The first installment in this series was in regards to an owner trying to change the terms of a lease after a tenant placed a deposit--and before the tenant moved in. I appreciate the feedback received--it is very interesting to listen to the discourse. There can be several outcomes to any situation faced by a landlord or property manager. The best outcome is the one that is mutually agreeable to all parties. Often the property manager is called upon to weigh in on different scenarios and find some acceptabler middle ground for the parties involved.
Scenario#2: Appliances stolen from the vacant unit after a tenant placed the deposit and before they took possession.
In this situation the tenant placed a deposit to secure the rental for a future move in. Some three days before the move in date the vacant unit was burglarized and the refrigerator, washer and dryer were stolen. The owner contacted the insurance company--with a high deductible he could not afford the claim. The owner immediately informed the tenants that they could not afford to replace the appliances. The owner reminded the tenant that the appliances were "as is" appliances--meaning he was not obligated to repair or replace the appliances in the event they did not perform. The tenant demanded the appliances be provided or a reduction in rent be made to compensate for the additional expense they would incur to rent or purchase their own. The owner refused.
What ought to happen?
James Safonov
In property management there are countless scenarios we experience that cannot always be answered in simple black and white terms. Lots of gray is out there for owners, tenants and property managers to sift through. Much like common citizens existing in society, tenants and landlords interact within a giant, ethical sea of laws and boundaries.
I am interested in receiving feedback from those in and outside our industry as to how this series of situations ought to be handled. I have compiled a list of scenarios from my own experience as well as from others in my industry. Some scenarios are less sensational than others; however, each can consume vasts amounts of time for a manager or landlord to resolve. Tenant/landlord law dictates much of what results despite what common sense may overwhelmingly scream to the contrary. In a side note, my previous employer Senator Leroy Green (now deceased) always had unique input on any topic. His thought on "common sense" was that anything "common" must not be very good if everybody has it. But I digress.
Scenario 1: deposit refund for failure to agree to lease terms.
In this case the landlord listed the property for either a six or twelve month lease term. The applicant was qualified and placed a deposit to secure the home for a future move in. The deposit receipt listed the lease term to be 12 months. A few days after accepting the deposit (less than one week from the scheduled move in date) the owner realized the lease would expire in January. Despite the fact the lease reverts to a month to month agreement and the tenant may opt to live there for much longer than the original term, the owner demands that the future tenant accept a six month lease. His rationale is that a January vacancy is much more challenging to fill than a vacancy in mid summer. The tenant refuses to accept the change in terms. The owner presents the deposit receipt showing he is not responsible for damages outside the amount of the deposit for not making the property available. The tenant, inconvenienced and out of a home threatens to sue.
What ought to happen here?
James Safonov
It cannot be said too often--opportunists are out there and your vacancy is an easy target. I am hearing more and more recent stories of thieves breaking into vacant properties and stealing everything they can. More and more it is the appliances: refrigerators, washers, dryers--even the built in microwaves, ovens and dishwashers. With all the moving trucks in the world it is too easy to use a rental ytruck to empty a rental home. View your vacants often--Homepointe is inside our vacants between two and three times a week. Be warned!
james Safonov
In this day and age we are working with more and more applicants with foreclosures. Our processors are able to evaluate who is rent worthy based on the big picture of the application. If an applicant has otherwise acceptable credit and verifiable income--it is our opinion that these applicants should be accepted with a slightly higher deposit. In most cases they are applying for a home which is similar in quality to the one they recently lost. The difference is cash flow--they are exchanging ownership for rent which is often half of the mortgage they were used to paying. The higher deposit is suggested as we are unable to verify how the home was cared for and other issues that may come up with a standard rental reference check.
James Safonov
It is crucial for all landlords and tenants to properly document the move in and move out conditions of their respective rentals. Digital pictures and written inspection sheets need to be done without fail. In this down economy every dollar counts. Though California tenant/landlord law is typically pro tenant--property owners and managers can still do their part to protect the property. Homepointe goes a step further in providing new residents with a move in amend sheet to complete. At the time of move in our tenants are given copies of our interior inspection of the rental. The tenant is given an amend sheet to take home, fill out and return within a week of the move in date. This allows them plenty of time to live in the home and do their own documentation. If any big ticket items are found we then go back to the home for a follow up. Once that initial week closes the condition of the property is cemented. The move out inspection is then compared to the notes and pictures to complete the deposit disposition. Do not do any handshake move ins....you will get burned sooner than later.
James Safonov
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Property Management Rentals and Maintenance in Sacramento, Yolo, Placer, and El Dorado Counties from offices located in Sacramento, Roseville, and Orangevale, CA We manage residential and commercial.
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