|Landlord Newsletter October 18, 2011|
FREE Sign Up
October 18, 2011
In this issue:
Please e-mail us if you have any questions or would like to add or share any material / information.
The LPA Dishonored Check Notice
Do Your Tenants' Rent Checks Bounce?
One fact of being in the landlord business is that rent checks will occasionally bounce. When that happens, you, the landlord will probably not find out the rent check was returned until 3 or 4 weeks later, depending on how efficient your bank is.
Like a late rent notice, the LPA Dishonored Check Notice will inform the tenant that the rent check was returned for insufficient funds. It will ask for the balance due along with any applicable bounced check charges, late fees, and daily late charges as agreed in your lease ...
By Vincent S. Castellano With apologies to Dr. Laura of Talk Radio, small landlords are among the dumbest people on the planet. They must be, because they do the dumbest things.
1. Landlords Give Keys to StrangersWould you give your car to a complete stranger? Of course not. But landlords give keys to their buildings (which are worth much more than any car) to complete strangers. Consider what typically happens when a landlord has an apartment for rent. The prospective tenant calls and makes an inquiry about the apartment. The landlord is so happy to get a call he spills his guts to the tenant, and makes an appointment for the prospect to see the apartment.
The prospect comes over and the landlord shows the apartment, all the while telling the prospect how wonderful the apartment is. At that point, if the prospect says he wants the apartment and has the money, the landlord is so mesmerized by the cash that he will give the prospect the keys on the spot.
What does this landlord know about the prospect? Nothing! This prospect could be New York's number one deadbeat. He could be wanted in a dozen states for murder. Yet the landlord just gave keys to property worth more than $50,000 (and often much more) to him.
2. Landlords Don't Get Rental Applications From Prospective TenantsThe landlord-tenant relationship is a very odd one. The landlord is at the most powerful BEFORE the tenant is given the keys. Once the tenant has the keys, then the power shifts to the tenant. The tenant then has a right to be on the property (whether or not he pays the rent) and the police will enforce that right.
After the prospect has seen the apartment and has said he wants it, that is the point of the landlord's maximum power in the relationship. The prospect needs the landlord to agree to the tenancy. Therefore, the landlord can get anything he wants out of the tenant at that moment, but not later.
That's when the landlord should give the prospect a rental application. Some owners make up their own (this can be very dangerous unless you know what questions you cannot ask), while others simply buy rental applications from stationery stores.
A rental application has two purposes. The first purpose is to find out who this prospective tenant really is. The second purpose is to get enough information so you can find him later if he leaves town owing you rent. Applications vary, but you must get certain basic information: the full legal name of the tenant, current address, prior address, social security number and date of birth. It's highly advisable to get the tenant's occupation, employer's name, driver's license number, car license plate number and bank.
I once worked for a property owner who insisted that photocopies be made of the prospect's driver's license and social security card. The more information you get, the easier it will be to find the tenant if he skips town.
Oh, by the way, if you don't get the information at this point, you can't get it later. Not that it is illegal to ask a tenant for the information later, but if you ask the tenant and he refuses to give you the information, what are you going to do about it? Evict him? No Housing Court Judge in this city would evict a tenant for failure to provide this information after he has signed a lease.
3. Landlords Fail to Check the Information on the Application
It may come as a surprise to you, but people lie. Especially those with something to hide. The prospective tenant can tell you anything and you won't know they are lying unless you check it out. There is no excuse for that. Credit checking companies exist and the more sophisticated companies can get you a credit report on the tenant and a tenancy report (they can tell you if the tenant has ever been evicted before) in less than an hour by fax. But be careful. It is illegal to do a credit check on a tenant without his written permission.
I know of one two-family homeowner in Brooklyn who was burned by the "tenant from hell." Now she visits the prospective tenant at their current address. She visits without warning because she wants to see how the tenant lives. Are they clean? Is the apartment damaged? Many owners call the prospect's employer to verify employment. Whenever a prospect gives me a check I routinely write on the application the name of the bank and the account number.
Think of it this way, credit checking is so common today that if you don't do a credit check on the prospect, you are probably accepting a tenant that other landlords rejected.
One word of caution if you call a prospective tenant's current landlord for information ...
John Reno also does Mortgage Loan Modifications (Nationwide).
Dear Mr. Reno:
"If tenant wishes to purchase said property in the future, she will be given first right of refusal. If a meeting of the minds on the sale of said property happens, a commission of 4% is due"
Is this wording typical? Should there be a time limit or indefinite? What if I do some lease with option to buy and don't get enough dollars up front until the full purchase contract goes through? It clearly says meeting of the minds rather than actual transaction - that concerns me. Am I right in thinking that I would owe the commission as soon as the terms of the agreement are decided on rather than on a closing date?
A: That's sneaky! A hidden commission agreement in a lease. You should delete this. The realtor shouldn't dictate the terms of the lease, and in this case, for her own motives.
Dear Mr. Reno:
A: Well I'm sorry to hear that but when the lease expires, you can't force him to renew it. Why don't you offer him some rent? Maybe you could get some financial aid. Maybe Section Eight?
If you have a landlord tenant problem you'd like to ask a question about, please feel free to e-mail me your question.
"Being the richest man in the cemetery doesn't matter to me... Going to bed at night saying we’ve done something wonderful... that’s what matters to me." - Steve Jobs
"95% of tenant problems can be eliminated in the screening process." -
"Tough times don't last. Tough people do." - Gregory Peck
If you want to survive as a landlord, "You can not run your business from your heart. You have to run it from the head." - Nick Koon, Hard Nose Landlording
"How much did your last tenant problem cost you?"
- John Nuzzolese
1 FREE BONUS ITEM with a NEW 5 Year Membership
Receive a copy of "The Accidental Landlord" by Danielle Babb or a NEW LPA HAT!
Please email us your new LPA Membership order # and we will send your book and hat!
Offer valid until October 31, 2011!
Did You Know...?
If you ordered any LPA forms in the past 60 days, the LPA will credit back to you the cost of those orders when you email us your new LPA Membership order #.
Take Advantage of our low Renewal Prices!
How to Check your LPA Membership Expiration Date:
If you haven't already, please take the opportunity to sign up for The LPA's Quick Check Credit Reports! Quick Check is a simple, fast way to access online credit reports while saving you money!
What are people saying about The Landlord Protection Agency?
© 2000-2013 The Landlord Protection Agency, Inc.