should definitely have something in your lease that allows you to go back in and back bill a tenant, kinda like what we were talking about with the additional, additional rent in the previous question. More often than not, that’s, that’s the way that it works, is any damages caused by tenant are converted into additional rent and applied to the tenant ledger. At
Josh (00:44:11):
Point. So would the bathroom flawed? Would the bathroom flood or the garbage disposal be considered wear and tear repairs?
Andrew (00:44:17):
No. Neither one of those would be wear and tear. Not by, not from the information presented to me by the sounds of things here. Putting a loose screw into a garbage disposal if they were the ones who dropped the screw in there, it’s no different than dropping a fork in the garbage disposal that’s a tenant caused might have been an accident, but it doesn’t mean that it wasn’t caused by the tenant. Accidents happen each and every day. People get in car accidents all the time, doesn’t mean that they went out that morning and intended to slam into the back end of somebody at a stoplight mm-hmm <affirmative>. But it does mean that they’re responsible for the cost of that care. So that’s probably what I would do. I would charge the tenant for the repairs and explain to them, look, you guys caused this.
Andrew (00:44:56):
You flooded a bathroom which caused damage to another unit, you dropped something into the garbage disposal, which required me to send a service person out and you’re gonna be responsible for those costs. Made the mistake of leasing for 22 months. We just talked about how sometimes long-term leases can be a headache. And this is exactly what I meant when we were talking about that. Home warranty service requests home warranties are garbage. Get rid of it as soon as you can. I don’t like home warranties. I think they’re garbage. And especially in a landlord tenant situation, I think they create a lot more problems than they solve. The lease explicitly states that the owner’s only responsible for wear and tear repairs. Again, none of these are wear and tear, kinda like what you and I had just said there. And she should have pursued it at the time.
Andrew (00:45:39):
So depending on the state, and depending on what the rules are, you may or may not be able to pursue the tenant for those damages after the tenancy depe I, there might be a statute you can only charge for X number, you know, period of time or whatever. But my my thought process here is that based on what we’re seeing, the information that we have in front of us here, I’m willing to bet that the tenants are probably going to try to use their security deposit towards their last month so that they can use that money toward the rent money they would’ve been paying for rent towards the security deposit on their next place so that they can get out as far as pursuing them after the fact. You can go that route, you can go small claims, you can go civil court if, depending on how much damage there is and stuff like that.
Andrew (00:46:20):
Again, depending on your state, it may or may not be worthwhile in New York state, you’ll get a judgment that’s valid for some against somebody for about 10 years. And I believe you can also renew the judgment for another 10 years after that, which, you know, if you have $10,000 worth of property damage Yeah. I would say it’s probably worth, probably worth pursuing at that point. Yeah. If you have a couple hundred dollars worth of property damage, you’re gonna spend more time and more money just trying to get through the court process than you are actually likely going to collect on that judgment. And by the way, a judgment doesn’t mean they’re gonna pay you. It means that you have a piece of paper that says that they owe you money. That’s it. That’s all. You could sell your judgment maybe to a collection agency or something like that. There are some out there that will buy money judgments, but oftentimes they require a lot more background paperwork and stuff like that. So that’s, you know, another, another story for another day.
Josh (00:47:09):
Yeah. Okay. Let’s let’s do this one. It’s a Facebook question from Lenny Te child left sink running on full blast and it flooded the apartment below. Mm-Hmm. <Affirmative> professional water damage company came in and set up commercial dehydrators $650 contractors coming in to put in drop ceiling by plaster ceiling collapsed and new flooring, no price yet. My insurance adjuster said that my deductible is so high, $2,500 that this claim might not be worth submitting. So do I submit the entire cost of the tenant upstairs? I can’t go after his insurance company. Only my insurance company can do that.
Andrew (00:47:57):
I’m surprised that the insurance adjuster is saying that it might not be worth submitting, cuz it sounds to me like this is way more than $2,500 worth of work. Yeah. if the dehydrators were $650 a loan, like
Josh (00:48:11):
Right.
Andrew (00:48:11):
I, I know enough about construction to be able to say that this is going to be well over $2,500 worth of work, depending on how big of an area was impacted by this water damage and, and stuff like that. But Well,
Josh (00:48:21):
You’re, you’re doing those and the, the ceiling collapsed the
Andrew (00:48:24):
New floor. Right? The ceiling the floor, like you’re gonna be well over two $2,500. If your tenant has renter’s insurance, your insurance company should automatically be trying to go after the tenant’s renter’s insurance policy. Yeah. If the insurance company determines that the tenant was the root cause of the issue, then they honestly should be trying to go after the tenant. Even if the tenant doesn’t have insurance, I don’t know how many insurance companies will actually go ahead and pursue something like that. But I could see the, I could see the property owner’s insurance not wanting to pick up the tab on this because it wasn’t, it was caused by a tenant, so. Right. That might be why the insurance adjuster is trying to kind of push this, push this to the, the tenant side of things. But realistically speaking, if the tenant has renter’s insurance, their renter’s insurance should be picking up, picking up the cost of this, I would think.
Josh (00:49:13):
Yeah.
Andrew (00:49:14):
I would say this is definitely, like, this sounds to me like it’s probably in the area of 7,500 to $10,000 worth of damage without breaking a sweat. Depending on if there’s walls that need to be open or if there’s any buckling in the floors or anything like that, that needs to be corrected. This is gonna be way more than 2,500 bucks for sure.
Josh (00:49:30):
I think so. Oh yeah. I think so. Okay. Let’s do, let’s do this. One question from Kim. A couple signed a one year lease in February. He moved out in May. She’s been able, she’s been able to manage rent until now. July was nine days late, but she paid in full, including late fees. Her mom is going to move in into help her background, check her background and application. Of course, the question is, should I just add her as an additional tenant to the original lease or do a new lease for the mom and daughter, and how do I handle the security deposit refund since the girlfriend isn’t moving?
Andrew (00:50:17):
All right. So she’s been able to manage the rent. July was nine days late, late, but she paid in full, including late fees. Her mom’s gonna move in,
Josh (00:50:27):
But the couple didn’t break. They didn’t break up or the, he moved
Andrew (00:50:32):
Out in May. It doesn’t whether
Josh (00:50:34):
He did move out,
Andrew (00:50:35):
Whether or not he’s signed off on the lease yet or not, though she’s able to. Okay.
Josh (00:50:40):
Right
Andrew (00:50:40):
Now. So if there’s a couple different ways that you can do this, if he’s still willing to sign paperwork I would say that the proper way to do this would probably be, terminate that lease in its entirety and then refund the security deposit, however you need to do that in your state, and then collect a new security deposit from mom and daughter and just start a new lease with them. Okay. Having the mom as an additional tenant to the original lease, he still has rights to the property. Yeah, and I think that that’s probably what they’re trying to eliminate. The only way to eliminate the rights to the property is to terminate that original lease with him. And everybody goes their separate ways and you start a new lease or he needs to sign out of the existing lease and mom night needs to sign into the new lease an ad drop kind of a situation, which that’s an option too. But in this situation, I would probably, I would probably just make it a, a fresh lease.
Josh (00:51:35):
So you would, you would do the full security deposit. You wouldn’t do, you wouldn’t do partial. You would give the full thing, get it back to clean even, and then collect another one from the new, the new tenants in the property, essentially.
Andrew (00:51:47):
That’s probably the easiest way to handle security deposit situations. Like, like this is the most common question that’s asked in the rent prep groups about how do I handle security deposit when somebody moves out, but somebody else is staying in the unit and we basically tell, it’s like written into our leases and on everything else that whoever is living in the unit at the time of move out is who we’re refunding the deposit to. We do one check to every party that’s written on the lease and everybody needs to sign it, and you guys can figure it out after the fact. Right. we’re not gonna sit and say, this person’s getting a hundred, this person’s getting 500, blah, blah, blah, blah. We’re not, we’re not doing that. Yeah. in this instance with the original tenants having a security deposit, I think the cleanest way to do this would be cut a two party check to the girlfriend and boyfriend, and then get a new deposit in from the mother and daughter and pursue it that way.
Andrew (00:52:43):
Yeah. There are other ways of doing it. I’m not saying that this is necessarily the be all end all way of doing it. You also have to check your laws and your state to make sure that you’re, you know, handling the deposit the way that you need to. But realistically speaking, I think the cleanest way to handle this situation would be a full move out of the, basically the daughter, the boyfriend and girlfriend, mom and daughter now sign a new lease with mom and daughter on it after mom passes the credit and background check and they go through that process. I think that’s the cleanest way to make it work from a paperwork standpoint.
Josh (00:53:15):
Yeah, I think so. All right. Let’s do, let’s do another form submission question from David. I have a property in Minnesota with a soon to be tenant lease signed, but not moving in until August. That asked me about having a long-term guess at least three months that would be there shortly after they move in. I already told them I’d want them to sign a, the guest to sign a lease, a denim outlining the term and their stay abiding by the lease, et cetera. I’m wondering if it’s reasonable slash legal for me to charge a long-term guest fee for this, primarily to cover my time to create an addendum, cover, increased water, sewer costs, potential, additional wear or tear on the unit. Also, is there anything else I should be considering at this? I wanted to do this one because we mm-hmm. <Affirmative>, I feel like we talked a little bit, we were talking for, I don’t know, 10 minutes on what, A few minutes. Yeah, I guess. Yeah.
Andrew (00:54:10):
Well, and this is, this is a good example. This is a situation where this is gonna be a long-term guest. I would probably have some kind of an addendum. They would definitely need to do credit and background checks with us. And I think that it’s appropriate to charge a little bit extra on a monthly basis for the duration that that guest is there because you hit the nail on the head. There is additional wear and tear, there’s certainly additional water and sewer usage. And if that’s an expense or other utilities, you know, whatever utilities are on the, on the landlord, that cost is going up because there’s another body in the, in the unit using those resources. So I don’t think that it would be, I think it would be very appropriate to charge a little bit extra on a monthly basis.
Andrew (00:54:49):
Yeah. I can tell you that our lease stipulates that if we find an un unknown occupant like we were talking about the use earlier where I was showing that piece of my lease, we charge, I believe it was $150 for every month or portion of month where the unknown person was living in the unit. So there’s a, a penalty there. And with the penalty being 150, I would say that the increase in rent should be less than that because it encourages people to go the right path. It encourages people to actually go through the process of having the tenant screened and added the lease legitimately. Right. You know, so that the process is done correctly. As far as how much should you add, I think that’s gonna be market dependent and I think it’s gonna depend on what utilities you have included with the rent, what appliances you have included with the rent and things of that nature.
Josh (00:55:39):
Yeah. No, I, I think David did a nice job with, with just how he, he started to handle this.
Andrew (00:55:46):
Yeah. I think it’s very reasonable. I don’t think that he’s asking for anything unreasonable there. And I think that the, I think that’s something that the tenant would understand. Like there’s more wear and tear and more usage in the unit. There should be at least a, yeah, I’m not saying it needs to be a huge amount, but you should have some sort of compensation for that.
Josh (00:56:01):
Yeah. The properties are, properties are priced and prepared and for the number of occupants that are, that are supposed to be inhabiting, and I’m not, you know, if you have a guess, like, like you said, like he hit the nail on the head, there’s gonna be wear, additional wear and tear, there’s gonna be an increase in the water. There’s gonna be, you know, additional charges, so mm-hmm. <Affirmative>. Yeah. You gotta find that sweet spot and you’re right. Market dependent on, on what that increase would be, but you know mm-hmm. <Affirmative> still fair enough to encourage, to encourage, tends to go about it the right way. Mm-Hmm.
Andrew (00:56:31):
<Affirmative>, we’re coming up on the end. I know we’ve got a couple more minutes left here and I wanted to hit this question from Van Dale and I hope I’m pronouncing that correctly. I apologize if I’m not simply because he is been super, super active in the rent prep group lately and I wanted to acknowledge that and I wanted to make sure we got his question up on the screen. Cause I think he had one last month that did not get asked. So do you have that one up or you want me to
Josh (00:56:53):
Sorry. Yeah, sorry, I was muted. Give me, oh, <laugh>. I was muted. I, all right, here we go. I think it does it start with, we have, we have all, okay. Question from Vande. We have all of our rental qualifications documented on our website as well as all advertising. We do mm-hmm. <Affirmative> and we do a pre-screen before viewing the property. However, we still have unqualified people that don’t read and apply for the unit anyway. As part of our screening process, we have a policy that every application that is submitted to us requires a $55 fee for the background check via REM prep. This fee is collected when the application is submitted. And I’ve been screening people for a while now, and sometimes I can just tell by looking at an application that the applicant isn’t qualified. Example, I know you don’t make three times the rent working part-time making minimum wage. Is it still appropriate to charge the applicant the fee even though I know they don’t qualify based on their answers? Currently, I process all applications no matter what through rent prep. There are no refunds. My intention of this policy is so everyone is treated equally and I can’t be accused of discrimination. Is this the best process?
Andrew (00:58:04):
Not only is it the best process, I wish everyone would listen to what he’s doing. Yeah, it’s absolutely the right process. I’m gonna tell you what a fair housing attorney told me a couple of years ago that stuck with me. If you don’t treat everyone exactly the same, that is when you were opening up the door to discrimination.
Josh (00:58:22):
Yeah.
Andrew (00:58:23):
So there’s two parts to this, and I, we talk about this all the time cuz Rent Prep is a tenant screening company and I hate to beat a dead horse, but here we are. Tenant screening is a snapshot in time and there’s nothing that says that someone doesn’t lose their job two days after you approve them for a rental property. Tenant screening is a snapshot in time. That’s a true story. And it happened to me. Yeah. Literally happened to me. I signed a lease and two days later got laid off from a job. Tenant screening is something that should be done every single time on every single applicant, and it should be the same process. Each time you have written criteria, you have them on your website, you’ve fully disclosed to these people what they need to do to qualify for the apartment prior to applying.
Andrew (00:59:07):
If they choose to apply for an apartment, knowing that they don’t meet the criteria which are freely available on the website. As a matter of fact, we actually have people sign off on the criteria before they continue their application just so that there’s no question of, well, I didn’t know that. Well then you didn’t, you didn’t, you signed something you didn’t read. Yes. Treat, treat every single application the same. If somebody wants to apply for an apartment, you hand them an application or you give them the link to your website no matter what. Even if you know, they’re not gonna qualify because it’s on them to decide if they want to make that application. It’s on them to decide if they wanna spend that $55. And if they are not following the criteria, like if they don’t meet the criteria and are still willing to go through the process just to get a denial, then that’s on them.
Andrew (00:59:56):
Yes. It’s definitely, it sucks. Like, none of us want to do that. And I hear a lot of people complaining that every time they turn around it’s $20, $20, $20 for a credit and background check, and then they never get any response. And I have a feeling that more often than not, it’s because people are not spending the time to read the selection criteria, assuming they’re posted. I know a lot of landlords don’t security through obscurity is, is the method that a lot of people need to take <laugh>, which is gonna wind up, it’s gonna, it’s gonna wind up with them in a fair housing lawsuit. It’s just a matter of time. Yeah. But yeah, having a set of written criteria and following that written set of criteria every single time on every single applicant, assuming that your criteria are fair housing compliant will keep you safe.
Andrew (01:00:39):
If your criteria are garbage, it’s garbage in, garbage out, it’s just programming. If you have bad criteria that aren’t fair housing compliant and you use those fair housing, those, those non-compliant criteria, you can open yourself up to a fair housing lawsuit. It’s pretty straightforward. So, but yeah, I think that, looking over the question again they have a policy, every person has to submit their application. Everybody over 18 has to pay that fee. I don’t know what state they’re in. Some states do regulate the amount that you can charge, but from where I’m at, everything that they’re doing is, is a hundred percent correct. And it’s very, very similar to the process that we follow here at Own Buffalo.
Josh (01:01:16):
Yeah. Well, good.
Andrew (01:01:19):
So I think that was our last one, right?
Josh (01:01:23):
Yeah, we got 2 0 2 Eastern.
Andrew (01:01:26):
Nice. So very good.
Josh (01:01:30):
Yeah. I thought that was a fun one. It felt quick. That one,
Andrew (01:01:33):
It did feel quick actually. I was kind of surprised by that. I, I thought that when I was looking at the questions earlier, I was like, oh man, some of these are gonna be real tough. But I’m glad that they were not as rough as we thought they were gonna be.
Josh (01:01:47):
Yeah, a lot of I feel like the, the themes from today were guests having guests in your rental property and how long can they stay and what are the, what are the legalities with that? And then I mm-hmm. <Affirmative>. I think the other theme was probably damage. We Yeah. Feel like we had, I feel like we had six or seven questions today about damage and who to charge and where, how can it be included in, can it be included in a rent payment and all that kinda stuff. So
Andrew (01:02:16):
Yeah, definitely a little bit different set of questions than what we typically get. Yeah, definitely. Interesting though. There’s always, there’s always something new to learn in Landlording and property management and realist. I learn something new every day. Every single day there’s something new to learn. And I think that a lot of people feel like they get to a point and they can just stop and be like, no, I’m done. I’ve, I know everything I need to know. And that’s just, it’s never the case in real estate. There’s always something changing. There’s always something new to know.
Josh (01:02:42):
Yeah. And talking, just talking through the different, there might be a common answer, but just the different scenarios and the different stories that we get submitted to us mm-hmm. <Affirmative> to try to arrive at that. Yeah. To try to arrive at that. You know, the most effective solution is like, okay, like, all right, I’ve heard this before. We, this is probably where we need to go. Like, and just kind of talking through it is, is good practice.
Andrew (01:03:05):
Well, and what works for one person in one, one person’s area may not work at all for another person in their area. Yeah. It’s a situation where every market’s a little bit different. Obviously every state has different laws, so even something that we present here may not work for you in your situation or may not work for you in your state, which is why you kind of have to spend some time doing research above and beyond on almost every topic.
Josh (01:03:28):
Yeah, for sure.
Andrew (01:03:29):
So before we jump outta here, I did bring up the rent prep YouTube page. There were a couple of videos that I just wanted to highlight here in case people haven’t had an opportunity to check them out yet. The first one that I wanted to mention is this first look into a foreclosure. This was a video that I put together based on one of the banks that we work with. We just had a new foreclosure assignment, and that is a true first look at a foreclosure. I hadn’t even been through the place yet and basically walked through with my camera and recorded exactly what you see as a real estate agent the first time you walk through one of these, these foreclosure assignments for the first time. So you get to see kind of the nitty gritty there. And that one actually wasn’t too bad.
Andrew (01:04:06):
I’ve been in some, some real nasty ones. That one wasn’t too bad. <Laugh>. and then there’s a video that we posted about a month ago on top rental calculations. Landlords should know this is a nice one. And it’s actually going to have a companion video coming out in the next couple weeks on how to analyze a rental property. And that’s gonna get into, we actually introduce a spreadsheet that I’ve been using for, I’m gonna try to read this before cash. There we go. We introduced a spreadsheet in this one that I’ve been using to analyze rental property for a long time now. And the companion video to this goes into a lot more depth on how to actually decide whether or not the property that you’re looking at is a good property that’s worth the investment or something that you need to turn around and run the other way from. Because I feel like a lot of investors don’t have a clue when they go to make offers and it can really turn around and bite ’em.
Josh (01:04:54):
Yeah, I know we I know we included some of the top calculations in the REM prep for Landlords newsletter that goes out weekly on Tuesdays, which you can sign up for on the REM prep website all over the place. There’s different areas where you can sign up for it. I know we included that one of those posts in the newsletter and you had already gotten, I know within the first like hour or so of, of sending that out, you already had a bunch, a boatload of requests for, for the calculators and, and those tools. So we’re glad that, we’re glad that landlords are finding it, finding it useful.
Andrew (01:05:28):
Mm-Hmm. <affirmative>. Yeah, definitely. And it’s, it’s a free tool as well. Like it’s worth noting that there’s no charge for that. It’s one of those things that I developed it because I had a need for it. I basically have been tweaking it over the years as I’ve needed to, to, to add things or to make it a little bit better here and there. And yeah, it takes about five minutes to really do an analysis on a rental property once you know what you’re doing. And that video will take you from not knowing the first thing about cap rate to understanding what D Dscr R is. So it’s a, it’s a good video to, to take a look at for sure.
Josh (01:05:59):
Cool.
Andrew (01:06:03):
All right. I think that’s pretty much I think that’s pretty much it for this month’s AMA session, right? Josh
Josh (01:06:08):
Did that. That is it. It is, it is already the end of July, middle to end of July. Mm-Hmm. <affirmative>. So we are, we are almost coming back around to August. And then before you know it, at least for us up in the northeast, we’ll be, we’ll be getting back into the fall in the, in the colder weather.
Andrew (01:06:26):
I’m not interested <laugh>, I listen, it’s, it’s like 82 degrees, 82 degrees here today, which is nice. Like, that’s a nice summer day here in Buffalo. I’m not looking forward to snow again. Like, no, I’m not gonna lie, that Blizzard last year where we had seven foot of snow really took a lot out of me. I’m not looking to get back to that time of year.
Josh (01:06:44):
<Laugh>. Well, well still got a couple more AMAs until then.
Andrew (01:06:48):
Yes, exactly. So on that, on that note, everyone join us for our September. Nope, we’re still in July. Join us for our August ama and actually I can pull up the date of that real quick if
Josh (01:07:00):
Yeah,
Andrew (01:07:01):
I think I have that. We think we scheduled that already, didn’t we? Josh?
Josh (01:07:04):
Yes. I believe,
Andrew (01:07:06):
Let’s see here.
Josh (01:07:07):
Might be middle of August.
Andrew (01:07:09):
It’s mid August. It’s the 21st, so it’s gonna be on August 21st. That’ll be at noon. Nope, at 1:00 PM Eastern Standard time. And then obviously the replays go live after that and you can watch the replay after the fact. Other than that though, make sure you guys are checking out the podcast. Check out our YouTube channel, check out our newsletter, check out the Rent prep for Landlords Facebook group. If you haven’t checked that out already. Check out rent prep.com when you need tenant screening. Yes. Is there anything else that we, that we, that we didn’t mention?
Josh (01:07:38):
<Laugh>? No, you can, you can follow us on social media. We’re on, we’re on Twitter, Facebook, Instagram. We’re on LinkedIn too. But yeah, I think that’s, that’s all the <laugh>, that’s all the different areas. Maybe it’s all the different areas that we’re at.
Andrew (01:07:54):
There will be a new one by next month anyway.
Josh (01:07:56):
I’m sure there will be.
Andrew (01:07:58):
All right everybody. Thanks for, thanks for joining us today. If you got some value out of this, do us a favor like it and share it with a friend or family member that can get some value out of it as well. That’s how we grow and that’s how we get to educate more and more people. I’m Andrew Schultz with rent prep.com for Josh Ro Josh, I’ll talk to you next month and thank you everyone for listening.
Josh (01:08:15):
Yeah, thanks Andrew.