RentPrep Podcast #358

Podcast Host, Andrew Schultz, will go over the best practices for having AC Units in your rental property, including what to do when your tenant’s power bill starts to double in price.

There are certain things you should and should not ask on a rental application, including a prospective tenant’s social security number. Find out the best time to ask for a potential renter’s social security number.

Last, but not least, is a notice to quit acceptable through text? Find out by listening to our latest podcast.

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Show Transcription:

Andrew Schultz: (00:00)
Hey everyone. Welcome back to another episode of the Rent Prep for Landlords podcast. This is episode number 358, and I’m your host Andrew Schultz. On today’s episode, we’re going to be talking about providing a notice to quit through text message, AC units, tenant, or landlord responsibility, and social security numbers on rental applications. 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 12,300 members, chances are someone in the group has been there before and can lend a helping hand 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

Voice Over: (01:02)
Quorum forum, where we scour the internet for ridiculous posts from landlords and tenants.

Andrew Schultz: (01:10)
Let’s go ahead and jump right into today’s episode. We’ve got a really good forum quorum for you coming to us from the landlord subreddit. And this is basically a good way to look at a situation and realize how to do absolutely everything wrong. Let’s go ahead and jump right in here. So basically I have a verbal agreement with the tenants and I gave them notice through text message in February that they needed to be out by mid-July so that I can have a new tenant move in, who has a signed lease. In that time, they have both been late and shorting me on the rent. And one of them is saying that they can’t find anything in their price range in the specified timeframe. I’m worried at this point that they will refuse to leave causing arrangements for the new tenant to fall through all correspondents and agreements on rent, et cetera have been through texts.

Andrew Schultz: (01:55)
So I do have proof of that, but what course of action do I have at this point? So there’s quite a bit of information that’s missing here. Uh, we’re gonna have to speak a little bit more in generality on this one, but there’s so many things just in this little snippet of text here that could have been done a different way that would have probably not led to the situation that you find yourself in. Now, I’ll start with this one. Verbal agreements are a terrible idea for reasons exactly like this. It creates a ton of ambiguity that leads to management headaches, and without having a written agreement, there’s really nothing that you can reference back to, to say, no, you’re in the wrong or no you’re in violation. There’s just way too much. That’s left to the, you know, left out in the open for whoever to decide.

Andrew Schultz: (02:39)
Always have some kind of a written agreement in place, even if it’s just a month-to-month tenancy agreement. If you buy a place and the tenants don’t have any sort of leases, try to get them on some sort of a month-to-month agreement. So there are clear rules and expectations. So moving on to these tenants in particular, I don’t know what state this is in. So I don’t know what your for notices are, but I’m willing to bet that it’s more than just a text message saying, get out of the house. I don’t think there’s any state, at least not to the best of my knowledge, where you can just send somebody a text message, telling them that they have to get out. There’s a process for things like this. So, you know, it doesn’t sound like you followed whatever the process is going to be for your state.

Andrew Schultz: (03:19)
That said, you need to follow the laws for your state for serving a termination of tenancy. Notice it’s going to be different from state to state. You may even have some, some municipalities that have specific restrictions, but it’s going to vary from state to state at the very minimum. So what are some of the things that would be required when you go to serve the notice? Well, in some instances they require and by they, I mean, whatever state you happen to be in may require that the notice be served in a particular fashion by certain person. Maybe you have to have a process server for instance, who the notice has to be served to when that notice has to be served and how much notice you have to give them. For instance, you may not be able to serve a notice on a federal holiday or in some states you may not be able to serve a notice on a Sunday and have it be, um, in effect.

Andrew Schultz: (04:05)
You really have to understand what exactly it is that you’re dealing with before you just jump in and start issuing notices, especially issuing notices via text message, because I can almost guarantee you that there’s not a single court, at least here in the state of New York, that’s going to accept a notice that was sent via text. It just does not work that way. So make sure you understand what it is that you need to do to properly send somebody a notice that they need to vacate from the home. All right, so now let’s move forward and assume that the notice was served and served correctly and that the tenant has remained in the space after the notice expires. So essentially you now have in New York state, what would be called a holdover tenant, someone who’s living in the unit and their lease has ended. So at that point, it’s time to just move forward with the eviction.

Andrew Schultz: (04:50)
I understand that in some states, right now, there are still COVID issues. There are still eviction moratoria. As a matter of fact, as of the time that this is being recorded, the federal eviction moratorium is still in place though, by the time the episode goes live, it may no longer be the case. So, you know, there are issues in getting into court and getting an eviction case heard right now, but you’re only putting yourself further and further behind by not issuing the notice in the correct fashion because you’re just going to get booted back out of court. If they even let you file in the first place without having proper notice served. So that’s one of those things that you want to keep in mind is you already have an uphill battle here. You don’t want to make it worse by serving a notice incorrectly.

Andrew Schultz: (05:29)
You may also want to prep that incoming tenant, that the place may not be ready for them because based on what I’m seeing here, it’s, it sounds like it’s not going to be, uh, not going to be a good situation. It does not sound to me like this apartment is going to be ready for the new tenant to move into on time. The number one recommendation that I have here get a written lease that makes it so much easier for everybody to understand what the rules of the engagement are and make sure that they are compliant. And if they’re not compliant gives you something that you can point back to and say, Hey, you’re in violation of your lease. Not just, Hey, you’re in violation of that verbal agreement that we made six months, 12 months, 18 months back. You know, there’s a lot of things that can be lost, uh, to time when stuff’s not written down. Always, always, always get a written lease whenever possible. It’s just going to make your management experience so much easier. Water

Voice Over: (06:20)
Cooler wisdom, expert advice from real estate pros.

Andrew Schultz: (06:28)
We have two good water cooler wisdoms for you today. The first one is coming to us via the Rent Prep for Landlords Facebook group. This one comes to us from South Carolina and let’s go ahead and hop in here. I have a tenant that keeps complaining that his AC runs all day at night and that the temperature never gets below 72 degrees inside. I’ve sent three different air conditioning technicians to check the unit and all three say that it is working and running fine. Now the tenant is saying that his power bill has doubled because of the air conditioner. I have no idea if he’s leaving windows or doors, open leaving lights on all day, et cetera, to cause the power bill to increase. I’ve been inside the unit several times, myself and the temperature is always cool. Air conditioning is not considered an essential need in my state as far as for rentals, but I do understand maintaining the amenities provided, what more can I, or am I supposed to do?

Andrew Schultz: (07:17)
I like this question? I like this question because we don’t answer a ton of maintenance-type questions here on the show. And this one gives us an opportunity to think about this from a few different perspectives. So you’ve had three different technicians out in all three of the service techs have indicated that the air conditioning unit is working properly. That’s good news on your end. Um, but there’s some more questions that they may not be thinking through if they’re just coming out to do a service call that I would think through as I’ve just kind of thinking about the question. And honestly, these first few are probably things that were already checked. Number one, being a clogged filter that will do a lot to prevent cool air from being able to flow through the furnace and through the rest of the home. The second thing I had thought about was the actual air conditioning unit on the outside of the house, which actually houses multiple components.

Andrew Schultz: (08:05)
And we’re not going to sit and break down, you know, how an air conditioning unit works. But the one thing that you do need to know, and probably the simplest thing to maintain on your outdoor air conditioning unit is making sure that it is free of debris, making sure that you don’t have grass clippings or leaves or, you know, something like that right up against the unit so that you can’t get airflow through it because not getting airflow through there will prevent the unit from being able to get rid of the heat that it’s pulling out of your home. And that’ll make it a lot more difficult for the system to operate efficiently. So the best way to handle something like that, you don’t need a power washer or anything, just a simple garden hose. You can spray the outside of those units off.

Andrew Schultz: (08:44)
You’re not going to hurt it. They’re meant to sit outside. They’re meant to get wet. You know you can, you can spray those off and clear the debris off from the outside of it. And that’ll definitely help to make the unit run a little bit more efficiently as well. Another thing that I had thought about would be the amount of cooling in the system. If you have perhaps a slow leak or something like that, you may have a situation where coolant needs to be added into the system. That’s something that would be checked by your, your service technicians. And I’d be willing to bet if you’ve had three technicians out, somebody was bright enough to throw a set of gauges on there and make sure the thing had enough coolant. The next thing I would think about is how old is the unit. Maybe it’s just at a point where it’s not operating to full efficiency anymore, and it’s time for a replacement.

Andrew Schultz: (09:27)
You know, these things don’t last forever. If you’re near the point where it’s kind of getting towards end of life, maybe it is time to start thinking about a new unit is the unit that’s in place to size properly. You might have a unit that was not sized correctly for the size of the building when it was put in and it could be size too large or too small. They’re both headaches, they’re both problems. Um, you really need to get a unit that’s appropriately sized for the space that you are trying to cool. Something else I had thought about is where is the thermostat located? If you have a thermostat that’s located in a room where the sun is constantly shining on it, you know, there’s a pretty good chance that the reading is going to be inaccurate on that thermostat, which is going to cause the temperature be artificially hot, according to the thermostat.

Andrew Schultz: (10:12)
And again, it’s going to keep that unit running last but not least. What is the outdoor temperature? So something that a lot of people don’t realize is that an air conditioning unit is not built to take it home from 115 degrees down to 72 degrees. It’s generally expected that you’re going to get about a 20-degree range of cooling. So if you’re at 95, you’re probably going to be able to bring the house down to about 75. If the tenant has a thermostat set to 55 degrees and it never goes under 70, that air conditioner is never ever, ever going to turn off. It’s going to run constantly. So that’s something to keep in mind is especially with the incredibly hot weather we’ve been seeing so far this summer. If you have a house, you know, you may not be able to bring it all the way down to 72, if it’s 115 degrees outside, it’s just one of those things that air conditioners are not designed to operate to that level.

Andrew Schultz: (11:02)
So that’s, that’s definitely, you know, uh, several things that you could keep in mind there as far as something that you might want to recommend to the tenant. Maybe tell them that they should close curtains or install heavy, um, blackout curtains to kind of prevent some of that heat from finding its way into the house, especially on large windows to keep some of the heat out. I know that like in our living room, we have a big window on the front of the house and our thermostat is in the living room, which sometimes causes us to have inaccurate readings on our thermostat simply because that room is getting more sunshine, which causes the temperature to be off a little bit in that room. Definitely a lot of different things here that you can take a look at. It sounds like the unit is operating the way that it’s supposed to and that there’s probably some other issues at play here, but you have had several technicians out that have all verified that it is working correctly.

Andrew Schultz: (11:49)
So as far as what, what else can you do? I’ve given you a couple of different options there, but realistically speaking, it sounds like this unit is working and there’s something else going on. Some other issue at play here probably need to do a little bit more research to see what the unique circumstances are behind your situation. But hopefully, this will give you some guidance as to what to start looking for. Our second water-cooler wisdom. This week also comes to us via the Rent Prep for Landlords Facebook group. Let’s go ahead and take a look at this one. Do you require your applicants to enter their full social security number? I have a few individuals who are uncomfortable providing their social security number to landlords for rental applications. What is your approach? Thank you in advance. So our office has had a note blank spaces policy on our rental application for a lot of years now.

Andrew Schultz: (12:35)
And actually, that was something that was recommended to me by Steve white, the CEO over at Rent Prep. Obviously the podcast you’re listening to a whole bunch of years ago when we started doing business with them for our credit and background checks. And he explained why it’s very, very simple. The more information you have on somebody at the onset, the easier it is to deal with that person, if things go wrong, the more information you have, you know, people are more likely to give you information on the rental application. Then once they’re moved in, you’re not going to get further information for the most part. Once someone has moved into a unit, so gathering as much information to make the right decision on the front end is super, supercritical. So we always tell applicants that blank spaces mean your application is going to be delayed while we contact you and try to get a complete application.

Andrew Schultz: (13:22)
And that includes a social security number. A lot of people are under the impression that you can’t run a credit check or a background check without a social security number or a date of birth. But generally speaking, you can actually run those checks, the credit check and the background check without a social or without a date of birth. Generally speaking, it’s just a really, really bad idea having their social and date of birth makes it much easier to run the credit and background checks and verify the accuracy of the information that you’re getting back. And that’s the real key component. The less information that you have to verify against the broader the records are going to be that get returned. And if you have somebody with a super common name like John Smith, for instance, you’re never going to be able to sort out, okay, does this correct criminal record belong to my John Smith or one of the 78 other John Smiths, you know, across the state or across the country, whatever the case may be.

Andrew Schultz: (14:15)
So having that social security number and that date of birth certainly makes it easier to run those checks, but it’s not necessarily a requirement. Really. The concern is the less information you have available to you on that person. The easier it is to make a mistake because you’re going to be finding information. That’s just not pertinent and you don’t want to be making decisions based on information that doesn’t apply to the applicant that you’re actually screening. So having their social security number and date of birth will also make it way easier when it’s time to start the collections process, either via a judgment or via a collections agency, more so for the collections agency than for the judgment. So that’s to keep in mind as well is when you go to send a file to a collections agency, they’re going to want as much information as possible as well.

Andrew Schultz: (14:57)
Names of all the people living in the building or in the, uh, apartment, you know what the ledger balance is? Social securities, date of births, last known addresses, phone numbers, whatever they want as much information as possible too. So having as much as you can on the front end will make life a lot easier. So now let’s take a quick look at some of the possible fair housing issues that you could be walking into. And I’m going to start with having a blanket, no social security number policy, a blanket, no social security number policy could wind you up in a fair housing situation. Some people simply don’t have a social security number. And the one example that popped into my head when I was thinking about this particular section was international students on an education visa more often than not. They’re not going to have a social security number because they’re international students on a visa they can get to, what’s called an ITI, an individual, an individual tax identification number, which is issued by the IRS.

Andrew Schultz: (15:51)
But that’s probably not going to show much if they just moved here from outside of the country, you may want to look into some sort of an international credit and background check service at that point. Um, but that would be way outside the scope of this question. Also keep in mind that an ITN is not proof of legal status in the United States. The IRS will issue an ITI and does not check immigration status beforehand. So having an ITIN number does not necessarily mean that someone is here in the country, legally having an ITN also does not mean that someone can legally work in the United States. That is a completely separate issue as to getting set up, to be able to work in the United States. But an ITI number does not mean that someone has the ability to legally work here in the United States. So keep in mind, some states have now made it illegal to ask about immigration status and federal fair housing laws do prohibit discrimination based on national origin.

Andrew Schultz: (16:45)
There are some pitfalls that you can run into here, understand fair housing law, and how it impacts you before you go out and start getting ready to lease an apartment. I think that in the long run, having an understanding of the fair housing laws, even if you qualify for some sort of a Mrs. Murphy exemption or something along those lines, I think that you, it’s not going to hurt to know the law at the end of the day. It’s always a good idea to have a good understanding of all of the laws in the industry that you are operating in fair housing law being one of the most important laws that we operate under at least here in the United States, when it comes to rental housing, Rent Prep recently released their guide on all things security deposits. Get the low down on what mistakes to avoid when returning your deposits, when you should hold onto the security deposit and so much more visit rentprep.com/blog today for more information.

Andrew Schultz: (17:37)
So that pretty much wraps things up for this week’s 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 other episode 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. In addition to the Rent Prep for Landlords podcast, I also host a weekly show called ask a property manager.

Andrew Schultz: (18:15)
You’ll find a link to 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. I’ve been an enterprise user 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 a couple of weeks with an all-new episode that you won’t want to miss until then. I’m Andrew Schultz with ownedbuffalo.com for rentprep.com. And we’ll talk to you soon.