I am not sure where this came from or who starting teaching it.  I have heard many old-school landlords say that they use a PO Box for their rent checks.  I guess the theory was that you don’t want your tenants to know where you live.  I suppose in case of a zombie apocalypse that would be a problem or if you are a real jerk landlord I can see why you want to hide.  Now days, using a PO Box to hide your location really doesn’t work.  Using the Internet and Google, you can find out a lot about a person.  Plus, the county typically has your address on your tax statements and those are on-line also.  You would have to go to great lengths and expense to be invisible from Google and your tenants.

A more recent example is one that Kevin Stevensen from The Cleanout People.  I always knew this rule, but never found anyone that missed it and got caught by it.  Kevin sent this message:

Scott

Here is a good fyi to pass on to other landlords, we took a tenant to housing court for non payment of rent. Well she got legal aid and they found that on our lease we have a PO box for the mailing address for rent.  Well I guess as a landlord we cant do that we need a physical address.  

Minnesota state law requires that you have a physical address for you or your rental company on your leases.

504B.181 LANDLORD OR AGENT DISCLOSURE.

Subdivision 1.

Disclosure to tenant. There shall be disclosed to the residential tenant either in the rental agreement or otherwise in writing prior to commencement of the tenancy the name and address of:
(1) the person authorized to manage the premises; and

(2) the landlord of the premises or an agent authorized by the landlord to accept service of process and receive and give receipt for notices and demands.

I am 90% sure that you can still have the checks mailed to a PO box (which can be useful if you have an accountant or business partner doing the books), but you need to list a physical address per the above statute.

Here is how I handle this.  As I mentioned previously, I buy my leases from the Minnesota Multi-Housing Association.  While they cost me about $2 per lease (they are 2 part carbon), they have been approved by the Minnesota Attorney General and all Section 8 programs.  This tells me that I should not get myself into any hot water over anything in that lease.  They have a provision in the lease that handles the above law.

Here is a snapshot of that section of my lease:

I am not an attorney, but the 2nd section speaks to accepting service of process, which can never be done to a PO Box (they need to serve a person).  I am uncertain if I could put a PO box in the first section.  Probably to be safe, I would put a physical address in there and then in the Notes section of this lease write:  Mail all rental payments to:  PO Box 123, Minneapolis.

If you have only listed a PO Box on your leases, you may quickly want to post a physical address at the property and/or send a letter to all your tenants to get into compliance with this Minnesota statute.

Everyone knows the drill, you take a rental application and you call the previous landlords to see what this person was like as a renter.  Surprisingly, despite the number of tenants I go through in a year, I rarely get those calls.  When I do, I am happy to tell the caller what I think of that tenant, good or bad.  I will answer their questions.  Do I have any concerns about being sued if I give a bad reference?

****Disclaimer:  I am not an attorney and this is not legal advice, just my opinion*******

Yes and No.

• I have recently had a couple people send me emails (and I had one guy send me something on FaceBook) asking for a referral on a tenant.  I won’t answer those questions in any written format.  I will only discuss tenants verbally.  One less risk point that an email or fax could fall into the wrong hands and it could be used as proof at a trial.
• No, I don’t expect a tenant to sue me for liable.  I am mostly just stating the facts when asked questions.  Facts are facts.  If I evicted them, then that is public info.  No hiding that fact.  If the paid late, they paid late, while not public info, it is a fact.
• I can’t imagine any tenant having the energy, money, or guts to sue.  And for what?  Are they going to sue for $1 million cause I said they always paid late?  If yes, then get in line.
• While I do recommend you give factual information, I would refrain from hearsay and your opinion as much as possible.  I would expect that those opinions are what get you in trouble.
• There was a website going around that was asking for landlords to rate tenants to help each other.  While it sounds like an awesome idea, it will be plagued with issues if it gets widely used.

Using some common sense and taking the conservative road should keep you out of the courtroom.

No, this is not some new fangled material for your three season porch to keep the mosquitoes out!

This is a new technique that some associations are using to manage the flow of tenants into their buildings and neighborhood.  Here is how it works:

• All building owners agree to collective tenant screening.   Occasionally, the association may require this via a covenants or rules change.
• When you have a vacancy, you notify the association.  You still do all the showings and advertising yourself, but when you get a prospective tenant that is interested in your property, this is where things changes compared the typical screening process.
• The prospective tenant fills out an application.  That application is actually sent to either the association management company for the credit, criminal, and housing checks or you do it yourself.
• If you wish to rent to this tenant, that application is then reviewed by an association board that looks at the application to see if the tenant meets the neighborhood standards.
• The board votes if they will allow you to rent to this tenant.

A slick part of this process is that the association keeps a running list of all tenants that have ever lived in the property.  This prevents bad tenants from moving from one building to the next in same neighborhood, which can often happen because the neighboring landlords were not talking or comparing notes.

Additionally, this association group can do a better job of seeing through the tenant application faleshoods.  I have seen this problem frequently, where Jane gets evicted from 1500 Main Street for lease violations such as criminal activity or bad behavior.  Interestingly, Suzie applies for and gets accepted on an apartment at 1520 Main Street, but does not disclose that Jane will be living with her (basically moving the problem down the block).

While this process may not work in all associations, it can be very effective where there are consistent tenant problems.  It can also have a big impact where the density of housing units makes one problem tenant frustrating for all the residents.

Fall is a great time of year.  The grass slows down growing, I can open the windows and not have to run the A/C.  Kids are back in school.  I am realizing I like fall because of all the things that I don’t have to do or take care of!  Oh well.

This is also a great time of the year to get in and take a look at your rental properties.  If nothing else, it is an excuse to tell the tenant that you need to do your bi-yearly inspection so you can go in and take a look around at how they are treating your property.  Here are some other items that are worth doing as a preventative maintenance to potentially prevent emergency calls later:

• Turn on the furnace!  I can’t tell you how many calls I get once we have a cold spell from tenants that say their heat is not working.  Often, those calls are at 9pm at night once the temp drops.  Frequently, it is simply someone turned off the electrical switch next to the furnace, not knowing what it was.  Fire up that furnace now, make sure it runs, and more importantly, make sure the tenant knows it runs.
• Change the furnace filter and leave a box of 6-8 more filters for the tenants to change out every 30 days.  While I am pretty realistic that most tenants won’t change out the filters, at least the correct sized filters are next to the furnace.  Then if I ever need to go in for any other service calls, I can simply grab one and throw it in.  You will find that older home and homes that have smokers tend to have full filters much more often.
• Turn off the outside water spicket and drain it.  You do not want that to freeze and potentially flood the basement!  In fact, in many of my multi-family rentals, I simple remove these outside faucets.  There is nothing that a typical tenant needs that outside water for.
• Double check the operation of the front door locks and the garage door.  While this is not a cold winter item, these parts of the building take a lot of abuse.  Make sure they are lubricated and the screws are tight.
• Pour some drain opener down the drains.  Even if there is not a problem, this is an excellent preventative process.  I had to go over to a tenant’s property on Thanksgiving day once to unclog a kitchen sink.  She called me all in a panic because her sink was clogged and company was coming in 4 hours!
• Change the batteries in all the smoke detectors and carbon monoxide detectors.  I can’t tell you how many times I have seen tenants take the smoke detectors down and put them in a drawer because they were either beeping because they burned a pizza or because they were low on batteries.  This way, you insure they have them mounted and insure they will not beep.
• If you are responsible for supplying a shovel and/or sidewalk salt, make sure both are ready to go.  Fill up the salt container or leave another bag.  Better to do this now than when it snows at the end of October and you are running around!
• Winterize the lawn mower by at the very least putting some fuel stabilizers in the tank.  If possible, drain the oil, change the spark plug and air filter and sharpen the blades.

While all of these items may not be necessary for every property you own, getting into your units twice per year (once in the fall and once in the spring), can help you head off other maintenance calls and keep an eye on how your tenants are treating your investment property.

So everyone knows what a high maintenance person is.  In fact, some of us have dated (or are married to ) some (not you honey)!  These are people that just can’t seem to be satisfied with anything despite how good it is.  When you get one of these as a tenant, watch out.  They can be very frustrating as they are often not making problems themselves, but they want to complain about everything.  Often also, their complaints or requests are legit, but maybe they are a little oversensitive about things.

I had a new tenant in one of my townhouses.  This empty nester couple were a relocation from Memphis and had lots of cash in the bank from selling their home.  She liked the unit, but she said she smelled cigarette smoke.  I am pretty sure the current tenants did not smoke in the house, but out on the back patio.  No doubt that some of that smoke came in the house and I am sure it was on their clothes and other belongings.    They were going to be great tenants, but she insisted that I not only shampoo the carpet, but I have the ducts cleaned.  This unit was only 2 years old, but I agreed.  I paid the $250 to have the duct cleaned.  She was satisfied.  I go over there a month after they move in only to find out that she is a smoker.  Huh?

So what do you do if you have a tenant that seems to call you over every little repair and/or every little neighbor problem?  Are you spending 80% of your management/maintenance time on this one tenant?  Unfortunately, because their requests are often reasonable and legitimate, it may take you a while to identify that this is a high maintenance tenant.  So what do you do once you identify this?

• Start pushing back on their requests.  Question if it really needs to be done.  At first this may be difficult to do, because you know the work may need to be done or the place is not perfect.  Most rental units are not perfect and were probably never represented as perfect.  They have to live with some defects.
• Ask the tenant to put together a punch list and then agree that you are going to go in and do all the work one time and you are not coming back except for an emergency for 6 months.  While this may be difficult, it could get them to see that the property is just fine.
• Harder still, but I know many landlords do this, is to simply tell them that  you are not fixing it.  Period.
• Lastly, move them out.  If they continue to be a thorn in your side, tell them:  “Look, it sounds like you are just not satisfied with this property.  I don’t believe I will ever be able to get it to the level of maintenance/repair/beauty you want.  Maybe we should just break the lease at the end of next month and you should find another place that you are more satisfied with”.  This statement right there may be enough to shut them down.  Many people when presented with an ultimatum or take away will back down.

Having a high maintenance building is tough enough to deal with if you are a part-time landlord.  I would say that high maintenance tenants are probably worse as the building is not calling you on the phone at 7pm saying the door handle is loose!

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.