NWCLA Northern Worcester County Landlord Association “Landlords Helping Landlords” “Landlords Helping Landlords” 1 http://www.nwcla.com Volume 72 December 2010 Landlords Helping Landlords NWCLA President’s December Letter Dear NWCLA Membership, November’s NWCLA Members’ Meeting featured representatives from the Institute for Environmental Education (http://www.ieetrains.com/)who came in and discussed in our open forum the updated regulations for the EPA Renovation, Repair and Painting (RRP) laws. These laws and regulations are now being governed by the State of Massachusetts and it is required training and certification for anyone who is going to do, or have done, any Rehab, Renovations, or Painting to any properties that are “owned for a profit”. Even if in these economic times you are not seeing a profit, the intent of the ownership is to make a profit, then this applies to you. Unfortunately, because November’s meeting was rescheduled to a Wednesday night, I personally could not be at the meeting because of a previous commitment. The meeting was conducted by Jeff Landry of Landry Construction and David Fleckner of DMZ Properties. Both Jeff and David are volunteers that sit on the Board of Directors for the NWCLA and are also both certified for the new EPA RRP Laws. From reports I have heard from members in attendance, the information presented by IEE Training was not overall welcomed by our members. Please, don’t shoot the messenger! This is now, moving, forward the way we all have to conduct our business of being property owners and managers. And it is not just Massachusetts, but the whole United States. Our best line of defense to be educated, and take action on these new guidelines to do things right when we need to make these types of renovations. Obviously, no one wants to have the added expenses to our rehab projects when we buy an apartment building in desperate need of rehabilitation. But absolutely no one wants to have the heavy fine levied against them on a daily basis for being in violation of these mandates. This is a rare case of “what you don’t know CAN hurt you”. Moving forward, when you are considering whether or not to buy that multi-family unit apartment building that is either an REO, Bank Owned, or Foreclosure – it will be in your best interest to sharpen your pencil first and figure in what it will cost you to do your rehab projects the “right way” to ensure compliance with the EPA RRP Laws. A little information and prevention can go a long way. Jeff Landry is currently working with IEE Training to see if we can obtain some type of discounted price structuring for coming in at a group rate. We are currently in negotiations to see what they can offer us so we will pass along that information as soon as we have something to offer our members. One thing is for sure. If you are going to do any type of Rehab, Renovations, or Painting to your own property, you need to be trained, in compliance, and certified under the new EPA RRP Laws. No way around it. On a lighter note, our December NWCLA Member’s meeting is the annual crowned jewel of our monthly meetings. This is the time of year where we gather together for the Holidays to have our annual NWCLA Seasonal Gala Event. There is a full buffet prepared for the members by the Board of Directors, loads of door prizes and raffles, our annual toy drive for a local charity, and of course – extra raffle tickets will be rolled out to all of our members who bring in non-perishable food items for Ginny’s Food Pantry. As always, it is with great pleasure that I represent our association at this time of the year where we are able to give back to our communities where we do business. Again thank you all for your continued support through the year. See you all at the Holiday Gala Event! Happy Holidays to all of you from all of your NWCLA Board Members! Brian Lucier NWCLA President 2010 [email protected]In This Issue Page President’s Letter 1 NWCLA Useful Notes 2 Upcoming Topics, 4 BUY-SELL-TRADE-FREE 4 Tips To Keep Your Books Updated 5 Lease Payment Credit Reporting on the Horizon 6 Reasons (Excuses) for Not Doing a Thorough Tenant Screening 6 – 8 Just Say “No” 8 – 11 The Twelve Months of Renting 10 Caption: NWCLA President Brian Lucier models the latest fashion in EPA RRP Fashionware as mandated in the new rules and regulations of the law. This is the Hazardous Materials suit that is required to be worn while doing this type of work. As seen here on Mr. Lucier this fashion statement is more reminiscent of the “Stay Puff Marshmallow Man” from the movie “Ghost Busters”.
Transcript
NWCLANorthern Worcester County Landlord Association
Volume 72 December 2010Landlords Helping Landlords
NWCLA President’s December LetterDear NWCLA Membership,
November’s NWCLA Members’ Meeting featured representatives from the Institute for Environmental Education (http://www.ieetrains.com/)who came in and discussed in our open forum the updated
regulations for the EPA Renovation, Repair and Painting (RRP) laws. These laws and regulations are now being governed by the State of Massachusetts and it is required training and certification for anyone who is going to do, or have done, any Rehab, Renovations, or Painting to any properties that are “owned for a profit”. Even if in these economic times you are not seeing a profit, the intent of the ownership is to make a profit, then this applies to you.
Unfortunately, because November’s meeting was rescheduled to a Wednesday night, I personally could not be at the meeting because of a previous commitment. The meeting was conducted by Jeff Landry of Landry Construction and David Fleckner of DMZ Properties. Both Jeff and David are volunteers that sit on the Board of Directors for the NWCLA and are also both certified for the new EPA RRP Laws.
From reports I have heard from members in attendance, the information presented by IEE Training was not overall welcomed by our members. Please, don’t shoot the messenger! This is now, moving, forward the way we all have to conduct our business of being property owners and managers. And it is not just Massachusetts, but the whole United States. Our best line of defense to be educated, and take action on these new guidelines to do things right when we need to make these types of renovations.
Obviously, no one wants to have the added expenses to our rehab projects when we buy an apartment building in desperate need of rehabilitation. But absolutely no one wants to have the heavy fine levied against them on a daily basis for being in violation of these mandates. This is a rare case of “what you don’t know CAN hurt you”. Moving forward, when you are considering whether or not to buy that multi-family unit apartment building that is either an REO, Bank Owned, or Foreclosure – it will be in your best interest to sharpen your pencil first and figure in what it will cost you to do your rehab
projects the “right way” to ensure compliance with the EPA RRP Laws. A little information and prevention can go a long way. Jeff Landry is currently working with IEE Training to see if we can obtain some type of discounted price structuring for coming in at a group rate. We are currently in negotiations to see what they can offer us so we will pass along that information as soon as we have something to offer our members. One thing is for sure. If you are going to do any type of Rehab, Renovations, or Painting to your own property, you need to be trained, in compliance, and certified under the new EPA RRP Laws. No way around it.
On a lighter note, our December NWCLA Member’s meeting is the annual crowned jewel of our monthly meetings. This is the time of year
where we gather together for the Holidays to have our annual NWCLA Seasonal Gala Event. There is a full buffet prepared for the
members by the Board of Directors, loads of door prizes and raffles, our annual toy drive for a local charity,
and of course – extra raffle tickets will be rolled out to all of our members who bring in
non-perishable food items for Ginny’s Food Pantry.
As always, it is with great pleasure that I represent our association at this time of the year where we are able to give back to our communities where we do business. Again thank you all for your continued support through the year. See you all at the Holiday Gala Event!
Happy Holidays to all of you from all of your NWCLA Board Members!
NWCLA Useful Notes 2 Upcoming Topics, 4 BUY-SELL-TRADE-FREE 4 Tips To Keep Your Books Updated 5 Lease Payment Credit Reporting on the Horizon 6 Reasons (Excuses) for Not Doing a Thorough Tenant Screening 6 – 8 Just Say “No” 8 – 11 The Twelve Months of Renting 10
Caption: NWCLA President Brian Lucier models the latest fashion in EPA RRP Fashionware as mandated in the new rules and regulations of the law. This is the Hazardous Materials suit that is required to be worn while doing this type of work. As seen here on Mr. Lucier this fashion statement is more reminiscent of the “Stay Puff Marshmallow Man” from the movie “Ghost Busters”.
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NWCLA Membership $80 Membership Benefits Include:• Monthly NWCLA Newsletter• Local Drug Arrest List • Housing Court Eviction List• Member to Member Support• Informative Monthly Seminars• Association Attorney• Legislative Updates• E-mail Alerts on Housing Issues• Web Site - www.nwcla.com• NWCLA Blog posts at
Every month we are going to extend to you an opportunity to highlight the positive experiences you’ve had with any of the vendors in our newsletter.
Please take a moment to e-mail me a few words describing the work that was done for you and the name of the contractor who completed the job.
Your affirmative input will let other property owners in our group know that working with our advertisers can be a positive experience.
This is also a great way to say “thanks” to the business men and women who contrib-ute to the Northern Worcester County Landlord Association and our goal of being the best landlords that we can be!
Jay Johnson’s e-mail is [email protected] or mail him your stories to:
NWCLA, ATTN: Jay Johnson, P.O. Box 276, Fitchburg, MA 01420
NWCLA Useful Notes • Summary Process Summons &
Complaint Forms are available for $5.00 NWCLA meetings
• The newsletter committee needs you to E-mail your stories, ads, helpful hints, to [email protected]
• The Successful Landlord is available to purchase at our meeting. Cost is $40.00. While supplies last
• Anyone seeking past eviction lists please go to our web site to download the latest copy.
Ginny’s FOOD DRIVE Bring your canned goods or non-per-ishable food items to the next NWCLA meeting to donate to Ginny’s FOOD PANTRY and get extra raffle tickets for our door prizes. Get involved and make a difference to what Ginny has been doing for years for the local community. This is also another way to get the word out about how our landlord association is helping our community By participating in the food drive at the monthly meeting, you also get a free raffle ticket for our monthly member’s incentive program raffle for door prizes.
The Successful Landlord This book is a must have for your landlord library book shelf. It is essential in this state and covers the Massachusetts housing laws and is now available to purchase at meetings.
Cost to members is $40.00 while supplies last. You may also pre-order the book at the sign-in table at our NWCLA meetings.
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NWCLA MEMBER DISCOUNTS
Aubuchon HardwareGroup # 1000501 – Membership card required20% off Glidden paint 10% off merchandise
Grand Rental StationCash Acct. # *195 – Membership card and
Photo ID required 10% off
Maki’s Building Center Cash Acct. # *195 – Membership card and
Photo ID required 2% - 10% off
Sabourin HardwareMembership card and Photo ID required
Quality Drywall 10% OFF to NWCLA members
Joe Goodbrake Electrical Services 10% discount for any job for members
Does Your Real Estate Attorney Guarantee Your Satisfaction?
We do. You’ll be satisfied or we’ll refund 100% of our fee. We guarantee: • Accountability – for the service & quality we provide • Accuracy – our info is accurate, detailed & reliable • Solutions – we offer effective solutions & legal counsel
See website for details
Close a real estate purchase with us in Q1 ‘10 & we’ll prepare a Limited Liability Company or Real Estate Trust for half price ($250.00 value)
Real Estate Law Representing buyers, sellers &
mortgage lenders 978-847-0104
www.TheBestClosings.com/NWCLA
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Please Note: The information in this newsletter is not intended to be construed as legal, accounting, or other professional advice. Seek legal advice from licensed professionals for answers relating to your particular questions and circumstances.
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NWCLA Members – Did You Know?... That NWCLA Board Members David Fleckner has been tracking pending legislation that effects all of us as landlords? Be sure to visit the Legislation page on the NWCLA Web Site for this information and more related legislation topics. Take Action Today!!! http://www.nwcla.com/
NWCLA Program Schedule 2010Dec 9, 2010 Come One - Come ALL to our 2010 Holiday
Gala Event. Lots of Raffles, Door prizes, Food Pantry and Toys For Tots Drive.
Jan 13, 2010 National Grid & Unitil Service Corporation. Discussing programs to benefit landlords and answer questions in an open forum session after the presentation.
Feb 10 , 2010 Richard Reynolds, Building Commissioner of the City of Gardner Building Dept. The Building Dept’s goal is to assist contractors and citizens alike in all matters associated with building and the Building Permit process.
FOR SALE 2 Stoves 2 Refrigerators, 1 Washing Machine, 1 3-bay metal sink, 1 plastic utility sink. Great for your apartments! Starting at $100.00 Tim Damon @ 978-297-5254 __________________________ http://www.forrentorsale.net/ 3 different Ken Roberts training videos, and tapes complete with the manuals. Call Mark @ 978-502-5723 or e-mail: [email protected] __________________________ NEW, sliding glass door unit for a 4 foot tub enclosure. Hard to find. Paid $200., Will sell for $100. Call Marria @ 978-534-5982 ___________________________ 1.) Used HP MX.70 17 inch desktop monitor color grey apx 4 yrs old not used for 2. Complete with box manual, pwr cord Excellent condition like new.Asking $65.00 or BO. $50.00 takes it2.) Also have HP 845c color ink jet printer (grey) excellent condition like new with pwr adapter, no ink. Asking $35.00 or Bo. First $25.00 takes it.
Will sell all items above for $75.00 cash. All items are in working order and sold as is. I have all boxes; will deliver for slight fee w/i 30 mile radius of Fitchburg. These are my sons units - I need the room, he needs the money. Call Ken @ 978-342-0639 or e-mail: [email protected]___________________________36” x 80” outside door, hardwood with 6 windows, with frame. Dead-bolt lock included. $50.00 or BRO call Ken Anderson at 978-534-9533 or 508-641-1559
REAL ESTATELooking for Property in Gardner, Any and all calls welcome for 10+ multi-family units. Have financing approved and ready to go. Call 978-448-3873 and ask for Brian. [email protected] ___________________________NEW RE OPPORTUNITY!!!!12 Unit Multi-Family - For SaleLeominster, MA
$795,000Peter VerheyenKeller Williams Boston Northwest978-764-8846. ___________________________Ad listings are free to members. There are three ways to submit your ad: (all ads are subject to review and editing)
1.) Bring your classified ad(s) to the meeting and post on the bulletin board
2.) E-mail your classified ad(s) to: [email protected] 3.) Mail your classified ad(s) to: Attn Brian
NWCLA PO Box 276 Fitchburg, MA 01420 a.) State classification – Wanted, For Sale, Free, etc.b.) Describe the item – color, size, condition,
age, model number, price, etc. c.) Contact name – first and last name please
(must be NWCLA member)d.) Contact information – telephone and or
e-mail address
All ads subject to space limitations in our newsletter.
BUY-SELL-TRADE-FREE
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Tips to Keep Your Books Updated
By TReXGlobal Category: Business Strategies RealEstateInvestor.com
Why Book keeping? Without proper Business book keeping practices, your business is susceptible to cash flow issues and potential legal problems. Book keeping is one of the most important of your business records since it includes all your business transac-tions. Book keeping enables the IRS to evaluate your busi-ness operations and helps manage your business better.
Here is a Guide to Understanding the Basics of Book Keeping:
1. Maintaining Employee Records Employers are responsible for maintaining records on withholding, employer matching, unemployment, work-er’s compensation and employee forms such as the W-4 (Withholding Allowance Certification) and the I-9 (Em-ployment Eligibility Verification).
2. Tracking Revenues and Expenses Revenue and Expense records can be maintained through a journal or a ledger. Journal is a popular method that details receipts and expenses. Ledger is a method that records transactions as credits and debits. Recording rev-enues and expenses helps track how much and on where money is being spent, and how much money is coming in.
3. Recording Cash Expenditures To estimate your expenses as accurately as possible, it is important to record the cash your business spends.
4. Recording Inventory Maintain records of all inventory, dates purchased, stock numbers, purchase prices, dates sold, and sale prices. Try to keep inventory holdings to a minimum based on busi-ness trends.
5. Accounts Receivable and Payable Maintain all records of invoice dates, numbers, amounts, terms, dates and amounts paid or due, balances, and client information.
Tip: Consult a professional to understand the most efficient way that works for you to keep your books. Also, find out how other property management professionals keep their books.
Useful Web Site of the Month http://www.landlordonline.com/Start Your Risk-Free Evaluation Now And Get FREE BonusesLandlord Resource Center with Updates, Strategic Advice and Tips
This private, members-only site provides you with access to our Landlord Resource Center that includes; Landlord Training Articles, Community Forums, Books, How-to- Guides, Q&A, Maintenance, Collection Services, Landlord Tenant Law, Landlord Attorney Directory, Landlord Legal Forms.
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Lease Payment Credit Reporting on the Horizon
By Rental_Lease Category: Finance and Credit RealEstateInvestor.com
Starting in 2011, Experian will be tak-ing positive lease payment history into account for credit score calculations. In 2012, negative data (such as late lease agreement payments) will also be calculated.
This is mixed news for tenants, who have always enjoyed relative anonym-ity in their lease payment histories. Ulti-mately it means more accountability for tenants, who account for over a third of the American population. Those who consistently make their lease agreement payments on time will be rewarded, while those who are consistently late will see their credit scores (at least their Experian credit score) take a dive.
Experian recently acquired RentBu-reau, the largest rent payment database in the country. It’s worth mentioning that only large property management corporations currently report to Rent-Bureau, due to their stringent reporting requirements. Reporting to RentBureau is more involved than submitting a few numbers each month; contributing property managers must be willing to undergo audits, must use the technical industry-specific data-formatting Metro 2 system, and must report data on time every month without exception. There are few independent landlords willing to jump through those hoops, especially when most only manage a few rental units.
For responsible tenants, the new credit reporting will actually enable them to establish a credit history, without the need for credit cards or automobile loans. Theoretically at least, mortgage lenders will pay particular at-tention to the new data to help qualify first-time home buyers, and many with little else in the way of credit should now be able to qualify for a loan to buy real estate.
At present, roughly 50 million America have little or no credit history, and the new lease agreement reporting should help them establish credit. It comes as no surprise that nearly all of those are among the 96 million Ameri-cans who lease their homes, although many are not listed on their lease agree-ments, and therefore will not benefit from the new reporting. Of those 96
million tenants, about 8 million are cur-rently being reported to RentBureau.
As information becomes ever-more ubiquitous in American society, it seems all but inevitable that the other credit bureaus will follow suit with their own lease payment reporting programs. Ten-ant lease payment reporting is probably going to be here for all tenants in a few short years, so tenants should be pre-pared for both the positive and negative consequences for their credit.
Reasons (Excuses) for Not Doing a Thorough Tenant Screening
Last month in the November 2010 NWCLA Newsletter I wrote a full issue article on some of my best tips on pre screening tenants BEFORE signing a rent-al agreement with them and ultimately ending up in housing court for an eviction from not doing a proper screening and background check. Here are some of the top excuses Landlords have used for NOT doing pre screening of tenants.
Without a doubt, the biggest head-aches that a landlord can experience come from problem tenants. One bad
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tenant in a rental unit can cost much more than all costs associated with a typical vacancy. Inadequate tenant screening will likely result in having tenants who pay late, don’t pay at all, damage the property, and cause other problems for the landlord and/or neigh-boring tenants.
Of particular interest is the applicant’s history of credit use, evictions, and criminal activity. Past behavior tends to be indicative of future behavior, which is why the landlord must do adequate tenant screening. A prospective tenant that pays the majority of his or her bills late will likely pay the rent late.
With tenant screening, the landlord is helping himself to protect his invest-ment. By doing everything he can in the first place to adequately screen applicants and select a good tenant, a landlord will save himself headaches, time, and money.
Knowing all this, why do landlords fail to follow through on tenant screen-ings? There are many reasons why landlords fail to perform adequate tenant screenings. As with many tasks in life, we too often find excuses for not doing what we know should be done.
The reason/excuse “I don’t wan to take the time.” Certainly there are mul-tiple demands upon a landlord’s time, however, considering the adage “pay me now or pay me later.” Time spent up front on screening and selection is more effective use of your time than
later spending time battling bad tenants behaviors; processing evictions; and /or collecting judgments.
“It’s too complicated” is often used with “It takes too much time.” It may seem more difficult than it really is if you don’t understand the issues, processes, and products associated with tenant screening. Before finalizing on a vendor, ask customer service what to expect. What exactly do you need to do in order to become a tenant screen-ing customer? Keep asking questions until you understand the requirements and time frame to both sign up for the desired services and to conduct typical screenings.
“It cost too much” is another often used reason/excuse. If cash flow is in crisis, it is prudent to minimize cash expenditures. However, some screen-ing items can be done by landlords themselves at the expense of only their time those items that require third-party vendors are available at relatively low cost. If money is the issue, poor deci-sion making on tenant selection will only add to the cost.
It is important to differentiate be-tween price and cost. What you pay now does have an immediate impact on your checkbook, but the cost of adequate screening is usually returned many fold by the benefits of a good tenancy.
“I don’t know how” or “I don’t know where to start” is a valid concern, but
one that can easily be remedied. Land-lord associations, landlord help Web sites, print publications, and seminars devoted to helping landlords succeed are numerous and varied. Landlord Web forums are great opportunities to learn from others. Fellow landlords freely share the wealth of their experi-ences and offer encouragement and advice.
There is no need to feel alone or that adequate screening cannot be accom-plished. It will, however, take effort on your part to assess what you know, de-termine what you should know, and ap-ply yourself to education. Of particular importance is becoming knowledgeable of all applicable federal, state, and local laws associated with tenant screening.
Take time to analyze what your true screening needs are. If you have made your process to be complicated in of itself you may want to step back and determine if you really need all of that. If you do get all of that, what are you going to do with it? Remember too that fair housing compliance will mean that each and every applicant is screened ex-actly the same. So any report you order for applicant A will need to be ordered for applicant B as well.
“I trust my gut instinct” is of course your prerogative, but are you really comfortable in turning over possession of your significant investment to just anyone who walks in off the street? If your gut is wrong, that’s exactly what you will be doing. Not to say your
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character assessment isn’t better than most others but why trust to luck. Most landlords would be reluctant to give the keys to their car to a passing stranger, even a nice stranger at that. Giving away the keys to an investment prop-erty even to a nice stranger is downright foolish.
“I tried it once, but still got burned.” Although past experience does provide opportunity to teach us lessons, if we didn’t take the time to analyze what happened and adapt and adjust we haven’t learned. We probably learned the hard way more than once, but it took getting back in the saddle again to realize the benefits. No one size fits all in spite of what the label says. If you gave it your best shot, would do noth-ing different, and can handle inherent risk, then your decision is the decision that best fits your business.
“I just don’t want to be involved.” Landlords who might have this reason/excuse need to realize that they are in-volved by the fact that they own rental properties. Landlords who don’t want to be personally involved must pay
others to perform the task. However, landlords must still first understand the issues, decide which screening items will be utilized, and make sure that screening and selection is performed in accordance with all applicable laws. Screening and selection should be un-dertaken as a critical task not just going through the motions.
“I leave screening up to my property manager” is another reason/excuse for those who utilize professional property managers. Many landlords are surprised to learn that they are responsible for the actions taken by the property manager, including those related to inadequate screening. A rental property owner can be held partially, even totally liable for tenant screening/selection actions by a property manager that violated fair housing laws. Accordingly, owners should understand fair housing and be familiar with policies and procedures utilized by their property managers.
Landlording is management of the real property and of real people who become tenants there. In the course of every day management, there are situa-
tional decisions to be make. Sometimes landlords, even those who understand the issues and have adequate screening and selection policies and procedures in place, must consider reducing their standards in order to fill a vacancy. This is usually due to market conditions that result in fewer applicants, with none meeting the landlord’s standard criteria.
Perhaps the applicant is desperately in need of immediate housing and the information supplied on the application meets the state criteria. The appli-cant may be willing to provide a large security deposit to compensate for bad screening information. Will it hurt to bypass standard procedures or ignore certain screening results and accept the applicant for tenancy? The real answer is “it depends.” However, as a rule, if you ignore good business practices you will regret it. Even if this applicant is the only applicant and you feel that your cash flow demands immediately filling the vacancy, stop and reconsider. The cost of installing a bad tenant are potentially significantly greater than allowing the vacancy to remain unfilled for a while longer.
In filling vacancies, there are times when the best business decision you can make is to say NO. Saying “no” can be a difficult decision for some landlords either because they desperately need to fill the vacancy or they get caught in the emotion of the applicant’s situation.
There are also those landlords who believe they cannot say no without risking a violation of fair housing laws. While it is true that fair housing laws offer protection to certain classes of indi-viduals, it is not true that you cannot legally discriminate.
As the landlord, you should set your rental policies based on sound busi-ness criteria. Those business criteria, if developed and implemented correctly, give you the right to say no to unquali-fied applicants.
The key is to understand that filling vacancies is a business decision. The decision you make will either make you money or cost you money. Is this applicant worth the risk? You need to make sure your no is reasonable and justifiable. If you say no to everyone you won’t be able to fill your vacancy, whereas, if you say yes with even the slightest doubt, you need to be sure you can accept the risk.
Screening is a way to evaluate the degree of risk that the applicant repre-sents. Too often we think that screening
only starts with ordering a credit report. However, with the first response to your marketing efforts, you make the first de-cision, yes or no. The caller asks if pets are allowed. Your rental policy says no. The open house visitor has a rent budget of $500. Your unit at fair market rent is $650. You say no. The applicant hands you an application that is obvi-ously incomplete. Should you accept it? The business decision should say no.
What are the reasons you can legally reject an applicant? It is usually not illegal to reject an applicant under the following circumstances:
Personal Identification - If the applicant cannot furnish proof of his identity, do not accept his applica-tion. It is reasonable to require that an
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applicant furnish at least two forms of personal identification, with one being a current photo identification document.
Social Security Number - While it may be possible to conduct various tenant screenings without the applicant’s Social Security Number, do not make exceptions. Require that all applicants furnish a Social Security Number or other taxpayer identifica-tion number in order to run applicable screenings.
Refusal to Sign Application or Consent to Background Checks - While unlikely that an individual ap-plying for housing will refuse to sign the application, it can happen. If the individual signs the application, but refuses to sign the consent for screen-ing, you probably can conduct screen-ings, but why take the risk that later the applicant/tenant contests your right to gather information. If the applicant refuses permission for screening, you should say no.
False or Misleading Information - Your rental policies should contain a statement that any false information given or discovered during the course of application and screening would be grounds for rejection of the application. If you determine that the applicant has provided false or misleading informa-tion on his application or through his references you should say no.
Cannot Meet Deposit Requirements - If the applicant’s income is apparently sufficient, but he request an accom-modation of the deposit amount or a deferred deposit payment schedule, you may want to rethink this applicant. If you say yes to this, be very sure it is a business decision and not a preferential or discriminatory reason. The best deci-sion is to say no if the deposit amounts cannot be made before lease signing.
Is Not of Legal Age - You cannot have a valid lease agreement if your applicant is not of legal age or considered an emancipated minor ac-cording to your state’s law.
Exceeding Occupancy Limits - If there is a valid reason to limit oc-cupancy, such as for health and safety reasons or due to limitations of the unit’s mechanical systems, you can say no. However, be careful that your oc-cupancy limit can be supported.
No Employment - You want the applicant to be able to meet rent payments. Without employ-ment or some other verifiable source of income, there is no reason to assume the applicant can make the rent.
Insufficient Income - You want a tenant who has enough in-come to pay the rent and his other living expenses.
Cannot Meet Terms of Lease - Your rental policies state your lease terms and conditions. You should also re-state them when you accept an appli-cation. If the applicant requests negotia-tion of certain terms, or cannot meet the lease terms, think again of the risk and claims of possible discrimination if you alter such terms.
Insufficient Rental History - Are you willing to accept first time rent-ers, students and others with a limited history, or former homeowners now re-entering the market? If they don’t meet the requirements of your policies, say no.
Guarantor or Cosigner - A cosigner or other conditional accep-tance requires more time, effort and money to process and monitor through-out the tenancy. Do you really want to offer this option? Once the policy is set, stick to it.
Bad Landlord References - Did the applicant give sufficient notice before moving and generally adhere to the terms of the lease? Would they rent to this individual again? Rent payment history, property damage, and whether full deposit was returned provide clues for future rental performance. If the landlord who knew your applicant doesn’t give a positive endorsement, you should say no.
Bad Employment References - If possible, ask the supervisor if the ap-plicant is considered a good employee. Is there a history of tardiness? Behav-iors at the work place can also be indica-tive of actions taken outside of work.
Bad Credit History - Credit management history is clearly shown in credit reports. With a history of late payments, missed payments, or debt obligations that burden the abil-ity of the applicant to meet current or future debt, you should say no. You should say no if public records indicate the individual has uncollected items, liens, judgements.
Credit Score - While there is no magic number, there is indeed a range that indicates potential trouble. Become familiar with credit scoring models and set your rental policies so that the minimum acceptable score is consistent with the location and condition of your property.
Evictions - Most landlords do not want a tenant who has been evicted. Some landlords think this condition as a make or break deciding factor. Other landlords place less of an emphasis on evictions if the eviction occurred in the distant past.
Bankruptcy - You have the right to say no to an appli-cant who has filed bankruptcy. How-ever remember that once discharged, applicants cannot file again for a certain number of years, the number depend-
Volume 72 December 2010Landlords Helping Landlords
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The Twelve Months of Renting By Brian LucierSung to the tune of: The 12 Days of Christmas Throughout the year the NWCLA presents some tough topics to deal with as landlords to our members. Not always good news, but we are hear to help as a volunteer organization. This Holiday Jingle in no way is meant to poke fun at our tenants or take lightly the task at hand of providing safe, affordable housing. It does however pro-vide a breathe of relief to look back at the past year to highlight some of the topics we have covered at our monthly meetings and poke a little fun at ourselves as landlords. Feel free to sing along...
On the FIRST month of renting, my tenant said to me... Can my best friends move in with me?
On the SECOND month of renting, my tenant said to me... Wanna have a dog... Can my best friends move in with me?
On the THIRD month of renting, my tenant said to me... Think I blew a fuse... Wanna have a dog... Can my best friends move in with me?
On the FORTH month of renting, my tenant said to me... Better call the plumber... Think I blew a fuse... Wanna have a dog... Can my best friends move in with me?
On the FIFTH month of renting, my tenant said to me... I CAN’T PAY RENT!!! Better call the plumber... Think I blew a fuse... Wanna have a dog... Can my best friends move in with me?
On the SIXTH month of renting, my tenant said to me... Sink pipes are leaking I CAN’T PAY RENT!!! Better call the plumber... Think I blew a fuse... Wanna have a dog... Can my best friends move in with me?
On the SEVENTH month of renting, my tenant said to me... Lost my keys again... Sink pipes are leaking... I CAN’T PAY RENT!!! Better call the plumber... Think I blew a fuse... Wanna have a dog... Can my best friends move in with me?
On the EIGHTH month of renting, my tenant said to me... Had to fix my car... Lost my keys again... Sink pipes are leaking... I CAN’T PAY RENT!!! Better call the plumber... Think I blew a fuse... Wanna have a dog... Can my best friends move in with me?
On the NINTH month of renting, my tenant said to me... Think I saw a mouse... Had to fix my car... Lost my keys again... Sink pipes are leaking... I CAN’T PAY RENT!!! Better call the plumber... Think I blew a fuse... Wanna have a dog... Can my best friends move in with me?
On the TENTH month of renting, my tenant said to me... Water in the basement... Think I saw a mouse... Had to fix my car... Lost my keys again... Sink pipes are leaking... I CAN’T PAY RENT!!! Better call the plumber... Think I blew a fuse... Wanna have a dog... Can my best friends move in with me?
On the ELEVENTH month of renting, my tenant said to me... Heat isn’t working... Water in the basement... Think I saw a mouse... Had to fix my car... Lost my keys again... Sink pipes are leaking... I CAN’T PAY RENT!!! Better call the plumber... Think I blew a fuse... Wanna have a dog... Can my best friends move in with me?
On the TWELFTH month of renting, my tenant said to me... Is this place deleaded? Heat isn’t working... Water in the basement... Think I saw a mouse... Had to fix my car... Lost my keys again... Sink pipes are leaking... I CAN’T PAY RENT!!! Better call the plumber... Think I blew a fuse... Wanna have a dog... Can my best friends move in with me?
Volume 72 December 2010Landlords Helping Landlords
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Story continued from Page 9
Do You Know Other Landlords Who Are Not NWCLA Members? http://www.nwcla.com NWCLA Members, with your paid membership, have access the member’s only section where you can download the latest HOUSING COURT EVIC-TION LIST and DRUG ARREST LISTS. We welcome any feedback you may have on the web site and hope you find it informative.
NWCLA Bucks Up for Grabs For each new member that you refer to NWCLA , You will receive $10 (ten) dollars in NWCLA bucks. You may redeem these dollars at our monthly meetings to buy items that will be avail-able for sale or… you may save them up towards your yearly membership fee.
Brian Lucier also maintains online forums, blogs, and posts at http://realestateinvestor.com/brianlucier and at http://brianlucier.wordpress.com/
Our NWCLA group can be seen at http://www.realestateinvestor.com/groups/69/
Invite NEW MEMBERS to Join Do you know someone thinking of becom-ing a landlord or property manager? If so, invite them to become an NWCLA member. It is the mission of the NWCLA to educate, inspire and assist landlords in their business. The membership of the NWCLA is filled with knowledgeable, experienced and help-ful people. Meetings are held the second Thursday of each month at 7:00 PM. Contact Brian Lucier via e-mail at [email protected] or call (978) 448-3873 for more info.
ing on the chapter filed. Past problems may have taught the applicant a valu-able lesson.
Criminal Record - A criminal conviction can be reason to say no if the nature of the crime presents a future threat to the safety of others or damage to property. Ex-con-victs are not a protected class with one exception - Individuals with convic-tions for past drug use. Past drug ad-diction is considered a disability under fair housing laws. Individuals with convictions for sale or manufacture of drugs or who currently use illegal substances are not protected under fair housing laws.
Sex Offender - Megan’s Law requires persons con-victed of violent sexual offenses and sexual offenses against children to register with law enforcement of-ficials in the state where the person lives. While most states have online databases where such information can be searched by the general public you should be aware that in some states there are restrictions on whether this information can be used to deny rental housing. If your state’s law does not prohibit such actions and you are reasonably certain that the person poses a current, direct threat to your other tenants, you can say no. You may also wish to consult a competent attorney regarding the matter.
Pets - If your rental policy is “no pets,” then you can say no to an applicant who also wants his dog to move in. However, be aware that in the case of service animals you must accommodate the tenant’s request.
Has Water-Filled Furniture - If your rental policies say no water-beds, then say no to applicants who have one.
Smoking - Since smokers are not a protected class, you may prohibit smoking in you unit or on your property.
Has Home-Bassed Business - Many individuals are self-employed and do work from home. Be sure you know your local regulations regarding zoning, know any HOA restrictions, and understand related insurance is-sues before saying yes.
As a final note, do not assume you can legally discriminate for any rea-son that is not mentioned by name in federal, state or local fair housing laws. Courts in some states have ruled that discrimination on the basis of personal characteristics constitutes arbitrary discrimination and is illegal. You may think you can say no to an applicant because of his occupation (e.g. attor-ney). If the applicant was otherwise qualified, you could find yourself defending a fair housing claim based on your arbitrary decision not to rent to attorneys. Be very thorough in you evaluation of applicants and base any decision on facts that can be supported based on business principles.
If there is a business reason to say no, you can legally say no. However do not use a business excuse to disguise illegal discrimination.
Additional Information
Most of the issues discussed in the article are covered in considerably more detail in our eCourses and/or in our Mini Training Guides.
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NWCLA’s Dinner Buffet NWCLA Monthly Meeting Menu
Dec. 2010 Assorted Buffet Dinner Prepared by The NWCLA Board of Directors Soda, Coffee and other Beverages
You may have noticed lately that all of the board members are now pitching in and taking turns to make sure all of meeting have a variety of foods that you have been requesting such as pizza and better deli sandwiches. If you have menu suggestions as what you want to see served at our meetings or any other ideas for food, kindly talk to any of the board members at the food table! We welcome your comments and suggestions.
