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How to Navigate a Short Sale as a Tenant

Moving boxesBy Salvatore Friscia, San Diego Premier Property Management, San Diego, CA You don’t have to be a homeowner to have heard the term “short sale”. It’s one of the most widely used terms in the real estate industry these days, and unfortunately, it’s also a term that many renters are starting to hear more of as well. The prolonged economic downturn that engulfed the real estate industry, starting with the subprime loan debacle, which rapidly resulted in mass foreclosures of adjustable rate home loans, has now inevitably morphed into the “short sale” frenzy of the 20% down conventional homeowner. Unfortunately, many of the affected properties are the homes of renters who abruptly find themselves caught in between the bank and the landlord’s hardships. The typical scenario is as follows: An owner/landlord carrying an upside-down mortgage on a rental property finds himself under financial distress due to the economy. The landlord tries to hold onto the property for as long as he can only to realize that it’s either too far underwater or the loan modification offered by the bank isn’t going to reduce the monthly mortgage payment enough to help him through his current financial situation. At this point, it’s either foreclosure or short sale, and currently, most banks are starting to favor short sales. Either way, the unaware tenant is typically left with minimal notice to relocate. So, what can you do if you find yourself in this situation? Tenants do have rights, and even though you may not be ab......
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Military Lease Agreements

By Salvatore Friscia, San Diego Premier Property Management, San Diego, CA The city of San Diego has always had a strong military presence, and here at www.SDPManagement.com we are very thankful for the men and women of the armed forces who brave their lives each and every day to protect our country and freedoms. The military is a strong and considerable part of our local economy and we take pride in marketing our rental properties to active and retired military personnel. In doing so we also understand that “Service Members” of the military and their dependents are provided further protections under Federal law regarding tenancy rights. Under Federal law, a “Service Member” is classified as: A member of the Army, Navy, Air Force, Marine Corps, or Coast Guard on active duty;  or A member of the National Guard under a call to active service authorized by the President or the Secretary of Defense for a period of more than 30 consecutive days under section 502(f) of title 32, United States Code, to respond to a national emergency declared by the President and supported by Federal funds; or A member of the commissioned corps of the Public Health Service on active service; or commissioned members of the National Oceanic and Atmospheric Administration on active service; The Federal Service Members Civil Relief Act is one of the protections afforded to service members. It applies to any service member who is on active duty or active service; or during any period when the service member is absent from duty because......
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8 Tips for New Landlords

Transfer PoliciesA guest post by Brian Davis, Ezlandlordforms.com, Moorestown, NJ Building a strong relationship with a new tenant and protecting your real estate investment is of paramount importance when crafting a lease agreement.  There are a multitude of considerations at this juncture that are essential to understand.  Brian Davis, Vice President of EzlandlordForms.com, is a seasoned landlord and top expert on landlord-tenant relationships.  Here he offers his top tips for new landlords as a helpful tool for navigating lease creation and the ongoing considerations of managing a rental property. 1. Understand the Fair Housing Act and how it applies to your rental.  When advertising for a new tenant, it is critical that landlords and property managers understand and comply with the Fair Housing Act. The Fair Housing Act prohibits landlords from using any of the following criteria when evaluating potential tenants: race, color, national heritage, religion, gender, disability, and familial status. While that may sound simple on the surface, consider that stating in a rental listing “perfect for a single professional” is a violation of the Act (bias against familial status). Advertising only in your church’s newsletter discriminates by religion. What landlords can and should use to evaluate potential tenants is financial data, credit histories, and other background data. 2. Know your tenant by thoroughly screening each prospective renter to avoid problems down the road.  This can be accomplished by a few simple steps.  First, conduct a professional credit check to learn an applicant’s credit history and if they have been fiscally responsible in t......
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Establishing Transfer Policies for Multi-unit Properties

By Ben Holubecki, STML Realty Group, Glen Ellyn, IL Transfer policies are often a detail overlooked by landlords and property owners who own/manage multi-unit properties. A tenant requesting a move from one unit to another presents challenges and can add unnecessary and unexpected costs for property owners. Ignoring these requests or not addressing them properly can open landlords up to potential resentment from tenants and even legal liabilities if not properly documented. There are a lot of reasons why a tenant might request a transfer to another unit within the same property and there are positive and negative impacts resulting from this type of request. The most common reasons for these requests in my experience are: - Problems or issues with current neighbors - Maintenance issues within their current unit which they feel were not or will not be addressed - Lack of upgrades due to extended tenancy (newly remodeled units are obviously more desirable) - Preference regarding location within the property (different floor, closer to parking, amenities) - Moving from 1 unit type to another such as moving from a 1 bedroom apartment to a 2 bedroom Regardless of the tenant’s reason for the transfer request, there are both positive and negatives that you should consider. The positive: - Your tenant obviously likes the property enough to want to stay - You have a history with this tenant so you know what to expect regarding care for the property and rental payments. No surprises. That is always a positive. ......
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Dodd-Frank Bill Requires Adverse Action Letters

By Salvatore Friscia, San Diego Premier Property Management, San Diego, CA The property is ready to be occupied, marketing is complete, and now you are receiving multiple inquires. At the first showing you receive two applications and it looks as though you’ll fill the unit quickly but remember only one party can be offered the property and after you have evaluated both applications – pulling credit information, confirming employment status and reviewing past rental history – it is clear that only one party meets your qualifications. So is it as simple as offering the rental to the qualified party and just letting the other party know that they didn’t get the unit? Not so fast. As of July 21, 2011 the Dodd-Frank bill requires you to provide the consumer with a Score Disclosure letter or an Adverse Action letter if you decline their application or impose additional conditions (such as a higher deposit) in order to accept the application. This law was enacted toward creditors but does include “Property Managers” who deal with making decisions based on credit scores for potential tenants. According to the Fair Credit Reporting Act (FCRA) creditors are required to issue an adverse action notice containing the name of the credit reporting agency, notice of the consumer’s right to request a free credit report, and notice of the consumer’s right to dispute the accuracy of the report’s content. The Equal Credit Opportunity Act (ECOA) requires creditors to provide consumers with the specific reasons for a denial, o......
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Not Everyone's a Property Manager!

By Salvatore Friscia, San Diego Premier Property Management, San Diego, CA I made a quick trade, put an offer in on a property in Arizona and then closed my laptop and headed with the kids for lunch in La Jolla. It was after lunch that I had an all too familiar experience. We were playing tourist for the day and on the walk back to our vehicle we stopped into a small boutique store near the cove to allow each kid to choose an item of there choice as a fun reward for good behavior throughout the day. I noticed the owner of the boutique slumping over his cash register near the back of the store and I greeted him and asked how his day was going. He responded quietly, “Better then yesterday” and we struck up a conversation. The conversation quickly went toward business and the owner proceeded to tell me that he just bought the store last year and sales were considerably down. To make matters worse the landlord was increasing his rent. I empathized with him and offered some of my ideas for a short term solution but it was obvious they were falling on deaf ears as the owner quickly interrupted me and said something that made me stop and think. He told me that he was not really worried about the slower sales at his store because he was going to start managing some real estate for a couple of friends that own rentals in ......
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Resident Retention: Have We Met? You Look Awfully Familar...

The leasing agent smiles warmly at the nice-looking woman dressed in jeans, a tee shirt with her hair pulled back in a pony tail. She could swear she's seen this person before."Yes! Yes!" The woman wants to scream. "I was the one you called every other day for the past 2 weeks so I would sign a lease. I finally said yes! So here I am. Moving van outside. Am I in the twilight zone?"According to the current SatisFacts Move-In Index, 5% of all new move-ins say their keys or lease agreement is not ready when they arrive on Move-In Day. What a missed opportunity! Our leasing and sales teams spend a lot of time and energy getting prospects excited about the idea of moving in to this community. Once that prospect agrees to move-in, the excitement needs to continue. There is nothing worse than showing up to your new home, expecting the welcoming committee to be waiting for you, only to discover that not only were they not prepared for your arrival, they don't seem to even recognize you. How disappointing! The lease renewal decision begins in the first weeks, days, even hours of moving in. If the stage is not fully set for a new resident's arrival, there is a significant chance that new resident may begin regretting their rental choice almost immediately. You don't want their first thoughts at move-in to be those of moving out!Before close of business each day, ensure everything is prepared for any move-ins expected the......
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Tenants Have Legal Responsibilities Too

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA Recent posts have suggested onerous burdens and detailed obligations owed by landlords.  “What about the tenants?” you ask.  They have some responsibilities, too.  If a tenant in California does not adhere to these minimum requirements, a landlord may not be held responsible for failure to provide a tenant with a habitable residence – i.e. the bare necessities.  Let’s outline them here, ok? To successfully prosecute a claim against you for not providing those bare necessities, a tenant probably should be able to show that: He kept the unit clean and not unsanitary.  He cannot let it get dirtier than it was when he first started renting. He cannot abuse or misuse the plumbing, gas, or electric fixtures in the unit. He should prevent his guests from damaging the premises. He should make written requests of his landlord when he wants something in the unit fixed. When you come to fix it, he should not prevent you from doing so.  He should not put the chain lock on.  He should not refuse to let you come to fix it on reasonable notice. He should throw out his trash and garbage. If your standard lease agreement does not spell out some of these responsibilities, you might consult with your transactional attorney to see if such terms can or should be incorporated. Basic equity (and some statutes) provide that a tenant should inform you if he believes the premises are or have become uninhabitable.  Any ......
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Move In - Move Out Checklist (Part 1)

By Salvatore Friscia, San Diego Premier Property Management, San Diego, CA A vital part of reducing cost when managing a rental property is limiting the expenses associated with tenant turnover. Tenant turnover usually requires the rental property to be professionally cleaned, painted or touched up, and carpets cleaned or replaced. In order for you to know what expenses to absorb and what expenses to charge back to the tenant, you should always know the current condition of the property as well as the condition in which the property was given to the tenant. To accomplish this, each tenant should be provided with a written “Move-In/Move-Out” checklist. The “Move-In/Move-Out” checklist allows both parties to identify in writing the initial “Move-In” condition and the final “Move-out” condition of the property. These checklists will eliminate any misunderstandings regarding which party will pay for non-normal wear and tear repairs throughout the tenancy and upon move out. Prior to giving the keys to the tenant the owner should completely inspect the property and document the existing condition on the “Move-In” side of the checklist. It is necessary to document the condition of the appliances, windows, screens, blinds, doors, walls, lighting, flooring, a/c, heating, toilets, faucets, ceiling fans, and any other necessary interior and exterior areas. During the initial walk-through with the tenants, it is important to review the findings with the tenant and have the tenant sign and date the document. The use of a digital camera or video camera is also recommended upon both “Move-in”......
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Property Management - Let's Talk Bare Necessities

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA In my last entry, we discussed how it was possible in this great country of ours that a burglar could sue a property owner for injuries he sustained while robbing that same property owner.  In my next entry, we will discuss why it is in the fine state of California that a tenant can sue his landlord for injuries sustained on the property which are inflicted by criminals.  But in this entry, I will get a little more practical:  we will discuss just what your responsibility is to your tenants regarding the liveability of the unit. Just what do you – the property owner – have to provide to your residential tenant to remain in compliance with the law?  Well most of this is just common sense.  If people are going to live in the premises, if you do not provide the following, not only are you not being nice, but you are breaking the law: A weatherproof environment.  The unit has to have a roof and walls as well as doors and windows that are unbroken (more on this next entry!) Electricity.  It may come as a surprise to you that most will not want to rent your unit if they cannot plug in a TV and refridgerator.  Or it may not. Plumbing.  It may also come as a surprise to you that not only would most tenants enjoy a good shower and functioning toilet, but the law generally requires it. Gas and heating.  People don’t like to be col......
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