I was thinking about using some cliche’ to start this post off with like: “You can’t teach old dogs new tricks” or “you are never too old to learn”, but I just couldn’t bring myself to do it! I was invited to a training course about a month ago that was sold as landlord training. The cost was $45 but the speaker wanted me to attend to see if it was something that I could recommend to my investors and blog readers.
I attended this seminar last week. I was very skeptical that this wasn’t going to be much more than a very basic landlord class. Boy was I wrong! This class was informative and interesting, even for me (a guy that has owned lots of rental properties and helps investors get started as landlords almost daily). This class is actually taught by an attorney from the Home Line Tenant Hotline. They provide free legal advices to tenants and will even help them in court in certain situations.
The speaker was one of the attorneys from Home Line. He was engaging and interesting, but what I found fascinating was how he and his peers looked at different situations that we as landlords encounter every day. He was able to show how they defend the tenants by using the landlord’s ignorance of the laws and statutes. A couple quick examples were:
- They are often able to have leases invalidated because the landlord has a PO Box as the mailing address (when the state statute requires a physical address). I realized that I was taught as a landlord to use a PO Box to get your checks. I am sure there are many other landlords out there that are breaking this rule.
- If your lease converts to a month to month lease for a tenant, you legally must send them a written notification 75-90 days prior to the expiration of the lease telling them about the automatic renewal. This notification can only be sent during that 75-90 window and must be sent via certified mail or personal service. How many landlords do you think actually do all those steps?
- If you have tenant that stays on past the end of the lease, they are a hold-over tenant. If you accept money from them, you have entered into a new oral lease and you can not evict them.
- We also discussed many other legal issues such as fair housing and discrimination.
These and many more gaps/problems in landlord procedures were pointed out to us in class. I was writing furiously because I could see places that I needed to shore up my processes to keep myself protected. Not only could this information help you be a better landlord, it may help you stay out of court! I recommend that every landlord take this class. It was invaluable.
7 comments
#1White Bear Lake HomesAugust 30, 2010, 9:34 pm
Scott, another great post as usual. I also took a landlording class, but I was “forced” to take the class… This class was a requirement if you own rental property in Coon Rapids, MN. At first I was thinking to myself, “What can this class teach me as an experienced landlord?” I, too, was pleasantly surprised by the quality of the class! I just wanted to clarify what I learned about your 2nd bullet point above about providing your tenant notice of an automatic Lease renewal. My class was informed by the real estate attorney instructing that segment of the landlording class, that the landlord must remind tenant of the automatic renewal between 15-30 days before the notice period (i.e. notice period = 30 days, 60 days, 2 months, etc). So if the notice period is 60 days or 2 months, then your 75-90 days as explained above is accurate. If the notice period is 30 days or 1 month, the notice period would 45-60 days before the end of the Lease. Also, we were told that if the Lease automatically converts to a month-to-month after the original Lease ends, then the landlord is NOT required to provide the tenant a reminder of the automatic renewal (since the automatic renewal rent period is less than or equal to the notice period). Great post!
#2Darin AndersonAugust 31, 2010, 12:02 am
The PO Box thing was news to me. I can’t find mention that the address has to be physical when looking at the actual statutes but the MN SOS page on housing expands further and says the following (not sure why it doesn’t say it explicitly in the statutes as they are printed):
31. LANDLORD DISCLOSURE
Landlords must provide their tenants, in writing, with the name and address of:
The person authorized to manage the premises. (230)
The owner of the premises or the owner’s authorized agent (the person or entity that will be receiving any notices or demands). (231)
The addresses given must be a street address, not a post office box number because it must be an address at which papers can be served (handed to the recipient). The disclosure can be inserted in the lease or can be put in some other written form. It must also be printed or typed and posted by the landlord in some clearly visible place on the premises. (232)
The frightening thing is this statement claims that the disclosure also must be posted in a typed format somewhere clearly visible on the premises. Now that sounds more like multi-housing law than individual property law. Can that be for real when renting a single family house? Who is going to post stuff on the wall in a house for rent?
#3Darin AndersonAugust 31, 2010, 12:38 am
I thought I would post what I found when looking further. After digging deeper into the statutes it appear that not having given this notice will prevent you from recovering lost rent or taking back possession. However luckily it appears you can give this notice and then take action within 30 days after having given such notice. The statutes also state that not having made the formal posting of the notice on the property will not prevent you from recovering rent or possession. So that calms my fears about the posting thing. It appears the requirement to post has no teeth. But the requirement to disclose a physical address does. I am pretty sure you can still give a mailing address for checks to be a PO box if I read the statutes correctly. You just have to disclose the physical address of the manager and landlord so that if the tenant wants to serve you papers that someone can receive them.
The extra statute that I found is excerpted below. The entire statute is section 504B.181 and subd. 4 is the particular piece excerpted below:
Subd. 4.Information required for maintenance of action.Except as otherwise provided in this subdivision, no action to recover rent or possession of the premises shall be maintained unless the information required by this section has been disclosed to the tenant in the manner provided in this section, or unless the information required by this section is known by or has been disclosed to the tenant at least 30 days prior to the initiation of such action. Failure by the landlord to post a notice required by subdivision 2, paragraph (b), or section 471.9995 shall not prevent any action to recover rent or possession of the premises.
#4Scott FicekAugust 31, 2010, 10:57 am
You found the answer, but in the leases that I have there are 2 spaces for writing in the property managers info. I never understood why it was duplicated, but after learning the above rule, I know why. One space to send the rent to a PO Box and the other space to comply with the statute.
No need to post the address if the tenant has been given the information in the lease.
#5Anja LoveAugust 31, 2010, 8:06 pm
I was wondering if you could help me with what information I must release to a prospective tenant after I have done some investigation on the information she provided me on her application.
My prospective renter is asking that I send her the written information I gathered from her previous landlord.
Do I have to or does it just suffice that I tell her I could not accept her information based on the information I received and explaining her that it had to do with breaking the lease rules at her previous place of residence, that she left owing a large unpaid sum of money in damages to the unit, having one more person staying at the unit that was not reported on the lease and a few other lease violations?
In addition to having omitted information on her application and also providing misleading information?
What do you suggest I write to her or say?
As a background I’d like to mention that I did not run her credit check nor did I collect any screening fees from her. I was going to run her credit check paying it myself once I contacted the previous landlord and her character references.
I first called the phone number she gave me for her previous landlord. I asked for the person she said was the landlord (she was living at an apartment complex). The person told me that he had been there just a short while but remembered the tenant and that she was a good person, paid her rent on time and would rent to her again. Something about the way he talked or spoke about her gave me a funny feeling. So, after I talked to him, I researched the apartment complex name and number on the internet and called the number I found (which was not the number she gave me). A lady answered and I told her that I am a landlord and that the person I was calling about had filled out a rental application and I needed to verify some information. I was told that they do not answer questions over the phone but that I could send a fax with a list of questions I wanted answered and a copy of her authorization to release information. Before I hung up the lady did say I am surprised she gave you our number (she did not). After I hung up, I typed up a set of questions and faxed it along with a scanned copy of her authorization. While I was waiting for the apartment complex to get back to me, I called her character references. All of them immediately told me what a wonderful person she was, how she paid her rent in time, how nice she was to all the neighbors and how clean she kept the place (all of this information was given out without my asking for it). However, when I asked about how they knew her, one was completely vague, she said she was a neighbor and did not want to add anything else. The other two also told me they were neighbors. So I asked them where they were staying where they were her neighbors and when this was. The both gave me the names of the apartment complexes and a time period.
I then researched the apartment complexes and found that one seemed not to exist (or maybe it had just gone out of business?), the other one existed but she had not mentioned it in her application. The Leasing/management office told me to send them a copy of the authorization and the questions I wanted answered. I sent them the fax and waited for them to answer.
When I received the information – sent via fax – by the first apartment complex, the report mentioned various lease violations including having someone stay at the apartment that was not on the lease, neighbors complaints, being late twice on her rent (she stayed there for a year), her not taking care of the unit and causing damages, and her living the unit in a mess, furniture left behind and over $3400 in damages (excluding the security deposit) which she still owes the complex and other “issues” (unspecified) and that they would NOT recommend her as a tenant nor they would rent to her again.
Also I was told that the person whose number she had given me was not an employee and had never worked there.
Later I received a call from the second apartment complex I contacted and the representative there said she would not be able to answer the questions because my prospective tenant is a tenant there and they had not received a notice from her.
Based on the above info, I decided that this not the type of tenant I wanted in my house and did not even bother with the credit report.
Thanks so much in advance for the advice and insight you will provide!!!
#6Scott FicekAugust 31, 2010, 9:47 pm
You are in a different state and it may be worth a call to an attorney that specializes in landlord/tenant issues.
I would personally send her a letter saying that her application was denied for unfavorable rental history and leave it at that. I don’t think you want to disclose anything more as you could lead yourself and the other landlord down the road for a potential lawsuit. Document everything you do.
Just like when you fire someone. You don’t tell them how terrible they are, you just say that “their employment is being terminated”.
#7Jay Redding, Real Estate Investment ConsultantOctober 14, 2010, 2:48 pm
Good landlord tips!
Landlords should always entice tenants too.
Tthere is an infinite number of little ways to excite a new tenant. Free cable, installed appliances, fans, fenced-in yards, etc. Clearly each of these things costs the landlord money, but it cannot be overstated how much money you will save by keeping your property occupied at all times.
Once you acquire a good tenant, the real trick is to keep them forever. Spoil your tenants—make it so that if they go anywhere else, they will come running back to you. This doesn’t mean lavish them with expensive gifts, but be responsible. Make repairs, follow-up, and provide little bonuses like a gift card when they resign the lease. Some landlords are going as far as offering long-term tenants free high speed internet and even a free computer! What’s $500 spent on a person who will bring you thousands? While not everyone has to take such an expensive approach to tenant maintenance, I think the concept is clear: don’t just sign your tenants up and then disappear. The cost of getting new tenants—between repairs, repainting, installing new carpet, and the loss of rental income during the period of vacancy—far outweighs the cost of keeping your current tenants happy. The most successful landlords are, quite simply, the ones chosen by their tenants. Keep your tenants happy, and you will be much better off.
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