Landlord Newsletter February 21, 2011

Dear Fellow Landlord,
Happy President's Day!

In this issue:

• Security is Not Rent!
  
• Ask the Attorney, Real Estate Attorney, John Reno
  
• Move-out Reminder Letter
  
• "Successful Landlord Wealth Quotes"
  

Please e-mail us if you have any questions or would like to add or share any material / information.
John Nuzzolese
John@theLPA.com

So your tenant asked to use the security deposit as rent? This happens to landlords everywhere every day. The rent isn't paid, you ask the tenant for the rent and they say, "We don't have the rent this month, couldn't you just take it from our security deposit?"... or ... "We are moving - you'll just have to use our security."

Most landlords are caught off guard and are dumbfounded when this happens. Beware, this is a common occurrence in the landlord business. The tenant wants to use the security deposit for a purpose other than what was agreed.

How can we be prepared to deal with this situation? First, it is very important that your rental agreement contains a good security deposit clause, like the LPA Lease does. I believe it is very important to read the lease to the tenant before the tenant signs it. The Security Deposit clause explains how security money may not be allowed to be used as rent. That's when I warn the tenant against trying to use the security deposit as rent.
These are the points I try to make clear to the tenant:

• Security is to be kept in a special escrow account for the entire term of the tenancy.
• Security may not be used by the landlord for any reason other than physical or financial damages as a result of the tenant's failing to comply with the lease contract.
• Failure to pay rent is cause for eviction which will result in the destruction of your credit rating.
• I report delinquencies to the credit bureaus.
• Your lease agreement states that security deposits are not to be used as rent, so if you ask me to do that, you would be breaking your contract and your word.
• If your word and signature are no longer good, then I may not believe anything you say about when you want to leave, so I'll be forced to begin legal action.
• In the event you default on your rent, you are responsible for my late fees, collection costs and attorney fees.

I've been able to counter this particular type of "tenant attack" by being ready with the right comeback:
Tenant: I don't have the rent this month. You're going to have to take it from our security deposit.
Me: That's too bad. I hope you remember the consequences you agreed to in your lease.
Tenant: Oh yeah? What's that?
Me: Security is not to be used as rent... ever. Non-payment of rent is a breach of this lease subjecting you to late charges, delinquency credit reporting, attorney fees, etc. Do you really want to incur all these charges, flush your credit down the drain and have to go to court over your last months rent???
Tenant: No. Thanks for setting me straight.

OK, the tenant doesn't usually say that. He may say a few things I don't want to print on this site, but will usually snap back in line. Sometimes the tenants will bluff to see what you will do, but when they receive an attorney's letter that shows you weren't kidding, they should pay up and follow the rules.

Try to remember these points or have this page ready to refer to in case the tenant pulls the old "Use my deposit as rent" trick.

The Landlord Protection Agency® is proud to introduce John Reno, Esq., a highly experienced Landlord - Tenant attorney based on Long Island, NY.

John Reno also does Mortgage Loan Modifications (Nationwide).
(Mention The LPA for a 10% discount!)

If you have a landlord tenant problem you'd like to ask a question about, please feel free to e-mail me your question.
Submit a landlord / tenant question for Mr. Reno
Please try to keep your questions as short and to the point as possible.

Dear Mr. Reno:
I gave my tenants a letter to move out. It was supposed to be a 60 day notice but I put Jan 4 on the letter and told them they had to be out Feb 28. They confronted me and said this was not a 60 day notice. I said ok, I can change that. Do I have to send them a new letter? They have done nothing wrong and they are up to date on their rent. I am just selling the home. If they are not out by the 60 days do I have to file a eviction notice with the court or can I just call the police and they make them leave right then? Also, my Mom is their landlord and is the only one on the lease. I am the owner of the house though. My Mom moved to Mexico so can I be the one to get them out or does she have to be the one? Thank you.
Jennifer L., GA

A: You haven't mentioned unpaid rent, so I'm assuming they're current. That's a problem. If they were entitled to a 60 day notice, you haven't given it. Dum - Di - Dum - Dum.

FREE DOWNLOAD Move Out Instructions Reminder Letter This is one of my favorite forms because it saves me time and money when tenants move out according to our instructions. It is one of the LPA Forms that is often overlooked, probably because it is not listed on the LPA Essential Landlord Forms page. It is one of our Free Forms, but I consider it an "essential form" just the same. We send this form to the tenants about a week or two before they vacate. It reminds them specifically of certain tasks and cleaning they should perform in order to get a full security refund. This letter instructs the tenants how to lock up and secure the rental until it can be inspected by the landlord/ management, and also where and how the tenants should return all keys. We have found this form to be very effective in helping tenants to be more cooperative when they are moving out.

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For the LPA Landlord Q&A Forum!

Now you can rate the feedback to the questions posted by yourself and others! Your rating will show readers which answers were most helpful to you.

"While we are contending for our own liberty, we should be very cautious not to violate the rights of conscience in others, ever considering that God alone is the judge of the hearts of men, and to him only in this case they are answerable." - George Washington

"The probability that we may fail in the struggle ought not to deter us from the support of a cause we believe to be just." - Abraham Lincoln

"It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly; who errs and comes short again and again; because there is not effort without error and shortcomings; but who does actually strive to do the deed; who knows the great enthusiasm, the great devotion, who spends himself in a worthy cause, who at the best knows in the end the triumph of high achievement and who at the worst, if he fails, at least he fails while daring greatly. So that his place shall never be with those cold and timid souls who know neither victory nor defeat." - Theodore Roosevelt

"If I had eight hours to chop down a tree, I'd spend six hours sharpening my ax." - Abe Lincoln

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Electronic Rent Collection

LPA members have been asking me for a while now about how to set up automated rent payments with their tenants. I’d like to bring your attention to “ClearNow, the leader in electronic rent collection.” ClearNow enables you to have your rent automatically withdrawn from your tenant’s bank accounts and directly deposited into your bank account.

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