It has gotten to the point that we have to spend so much time policing our ads rather than finding people actually interested in renting our homes. It is such a shame that people take a good thing and use it destructively to the point that it ruins it for others. 

If you are not aware of how the scam works, we have explained it below. In addition, we are going to share tips for tenants who are looking for quality rentals and how to avoid the scams. 

THE SCAM: 

We post a legitimate advertisement on Craigslist. We make it nice with pictures, showing instructions, our brokerage information, and information about how to apply. 

The scammer takes our ad and copies the whole thing. They change the price and place their contact information in place of ours. Sometimes they add in additional incentives like all utilities included, second month free rent, etc. Typically there is only an e-mail address and no phone number. 

A prospective tenant finds the ad and is amazed at the great price that it is listed for and also the nice owners have decided to include all the utilities. How awesome is that? 

Since the tenant can’t call to find out more details, they e-mail the “owner” and the “owner responds. Great love to have you rent it, send me $XX.00 to apply for the property. Believe it or not there are people who because it is a great deal, will send the money. Of course they never hear from them again and the money is now gone. 

VARIATIONS: 

We have seen where scammers are also taking vacant homes/ bank foreclosures and doing a similar scam. 

RED FLAGS: 

Don’t Proceed if – 

• There is not a number to speak with someone.
• The number that they give you is out of the country.
• You can’t find out information about the person or company.
• They ask for money before you even view the property. 

MYTHS: 

There are a lot of people who share with you to never send money before you meet someone. At SSPM, we don’t meet our tenants at the property. We don’t meet tenants to collect applications/ application fees. We require money to be in the form of a money order or cashier’s check. We are a legitimate property management company. We have established these policies in order to maximize our time and resources. 

So, what can you do to make sure that you are dealing with a reputable firm? 

TIPS:

In today’s information age, there are plenty of ways to verify information: 

Search Craigslist for the address of the property to see if there are multiple ads. If there is one with a higher rent amount – it is a scam. 

Google the address of the property. Are there other ads for the same address for more money? Is there another contact listed? If so, you may want to contact those people and ask about the rental. 

Google the contact phone number of the advertiser. What comes up? If it is a legitimate business, you will see other ads or information about the company. 

In Georgia, there are real estate license laws that need to be followed. If a company manages more than 1 owner’s rentals, they need to be licensed by the real estate commission. Go to the site for the real estate commission and look for the firm – http://www.grec.state.ga.us/clsweb/company.aspx 

If a company, is there are professional website with information about the company and the company executives? 

Most experienced landlords have written applications process and guidelines. Ask for a copy of them before your apply. 

First and foremost, trust your instincts. If something sounds too good to be true, it probably is.

Click here to view the embedded video.

So, let me explain the tenant’s right to quiet enjoyment. When you receive compensation for someone living in a property, Georgia Law clearly states: 

OCG 44-7-1.
(a) The relationship of landlord and tenant is created when the owner of real estate grants to another person, who accepts such grant, the right simply to possess and enjoy the use of such real estate either for a fixed time or at the will of the grantor. In such a case, no estate passes out of the landlord and the tenant has only a usufruct which may not be conveyed except by the landlord’s consent and which is not subject to levy and sale.
(b) All renting or leasing of real estate for a period of time less than five years shall be held to convey only the right to possess and enjoy such real estate, to pass no estate out of the landlord, and to give only the usufruct unless the contrary is agreed upon by the parties to the contract and is so stated in the contract.  

So what is quiet enjoyment? It is the right of the tenant to possess and enjoy as the tenant deems fit. They have the right to be undisturbed. The Department of Community Affairs (DCA) clearly states in their Georgia Landlord Handbook when discussing right of entry into a property that the law has been interpreted as “If the lease does not state that the landlord can enter the apartment, a tenant could legally refuse the landlord access except in case of an emergency.” Now at Solid Source Property Management as well as most leases does state a provision for entry for reasonable timeframes Monday through Saturday with 24 hour written notice. 

But here is the bigger issue. What happens if we get inside and find that they aren’t maintaining the inside? Maybe they have not cleaned, or maybe they have broken something. What can we legally do? The answer is nothing. They have the right to live in any manner that they seem appropriate. 

What I feel is appropriate and what you feel is appropriate is subjective. As long as at the end of the lease term, they return the home in the same condition that it was when they were given possession – less normal wear and tear, they will receive their security deposit back. If they don’t leave in a clean rent ready condition, then we by law can deduct the amount to repair from their deposit as compensation to the owner for the damage. If damages exceed the security deposit, then we can pursue them in collections. But really until they move out, we can’t do anything.

We have had instances where a tenant lived in a manner that I wouldn’t live in, but when they moved out, the property was returned in immaculate condition and received their full security deposit back. This is why it is so important to establish the proper condition of the property at move in with detailed notes and pictures. Then it is really easy to compare the move in and out check sheets and determine the deductions. 

So in reality, unless we have cause to believe that there is an unlawful activity or a known lease violation (unauthorized pet for example) in the property, we allow the tenant to have full use of the property without intrusion. 

We do perform a quarterly drive by of the property and will notate anything that is not being handled properly which is the lawn maintenance or any infraction of the HOA rules & regulations. Remember however, that owners are responsible for the exterior structure of the house which includes – gutter cleaning, yearly shrubbery maintenance, pine straw/mulch refreshing, pressure washing, etc. These items are not the tenant’s responsibility. Tenants only have to maintain the mowing of the lawn and keep the beds free from weeds. Weeds in the lawn are also the owner’s responsibility so some owner’s elect to pay a weed treatment company to assist in the weed control. 

Since the tenant is paying rent, they have rights to the property and these rights must be respected. At Solid Source Property Management, we take great care to act in the best interest of our owners while abiding by the law set forth. We do believe strongly that proper screening typically saves us from a lot of problems in the future.

Last week, we received some very disturbing information that translates into even longer time frames for evictions. With all the budget constraints, the county has shared that they are no longer allowing eviction companies to reserve a sheriff for a day per week to handle their clients’ eviction. This was significantly decreasing the already lengthy process as we were able to take advantage of the eviction company planning the most effective route for their clients to get the job done.

With this new development, we will be in line with everyone else meaning that there will be less efficient routes and a first come first serve basis which will result in longer eviction timeframes. We are supporting the eviction company’s stance that this is not a good thing and will only hurt more than help.

In the past year and a half, evictions have increased dramatically. The foreclosure evictions are lumped in with our non-paying tenant evictions. With foreclosures rising to astronomical numbers, this is only crowding an already stretched sheriff service. With Gwinnett County running out of budget, we have been told that there will be no overtime that can be spent. So what does that mean for us as landlords? We are stuck waiting for the process.

At Solid Source Property Management, we are considering a wide variety of options to shorten this process. We are guiding our clients through the eviction process with the best information possible available at the time. While we statistically have very few evictions due to proactive screening, there is little we can do to foresee the loss of a job, a medical issue, or death. We work very hard to maintain a professional working relationship with the tenant throughout the whole process.   

To read some good news – read Mark’s remarks about New Construction sited in Forsyth County.

This month, we are transitioning to new property management software. This transition has allowed us to examine our base of business and to help us better serve our clients and tenants. What I found as part of our analysis was that 30% of our tenant base has at least one pet. Some actually have multiple pets. 

So what does that mean to you? First, if you are an owner of investment property and don’t want to accept pets, you are significantly reducing the number of tenants that will want to rent your place which will result in longer vacancies. 

So what is a landlord to do? We encourage all of our owners to accept pets with conditions. It has been our experience that if you do not allow pets, the responsible pet owners will go elsewhere and you will still end up with unauthorized pets for those tenants who are dishonest. Unauthorized pets create more damage and are a bigger liability. 

There are certain pets that due to insurance requirements, we cannot accept. Those are the vicious breeds – Alaskan Malamutes, Akitas, Chow Chows, Doberman Pinschers, German Shepherds, Pit Bulls, Rottweilers, Staffordshire Bull Terrier, or Siberian Huskies. The interesting thing is that people who have these breeds are appalled that we don’t accept them. While we are sure that there are many dogs in those breeds that are fine, there are a greater number that have caused problems and our insurance would not cover us should a problem arise. 

Responsible pet owners are happy to pay a pet deposit. We recommend charging a non-refundable portion for the privilege of having a pet and returning the rest provided that the lease was honored and there were no damages. 

We have all our residents sign a pet policy even if they don’t have a pet, so that everyone knows exactly what our pet terms are. It also shares with them the consequences of having an unauthorized pet. We find this comes in handy from time to time. 

We charge based on the weight of the animal the heavier the breed, the more the deposit. Also, we take into consideration the type of dog as some dogs are notorious chewers while others are just helping keep their owner’s lap warm. 

We love our pets and understand that others do too. I hope that this has helped take the fear out of accepting pets in your rental property. 

Merry Christmas from SSPM

What the letter basically stated was due to lack of funding for the program they had to cut back their portion of the rental proceeds by 15%. So that left 2 options – one to have the tenant make up the additional 15% or to forgive the amount to the tenant.

 Once again the DCA puts the landlord in a very difficult position. For the average rental, this makes about a $135 to $150 deficient per month total. If the tenant could have paid the additional money, they probably wouldn’t be on government assistance in the first place. So collecting it from them I believe will be challenging. 

So what is a landlord to do? It’s not worth it in today’s market for a landlord to terminate the lease or to evict a tenant for $1,500.00 deficient. The vacancy period, turn key, and marketing expenses for a new tenant are much more than that. However, should we just accept that? 

In Gwinnett county, we were told that after the first 12 month’s the lease renewal didn’t matter to DCA, that they would authorize a tenant to be relocated at anytime during the term and we could nor charge for early termination. This happened to put the owner in a huge disadvantage and cost the owner a much longer vacancy than has they not renewed. 

All this to say is that the government assisted programs are quickly changing and for this reason, we are not taking on any new Section 8 properties. They don’t seem to care about the contracts that they sign or that the tenant’s sign either. This is very disturbing to me. 

At a meeting of NARPM (National Association of Residential Property Managers) last week, we brought up the question about how other professional property managers were handling these issues and they also stated that they had stopped serving the DCA programs. So what is going to happen when professional property manager’s quit servicing this segment of the market? I think the DCA will find that there will be fewer homes available to serve their needs. 

It was already a difficult process for a landlord to serve this segment of the market place and I believe that we will find fewer and fewer reputable managers willing to go through the hoops necessary. This will become true especially after we see more and more landlords becoming burned by the arbitrary changes in contracts. 

Please feel free to leave your thoughts…

So I wanted to take a minute to share with you why owners need to perform the repairs and some things to be aware of. The number one reason that an owner needs to repair the property is because it is the law here in Georgia and I would assume in other states as well. Section 44-7-13 of the State of Georgia Landlord Tenant Law Official Code clearly states “The landlord must keep the premises in repair. He shall be liable for all substantial improvements placed upon the premises by his consent.”

In Georgia, the only issues I have ever seen a tenant win a legal case for non-payment of rent was when the owner did not make repairs in a timely or professional manner. The law provides a provision for the tenant to withhold their rent in lieu of repairs if the repairs are not done. Other than repairs, there is not another reason a tenant has for not paying their rent. So why would an owner want to open themselves up for litigation and not perform the repair?

I suppose it comes down to cost. I find it funny when I speak with owners and ask them if they would want to pay to live in a property where the sink constantly drips, or the stove doesn’t work, or the HVAC isn’t cooling properly and they reply of course not, but some expect their tenants to. Most property management companies like ours buy in bulk, that means that we get better service and better pricing than a typical individual would get. We do charge a fee to perform the repair or coordinate the request if not done by the in house maintenance staff. Yet, even then we are significantly cheaper on most items and yet the owners still complain.

What they don’t understand is that we hire professionals who have their own insurance, liability coverage, workman’s compensation, and are screened. We do this to protect our owners as well as our company. We have seen issues where owner’s did not use licensed and insured workers thinking that they were saving money only to be sued later by that same contractor for being hurt on the property. I encourage every owner to think carefully about using legitimate companies with the proper credentials.

If you own rental property, this is a business, the repairs are the expenses are deductible and should be done professionally. Don’t be pennywise and pound foolish.

It appears that the City of Buford went out to establish the utilties and turn on the water. Unfortunately, the tenant wasn’t home at the time they opened the water line and the washer wasn’t hooked up, but the water valve was open, so the result was a home with several inches of water. Below are some pictures of the damages:

Since there was little that we were able to do to assist at midnight, we asked them if they could stay with a family member until we could resolve the issue. First thing the next day, we dispatched our crews and found that it was a terrible mess. We had already notified the owner via text the night before so that he was prepared. He called the City of Buford and found that they were not going to take any responsibility for the issue.

The tenant’s personal items were also harmed. So we advised the tenant to also get involved. They called the City of Buford and was told that they were not responsible. So, if they cannot prove that the City of Buford was at fault, they will be out of pocket for their possessions as they did not have rental insurance. We ALWAYS recommend having rental insurance for these types of issues. If they did, the insurance company may be willing to pursue the City for them. As it stands, their only option would be to continue forward with their claim against the City.

The owner is also pursuing the City of Buford as his damages are very extensive. Historically water companies will turn the water off at the meter so that this problem doesn’t happen and leave a note for the resident. So stay tuned and we will update you on the progress.

Isn’t being a landlord great? Never a dull moment!

As a property manager, it makes our lives a little easier. Once we confirm that the owner has foreclosed, we simply turn the lease documents over to the foreclosing attorney along with the security deposit and notify the tenants where to send the rents and that we have transferred their deposit over to the new owner’s representative.

For the tenant, this is much better than having an owner who forecloses and the security deposit is lost forever. Once the new owner takes over, they may elect to negotiate a move out- cash for keys so that they can put it on the market for sale, etc.

What the law really doesn’t address is the following – banks make really poor landlords. For example when there is a repair on the property, who is the tenant going to call – the attorney or will there be a designated person at the bank? I guarantee that there is not a 24 hour maintenance hotline. No one will be dealing with their issues over the weekend which in effect, places the banks in a position of possible Landlord/Tenant violation. Banks are not in a position to be a long term landlord, but that is where we are placing them.

On a positive, the banks will be able to capture some of the revenue rather than have a vacant property. They will be able to get their marketing plan in place while the asset is (hopefully) being maintained. They will have less cost of mowing and vacancy insurance.

It is our belief that they will eventually become tired of managing the properties and hire management companies. For now they are relying on the asset managers to handle some of these tasks for them, but they too will grow weary of these services or accidently get themselves into trouble by violating landlord tenant laws and find themselves in a lawsuit.  I certainly will be interested to see what happens over the next few months.

As a professional property manager and a member of NARPM, my colleagues and I have often discussed this issue especially in the last 18 months. As the economy continues to decline, we are finding more and more property owners not living up to their responsibility and leaving the tenant high and dry with little time to regroup. Typically their security deposit is non-recoverable as well, so there is no money to relocate and in today’s economy – every dollar counts.

This is why tenants should not rent for an individual owner, but a professional property management company. At least a management company should be a firm of licensed real estate agents who holds funds in escrow and is not distributed to the owner. In addition, there is typically a provision that states that once the foreclosure auction is advertised, we can withhold the rent until the owner clears up the foreclosure.

One thing tenants need to be aware of is that there are a lot of owners that can get a stay of foreclosure action through working with the bank for a loan modification. So just because notices of foreclosure show up, doesn’t mean that the house will automatically go into foreclosure, but you should contact the owner or property manager right away to determine the best way to proceed.

Our firm always looks through the major foreclosure reports to see if an owner is listed. If so, we contact the owners and work with them to see what can be done to protect the tenant and figure out expectations.  While a management company works for the owner, we are bound through license law to treat all parties honestly, fairly, and provide accurate information. What this means is that we will work with all parties to insure the best possible outcome.

If the worst does happen and the property does go into foreclosure, we can typically refund the security deposit and sometimes part of the rental amount depending on the situation. Of course there are certain conditions that need to be met in order for this to happen.

While there is a lot of press about the owners that allow foreclosure to happen when a tenant has been paying rent, a more common issue is an owner who has allowed a tenant to become behind on their rent. Most often – although not always, a tenant will not pay and this produces additional financial pressure on the owner having to carry two mortgages while the tenant continues to stay in the property. There is very little discussion about this issue. It would be nice to be able to track those instances along with the owners who blatantly don’t pay when the tenant has been paying all along.