Podcast Host, Andrew Schultz, chats about returning security deposits to tenants, including when to keep the deposits and when to give them back.

We’ll also give you tips on what to include in a tenant reference letter, also known as a landlord recommendation letter.

Last, but not least, we’ve got one story of a landlord who was experiencing an issue with the neighbor’s dog doing its dirty business on their property. Listen to our latest podcast to hear the rest of the story and more!

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Resources Mentioned on this Episode:

• https://www.reddit.com/r/Landlord/comments/o0fzdu/landlord_usca_should_i_include_pet_violation_in/
• https://www.reddit.com/r/Landlord/comments/nyxe7z/landlord_us_il_tenant_not_returning_keys/
• https://www.reddit.com/r/Landlord/comments/nyj5vo/landlordtx_neighbor_was_bring_his_dog_into_my/

Show Transcription:

Andrew Schultz: (00:00)
Hey everyone. Welcome back to another episode of the Rent Prep for Landlords podcast. This is episode number 359, and I’m your host, Andrew Schultz. On today’s episode, we’re going to be talking about what to include in a tenant reference letter. When you should return a security deposit and neighbors who use your rental property for dog duty, we’ll get to all that right after this.

Voice Over: (00:23)
Welcome to the Rent Prep for Landlords podcast. Now your host, Andrew Schultz.

Andrew Schultz: (00:28)
Before we jump into today’s episode, don’t forget to check out the Rent Prep for Landlords Facebook group. It’s a great free resource for you to network with housing providers from around the country. And if you have a question or a situation that you’ve never dealt with with over 12,300 members, chances are someone in the group has been there before and can lend a helping hand given check that out yet. Do it today. Over at facebook.com/groups/rentprep. Don’t forget to mention the podcast when answering the questions. So we know how you found us

Voice Over: (01:00)
Quorum Forum, where we scour the internet for ridiculous posts from landlords and tenants.

Andrew Schultz: (01:08)
This week’s forum quorum comes to us via the landlord subreddit. And this one is all about tenant reference letters. Let’s go ahead and jump right in here. My tenant requested me to write a reference letter and I was wondering if I should include that she violated one of the rental agreements regarding having no pets on the premises. She pays her rent on time and has a good tenant and other aspects, but she did lie about giving away a stray cat and ended up living with the cat for several months until she got caught. Should this be included in the letter? So this is actually a pretty interesting question because there’s a couple of different ways that you can look at it. Um, the first thing that I would mention is we never actually give a tenant, a reference letter. We always tell them to have their landlord contact us and we’ll provide a reference for that landlord.

Andrew Schultz: (01:49)
We also require anybody calling us for a reference from a tenant, require them to provide a signed release, signed by the tenant, authorizing you to provide that information. Uh, and the reason that you want to do that is because if you don’t have that signed release from the tenant, they could turn around and say, I never told you that you could talk to anybody about my tendency, this, that the other thing, cover your butt and make sure that you have a copy of the signed release from the tenant, authorizing you to provide information to a third party on their behalf. Um, that said, I will say that we ask a lot more questions than we’re willing to answer on our tenant screening. Excuse me. On our landlord verifications. We ask a whole bunch of questions we ask. When did they rent the property? Do they still live?

Andrew Schultz: (02:30)
There was the applicant’s name on the lease. What was their monthly rent? Was it on time? Were they late? Did they ever bounce a check? Why did they move? Did they give proper notice? Was the unit kept clean? Did they get their security deposit back? Did they have any pets, any sorts of neighbor complaints? Did you have to serve any sort of legal notice or eviction notice? Did they pay their own utilities? Would you rent to them? Again is actually one of the most critical questions that we ask. And then we ask for any additional information that they want to give us. We ask a lot of questions and we will not provide nearly that level of information on a reference when we’re providing one. When we provide a reference, we will give them the information on when did they rent the property? And if the tenants still living there, if they were named on the lease, we’ll answer questions on what their rent was and whether it was paid on time or not, or how often they were late.

Andrew Schultz: (03:21)
And then we’ll answer questions on any pets that we know of. And then we’ll answer the question. Would you rent to them again? We won’t answer any questions that get into a territory of opinion-based questions, I guess is probably the better way of putting it. We want to work from factual information, not from someone’s opinion, essentially. So we won’t go ahead and answer any questions that are effectively an opinion-based question, because we don’t want to, for lack of a better term, overexpose ourselves by answering questions that are open to interpretation, we’ll answer questions that we can provide a factual reference to because at that point, if somebody ever came back to us and said, well, you said something that wasn’t true. No, it was true. And I know it was true because I can verify it against your tenant ledger or whatever the case may be.

Andrew Schultz: (04:08)
It keeps you out of an area where you’re providing information that somebody else can misinterpret. And the one thing that I would say is don’t overstate anything that you don’t have to provide the information that you need to provide, just the information that you need to, and don’t overexpose by providing more information than you’re technically required to. That would be how I would handle any sort of a tenant reference, especially in today’s society, where it seems as though the tenant selection criteria are tightening up more and more. You really have to be on top of this to understand what you should and should not say when you’re offering up these tenant references. The one thing I will say is while you shouldn’t be overexposing yourself on providing any sort of a tenant reference, you also shouldn’t lie when performing a tenant reference, because really all that does is just makes everyone one else’s job more difficult, and it makes the entire process that much less trustworthy.

Andrew Schultz: (05:00)
There are some landlords that are moving away from landlord verifications altogether, for now, we’re going to stick with it, but that may change down the road. You know, it just seems that the, if you can get factual information, I think that you’re working from a good spot, but if you have a tenant reference that is coming back with all kinds of opinion information on it, you know, you really have to analyze that and say, does it really make sense to trust the information that I’m being provided here? So that’s something to keep in mind, but again, please don’t lie on these references because there are other people in this process that are trusting your information to make decisions. And if you’re providing false information, it really does just make everyone else’s job that much more difficult. So please be truthful when you’re providing a landlord reference.

Andrew Schultz: (05:43)
You don’t have to sit there and overexpose, but just make sure that you’re providing truthful factual information. And there’s really not much of a way that you can get in trouble. At that point. I have heard some landlords come back and say, well, I’m concerned that if I don’t tell the person who I’m giving a reference to exactly what happened, that they’re not going to understand, and that they’re going to make a bad decision. Trust me when I tell you that when you say, oh yeah, the tenant paid their rent on time every month and they were never late, but you would not rent to them again. That’s enough to get somebody to kind of read between the lines and realize, okay, there’s more to the story here. Obviously, this person’s not going to tell me, but I understand that there’s something more that’s going on here. So that’s, that’s one of those reasons that we will answer the question. Would you rent to them again? Because we think that that’s a very good indicator of the overall situation, but it’s definitely a situation where you want to be cognizant and conscious of what it is that you’re saying. When you provide these references water

Voice Over: (06:40)
Cooler wisdom, expert advice from real estate pros.

Andrew Schultz: (06:48)
Our water cooler wisdom this week also comes to us from the landlord subreddit. This one’s all about security, deposits, and possession of an apartment. Let’s go ahead and take a quick look. Hi everyone. I need some guidance. Am I wrong? Or is my tenant being unreasonable? The tenant is vacating the home on June 30th. And he is saying that after a walkthrough, from a qualified professional, where we all agree on the results of the inspection, that we will return the security deposit and the tenant will hand over the keys. The contract says that we were to turn the security deposit within 45 days. My position is that we will do a walkthrough and see if there are any defects, get a quote, and then return the deposit after deducting the charges as per the contract. Should I hire an attorney to get the keys back? So I’m going to start this one off by letting you know that your tenant is being completely unreasonable.

Andrew Schultz: (07:36)
Follow the laws in your state regarding a security deposit disposition. And I would ignore this request altogether unless you’re in a state that requires you to perform the inspection with the tenant. That would be a little bit different set of circumstances. But if you’re not in a state that requires the tenant to be present when you do the move out inspection, I would not have the tenant there because you need time to walk through the unit and you don’t want the tenant kind of in your ear the entire time saying, oh, it was like that. When I moved in this, that the other, you want to have time to walk through and really assess the unit is basically what I’m trying to say there. So if they refuse to hand over the keys to the unit, you have to check your state law and see if that means that they’re still in possession of the unit and have now become a hold-over tenant.

Andrew Schultz: (08:18)
If that’s the case, then guess what that month’s rent is now due. And you can move on into the eviction process where they certainly aren’t going to be getting any sort of a security deposit back. Once you have that conversation with a tenant, chances are they’re probably going to change their tune at that point. Um, and then my other thought was who is determining what a qualified professional is in this instance, are they saying that they want a licensed contractor to come through and do this inspection or a home inspector, and who’s supposed to pay for that, by the way, I would consider you as the landlord to be the qualified professional here. Uh, I don’t know of any state that requires a third-party post-occupancy inspection. If there’s one out there, let me know. Cause I would certainly be interested in digging into that, but I don’t know of anybody that requires a third-party post-occupancy inspection in order to clear up a security deposit.

Andrew Schultz: (09:06)
I will say that in this instance, you need to make sure that you follow the security deposit, disposition rules to a T on this, whatever the rules are in your state, this tenant sounds like they would be willing to argue pretty much any and every security deposit deduction. So I hope that you have a good set of moving photos to compare everything to as well. But yeah, I would definitely say that in this instance, it does not sound to me as though your tenant is being reasonable or understanding of how a move-out process works. You can point back to your lease and hopefully, in your lease, you’ve specified actually it, you said in the, in the question that you specified in your lease, how the process works, you would probably be in a good position to point them back to their lease at this point and say, look, I understand where you’re coming from, but that’s not how we do business.

Andrew Schultz: (09:51)
Please refer to your lease the section on security deposits, which clearly states that your deposit is going to be returned to you within 45 days after move out. And at that point, I would look to see where the situation goes from there. But yeah, that’s the one thing that I had thought about is if the tenant is refusing to hand over keys, you definitely want to double-check your state law and see if that means that they’re still in possession of the unit as a holdover tenant, or if their tenancy does truly end, regardless of the key transfer at the end of that lease term. So that’s something that you’re probably going to want to speak to an attorney on, just to make sure that you were covering yourself from a legal perspective with regards to that as well. If the tenant is still in possession of the unit, don’t do something stupid, like change the locks on the tenant. That’s just asking for headaches, uh, in New York, there’s actually a specific charge for that relating to self-help evictions. And you certainly don’t want to find yourself on the wrong side of those rules. So definitely understand what it is that you’re getting yourself into before you jump too deep into this

Voice Over: (10:50)
Feet on the street, real stories from real property managers.

Andrew Schultz: (10:58)
That’s right, feet on the street is back. We haven’t had this feet on the street segment in here in a while, and we certainly with a bang. This is a pretty good story. Uh, this one comes to us from the landlord subreddit as well. Let’s go ahead and jump right in here. Uh, my tenant moved out the 1st of May and I’ve been working on the place ever since late last week, I was in the backyard and it was clean today. I noticed several new, fresh piles of dog poo, my wife and I decided to knock on the neighbor’s door and ask what they were doing. The neighboring tenants’ friend was there and said, yes, he’s been taking his dog into our yard. He added that my tenants complained about it a number of times, but that they just don’t care. I think this may have been one of the reasons that the tenant decided to move out.

Andrew Schultz: (11:39)
After 11 years, I made it clear that this was a violation of city ordinances, and I will not hesitate to call the police animal control and their landlord. In addition, they are trespassing, possibly even criminally trespassing as he was in the act of another violation. I now have a lock on the gate and we’ll be checking the backyard again tomorrow morning. I’m having trouble wrapping my head around the idea of taking your dog poop into someone else’s backyard. Yeah, you and me both. I mean, this is a certainly an interesting one. Like even when I walk my dog around the neighborhood, I take poop bags with me to clean up because that’s just how it works. That’s how society functions. Uh, I just don’t understand why people think that it’s okay to even walking around a neighborhood and not picking up after your dog but to literally let your dog into someone else’s backyard to do their business.

Andrew Schultz: (12:26)
That’s pretty bold. That’s a next level. Bold. I would say putting a lock on the gate is probably going to be enough to stop this in this instance. But if they persist, you may want to consider contacting maybe either the police department or code enforcement or the health department to see if they can issue some sort of a citation. Uh, if there’s a department that handles dog registration in your area, you may want to see if the dog was ever registered properly. They’re not going to take the neighbor’s dog over a registration issue. They’re just going to issue a citation. You know, you may want to throw a camera up temporarily if it somehow continues. And that way you can try to gather some evidence for the police, but even still, the police are just going to issue a citation on something like this. It sounds like you’re dealing with the tenant based on what I had read here, the next door, neighbors tenant, maybe take a look at the tax records to see who the owner is and try to reach out to them directly.

Andrew Schultz: (13:17)
Or if they have a property management company, see if there’s a property management company in place that you can reach out to. The one thing I will say is, please don’t do something stupid. That’s going to harm their dog. It’s not the dog’s fault that they have a crap owner. Literally just don’t do anything. That’s going to hurt the dog. The punishment belongs to the owner, not to the poor dog. Um, who’s just trying to go out and do his business. But yeah, it’s crazy to me that somebody would even be so bold as to bring their dog into someone else’s backyard and allow it to do its business without picking it up. So hopefully putting the lock on the gate is enough to stop this behavior. But if they persist, you do have a few options available to you. Certainly. Good luck on this one.

Andrew Schultz: (13:53)
And, uh, yeah, that’s uh, sorry. You’re dealing with such a crappy situation as a landlord. Your rentals rules and regulations can change depending on the circumstances. So can you make changes to a rental agreement mid-lease? Get the answer by checking out our latest guide over at rentprep.com slash blog today. That pretty much wraps things up for this episode of the Rent Prep for Landlords podcast. Thank you all so much for listening. We truly do appreciate it. Our goal with the podcast is to help as many people as possible make educated decisions when it comes to real estate and you can help us to reach our goal. If you heard anything in this week’s episode or any of our other episodes that will help someone, you know, please do us a favor and share it with them. If you’re looking to get in contact with me, I can be reached over at whatsdrewupto.com from there, you’ll find links to everything going on with me over at Own Buffalo, as well as other projects that we’re working on.

Andrew Schultz: (14:45)
In addition to the Rent Prep for Landlords podcast, I also host a weekly show called a property manager. You can find a link my YouTube page over at whatsdrewupto.com. And from there you can access the growing catalog of 75 plus episodes. Take a look and don’t forget to subscribe. If you’re looking for top-tier tenant screening services, head on over to rentprep.com, there are multiple products to choose from including a tenant-paid option. And if you’re over 50 doors, ask about the enterprise-level programs and pricing. We’ve been enterprise users of Rent Prep for years now, and it’s definitely changed the way that we screen our tenants. Check that out today, over at rentprep.com. Again, thank you all so much for listening. We’ll be back in two weeks with an all-new episode you won’t want to miss until then. I’m Andrew Schultz with ownbuffalo.com for rentprep.com. And we’ll talk to you soon.