Posts Tagged ‘new landlord’

Any tips for a 1st Rental Home owner / Landlord ?

Wednesday, October 22nd, 2008

I’ve just purchased my first home rental property and I’m very excited. I was curious if anyone has any tips or pointers that I should know as a new landlord.

1 – Charge prospects a non-refundable credit check charge. You need to screen applicants by conducting a criminal, credit, and employment check. You should also verify employment and you should ask for rental references. The most important question to ask rental references is, “Would you rent to this person again?”

2 – Once you move someone in be firm. Enforce late fees and serve tenants with a Three Day Notice To Pay Rent Or Quit immediately as the eviction process often takes several weeks to a month.

3 – Contact your local court and learn the eviction process. Get all the necessary forms in advance. Know how to evict a tenant and the steps you need to take BEFORE you actually need them. That way if there is a problem, you can act quickly with less stress.

4 – Get the necessary insurance. Call your insurance company and find out what insurance you need to purchase. Do not make the mistake of thinking that your existing home insurance covers a renter, it doesn’t.

5 – Get all the necessary forms like the Rental Application, Lease Agreement, Lead-Based Paint Disclosure, Lead Paint Booklet, Pet Agreement, Property Condition Report, Rental Binder & Deposit Receipt, Residential Lease Extension, Eviction Letter, Notice to Quit, etc. I highly recommend the forms you can get by clicking here.

6 – Be proactive with neighbors as they are a great source to tap that allow you to “spy” on your tenants. Give neighbors your contact information in advance.

7 – Never accept partial rent payments. Tenants will try to avoid a late charge by giving you a partial payment earlier. Send their partial payment back to them with a Notice To Pay Rent Or Quit. Do not accept the rent without the late charge included. If the tenant pays the rent without the late charge, deduct the late charge from the rent they paid then immediately serve the tenant a Notice To Pay Rent Or Quit on the rent. Remember, you can serve a tenant a Notice To Pay Rent Or Quit on rental income only, not on late charges. For example, if a tenant owes you $900 for the rent and on the 7th (2 days late if your Lease Agreement states that rent is late on the 5th of each month) and rather than pay you $931 ($900 rent + $31 late charge ($25 base late fee plus $3 per day)), the tenant only pays their rent of $900, then do this. Deduct $31 in late fees from the $900 which gives you $869 paid towards the rent plus $31 late fees that you right in your receipt book. Now serve the tenant a Notice To Pay Rent Or Quit on the $31 they still owe you for rent. Again, this is important, you can only serve a Notice To Pay Rent Or Quit on rental income and not late charges.

8 – Make sure every adult that lives in your rental has filled out a rental application. Make sure you do a credit check on each rental applicant. Never accept payments from a non-tenant.

9 – Notify utilities of the tenant’s move-in date.

Technorati Tags: , , , , , , , , , , , , , , ,

What do you do when your tenant does not pay rent?

Saturday, October 11th, 2008

I am a new landlord and I have a tenant who does not pay the rent. The tenant paid the deposit and first month’s rent when they moved in. It is now the second month and the tenant has not paid the rent. I spoke to him and he said he was sorry and that he would pay the rent by last Friday. Guess what? He never paid the rent. What should I do now? Also I know the laws are a little different for each state, I live in California. Thank you so much!

The first thing you must do to a tenant who is not paying the rent is to get them out as fast as you can. This is a simple, straight forward process.

You need to serve the tenant with a Three-Day Notice To Pay Rent Or Quit (California). This document must be filled out correctly as it will become part of the Court’s records. If it is necessary to go to Court to seek an eviction, an improperly filled out form will most likely cause the case to be dismissed. If the rent falls due on Saturday, Sunday or a holiday, the law extends the time of payment through the next business day. The rent is not legally due except on a regular business day. The Resident is not in default until the day after the rent is due. Service of the Three-Day Notice prior to default is invalid.

Keep in mind that, according to California law, Residents have three full days to make payment after a Pay or Quit notice is served. If a Resident attempts to make payment on the third day after office hours, be sure to accept the payment since that is still within the three-day period.

As of January 1, 2005, you may not demand cash as the exclusive method of payment, unless the Resident has previously attempted to pay with a check drawn on insufficient funds or has instructed the drawee to stop payment on a check or other instrument. If you choose to demand cash under these circumstances, you must provide a written notice, and the rental agreement must allow the cash demand. You may demand cash for up to 3 months.

The Thee-Day Notice:

Has to be in writing
Has to have the title “Three Day Notice to Pay Rent or Quit”
Has to say the name of the tenant
Has to say the address you are talking about
Has to say exactly how much rent is overdue
Has to say why that much rent is due and the dates the rent was due
Has to give the tenant the chance to pay the rent or move out in 3 days
Has to say that if the tenant doesn’t pay in 3 days, they will forfeit the lease.
You have to sign and date the notice

Be very careful when you fill out the 3-Day Notice to Pay Rent or Quit. The notice won’t be valid if you:

Don’t say how much money is due,
Ask for more money than what is due,
Ask for rent that was due more than 1 year ago,
Ask for something that’s not rent. This can be late charges, interest, utilities, property taxes, or damages,
Tell the tenant to “pay rent and quit” (instead of “pay rent or quit”), or
If you don’t let the tenant chose to forfeit the lease. This is called “election of forfeiture.”

How to use more than 1 notice:

Sometimes, you can use more than 1 type of notice.

For example, if your tenant is always late with the rent, you can serve them with a “3 Day Notice to Pay Rent or Quit” and a “30 Day Notice to Quit”.

The tenant has 3 days to pay or leave. But even if they pay, they have to leave in 30 days.

If the tenant does not pay, you can file an Unlawful Detainer after 3 days. If they pay in 3 days, you have to wait 30 days to file the Unlawful Detainer.

There are 3 ways to serve the notice.

Personal service:
You have to give the notice to the person you want to evict in person.

Substitute service
If the person you want to evict isn’t at their normal home or work, you can serve the notice if you leave a copy with someone over 18. You also have to mail a copy to their home.

Nail and mail service
If you can’t figure out where they live or work, or someone over 18 to give the copy to, you can:
1) Attach a copy in a place where it can be seen easily,
2) Give a copy to a person who lives there, if you can find one, and
3) Send a copy by mail to the property. Write the name of the person you want to evict on the envelope.

If the tenant doesn’t voluntarily move out after you have given the required notice to the tenant, you can, of course, evict the tenant. In order to evict the tenant, you must file an unlawful detainer lawsuit in superior court.

In an eviction lawsuit, you are called the “plaintiff” and the tenant is called the “defendant.”

An unlawful detainer lawsuit is a “summary” court procedure. This means that the court action moves forward very quickly, and that the time given the tenant to respond during the lawsuit is very short. For example, in most cases, the tenant has only five days to file a written response to the lawsuit after being served with a copy of the landlord’s complaint. Normally, a judge will hear and decide the case within 20 days after the tenant files an answer.

You must use this court process to evict the tenant; you cannot use self-help measures to force the tenant to move. For example, you cannot physically remove or lock out the tenant, cut off utilities such as water or electricity, remove outside windows or doors, or seize (take) the tenant’s belongings in order to carry out the eviction. You must use the court procedures.

If you use unlawful methods to evict a tenant, you may be subject to liability for the tenant’s damages, as well as penalties of up to $100 per day for the time that you used the unlawful methods.

The court always decides in favor of the landlord unless something totally outrageous and illegal was done by the landlord. When the court decides in your favor, they will issue a writ of possession. The writ of possession orders the sheriff to remove the tenant from your home, but gives the tenant five days from the date that the writ is served to leave voluntarily. If the tenant does not leave by the end of the fifth day, the writ of possession authorizes the sheriff to physically remove and lock the tenant out, and seize (take) the tenant’s belongings that have been left in your home. You are not entitled to possession of your home until after the sheriff has removed the tenant.

The court will also award you any unpaid rent if the eviction is based on the tenant’s failure to pay rent. The court also may award you damages, court costs, and attorney’s fees (if the rental agreement or lease contains an attorney’s fee clause and if you were represented by an attorney). If the court finds that the tenant acted maliciously in not giving up the rental unit, the court also may award you up to $600 as a penalty. The judgment against the tenant will be reported on the tenant’s credit report for seven years.

This process is not that hard. The first time is a little challenging only because it is something new. Once you’ve done it once, you will realize how easy this process really is and it certainly isn’t something that you should fear doing.

Technorati Tags: , , , , ,