Guest Post: Life as a Landlord by Bert Stratton

I’M a landlord in Lakewood, Ohio, a Cleveland suburb near where I live that is predominantly prewar apartment buildings and double houses. In Cleveland — and probably most of the Midwest — you can get a clean one-bedroom in a decent neighborhood for $500. No air-conditioning and no dishwasher, but the unit is painted and has refinished hardwood floors.

I once had a tenant, Stan, who paced those floors at 3 a.m., waking up the people below. When I asked Stan to ease up, he said: “What do you want from me? I can’t fly.”

He moved out shortly after that.

About 10 years later, he called and said: “Stratton, you remember me. I want to move back in.”

“Stan!” I said. “You complained about the guy across the hall blasting organ music. You complained about the people below you fornicating. You skipped on your final month’s rent. You painted the floor.”

“But I used Benjamin Moore paint, Stratton. Only the best.”

I didn’t let him back in.

I want my tenants to be law-abiding and act middle-class. That’s the goal. The riskiest tenants are bartenders and servers. They often come home late and party hard, annoying the 9-to-5 tenants. I rent to welders, bartenders, landscapers, flight attendants, legal secretaries and Suzuki violin teachers. Some of the tenants meet one another in the vestibule, fall in love and marry. Then I have another vacancy.

I recently had an application from Joe, 71, a retired factory worker. He made $1,600 per month.

Welcome, Joe.

I ran a criminal search on him as a formality. Aggravated arson, forgery and sexual battery. Pre-Internet, I would have rented to him. Pre-Internet, it was hard to run background checks. I once rented to a rapist-murderer because I wasn’t schlepping down to county records, and he wasn’t volunteering he was a rapist-murderer. (The man got picked up on a parole violation and moved out of my apartment without killing or raping again.)

I rented to a retired nurse whose previous landlord followed her to my place. He told me the old lady was a convicted forger and con artist.

But my building manager had already given her the keys!

I moved her belongings into the basement and locked the basement door.

“Give me my meds!” she said.

She had a point. I gave her the meds, and her toothbrush. She gave me a lawsuit.

This cost me. I was young. I learned two things: 1) Don’t ever evict a tenant yourself. Lawyers love “self-help evictions.” Wait for a court order. 2) Screen all tenants like crazy on the way in.

At cocktail parties, I say, “I’m a landlord.” People hate that. Everybody hates landlords. That’s because nobody paid rent as a child. Renters think apartments should be free, like the wind, rain and baby food.

I used to say, “I’m in real estate.” That sounded better; however, I spend a fair amount of time peering in apartment windows for cats, to charge pet fees. That probably doesn’t say “real estate” to most people.

A competing landlord, next door, put in granite countertops and tried to jack up his rents. It didn’t work. The fancy-kitchen, fresh-coffee-grinding tenants are mostly in other parts of town or, more likely, in other parts of the country. Renters in Lakewood aren’t looking to move out and up right now.

My vacancy rate is 4 percent, the lowest in 10 years. Four years ago, tenants were leaving as if a siren was blasting in the hallway. Young home buyers could get easy financing and low down payments. Now nationwide home sales are back up again, at the highest level since May 2010, but distressed and foreclosed properties make up the largest portion of those purchases. In Cleveland, speculators buy foreclosed houses with all cash. But my tenants aren’t at the sheriff’s auctions. They have lost faith in the homeownership dream, at least for the moment. They’re sticking with rental.

Or they’re returning to rental. I have had several tenants move back into my buildings years after leaving, after owning homes and losing homes.

I save the old records on tenants. Nothing personal, just notes on whether they paid the final month’s rent, turned in their keys and didn’t trash the place. If all’s well, I’ll let them back.

The good tenants, you don’t remember. You have to look them up.

Bert Stratton is the author of the blog Klezmer Guy: Real Music and Real Estate.

The Difference Between Deadbeats and Tenants Having a Problem

Deadbeat Characteristics

Rude
Party a lot
Cause problems with other residents
Have no respect ei. throw garbage off the balcony
Just moved in never paid rent
Don’t care, don’t even come to the office or call you when late with rent.
You can expect dirt & damages
Also a Deadbeat will try to emotionally manipulate you


Hard Time Tenants Characteristics

Apologetic
Have no outrageous social problems
Have a tenant history with you
Will make small payments as they can
Won’t generally cause problems with other residents
Will seek you out and discuss exactly what is going on and prove it…
Will often move if they can no longer make the rent payments.
Generally will pay you every single red cent they owe you.
Just tell you the facts

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Getting Difficult Tenants to Move on...

If your tenants are being difficult, and you're looking for a way to get them to move on without actually evicting them, you can try offering an incentive. For example, if they leave by a designated day, give them back some of their security deposit. Before you make the offer, however, calculate how much of the security deposit you'll need to cover lost rent and damage repair, then compare the overall cost of evicting your tenant to the incentive. Your incentive should be no less than $100.

You can offer to let the tenants store personal property for a month or two at no cost until they have a new place. So what if your basement gets a little crowded or your car sits out of the garage for the duration? Or you can rent a truck for a day so they can take their things to their new apartment.

Some tenants would be happy not to have you report them to the credit bureau. If they have an eviction on their credit report, it only makes it harder to find a landlord willing to give them a new apartment. Incentives like these may very well get them moving. It's illegal, however, to “force” or coerce tenants to leave by locking them out of the apartment, making the apartment uninhabitable, or threatening them. Such behavior can result in your having to pay a hefty fine.
If incentives don't work, start the eviction process with no further delay.

Common Mistakes Landlords Make and How to Avoid Them

Disclaimer please note the below information was gathered from my personal notes and should not be taken as legal insight or advice given.

1. Intake Error = Incomplete* or missing information from a rental application. Not confirming the validity of the information an applicant submits

I love this quote: "Taking Something Bad Never Gets Good"


2.A written rental agreement is a must. There are Pro's and Con's to either a 12 month lease of Tenant at Will. The bottom line is put it into writing.

3.Document the Condition of Premise before move in.
many city and towns have ordinances requiring a board of health inspection. "Board of Health is a Landlord best resource" an objective government agent has certified your property meets state standards.

4. Collect rental payments promptly. If tenant fails to pay prompty you should serve notice to quit quickly. If you don't know how to to serve a notice to quit then either learn or hire a professional. You don't want your day in court to be delayed because of procdural errors on paperwork. Discussed differances bewteen constable and sheriff. Methods of delivering paperwork. And this obsure 1800's law about "reciept in hand" is a must. (see handout given that night to add in rental agreement)

5.Keep good records. This is a businesss whether you have 1 or 100 hundred rental units. MUST HAVE A RENTAL LEDGER

6.If you have to Evict . The goal of an eviction is "not to collect rent but rather to gain possesion back of your property"
Discuss the differences between District court and Housing Court. Role of court appointed mediators.

7. Think and treat as a business. Need to make a budget that includes legal and accounting expenses in particular

8. Always treat tenants with RESPECT. You get what you give.

THE NEXT STEP: Checking and Calling References

So now that you've shown your vacant rental and conducted an informal interview with the prospective tenant and they present to you a completed rental application. So what's next?
Aside from running a credit check (which we will discuss in a future post), start calling references.

Below are questions to ask:

When calling a previous landlord, there are several questions you can ask to help you get more information on the tenant. Some landlords will answer questions over the phone, and some will require a fax and a signed release of information from the tenant. You DID include a release at the end of your application, didn’t you?

Were there any other people on the tenant’s lease?
What was their address? (They should know this relatively quickly, or they could be a bad reference)
Was their rent $xxx? (Give an amount other than the correct amount and see if they correct you – otherwise this may be a bad reference!)
Is their rent current?
Are they being evicted / have they been evicted? (If rent is not current, this may be why they are looking for a new place!)
Did they have any pets?
Were there any complaints from other tenants?
Did they cause any major maintenance issues?
Would you rent to this tenant again?

Workplace references are generally going to end up going to the Human Resources department of any larger company, and will have to be sent via fax. You’ll need the signed release from the application for this fax as well. Employers are very limited on what they can give you, but you can request more information (such as pay stubs) from the tenant.

Is the employee’s address _________? If not, please provide correct address. (Give address they are currently using on their application. People tend to update workplace records quickly when they move, so they continue to get paid!)
When did the employee start?
What is their position?
Are they full time or part time?
What is their current pay rate? (Check against the application and pay stubs)

Tenant screening can be challenging, but it is important to check out a prospective tenant fully and completely before turning over a very costly asset to them, your rental property! Not completing a tenant screen can cost thousands in evictions, lost rent, and repairs. It’s impossible to catch every bad apple, but proper screening will certainly reduce the number of bad apples you have to toss!

As members of the Greater Salem Landlord Association you can obtain a copy of a form I put together that authorizes a release of the applicants information and lists relent questions to ask a previous landlord

Legislation News: John Keenan replied back

Many thanks for taking the time and writing to me regarding HB 518 an act to require verified complaints in the summary process and HB 521 an act regarding discovery in the summary process. Tenant issues can be extremely difficult and your insights and a small landlord are much appreciated. Your thoughtful comments will be helpful should the bill come before the full House for a vote.

Again, many thanks for writing – I look forward to hearing from you again on matters of mutual interest.

Best Regards,
John Keenan


John D. Keenan
State Representative
7th Essex District - Salem
Boston, MA 02133
617-722-2263

Showing your rental and interviewing Applicants

In a previous post I emphasized the importance of providing a written application to prospective tenants. Several suggestion were made on what to include in a rental application and a FREE sample was available to current members of the Greater Salem Landlord Association www.salemlandords.org

Whether or not they decide to fill out the application there and now of take it with them and get back to you don't miss the opportunity to informally interview the prospective tenant before they leave your rental. This is a great opportunity to get a better know the prospective tenant
As a landlord, you have every right to ask a prospective tenant certain things. For example, you're entitled to know whether a prospective tenant is able to pay the rent you're asking, and to pay it on time every month. Keep in mind however there are also some things you should not ask. Learn the difference between appropriate and inappropriate questions before you speak with anyone who is interested in renting your space.

You can ask prospective tenants what they're looking for in an apartment, when they need it, and why they want to move. You can ask whether anything is wrong with their current apartment, what they do for a living, and whether they are of legal age to sign a lease.

You can ask if they've ever declared bankruptcy or been evicted. You can ask if they've ever been convicted of a crime. (Phrase this carefully — you may not ask if they've been arrested.) It's alright to check their credit and work history, and talk to previous employers to find out how much they made. You can even ask about outstanding debts — money they owe on a car loan or for credit cards.

Never ask prospective tenants if they've ever been arrested. An arrest is not the same thing as having been convicted of a crime. In the United States, people are presumed innocent until a judge or jury decides otherwise. Therefore, it is illegal to deny housing to anyone because they have been arrested.
What You Can't Ask

To avoid discrimination complaints, don't refer to anyone's sex, race, color, national origin, religion, or — even if they are obvious — disabilities. Don't ask about an applicant's age, sexual orientation, or family status (single, divorced, children). Never say you “prefer” mature tenants.

Treat all prospects equally — even if you should decide to take on a former homeowner with a less than sterling credit record. If you don't, that could imply discrimination and disgruntled applicants could file a complaint under local ordinances or state laws. Likewise, never arbitrarily raise the amount of rent you're charging or the security deposit you require for some prospects and not others. And don't make rent concessions for one person because you feel sorry for him. Everyone who comes to see the apartment is entitled to the same terms. Never tell someone that the unit has been rented when that's not true. Be honest and consistent with everyone who walks through your door.

Support these Bills & Write to Your Legislator

Dear________________

I urge you to report favorably on HB518 and HB521 filed by Rep Turner which will bring more equity to summary process actions.


As a lifelong resident of Salem and a second generation Landlord with strong ties in the community I am also the founder and President of the Greater Salem Landlord Association and Board Member of the Massachusetts Rental Housing Association which consist primarily of small "mom and pop" landlords. ,

Too often tenants are raising claims of housing conditions only after the landlord has started summary for nonpayment of rent. These tenants most often don't have the rent and use claims of condition to delay the eviction process.

I believe by making it a law that the tenant’s summary process answer and counter claims subject to verification along with the help of tenant advocates educating the tenants on the pains and penalties of perjury would reduce the case load on the already strained courts. Tenants would think twice before stating things that may not exist or were caused by them.

The small landlord is too often put on the defensive responding to the mere utterance of a pest infestation or broken screen when there is no other evidence regarding their claims

HB521 would reduce delays in the landlord’s summary process case by not allowing any continuances merely by asking for discovery unless an answer was filed as well. It is only fair that the landlord have knowledge of any counterclaims being brought at the same time they are responding to the burden of discovery and not at a trial.

Under summary process timeframes in the best case scenario a landlord will lose 2 months’ rent due to lengthy court process and significant tenant rights already in place.

Most cases that do go to a physical eviction leaves the landlord a judgment that is never collected and in many agreements made have the landlord forgiving back rent to get possession.

There are ample services available in the courts advising tenants of their rights. Pro se tenants have many advocates as were pro se landlords have few.

I urge you to provide your support for these bills.

Respectfully,

Mary Chalifour Woodcock

President of Greater Salem Landlord Association www.salemlandlords.org

Does your Rental Application Ask Enough

Compare yours to this checklist to see if you are leaving anything out:

Personal Information, including the full legal name (see What’s in a Name ), phone numbers, Date of Birth, Social Security Number, and Driver’s License Number is critical for screening. While the SSN is not required to obtain a credit report (see How to Screen a Tenant Who Does Not Have a Social Security Number ), it is a crucial identifier in the screening process. Likewise, the Date of Birth is critical to criminal background checks, and Driver’s License info is invaluable for uncovering fraud, and for collection efforts.

Previous Address history gives you the basis for deciding which criminal databases to search, allows you to cross-check against the PATH report and other information provided to avoid fraud, and gives you current and previous landlord information for references.
Employment information helps you judge financial ability, allows you to cross-check against the credit report to avoid fraud, and is a necessary step to satisfying a judgment should you go to collection.

Banking information is provided primarily to show financial ability, to screen for fraud, and is also used for garnishments in collection.
Credit references help you determine this prospect’s attitude toward financial responsibility, and provides important references.

Personal references, if verified, can help you decide if the tenant is responsible, and confirms other information, such as previous address history. If personal references are not from the tenant’s purported geographic location, this could be a red flag.
Emergency contacts are a must-have in case of an injury or when a tenant disappears, and also provide valuable clues for the skip-trace or investigation when collecting against a tenant who skips.

A list of other proposed occupants. GET AN APPLICATION FROM EACH ADULT, and record each child’s full legal name (see What’s in a Name ).
List detailed information about each car tenant owns (another way to find him if he skips), each pet, and inquire about possible nuisances like musical instruments, and heavy or dangerous furniture like water beds.

An Authorization Statement MUST APPEAR ABOVE THE SIGNATURE LINE to allow credit checks, references, criminal and other background checks. You can also include a statement that confirms the prospect’s understanding the application fee will be used to cover the costs of the background check, and is not refundable. Some landlords include a statement verifying that the information provided is true and complete.

The Signature serves as verification of the information, and validates the authorization for the tenant background check. Make sure the signature and the name match.
Do NOT accept the application unless every item of the application is COMPLETE.

What do you add to your application? Share with other landlords by leaving your comment below.