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renters rights

Renters Rights – Tenant’s Remedies for Noncompliance

Does your tenant disagree to vacate the house? Are they breaching the rental agreement? While these are the most commonly asked questions, do you know the renters rights for a tenant? Do you know that you have rights when a landlord breach your privacy?

A lot of tenants are not aware of their rights and this give property owners the freedom to exploit them. Tenants have rights when the landlord/agent cannot fulfill the lease obligations.

“Another area of tenant-landlord disputes over the return of deposits has to do with damages to the premises. Some landlords try to charge tenants for everything from a worn spot on a hall rug to faded paint to missing lightbulbs. The tenant is not… Click To Tweet

Noncompliance with rental agreement. If the property owner or manager fails to perform the required duties, as part of the renters rights, the tenant may sue for damages or terminate the lease by giving the owner the specified notice for breach of contract.

Many leases require the termination proceedings to stop if the owner or property manager begins a good faith effort to remedy the breach by the deadline stated in the termination notice. Remedies will vary depending on the lease.

renters rights

For example, under most residential leases, if the property owner or manager fails to perform the required duties, the tenant may sue for damages or terminate the lease by giving the owner the specified notice for breach of contract.

The law may require the termination proceedings to stop if the owner or property manager begins a good faith effort to remedy the breach by the deadline stated in the termination notice.

However, in which the commercial leases in the landlord’s covenants may be independent, the tenant may not have the right to terminate the lease for noncompliance by the landlord, but may be limited to a suit for damages.

renters rights

Failure to deliver premises. Some states require the owner to convey only the right of possession of the leased premises to the tenant. In others, the owner must grant actual occupancy.

If the right to possession or actual possession is not conveyed, renters rights state the tenant does not have to pay rent. The tenant can terminate the rental agreement or sue for specific performance and thereby obtain possession, reasonable damages, and attorney’s fees.

It is not uncommon for a property manager to be unable to deliver possession because the previous tenant has not vacated the premises or because repairs and alterations have not been completed.

The manager should protect the owner’s interests by including a covenant postponing the beginning of the term if necessary, waiving rental payments until the tenant is given substantial possession, and requiring the tenant to take the space, even if there is some delay.

Such a clause might stipulate that:

renters rights

Failure to supply essential services. Constructive eviction occurs when the tenant must actually abandon the premises due to the owner’s negligence in supplying essential services.

Examples of constructive eviction include failure to supply heat or water, failure to repair premises, or other material defaults that render the premises unusable by the tenant.

Constructive eviction is recognized by most state courts as the basis for termination of the lease, for an action to recover possession, or for a suit for damages.

renters rights

For the owner’s protection, the lease should require the tenant to give notice of any failure and allow the owner time to remedy the situation before the tenant claims constructive eviction. Some state statutes prohibit the cutoff of utilities to residential tenants even if rent or utility payments are owed to the owner.

Partial eviction occurs when a tenant has not physically moved out but is unable to use part or all of the premises for the purposes intended in the lease due to failure on the part of the owner.renters rights

In cases of partial eviction, state statutes sometimes allow the tenant to give written notice of the breach of contract to the owner.

After allowing time to correct the breach, according to the renters rights, the tenant can take appropriate measures to obtain the services needed and then deduct the cost from the rental payments. In other cases the tenant may simply be allowed to withhold rent until the breach of contract is corrected.

property management agreement

Property Management Agreement – The Management Contract

The property management agreement is a dated agreement signed by both the manager and the owner (or the owner’s authorized representative) that defines the relationship between the parties, serves as a guide for the operation of the property, and provides a basis for the settlement of any future disputes.

property management agreement

Property management agreements are as varied as the types of real property and the forms of real estate ownership. Specific circumstances aside, most management contracts share the following essential elements:

  • Identification of the parties and the property
  • Period over which the contract is to run
  • Authority and responsibilities of the manager
  • Responsibilities of the owner
  • Fees and leasing/sales commissions
  • Signatures of the parties

Click here to download the property management contract  that we use here at Aqua.

This agreement illustrates the kinds of issues that must be resolved before the manager accepts responsibility for the property.

“Successful negotiation is not about getting to ‘yes’; it’s about mastering ‘no’ and understanding what the path to an agreement is.” – Christopher Voss

Identification of The Parties and the Property

The owner’s name ought to appear on the contract exactly as it does on the title or deed to the property.

Required signatures vary depending on the type of ownership. The property must be unmistakably identified.

property management agreement

Parties vary. If the property is owned by a partnership, each partner’s name should be stated in the property management agreement and each should sign the document.

With corporate ownership, the corporate name should appear on the contract, a duly authorized corporate officer should execute the agreement, and, where required,…

…the corporate seal should be affixed to the document.

NOTE!

property management agreement

Identifying the property. Although a full legal description usually is not required, the property must be described so as to leave no doubt concerning its identity, location, and extent.

Exclusions. Exclusions should also be noted. For example, if the owner of an office building that has a restaurant and bar on the first floor wants to deal directly with the restaurateur…

…the property description in the property management agreement should specifically exclude that particular area.

Contract Period

Next, the property management agreement must stipulate a term of service.

There is no single standard term for a management contract. Its length is a function of the size of the property, the responsibilities delegated to the manager, and the future intentions of the owner or owning body.

Terms vary. Long-term contracts are uncommon. Some owners want a provision for cancellation.

Other owners may be thinking of selling their property in the near future and do not want to hinder the sale with a long-term management contract that cannot be cancelled.

property management agreement

On the other hand, the manager who assumes responsibility for a large new property, exerting a considerable initial effort to lease the premises and set up a management system, wants sufficient protection as compensation for his or her extra effort.

…therefore, management agencies usually will seek a minimum one-year contract period.

property management agreementThe amount of additional time requested under the terms of the contract will depend on how much initial effort is needed to take over the management of the premises and obtain a profitable lease-up rate.

Thus, clauses in standard management contracts leave the length of the agreement open so that a mutually satisfactory number of years can be inserted in the appropriate.

Contracts may be for a definite period of time or may also contain a provision for automatic renewal on a yearly basis unless notice of termination is given within the period set forth in the contract.

Termination. Generally, language is included to permit either the owner or the management agent to terminate the property management agreement by giving appropriate notice.

Notice to terminate may be served in person or by registered mail to the address listed on the contract. Mail notices should be sent “Return Receipt Requested.”

Cancellation is considered to be effective when the notice is deposited in the mail.

Termination by agent due to an owner’s illegal acts does not release the owner from his or her obligations under the contract terms.

The longer the agreement, the more likely things will change. Procedures for future amendments should be built into the property management agreement to adapt the agreement to changed circumstances.

Management’s Responsibilities

The manager is responsible for conveying to the owner information regarding the property. The following reports offer an idea of the status of the property and insight into the effectiveness of the owner.

Monthly reports and disbursements. The owner depends on the agent to prepare a monthly earnings statement itemizing income and expense for the owner’s property.

Surety bonds. As a rule, the property manager’s employees who handle funds have to be covered by a surety bond, obtained at the manager’s expense.

Handling funds. Most contracts (and most state laws) require the manager to maintain a separate bank account for the owner’s funds…

…that is, the owner’s funds should never be commingled with the agent’s personal or business funds.

Traditionally, if the manager worked for more than one owner, the manager should set up an individual account for each client.

However, with today’s software programs, the manager can easily track deposits and expenditures in one bank account without the necessity of multiple accounts, and deposit slips.

Authority to rent, operate, and manage premises. The terms of the contract should list the agent’s authority to lease, collect rents, terminate tenancies, return security deposits, evict tenants, and bring legal action for recovery of lost rents.

The most important is the agent’s authority to sign leases, for the statutes of fraud in most states do not consider an oral lease agreement of more than a certain duration (usually one year) to be enforceable.

Expenditures. Expenditures for maintenance, personnel, and services are an inherent feature of property management, but the amount the agent may incur without consulting the owner must be stated in the property management agreement.

property management agreement

Marketing costs. Advertising is considered part of the normal operating expense for many properties and, as such, is usually charged to the building and absorbed by the owner. The amount of the advertising budget is typically recommended by the management company and approved by the owner.

Agent’s control over personnel. The property management agreement should also specify the agent’s powers to hire and fire maintenance personnel for the premises.

These powers will vary from contract to contract; as a general rule, though, the manager who is going to be responsible for the work done by building employees should also have the power to hire and supervise them.

Property-Management-Agreement

Owner’s Responsibilities

The property management agreement should spell out the owner’s responsibility for miscellaneous management expenses.

It should contain a clear statement designating the person responsible for each item of management and maintenance expenses, including the following:

  • Payroll—maintenance, security, and supervision
  • Insurance—employee and fidelity premiums
  • Payments on owner’s behalf
  • Bookkeeping and auditing
  • Building expenses and repairs
  • Advertising for tenants
  • Management Fees

Payroll. Unless previously agreed upon, the property management agreement should also clarify whether the manager or the owner is the employer of the maintenance employees….

…the employer may not actually be the same person who is responsible for hiring and supervising the employee.

Some management companies engage a third party to process all paperwork necessary to meet all statutory requirements governing the employer-employee relations, including payroll…

…the employees work for the employer; the third party simply exercises all human resource responsibilities.

Insurance. The property management agreement should also specify that the owner will carry, at his or her own expense, sufficient liability and workers’ compensation insurance.

 Property Management Agreement

The owner and the manager should be named as co-insureds on these policies, and the owner should provide the manager with certificates of evidence for such coverage.

For the manager’s protection, a stipulation should be included that the manager may purchase such insurance at the owner’s expense if certificates of coverage are not produced within a reasonable period.

It is in the manager’s best interests to review the terms of these policies, for the owner usually looks to the manager to work closely with the insurance agency to settle any claims that might arise.

Purchasing. The owner should agree in the contract to give the agent a schedule of payments that must be made for debt service, taxes, special assessments, or insurance premiums. The manager can then budget or establish reserves for these items.

Building repairs. It is important for the property management agreement to contain a clause that requires the owner to make any repairs and replacements necessary to keep the premises in their current condition and operating efficiently.

Thus, the owner will be responsible for complying with the terms of the lease agreements, minimum housing codes, and any other applicable laws.

Advertising. The property management agreement should clarify advertising responsibility. Generally, it is the owner’s responsibility with smaller, scattered site housing.

As previously noted, advertising may be a management cost in very large apartment buildings and commercial properties. If it is an owner cost, limits should be set.

Management Fees

Management fees differ. Apartment buildings do not pose the same management problems as office buildings, and inner-city property has management needs that are different from those of suburban properties.

Nonetheless, all contracts should specify the amount of the fee to be paid, when it is to be paid, and the manner of payment. Although no universal rule exists for establishing fees, you can click here to read on two basic formulas that can be used to calculate fees.

property management agreement

Flat or fixed fee versus percentage fee versus other fees. The type of property will determine the appropriate fee.

A flat fee per unit may be most appropriate when managing a condominium or cooperative complex inasmuch as the owners want management to contain expenses, not increase them.

The percentage fee is a wonderful incentive, on the other hand, for the manager to seek to improve the income of the building, although a minimum fee may be established to protect management fees if the building revenue drops.

Some owners are willing to pay a lump-sum fee or bonus when a new lease is executed or if the agent reaches certain lease-up goals.

Commissions to outside leasing agents. The management agent often is not the sole leasing agent for the property, especially for commercial property.

Sometimes, the leasing fee is either split between the property manager and the leasing broker or wholly retained by the leasing broker.

In other cases, the owner may agree to pay an additional amount when an outside broker or agent is involved. All possibilities should be discussed and agreed upon in the original property management agreement.

Early termination. In all circumstances, the manager should see that the contract contains a clause that provides adequate compensation for the leases that the manager has already negotiated, should the owner wish to terminate the contract prior to its scheduled cancellation date.

The owner should be able to terminate the property management agreement upon service of proper notice as agreed to in the management contract, and the agent should receive payment for negotiating leases on behalf of the owner up to the date of termination.

The contract should also contain a provision regarding current prospects with whom the management company is or has been in negotiation with and how the management company is to  be compensated if those prospects become tenants.

Property Management Agreement

Antitrust issues. All fee structures must be negotiated between the owner and the manager, and terms should be kept between the two negotiating parties. Fees must not  be discussed with other competing property management firms.

If members of the property management profession try to impose uniform rates (or even appear as if they are trying to establish uniform rates), they will violate state and federal antitrust laws.

Property managers must always be able to represent that the fees set by their firms have been established independently and must avoid any discussions with competing firms that may even hint at collusion. Penalties for antitrust violations include fines, imprisonment, or both.

Make sure to read all the statements of the property management agreement to be sure of things you are saying “yes” to.

airbnb management

Airbnb Property Management (Part 1) – How to Evaluate Airbnb as a Business Opportunity

Sharing unused living spaces is not a new idea and it’s remained a staple way to help make ends meet. The vacation rental business has matured over the years as well and can triple your rental profits especially with the availability of airbnb property management service.

This is the exact thing you should do to triple your rental profits.

Now you can advertise your accommodations so that you can connect with travelers faster, at a lower cost, with more transparency, and a higher degree of security than placing your own individual classified ads.

So let’s evaluate this business opportunity for you.

airbnb property management

In a recent San Francisco economic impact study, it was discovered that 56% of hosts in San Francisco, used the money that they earned to help pay their mortgage or rent.

It was interesting to find out that 72% of the accommodations, were outside the central hotel district, which means they weren’t taking away business from other existing hotels.

And 42% of hosts, used the extra money they earned to pay for regular living expenses.

airbnb property management

A New York study showed that the average occupancy was 6.4 nights as compared to 3.9 nights for hotel guests.

82% of listed accommodations in New York were outside the main tourist areas…

…and 62% of hosts said that the extra money helped them stay in their very own homes.

More than 50% of New York hosts have non-traditional situations, and were freelancers, part-time workers, retired individuals and students.

Everyone knows if you don’t give a crap, you shouldn’t be here. It doesn’t mean you have to give a crap, it means you have to, to be here.” – Brian Chesky, Founder of Airbnb

Here’s a few things to consider about becoming a host.

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You’ll need to be at least 18 years old or older, in order to register and use the site for airbnb property management.

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If you’re renting out a sofa or a spare room, you’ll need to adjust your lifestyle to meet the needs and tastes of your individual guests.

For example, leaving your dirty laundry on the floor of a shared bathroom will not be okay as an airbnb property management  host.

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Transparency is a very important part of being a host, which means being upfront about the amenities, the pricing, and the expectations.

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You’ll have to prepare the accommodation before you list it, which means potentially investing in additional guest linens, such as towels, sundries, and decorations to make the space look more pleasing.

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You can block off days on the calendar so that you can make the accommodation available for yourself, family, friends, or even if you need a gap between guests, to deal with the cleaning and resetting.

The beauty is that you can control when you want to turn the availability on and off, and you can discontinue at any time.

This also means keeping your calendar availability always accurate.

airbnb property management

 

 

 

 

 

 

 

As a host, you’ll need to respond quickly to messages and reservation requests from prospective and actual guests.

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When you’re renting out an entire space, such as a vacation home, apartment, farm house, boat, or any space where you won’t be on-site, you or someone you trust, will need to be preparing the accommodation before check-in…

…to be on-hand to assist with check-in, and be available to manage the check-out, which will include cleaning and resetting the space for the next guest.

Because reservations are a contract, and your guests will be booking travel arrangements, and depending upon the accommodation, as a place to stay, it’s important that you honor your reservations.

airbnb property management

 

 

 

 

 

 

 

Customer service is important, and being a hero to your guests will be an integral part of your business.

If anything goes south, you’ll need to be accessible or have someone who is, so that any issues can be remedied.

It’s important to recognize that listing your property involves a commitment of time and care.

airbnb property management

It’s a business, and it’s not right for everyone.

If you’re too nit-picky or you’re apprehensive about other people’s habits, it might not be a good fit for you.

If you like people, have an accommodation to share, an internet connected device, a bank account, and a bit of spare time, airbnb property management is a great potential business to generate a tidy profit for you.

property maintenance services

Property Maintenance Services – Setting up a cost-efficient Maintenance Program

Property maintenance services can get costly. A program to reduce maintenance costs is not easily engineered, implemented, or maintained.

It requires the cooperation of all persons involved in the management of the property–from the resident manager or superintendent to the maintenance crew. 

property maintenance services

There is a definite need for both long-range and short-range planning techniques to control rising property maintenance services costs.

Emergency planning should be included in any maintenance plan, unanticipated emergencies are more costly if not responded to in an orderly, preplanned fashion.

Property Maintenance Services – Designing The Program

Software programs are particularly effective in designing a preventive maintenance program.

Once the pertinent data is entered, reports can be generated on a regular basis to enable the manager to schedule repairs and to track their completion.

There are five basic steps in designing a preventive maintenance program to fit the needs of a particular building.

  1. Prepare an inventory of equipment and building.
  2. Determine necessary maintenance tasks.
  3. Calculate the cost.
  4. Schedule the tasks.
  5. Keep records.

Inventory. Make a complete inventory of all equipment that may have to be maintained.

Determine necessary maintenance tasks. The manager and the maintenance superintendent must decide what type of inspections and preventive maintenance tasks should be performed and how frequently.

Structural items such as walls and roofs should be scheduled for inspection, painting, and patching.

Equipment such as elevators, air-conditioning, heating plants, pumps, and motors also should be regularly inspected and serviced.

Spare parts should be kept on hand to replace broken or worn machine parts. The exterior and interior of the building should be checked periodically.

Some areas need to be checked daily, whereas others can be examined less frequently.

Calculate costs. Once the tasks have been determined, the manager must then calculate how much time, labor, and money the preventive maintenance program will require. The final figures must be realistic in terms of both the budget and the amount of work involved.

property manager

Schedule tasks. Because these tasks vary in frequency–weekly, bimonthly, or seasonally–a full year’s schedule is easily determined in many software programs.

Once scheduled, the manager can easily issue work orders and verify work completion. While all the areas must be checked on a regular basis, time must be set aside to complete unplanned emergency work.

Keep records. A complete set of such records will ensure systematic preventive maintenance, minimize interruptions in property maintenance services and tenant services, and save the owner money.

Click Here to download the form that we use to track preventive maintenance of certain elements of the heating and cooling system in a large regional shopping center.

The resident manager or building superintendent should submit daily and weekly inspection reports to the property manager that are also entered into the maintenance history reports.

property maintenance services

A well designed and implemented preventive maintenance program may not show significant results or savings for six months to a year. However, it will ultimately pay off in terms of increased efficiency and economy of operations.

Property Maintenance Services – Control Plans

Control techniques ensure an ongoing, cost-efficient maintenance program. Cost-reduction opportunities should be identified and ranked according to their ability to generate savings.

Procedures for initiating work orders, timekeeping, control of materials, work scheduling, and control reporting then can be reassessed in light of new data gathered during the cost-reduction analyses.

property maintenance services

Short-term plans. Redecorating, landscaping, and supplying stocks offer short-range opportunities to exercise cost control. Careful planning in these areas will result in a small but immediate reduction in expenses.

Bulk purchasing of supplies, also known as volume buying, is one of the most effective cost-control tools available to the manager. In some cases, it has increased the margin of profit on a property by as much as 3.5 percent.

property maintenance servicesIn order to buy in large lots, the manager must have storage space for at least a six-month supply of goods.

An accurate inventory system enables the manager to identify items that are used infrequently or that have a short shelf life. These supplies should not be purchased in bulk, but rather as needed.

Security measures must be instituted to protect valuable stock from theft. One company solved the problem of expensive central control by maintaining small stocks of frequently used items at the offices of resident managers.

Another way to deter theft is to purchase liquid supplies in drums and issue only the amounts needed for a pending job.

Another system is known in other industries as “just-in-time” inventory–that is, ordering just what is needed, when it is needed. The success of JIT inventory depends on reliable and quick resupply.

The cost of frequent inventories, supervision of issue, and other security measures necessary with large stocks has to be measured against the higher cost of smaller purchases. Computer software can simplify these tasks.

Long-term plans. The first step in long-term cost-control planning is to identify opportunities to save on operational expenses and property maintenance services.

The property manager should study the functional alternatives for the property’s major mechanical and electrical systems and examine ways to save on maintenance, labor, and wages.

For example, it might be less costly to hire a handyman instead of a janitor. Although the salary for the former is higher, the extra expense is justified because the versatility of the handyman saves the wages that would otherwise be paid to contract personnel for repairs and other jobs.

Fuel and utility consumption costs, a large part of most properties’ operating expenses, vary widely. The cost of running a heating plant and maintaining its equipment should be monitored over a period of time. Representatives of utility companies can provide helpful information on types of service and ways of decreasing utility costs.    

property manager

Roles Of The Property Manager

A professional property manager works in one of two capacities: as employees of an owner of extensive properties or as independent managers for several owners.

The latter is often referred to as third-party managers.  

Property Management is sometimes like algebra. You sometimes look at ‘X’ and wonder ‘Y’.

property manager

While the roles and responsibilities generally vary depending on the salary and terms of a management contract, some of the most common things a property manager is responsible for include:

Property Manager as an Economist…

property manager

….A professional property manager must have a comprehensive understanding of the economic forces at work in the real estate market in order to evaluate the property in terms of operating income, forecast its potential future, and construct a management plan that reflects the owner’s objectives.

property manager

Click here to read on the essential elements of a Property Management Agreement.

The plan must be flexible enough to adapt to future changes in the market.

Property Manager as Involved Community Member

In addition to the tasks involved in property management per se, professional managers should take an interest in professional, social, and political organizations in their municipality.

property manager

Their long-range goals will be more easily realized if property managers take on civic responsibilities and help implement plans for the growth and improvement of their communities.

Property Manager as Facilitator of Owner’s Interests

NOTE!

property manager

Occasionally, a shortsighted owner will direct a property manager to operate a property to extract every possible dollar from the property without putting any money back into the property.

Even if not actually expressed or even tacitly admitted, it occurs when…

…an owner demands frequent payments of accumulated cash;

…refuses to make any repairs except those absolutely necessary to keep the property operating;

…and pays bills, and even taxes, at the last possible minute.

This is called milking a property and those owners are referred to as slumlords.

property manager

A property manager in this position should meet with the owner and tactfully, but clearly, point out the ultimate loss that can occur as a result of following such a course of action.

If the property owner, for financial or other reasons, continues to direct that the property be managed in this manner, the property manager should document the owner’s direction with a confirming letter.

The property manager should consider whether to continue managing the property under policies that may be illegal and would appear to doom the project to financial failure.

property manager

Property managers should also pay careful attention to owner attitudes regarding civil rights laws and other applicable laws and regulations affecting the property. If the property manager will suffer increased exposure to liability based on an owner’s refusal to comply with such laws, the prudent course of action is to terminate the management contract.