Please email Judy if you’d like to attend.
On Thursday, June 20th, I’ll be teaching a new property management class for the first time in Reno, NV. The class is called “Rental Application Scoring.” The topic is very timely, given the push toward transparency in property management’s approach to tenant screening.
Here’s what we cover in this 3-hour class…
- Understanding today’s renter
- Pre-screening rental prospects
- Renter Qualification Criteria
- HUD Rules – Criminal history, domestic violence, limited English proficiency
- Objective rental application scoring techniques
- Offsetting risk, and adverse action
Lots of pencils. Drawings. Unopened mail. Invoices never sent. Collections never pursued. No systems or procedures in place.
Just the art.
Just the art of making and repairing all types of roofs, and fabricating/hanging aluminum awnings. And, yes. They were all customized; works of art. Yet, the business acumen was missing. Big time.
I’m pretty sure I became a property manager to show him how that part is done.
It is forever mine then, to remember and embrace the art of it.
If so, you’ll want to read this.
“All levels of government should adopt requirements making it clear [that housing] cannot be denied to those with a criminal justice history, unless there is a legitimate public safety reason for doing so.”
-Deborah De Santis, President and CEO of CSH (Corporation for Supportive Housing)
In November last year, HUD released a memo specifically addressing a practice employed by many rental property owners and managers – the use of an applicant’s criminal records to determine eligibility for rental housing. Just today, HUD released additional guidance for housing providers, further clarifying the memo. That’s when the news media picked it up.
As expected, you’ll hear much talk out there on both sides of the issue. Some claim it’s government overreach. Others celebrate efforts to provide needed support to those reentering communities from incarceration. In my view, as a housing provider, if you’re using clear and objective criteria for evaluating rental prospects, you’re not likely to run afoul of HUD’s position. In simple language, it says:
- Housing providers should have policies that apply to everyone, and are evenly enforced.
- An arrest history is not the same as conviction history. Simply because someone was arrested for a crime does not mean he/she committed the crime.
- If a housing provider considers criminal background when evaluating potential tenants, the housing provider should not have a blanket “one-strike” rule that fails to take into consideration the type of crime, the length of time since the crime was committed, and the applicant’s actions/activities since the crime.
- Applicants should have the right of “due process” when it comes to the landlord’s qualification criteria. In other words, the applicant should have the opportunity to explain extenuating circumstances, and have the landlord reconsider its decision.
- Some crimes can be “one-strike” offenses, provided the housing provider is able to justify their policy protects the safety of others, and/or the property.
One important piece of HUD’s guidance on this issue is contained in the following excerpt from HUD’s FAQ on the matter:
…when owners make the decision to reject an applicant on the basis of a criminal record, the owner must provide the applicant with a written rejection notice. This notice must state the reason for the rejection, advise of the applicant’s right to respond to the owner in writing or to request a meeting within 14 days to dispute the rejection, and advise that persons with disabilities have the right to request reasonable accommodations to participate in the informal hearing process.
Since most of us already provide written notices to prospects when we deny their applications to rent, this shouldn’t be much of a burden. We simply need to remember to inform the prospect of his/her right to request a meeting to dispute a rejection based on criminal history. So far, our credit reporting agency has not, to my knowledge, amended our “Adverse Action Notice” to include such a provision. Until they do, should the need arise, we’ll be adding language to comply with HUD’s rule.
How do you view criminal background information when evaluating a prospective tenant? Will this new guidance change your policies or procedures? If so, how?
This is a subject near and dear to my heart, as I’ve been chasing insurance companies for the better part of the last two weeks, struggling to get proper evidence of coverage for my owner/clients’ properties. What continues to surprise me, is the fact that the insurance companies often play as though they don’t understand what we want.
In part, our property management agreement (PMA) states,
“LIABILITY INSURANCE – Owner shall obtain and keep in force adequate insurance against damage and against liability for loss, damage, or injury to property or persons which might arise out of the occupancy, management operation, or maintenance of the Premises. Liability insurance shall be adequate to protect the interest of both Owner and Agent. Owner shall furnish Agent with proof of fire insurance policies in force and shall obtain adequate vandalism coverage for the Premises. The deductible required under all such insurance policies shall be Owner’s expense. Owner agrees to name Agent as an “additional insured” on its liability and fire insurance policy, and furnish Agent with certificates evidencing such insurance within ten (10) days of the execution of this Agreement. In no event will such liability coverage be less than $500,000 in value. Said policies shall provide that notice of default or cancellation shall be sent to Agent as well as to Owner, and shall require a minimum of ten (10) days’ written notice to Agent before any cancellation of or changes to said policies.”
The Reader’s Digest version of this post, for those who prefer that kind of thing, is “No.” Just no. Only in very rare cases, can you convert an existing rental property from a traditional residential rental (welcoming families with children), to a 55+ property, under the exemptions contained in the Housing for Older Persons Act of 1995 (HOPA).
A property manager recently asked me whether her client could declare the client’s duplex a “55+ Community,” ‘since it’s a multifamily property.’
First, I suggested he talk to his lawyer, or Silver State Fair Housing Council. Then, “A duplex isn’t a ‘multifamily’ property. That term generally applies to 4+ units. Since this property is not part of a larger ‘association’ of similar properties who’ve formed an association… and, since there are no governing documents for your client’s property that address any kind of HOPA exemption, no. No, your client can’t do that.” Continue reading “Converting Rentals to 55+ Status (HOPA)”
If you’ve been in this business for a while, you’ve probably noticed how competitive property management has become! It seems that everyone is a Property Manager! It’s a much bigger challenge than it used to be, to attract and keep a good client base. A solid marketing campaign, consistently applied, will set you apart from your competition.
Here are a few proven tips…
As successful property managers, we quickly learn the importance of streamlining our policies and procedures, by establishing methods to save both time and effort. The profit margin in this business is tight, and if we fail to employ standardization and time-saving strategies, we’ll never succeed. I’ve noticed the average burnout time for most new property managers seems to be about 2 years. That’s how long it takes to realize it’s not a money-making business, unless we have policies and procedures in place that make the job doable.
What did I do on this rainy Sunday? Well, today I studied the Washoe County, Nevada property tax rolls. I compiled reports of the top 30 taxpayers in the county over the last 4-year period. Call me a Geek; I like figuring stuff out, and I love Excel. This little endeavor satisfied both obsessions.
What I discovered was a sudden and troubling shift in our tax base. Not necessarily unexpected, but greater than I imagined. I’ll explain.
Before I report on my findings, a disclaimer is required. I am not a property tax expert. I am a property management expert. My understanding of property taxes is no greater than what one might expect of someone with my background and experience. I invite you to examine my methodology and reporting for any flaws it may contain, and I welcome your feedback. Perhaps, things are not entirely as they appear? Continue reading “Washoe County’s Property Tax Base – A Sunday Study”
Every now and then, I’ll hear from a property manager expressing frustration over a request they received for permission to keep a “companion animal.” The request comes either before or during occupancy by a tenant (or owner, if in a condominium or similar housing) claiming to have a metal or physical disability. I’ve been told, “Anyone who wants a pet can have one just by getting a doctor’s letter.”
The frustration expressed by these property managers is clear. The assumption is that some residents “take advantage” of laws allowing companion animals as a fair housing accommodation when they don’t appear to have a medical need for the animal. The managers feel they’re being “worked,” by residents who want to circumvent landlord policies limiting pets.
Although, to some, the need for such an accommodation may seem unrealistic or exaggerated, medical science is continually proving that pets DO provide quantifiable health benefits. The Delta Society has a number of articles on its website pointing to medical research that substantiates these facts: Continue reading “The Healing Benefit of Pets”