All Forum Posts by: Franklin Spees

Real estate attorneys are great (notwithstanding the fact that I am one), but I will say that I have great confidence in the templates put out by my local and state apartment associations.  I've drafted custom residential and commercial leases and it can be expensive.  Granted, there are unique circumstances when this would be necessary but 85% of the time on residential leases, you can be completely covered by the association templates.  Here in CA, the Apartment Association has a team of attorneys that review, revise, and maintain all the forms ongoing as laws change or superior methods are discovered.  Also, if there are some additional nuances that require some custom drafting, you can always use the Addendum to accomplish.  Any particular issue that you are trying to address that requires a custom lease? 

Although it can often be an economically superior alternative to pay your delinquent tenants to move out, it can also be personally and morally challenging out of principle.  What might have been $750 to an UD attorney and 45 more days of no rent...can be mitigated by offering $500 cash for them to be out in 72 hours.  I've done it both ways and I often have mixed feelings about it regardless of how it plays out.  Specifically with the cash for keys approach--although it can potentially save time and money, it could also be releasing and virtually encouraging a bad tenant to go and find another unsuspecting landlord who will not see any of their past on the credit check.  

Anyone else have strong feelings either way on this issue?

I agree with a lot of what @Marcia Maynard said above but would also add that you need to be firm and consistent with imposing your late fees.  You set the tone and establish the structure and they adapt or have to transition out.  Being in the management business for almost 15 years now, one of the greatest lessons I have learned is that you as a manager or owner can allow/enable a distressed tenant to dig themselves a hole too deep for them to climb out of...regardless of their best intentions.  You have to go by the terms of the lease and if they get behind or breach the lease, serve the 3 Day Notice, impose the late fee, follow through.  I would be sure to consult with a landlord/tenant attorney as you are serving notices that will serve as a basis of a potential unlawful detainer action.  There are so many ways to screw those up and the law is extremely tenant friendly.  Two examples would be by including late fees in the 3 Day Notice to Pay Rent and also accepting rent after you've filed.  Best of luck.

also might check the statute of limitations...

One other thought I forgot to mention for you specifically would be to make sure they are using cloud/web based property management software.  This will allow you to remotely 24/7 check in on the financials, download invoices, run reports at any time.  

@Chace Mott Congrats! Here are a couple of general suggestions and things to watch out for:

1. Inquire about their entire scope of services.  Understand what is included (pay bills, showings, leasing, visiting, noticing, evictions, etc.)

2. Ask for a fee schedule.  It's very common for management  companies to bait you with a low monthly % of rents...only later to discover the additional fee services or that they contract or use their own employees at an inflated rate.

3. Read their agreement and provide yourself with an out based on their performance.  In other words, don't sign a 12 month agreement with a PM without identifying each party's duties and responsibilities.  You should be able to terminate the agreement based on their lack of agreed upon performance.

4. Ask for referrals of some of their clients that have similar sized or types of properties.

5. Check social media and other online Yelp-type of review websites.  Keep in mind usually tenants only post on those when there is something wrong.

That should get the juices flowing anyway...best of luck to you.

@Andrew Kerr 

I have run into the same issue and here are a few suggestions:

1) Use an iPad and allow the tenant to use it right there on the spot.  This of course still requires them to have an email.  You might even help them or encourage them to obtain an email address that they can check at the library.

2) I believe I have contacted MySmartMove and they had an alternative process that allowed you to do a manual check outside of the required email address.  It might be worth checking into.  

3) You can also get approved yourself to run credit checks over the phone by registering with certain credit check companies.  Often they will need to come out and verify your location, business, and see if you have a shredder and other necessary business equipment I believe.

I will say that now that I have been using the management software Buildium (that integrates with MySmartMove btw) I have been amazed by how many people, including lower income, are searching for rentals, applying, and even paying rent on their phones.

Best of luck to you.

So I've posted a couple ads in the Marketplace in order to try and drum up some networking related to real estate management, legal, and development consulting work in the Central Valley, CA.  No real response so I wanted to try and communicate with all the local BP members in my area but really want to be sensitive not to violate any BP policies or just rub folks the wrong way.  Can anyone give me some pointers in this regard?  Much appreciated.

Same here.  I missed the last one and am really looking to head out to Denver for the next one.  Haven't really heard any buzz about another one being planned.  Hmmm....

I'll preface my comments with the fact that I do not live in your state, but there are some real estate and legal concepts that are somewhat universal.  An contract or services agreement was entered into by two willing parties, each with certain respective duties and obligations.  Most management contracts are going to have a similar set of standard terms: identify the parties, the term, fees, duties, arbitration/mediation, termination, etc.  I recommend a detailed review of your agreement, with your real estate counsel if that's available to you.  Those terms are going to dictate the circumstances under which you can terminate that agreement.  Although it explicitly states:

"It shall be effective on April, 2013 and shall be for an initial term of 1 year. This agreement shall automatically renew for successive terms of 1 year each unless either party gives the other party written notice of its desire to terminate this agreement at least 60 days prior to the conclusion of any such renewal term, in which case this agreement shall terminate at the conclusion of such term"

 this does not account for any other breach of the agreement which could serve as grounds for terminating the agreement (i.e. performance, good faith, etc.).  

That being said, sometimes tenants just move out regardless of the diligent efforts of the managing agent.  As long as they acted reasonably to avoid the premature move out and they effectively communicated that to the owner within a reasonable amount of time, and then subsequently took reasonable steps to mitigate the loss and days of vacancy...that may just be a part of being a property owner.  Of course we don't have all the facts of your specific situation but I hope that at least provided some perspective.  Best of luck to you and your uncle.