In this week’s episode, Podcast Host, Andrew Schultz, chats about using a realtor to find and screen your potential tenants.
We’ll also go over a recent story about squatters that moved into a family’s newly purchased home. Let’s just say the family was surprised to find people living there after just buying the property on the market.
When dealing with contractors for your rental, find out if it is the tenant or the landlord’s responsibility to let the workers in.
Andrew Schultz: (00:00)
Hey everyone. Welcome back to another episode of the Rent Prep for Landlord’s podcast. This is episode number 376, and I’m your host, Andrew Schultz. On today’s episode, we’re gonna be talking about squatters, moving into a family’s recently purchased home as well as using realtors to find perspective tenants. We’ll get to all that right after this.
Voice Over: (00:24)
Welcome to the Rent Prep for Landlords podcast. Now your host, Andrew Schultz.
Andrew Schultz: (00:29)
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 12,500 members, chances are someone in the group has been there before and can lend a helping hand we’re on the push for 13,000 members. So if you haven’t checked it 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. We’re bringing back in the news for the first time in a long time as our first segment this week, this article comes to us via ABC 10 out of Sacramento. This was written by Andy Judson. Uh, total of the article is quote there’s somebody in the house, squatters move into empty homes, amid Sacramento’s booming housing market.
Andrew Schultz: (01:23)
Imagine moving into a home and realizing someone is already living there. That’s what happened to the Hodge family after they battled Sacramento’s competitive real estate market, and finally got the keys for their newly renovated home in south Sacramento. Unfortunately, their situation with squatters is not uncommon. Squatters will find homes that are empty and they’ll move into it. And landlord attorney Calvin Clement said, according to Redfin, uh, investment buyers bought 56.3% more homes in Sacramento in 21 than they did in 2020, creating a lot of empty residences because of that. People shopping for a home or looking to rent should be aware of squatters. We went after it, Barry Hodge said upped our bid in everything. And we got it. The Hodge family worked hard to purchase a home in south Sacramento. They pinched their pennies and were outbid a number of times before finally being able to write their name on the dotted line.
Andrew Schultz: (02:14)
As homeowners. Once we bought the house, we were so excited said Anderson Nascimento Barry’s son who plans to live in the home with his girlfriend. It was like the first home that we’d ever purchased. But after leaving the home empty for two weeks, as they prepared for their move from daily city, they walked into the new home and found oranges on the floor and smelled some burning plastic. It was at that point that NASA mano recalled, oh boy, there’s someone in the house. They called the Sacramento police and waited out front. As they stood on the sidewalk, they could see a figure standing in the doorway of their home, just staring at us from the house she said, and all he did was just close the door. I’m like, what’s going on here. They estimate that there were at least five squatters in the home for around a week.
Andrew Schultz: (02:59)
Squatters find empty homes like the Hodges in a variety of ways while he didn’t want to provide a how-to for squatters CLEs thought that it was important for homeowners and renters alike to know the dangers of them and how they operate. They might see a for rent sign on the house. CLE said, others simply peruse the ads looking for foreclosure auctions. And once they’re in that, when the real problems begin at that point, the owner has an issue. Clement said, unfortunately, it’s an issue that Clements is far too familiar with. As these helped homeowners navigate this tricky situation for decades. I had one case recently that took over a year to get these individuals out of the home. Clement said the Hodges family case was the best of a worst-case scenario because the squatters were removed by the Sacramento police, but not without a fight.
Andrew Schultz: (03:42)
They started telling the police, it was their house. Hodge said he was like, I have my own rights. I could stay in this house. Hodge said the cop was just not having it with him. It is a common claim that squatters will make the occupants may claim. They live there. They may have a phony lease that they show. And at that point, it becomes what the officer we’ll call a civil matter. Clement said, meaning you, the landlord need to handle the situation yourself to handle it. You or an attorney have to have a written notice, served, and evict the tenant through court often a two-month plus process. Sometimes these crafty squatters will file delaying motions with the court to prolong the process. And then it, the inhabitants know what they doing. They can draw that process out for three, six, sometimes more months. Clement send Realty, Roundup property manager.
Andrew Schultz: (04:27)
Jim Miller has 2000 plus properties from Stockton to Roseville. He said with the COVID 19 pandemic, they only did virtual tours and took down for red signs, helping to prevent squatters. We now just do virtual tours. We don’t do signage Jenny more so you’re not seeing if you will an abandoned house. But the other thing he has experienced is when a squatter poses, as the landlord renting out an empty home and collecting deposits, I’ve experienced a couple myself where the homes were rented. Illegally Miller said whether it had been deposits and rents taken down payments, and then people show up with a moving van to start moving in and they can’t move in. Miller said that he’s seen some cases where defraud tenants have gotten into the apartment or home. They believe to be theirs, which is an even bigger problem. As the property manager like Miller now has to go through the lengthy legal process to get those renters out lawfully either way.
Andrew Schultz: (05:15)
The fake landlord is already vanished. I feel sorry for them because normally they can’t find who they’ve rented. The home from Miller said for squatters who move into the homes themselves, it often leads to damage. Even when you get the property back, you’re now faced with tens of thousands of dollars worth of property damage. Clement said it’s something memento and HOD dealt with. They had found a mess of food, feces, vomit, and a huge amount of clothing and multiple rooms, including a pick bike, being burned in the fireplace. The cause of this plastic smell. The family first encountered when they entered the home. After the squatters were removed by police being charged with trespassing, the Hodge family were left to clean and fix everything. They immediately went to Home Depot and spent over 16 hours cleaning the home. The family also had to repair multiple broken windows, a melted part of their stove burner that was left on destroyed shower handles, and a flooded dishwasher. The squatters also left behind some alarming items, such as knives and drugs, as well as legal paperwork outlining their rights. These people are not stupid. They know what they’re doing said. We have a lot of compassion for the homeless, but when it’s in your face and it’s happening to you in that moment, it’s difficult to handle.
Andrew Schultz: (06:29)
Unfortunately, this is an all too common and very real situation. That’s happening all over the country right now. It’s not a new either, but it does seem to be getting more public attention. In the past few years, I would say once a squatter gets into a home, it can definitely be very, very difficult to get rid of them. Obviously, I’m not an attorney, but we have had squatters in some of our properties in the past that we’ve had to deal with. And frankly, the scenario outlined in this article is not too far from what the reality of the situation is in many states here, once someone has possession of the unit and I use air quotes for that, um, you may have to go through a Fullon eviction process to get rid of that squatter. It can be a lengthy and expensive process. And once you get rid of the squatters, yeah, you still have to deal with whatever’s left behind the article makes mention of the fact that there was a bunch of image, drugs documents left behind all that still has to be dealt with by you as a landlord after you get rid of these squatters.
Andrew Schultz: (07:25)
So what can you try to do on the front end to prevent this from even becoming an issue? There are a few tactics that I would use to help dissuade squatters from coming onto the property, or at least letting you know that they’re there as soon as possible so that you can try to get them out before they set up shop starting with the most simple idea, uh, putting a few lights on a timer will give the appearance that someone is occupying the property. Now, obviously, you don’t want lights that are gonna be on all night, but having a timer so that you can set lights to turn on and off a couple times a day, that’s gonna give the home the appearance that someone might be living in it. We typically keep our drawn or a window covering closed when a home is vacant, which obviously can make a home look vacant, but it also prevents people from looking to confirm the fact that it’s vacant, which I think is probably the better move.
Andrew Schultz: (08:10)
And then obviously depending on the thickness of your window coverings, you may even be able to see the lights coming on and off through ’em don’t forget to address your outdoor lighting at the same time. If you have lighting, make sure that it’s functional and that it’s aimed appropriately. You don’t want something that’s aimed out into the yard. If it’s supposed to be shining on the back of your property, squatters, don’t want to be obvious about breaking into a property. So if a home is lit up outside, it’s gonna make it much more difficult for them to hide what they’re doing. And they’re gonna be looking for a different target. I do not recommend placing a rent sign on a property that’s vacant anymore. I think that the small amount of people that you may get calling you off of a yard sign is gonna be offset by the fact that you’re putting a giant red flag in your front lawn.
Andrew Schultz: (08:52)
Most people, at least in this market start their apartment search online. So we’ve stopped using for rent signs in a lot of instances, more often than not the people that were calling off of the, for rent signs were not really serious inquiries. A lot of times they were neighbors or look lose, or they would even end up getting disqualified before they even scheduled a showing. So being that the yard signs weren’t really as effective as what they used to be. We’ve just made the decision to cut that risk altogether and eliminate them. Having people stop by the property on a regular basis is obviously a good idea. If that’s something that you can do, um, it’s going to, you know, if somebody’s squatting or somebody’s looking to squat and they’re watching this property and considering it, if someone’s coming to the pro-property on a regular basis, a squatter’s gonna take notice of that.
Andrew Schultz: (09:38)
They’re going to notice people coming and going, and that may be enough to prevent them from even trying to take that risk. I’m not saying that somebody has to be there for an extended period of time, or you have to have someone living in the property, but even having someone stop to do a quick walk-through every couple days will at least let you know that the property is staying secure. Or in addition, things like newspapers or mail are gonna stack up. You may wind up with flyers on your door, or even something as simple as a package sitting outside for more than a day. All of those are clues to a squatter that that place is empty and you don’t want that. So even something like having the neighbor kid pick up the stuff in the yard for 10 bucks a week or something like that, something like that may be enough to prevent a squatter from choosing your house as the place that they wanna break into and live in.
Andrew Schultz: (10:22)
Uh, and I guess I should mention this, even though it goes without saying, obviously make sure your property’s actually secure. If you have a window that doesn’t lock properly, get the lock fixed on it so that someone doesn’t have a point of entry, same thing with your doors, make sure your doors are shut and locked when you leave. And don’t forget to change the locks after closing. So, you know, who has a set of keys to the property? Obviously, it sounds silly, but if somebody can crawl through an open window and become a squatter in your property, you’ve just made their job a whole lot easier. Uh, last but not least, you may want to consider having an internet connection installed to the home so that you can have cameras put up or an alarm installed. This. Isn’t always a viable option on rental properties when you’re the only going to be vacant for a short period of time, maybe a couple of weeks, but it might be worth it.
Andrew Schultz: (11:06)
If it gives you the satisfaction that you have that protection, obviously there are a million different options for doorbell cameras, interior cameras, outside cameras, alarms, whatever it is that you’re looking to do, many of those can be installed quickly and easily without even having to bring a contractor in which may make this a good option. If you want that extra level of protection, honestly, at the end of the day, taking a few basic steps on the front end can really help save you a lot of aggravation on the back end. If you wind up with a squatter living in your property, it’s not that difficult to make your property an UNAT target. Obviously, there’s no guarantee that someone won’t still try to break in and become a squatter, but there’s probably going to be better targeted out there for them to go after
Voice Over: (11:52)
Forum quorum, where we scour the internet for ridiculous posts from landlords and tenants,
Andrew Schultz: (12:00)
Our forum quorum segment this week comes to us via the Rent Prep for Landlords Facebook group. This is a pretty interesting question on engaging a third party to help you with tenant screening. In this instance, a realtor, let’s go ahead and jump right in quick question for those who have used a realtor to find a tenant, what information were you given about the perspective tenants and when I have a possible tenant, which the realtor ran the credit and background checks on, I was told the credit score and they said that everything checked out. Also he being the realtor wanted to sign the lease so far, I’ve not received any information and it has been week. Is this normal? I know I gave up a little control. So it is a little hard for someone who likes to know the details of every step. And again, this one came to us via the Rent Prep for Landlords Facebook group.
Andrew Schultz: (12:45)
Now, I like this question quite a bit because we actually do tenant placement without management services in our office, in addition to our a full-service property management offerings. So I can give a little bit of insight here as to how I handle it as a real estate broker and property management company. We also have some insight here from Rent Prep on this one as well. But before I jump into that, I need you to understand that not every real estate agent or real estate broker knows how to screen tenants properly. Residential real estate agents are only interested in the listings and sales of residential properties. There’s not a lot of discussion about rental markets during real estate classes, and unless you’re actively engaged in the rental market or actively engaged in property management, it’s very easy to go your entire life as a real estate agent and not do a single rental transaction.
Andrew Schultz: (13:35)
Now, obviously, this is market-specific in New York city. You’re gonna do a bunch more rentals than you would in, you know, the, the breadbasket for instance, but in many markets, agents don’t engage in the rental market at all. So if you’re going to use a third-party property manager or a tenant screening service or a real estate professional, they need to know what they’re doing, and they need to have a PR a process and a procedure in place to service. You make sure that you have that before you engage with those individuals. Otherwise, you’re putting yourself at an even bigger risk than if you had just done it yourself. Now let’s get back on topic. I had an opportunity to reach out to Christie. Who’s the vice president of operations over at Rent Prep and at ask her what a third party, uh, specifically an agent is and is not allowed to share based on the FFC, a, the fair credit reporting act, which is what credit reporting agencies are bound to.
Andrew Schultz: (14:27)
Honestly, the information is so good that I’m gonna share it in its entirety rather than trying to paraphrase it. So again, this is an email from Christie to me talking about when and what a real estate agent would be able to share in terms of credit and background information. The FFC R a does contain several exceptions that enable parties to communicate information relating to consumer reports within strict guidelines, without the party, assuming the responsibilities or becoming a consumer reporting agency themselves. If an entity shares a consumer report information outside of the expectations created by the FFC a then the party is a consumer credit reporting agency and will be subject to the requirements of the FFC, a consumer reporting agency. I understand that this is a little bit dense, but we will get to a, uh, a point here where this is all comes together.
Andrew Schultz: (15:18)
If the consumer, in this case, the applicant is aware that their information will be shared among the two parties, agent, and landlord for the purpose of making a joint decision. And they’ve agreed to it. The landlord and the agent would then be able to communicate about the consumer’s information and report information, including the credit score. If the applicant does not agree to this information being shared amongst the parties and the agent still shares the information, then the agent will assume the responsibilities of a C R a, the consumer must also be given the opportunity to opt-out of the information, sharing among parties. If the information is shared prior to notice being presented to the consumer and an opportunity that the consumer to opt-out is not offered, then the party may be becoming an, a CRA and subject to the requirements as a CRA under the FFC.
Andrew Schultz: (16:08)
I understand that was dense. Now we’re getting to the talking points here for the sake of the talking points on the podcast. Here are the takeaways, and there’s two points here. Point number one, an agent cannot share information with a landlord unless the applicant gives specific consent ahead of time and point number two, an agent can use screening criteria decisioning as a partial workaround to giving insight without handing a copy of the credit report over, for example, if the agent explains to the landlord that the criteria is a minimum credit score of six 50, they can say that the applicant did not meet the minimum requirement. However, they cannot say that the applicant only had a credit score of 6 25, and that’s why they failed to meet the minimum requirement. So again, thank you Christie for sharing that information with us. I think that gives us a little bit of insight as to what an agent can and cannot share and who needs to be notified and who needs to give permission before that information can be shared amongst parties.
Andrew Schultz: (17:05)
So I thank Christie again for sending that information over. That’s incredibly helpful in this instance. So as a real estate broker and property manager engaged in this type of business, um, what is the information that we provide to our clients? When we do a tenant placement, we provide the fully signed lease, the move-in condition sheet, which details the condition of the home at the time of move-in the move-in photo set and a sheet with the tenant’s contact information. We don’t provide any applicant information to the property owner. We consider that to be our information for internal use only, and it does not get shared. What we do share is exactly what Christie had mentioned in her email. We have our screening criteria broken down into a scoring matrix that allows us to review an application based on pertinent objective data that takes into account the fair housing guidelines and make sure that when we screen a tenant, we’re staying compliant.
Andrew Schultz: (17:58)
The last point there is very, very important. I wanna take you all on a little trip with me back to the September of 2019, I was at a property management conference in, in Florida. And the discussion was going on about who gets to approve the tenant selection, the property owner, or the agent. And at the time we were still giving property owners more input on their tenant selection. We’d give the owner information on income and credit scores and things like that because we felt that we were giving them more information to make a good decision. And at this conference overwhelmingly other property managers at the conference were doing the exact opposite. They were the ones making the decision when it came to the tenant placement. And when I was listening to the reasons it all started to make a lot more sense to me, and really it boils down to essentially two main points.
Andrew Schultz: (18:48)
So that first point is very straightforward. Number one, we know what our selection criteria are and that they are fair housing compliant. And the second point is that most property owners don’t have a good grasp on fair housing laws by giving someone who’s not trained in fair housing, the ability to say yes or no to a rental application, you’re opening yourself up to a potential fair housing violation as the agent, and it’s simply not worth it. We take fair housing training. Every single time we renew our licenses. We understand the fair housing laws, and if you’re using a good agent or a good property manager, they have a set of compliant, fair housing, compliant screening criteria to protect you and to protect themselves from a bad situation. You’re going to find yourself in a situation where you have violated a fair housing law. For that reason, we brought those decisions in house where we can make good decisions that protect the property owner, the tenant, and our company, that conference combined with some landlord-tenant law changes earlier in 2019 led to a major overhaul of all of our screening criteria and the develop of our scoring matrix.
Andrew Schultz: (19:53)
So now we use that scoring matrix every single time that we screen a tenant and it’s completely removed the stress and anxiety from the decision completely, the application either qualifies, or it does not. And it’s very, very cut and dry. So when do we turn information over to the property owner we provide once the tenant moves in, and that tenant becomes yours as the property owner, essentially on move-in day, we’re gonna hand you a packet with your lease, your contact information, your move-in documents and stuff like that. That’s when you’re gonna get that information from us either the day of the move-in or within a day or so thereafter the contact information, definitely the day of at least, um, the pictures may need to be put onto a USB key or something. So it may be a day or two, but we don’t turn anything over until after that tenant has moved in.
Andrew Schultz: (20:40)
Again, because of an exposure issue. We don’t wanna provide someone with a bunch of information for a tenant that isn’t actually their tenant yet, and they’re not actually their tenant until they’ve taken possession of the apartment, at least in our eyes. So that’s when we make the decision to turn the information over. In addition, there really isn’t any reason that the tenant and the property owner need to be communicating prior to the move in that agent should be making sure that the tenants’ questions in the lay landlords’ questions are all answered, that the utilities and things of that nature are switched over prior to the tenant. Moving in that a move-in condition sheet was taken care of, uh, photos or video were taken, et cetera. The goal of the agent needs to be, to make the transaction as smooth as possible. Number one, secure a great tenant.
Andrew Schultz: (21:23)
Number two, make the transaction as smooth as possible for both the tenant and for the property owner. And finally, as for who signs the lease that typically would be figured out in your leasing agreement, leasing agreement may give the agent the authorization to sign on your behalf, or you may have some sort of a power of attorney in place limited to just that specific transaction or specific to leasing for that property. Something along those lines for our management clients, we have the ability to sign off on their leases here in house as for our clients that we do tenant placement for, we typically prefer to have the property owner sign those leases directly because they’re the ones who are ultimately going to be managing that tenant. Different states may vary as to who’s allowed to sign leases. So definitely check with your state laws on that one before letting anyone other than the property owner sign the lease. Can you use social media as a tenant screening tool, find out what you can and cannot use from social media platforms when researching your renters, visit rentprep.com/blog today. For more information
Andrew Schultz: (22:24)
That pretty much wraps up this episode of the Rent Prep for Landlords podcast. Thank you all so much for listening. We really 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 what’s up to.com from there, you’ll find links to everything going on with me at Own Buffalo, as well as other projects that we’re working on. Grab a copy of our free deal analysis tool today over at whatsdrewupto.com. There’s no obligation and it comes with a free companion video showing you how to use it.
Andrew Schultz: (23:05)
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. If you’re over 50 doors, ask about their enterprise-level programs and pricing. I’ve been an enterprise user at 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 wanna a miss until then. I’m Andrew Schultz with ownbuffalo.com for rentprep.com and we’ll talk to you soon.
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