Category Archives: Debt Collection

10 Steps Toward Low-Risk Landlording

Learn how to protect your rental property from common mishaps and risky situations.

Most rental property owners worry about protecting their investment. From physical damage to the property to insurance claims to lawsuits brought by tenants, there are myriad ways that you can lose money. Fortunately, minimizing risks in a rental business doesn’t require a ton of money or a staff of experts. All you need to do is learn where you’re vulnerable and then take commonsense steps to minimize that vulnerability.

Here are ten steps you can take to protect yourself against liability as a landlord. By acting now, you’ll enjoy a big payoff: reduced likelihood of lawsuits, harm to tenants and guests, damage to your property, and financial distress to your business.

Step #1: Get the Right Insurance for Your Property and Business

Don’t wait until a loss occurs before you determine whether you have the right insurance for your business and property. Review your current policy with your agent or broker, then discuss coverage options that fit your needs.

Step #2: Make Your Property Physically Sound

Keep your property safe so that people don’t get hurt. To do this, learn the basic legal requirements for repairing and maintaining your property, and then follow them.

Implied warranty of habitability. Virtually every landlord must comply with a legal rule known as the “implied warranty of habitability.” This means you must make sure your rentals are in a “fit” and “habitable” condition when tenants move in, and you must maintain this condition throughout the tenancy. Get familiar with your state and local health, building, and safety codes, and strive to keep your property compliant.

Take steps to prevent injuries and losses. In addition, take other reasonable steps to prevent injuries and other losses. For example, take all tenants’ repair requests seriously and fix problems promptly. Inspect your property yourself for hazards. If you can’t address a hazardous situation immediately, warn tenants and visitors about the danger. (For example, put traffic cones around a pothole, or post signs and safety tape near a spill on the floor.)

Step #3: Make Your Rental Property Accessible to Disabled Tenants

Make your property accessible to tenants with mobility impairments and other disabilities. Check whether structures on your property must follow the Fair Housing Act’s “design and construction” requirements. (Generally, multifamily buildings that were designed and constructed for first occupancy after March 13, 1991 must comply.)

Regardless of when your buildings were constructed, seriously consider all requests from a disabled prospect or tenant to modify your building in order to meet that person’s needs. Review each request on a case-by-case basis and grant it if it’s reasonable. For example, a prospect’s request to install grab bars in the bathroom or lower kitchen cabinets is probably a reasonable modification request.

Step #4: Remove Environmental Hazards from Your Property

Removing environmental hazards is often trickier than removing other physical hazards. Environmental hazards often can’t be seen, and they may not become apparent until they cause injury or property damage. For example, a landlord might not learn of lead paint dust on her property until a family gets their child’s blood test results showing elevated levels of lead. What’s more, in some cases environmental hazards remain invisible even once they’ve caused damage, as in the case of carbon monoxide or radon.

Do your best to address environmental hazards before they cause serious damage. Here are some ways to do so:

  • Require tenants to report all leaks and flooding to you promptly so that you can take quick action to prevent mold.
  • Maintain your heating systems and appliances, and install carbon monoxide detectors in order to prevent carbon monoxide build-up.
  • Comply with federal testing requirements when employees or contractors work on asbestos-containing building materials, such as sprayed-on ceilings. These tests will reveal to workers what’s in your building, and you can use this knowledge to protect your tenants, too.

Step #5: Prepare for and Handle Disasters and Emergencies

Take steps to safeguard your business and protect your property, tenants, and employees in an emergency. For example:

  • Back up your computer files and keep important documents (such as a mortgage, note, and management contract) in a secure and fire-proof off-site storage facility.
  • Report suspicious objects, activities, and mail to the police, and take bomb threats seriously.
  • Document the location of utility shut-off valves, a step that can save lives and minimize damage if a fire or other disaster occurs.
  • Create an emergency procedures manual with an evacuation plan that’s tailored to your property.

Step #6: Lower the Risk of Crime at Your Property

In recent years, courts have increasingly found landlords partially responsible for crimes on their properties because they didn’t provide adequate security.

To prevent problems and keep your property and tenants safe, comply with state and local laws concerning security measures on rental properties. Screen your applicants and employees carefully — don’t just look for experience and know-how when it comes to filling a position on your staff. Adopt a smart key policy so that keys don’t fall into the wrong hands, and make sure your intercom system doesn’t link tenants to their apartment numbers. Answer prospects’ questions about security candidly, and deliver on any promise you make to increase security.

Step #7: Avoid Fair Housing Complaints When Choosing Tenants

If a prospective tenant believes you violated her civil rights, she may take legal action against you. Even if you win, defending yourself takes time, money, and energy.

To avoid problems, learn the basics of fair housing laws. The key to compliance is treating everyone the same. Some ways to do this include:

  • putting your screening criteria into a written tenant selection plan and giving a copy to applicants
  • rejecting applicants for legitimate business reasons, such as poor credit or negative references from prior landlords, and letting applicants know your reasons for rejecting them, and
  • keeping an updated log of apartment availability, and granting prospects’ requests for reasonable accommodations. For example, if you have a “no pets” policy and a prospect needs a guide dog to accommodate his disability, let him keep the dog as an accommodation.

Step #8: Adopt Careful and Consistent Business Practices

Many landlords create risks just by the way they go about their business. Be a careful and consistent landlord by using a written lease or rental agreement with tenants and by enforcing lease clauses consistently. Create house rules for tenants to follow (for example, regarding pets or children’s health and safety) and enforce them. Don’t let a friendship with a tenant interfere with your professional relationship. Also, to prevent identity theft, don’t use tenants’ Social Security numbers any more than needed.

Step #9: Avoid Problems When Hiring Help

Hiring help brings the promise of efficiency, savings, peace of mind, and profitability to your business — but it also brings risk. To lower your risk, determine whether you must classify a helper as an employee or an independent contractor.

For employees, be sure to withhold the appropriate payroll taxes and create a zero-tolerance policy against sexual harassment.

When using contractors, make sure they have insurance and sign a written contract with you.

If you’re considering hiring a management company or need to hire a lawyer, ask questions until you’re satisfied you’re choosing the right one.

Step #10: Taxes: Stay on Good Terms with Uncle Sam

Take steps to avoid a tax audit and to maximize your deductions. For example,

  • Establish a recordkeeping system for your business so that you keep track of every document that will substantiate your claimed income and expenses.
  • Understand how your choice of business structure and tax year affect your taxes.
  • Find out what deductions you’re entitled to claim, and then claim them.
  • Finally, hire the right type of tax pro for your business, and review your past returns for evidence of trends or problems.
Information obtained from nolo.com

For more help regarding these issues please visit:

https://helpforlandlords.com/landlord-state-guide-assistance/

Back Rent Collection – Get on it Immediately!

Collect your back rent as soon as feasible. Clearly, it is a part of the rent collection procedure and not especially cheerful, however after you let the situation spin out of control, you will make collecting sometimes more difficult. If you do not allow that happen, you will have a significantly simpler occasion receiving rent that is later than usual. The 1st second your renter is behind schedule on money owed, you should step up to the plate!

It is valuable to get on it fast, however be judicious with doing so in person since that could lead to conflict. The ideal thing to do is send out a letter to the renter. The correspondence does not have to be sent certified and is not a legal paper. Be certain to send out your letter to the exact property and have the the required postage on it; this way, the second you mail it, it will be classified acknowledged. The subject of the correspondence must courteously say that he or she must notify you to solve the problem as soon as doable.

When the renter offers you some of the monies, it would be sensible to take it. And you ought to present the renter a receipt for the quantity of money you are handed noting that this is simply some of the money and that they are still obliged to shell out the balance of their money owed.

It is completely within your rights as a property owner to look into how substantial a circumstances your renter may be in. You are permitted to look into if they still have a job. If your original rental agreement does not avoid you from communicating with their employer, you might do so to determine if they are currently working at their job.

Additionally, the Fair Credit Reporting Act lets you to check their credit report once more if they are financially indebted to you (with back monies. Your property application is considered a legal paper and nearly always contains a clause noting that this is allowable.

Although it is inside your privileges to do so, it will not be of much benefit to you. Regardless of the renter maybe being unemployed and carrying extra debt, if they come up with the rent money, you can not send them packing. The only thing that getting this updated information may do for you is to give you personal rules as to how much breathing room you will assign them for closing out the balance of their rent.

What you do not want to have happen, if you can dodge it, is not collecting the rent and still having the renter in the apartment. If this happens, you are left with no options but throwing them out.

The first step is to send your renter a Notice to Quit which is considered a legal paper. This paper tells your late renter that they have a certain duration of time to pay you their back rent (usually between three and fourteen days depending on what city your property is located). If they can come up with the late balance, they are permitted to remain living there. If they can not, they must vacate.

If the renter vacates still owing you back payments, you might have to gather the overdue amount in some other way.

The Fair Debt Collections Practices Act (FDCPA) was established to protect consumers (in this case, your renter) from abuse by debtcollectors. The FDCPA states that a property owner is not considered a debt collector since they are acting on their own behalf. But even though you are not subject to the rules of the FDCPA, you can not use the same abusive and often, corrupt practices that the FDCPA disallows.

If your building is managed by someone other than yourself (for example, a residential property manager that lives on the site or you have hired a property management company to manage your property), they are not considered debt collectors either. This is for the reason that the rental payments are not owed to another individual or property management company. Know that, neither you nor your management company (if they look after your property) can mention a third party debt collector during the collection process. If you do, you are considered a debt collector and are subject to the practices of a debt collector under the FDCPA.

If you discover yourself unable to acquire your back payments paid in it’s entirety, you may have to sue the renter for breech of his rental agreement. If this occurs, you can maintain eviction on your own or hire an lawyer who is more familiar with the legal paperwork needed to complete the process to the courts satisfaction.

So, get on it now!

By Stirling Gardner (The Hollywood Landlord) is a writer and property management expert on StockMarketsReview.com

I currently use Rent Recovery Service collection service, they provide a flat fee program that has been extremely helpful in recovering my money.  Plus I get to keep all the money my tenant’s pay!!!  To find a collection agency visit my site here or visit Rent Recovery Service.

In this economy you have to screen your tenants!

As everyone knows the economy is drastically effecting the economy and cash flow.  But now is not the time to cut back on costs associated with proper property mangement practices.  I like to think of my property mangement practicies like Goldlocks and the 3 Bears.

If your expectations are too high (too hot!) you may limit yourself from finding qualified tenants for a vacancy.

If your expectations are too low (too cold!) or vague you may find plenty of tenants but the quality of those tenants will most likely be poor.

If your expectations are reasonable (mmm…just right!) your property mangement practicies will assist in protecting your investment and keeping your cash flow, well, flowing.

One of these good property mangement practices is getting in the habit of doing a thorough background check on a prospective tenant.  Tenant screening background checks are important and the reports included in them can vary.  Generally a tenant screening background check or tenant screening report will consist of the prospective tenant’s credit report or credit history, rental history, and any criminal activity.

Right now many tenant screening providers provide 2 different options to access tenant screening credit reports.  The first option is to receive a rental recommendation based on the prospective tenant’s credit report.  The second is to make your own decision by examining the credit report yourself.

For the first option, a rental recommendation based on the prospective tenant’s credit report, is an extremely valuable and quick way to decide if a tenant is “move in ready”.  The tenant screening provider will run the credit report and provide you with an instant decision based on the applicant’s credit. 

The second option requires a onsite or physical inspection.  Its more work on your part and costs more money.  While it does allow you to make your own decision, I’m not convinced it’s all that necessary. 

When selecting a tenant screening provider make sure they have an assortment of reports to choose from, like:

  • A Credit Report Decision or Credit Report
  • Criminal History
  • Statewide Criminal History
  • Nationwide Criminal History
  • Countywide Criminal History
  • Telecheck – a great source to check if a tenant wrote a bad check
  • Sex Offender Searches
  • Eviction History – I almost forgot that one!  Checking the Eviction history of your tenant is very important!!!
  • SSN History – this will provide you with all addresses associated with the Social Security Number.  It can be really helpful with evaluating some of the reports above
  • Fraud Checks
  • and many more

In addition to running the above reports for a reputable tenant screening provider, you’ll also want to obtain documenation from the prospective tenant.  Not only are these documents great for the tenant screening process but they will help in the recovery your money should the tenant skip out owing you money!  So keep these in mind:

  • Driver’s License
  • Social Security Card
  • United States Passport
  • United States Birth Certificate
  • United States Military Identification Card
  • Certificate of Naturalization
  • Certificate of Citizenship
  • Permenant Resident Card
  • Foreign Passport with United States Visa and valid I-94 form
  • United States Military Discharge or Separation Documentation
  • Medical Insurance Identification Card
  • Marriage Certificates
  • Divorce Decrees
  • Concealed Weapons Permit
  • Employee Identification Badge (with photo!)

Important!  You should be viewing originals only!  Do not accept photocopies!  It’s bad enough fraudlent documents are created to trick a landlord but its even easier to create a photocopied one.  Only accept originals.

Thanks for listening!

Collect Delinquent Rent

Collecting delinquent rents can be a difficult and discouraging chore. Allowing a tenant to get away without paying is even worse. Once a tenant has skipped out or been evicted for back rent, you must take the extra step and aggressively pursue him. Not only are they essentially steeling from you but if you let it go, they will go on and cheat another landlord. We are all in this together and need to keep each other informed of bad tenants. Reporting to the Tenant Registry and the major credit bureaus puts all of us on notice that a bad tenant is out there and we should not rent to him.

Rent Recovery Service (www.aBadTenant.com) provides an online collection service that will take your past due rent accounts on a flat fee or contingency fee basis. The flat fee basis is very inexpensive and completely automated. The contingency fee based method is more aggressive and open-ended. Either method is effective and ultimately brings the money back to where it belongs…your bottom line!

In today’s uncertain economy landlords and property management companies can ill afford to lose money and let tenants get away with living in your building for free. Take charge and take back what is rightfully yours.

courtesy of www.RentRecoveryService.com