Late Payments and Bounced Checks

Late payments and bounced rent checks are generally governed by the lease document. A lease document which deals with late and returned payments is essential. Assuming your lease allows you to collect a fee for a returned payment and/or a late payment, you should write the resident and advise them of what happened and request a replacement payment, as well as any administrative fees you have the right to collect. Also, if your lease allows for it or she is in a month-to-month tenancy, you may want to consider giving her notice that in the future you will no longer accept checks from her, only money-orders IF this happens again. Be sure to not be personal in this letter, so that it is very clear you are not playing favorites. It is best to have a written policy stated in the lease or somewhere in your business records indicating how many returned payments you will tolerate within a 12-month period BEFORE you give notice to a resident you will only accept a bank or cashiers check. And remember to save a copy of the letter in her tenant file for future reference.
As Always,
Ms. Merrie

Cohabitants Should All Be On One Lease

Typically, we advise against separate rental agreements with each resident. The better practice is to have all original adult tenants sign one lease agreement, submit a single security deposit and pay rent with a single check. This will help alleviate confusion regarding the return of the security deposit when the tenancy terminates.
Advise your tenants the security deposit will be returned to them when the unit is returned to you VACANT of all tenants (regardless of type - roommates, subtenants, guests, uninvited guests). The tenancy does not end until everyone is gone.
If you allow certain tenants to depart and terminate their relationship with you, but others remain, you end up with a complicated legal situation and you will have voided language in your lease making all tenants jointly and severally liable. By following the strict rule that no deposits are refunded until the tenancy (in its entirety) is terminated you will avoid the problem of what to do with the deposit should tenant B depart and be replaced by tenant D.
Due to the complexity of subleases in rent control jurisdictions and in California in general, our office recommends that all owners seek the advice of an experienced property manager or legal counsel when dealing with subleases. We certainly can provide this expertise. Give us a call.
As Always, Ms. Merrie

Smoking OK in Residential Units?

While smoking bans are common in the work place, restaurants, hotels, and leisure locations, currently there is not state law that bans smoking in residential units. Cities and counties in California are just beginning to enact bans on smoking. As residents become more aware of the risks associated with second-hand smoke, they also are becoming astute regarding their rights in order to protect their health.
Smoking is not a protected right under the U.S. or California State Constitution and there are rulings that set precedent in this regard. The safest approach is to adopt a uniform policy and to implement it during lease renewal and when signing new leases rather than to amend an existing lease. More information can be found at this link:
http://www.caanet.org/am/template.cfm?Section=caahome&template=/CM/HTMLDisplay.cfm&contentID=12618
-Ms. Merrie

Rent Increases and The Rent Board

Any increase in excess of the annual increase, plus available banked increases, requires a petition to the Rent Board. There are SIX types of increases that a landlord may file. They are as follows:
1. Capital improvement pass-throughs.
2. Operating and maintenance expense increases.
3. Special circumstances increases based on rent for comparable units.
4. Rent increases based on past rent history of a Prop I affected unit.
5. Utility pass-throughs.
6. Rules and Regulations Section 1.21 increases where there is not a tenant in occupancy.
If you are not sure HOW to go about doing this, I am always here for a consult.
As Always, Ms. Merrie

Special Leave for Military Spouses and Domestic Partners

DID YOU KNOW that In October of 2007, Governor Schwarzenegger signed AB392 into law. It added Section 395.10 to the California Military and Veteran’s Code. Therefore,if you have 25 or more employees you are required to provide UNPAID leave to spouses or domestic partners of military personnel who work “an average of 20 or more hours per week.” California Assembly Bill 392 lists the details for this new policy, which also states that the spouse or domestic partner must have been on active duty serving in Iraq or Afghanistan in order for this to apply. Visit the link for more details http://www.legislature.ca.gov/cgi-bin/port-postquery?bill_number=ab_392&sess=CUR&house=B&author=lieu.

And as always, I am always here to support you with your property management questions. - Ms. Merrie

Inexpensive Advertising for Property Managers

We know and appreciate everyones' need to be budget-conscience, yet still get the word out on your available listings. The following internet sites provide FREE or inexpensive advertising for rental properties:
http://www.apartmentlinks.net/
http://www.apartmentscout.com/
http://www.apartments.com/
http://www.craigslist.com/
http://www.rent.com/
http://www.rentlinx.com/
http://www.rentquest.com/
http://www.rentsearch.com/
http://www.sublet.com/
http://www.vacancynet.com/
http://www.yahoo.com/
http://www.lightnergroup.com/

Emergency Preparedness Was On Fire!

I was honored to do another interactive seminar for Bridge Housing in San Francisco. This seminar was focused on preparing for an emergency. It is hard not to live in a bubble where we think emergencies will never REALLY happen. We get so caught up in our daily lives that preparing for the worst is just not a priority. But then when we think about 911 or New Orleans, etc., and we begin to realize that emergency situations do occur and that we need to figure out how to handle them before we are blind-sided by them. Here is what some of Bridge Housing's gracious Resident Managers had to say about my emergency seminar:
"It made me realize the importance of having a plan and being prepared." - Kathie Miller
"This was a wonderful exercise. I intend to reinact it with my site staff." - Salette Campos

I love providing tools for other's success and would enjoy providing your company a tailored training on any version of emergency preparedness.
-Ms. Merrie

Rave Reviews for Lightner

Property Managers should always be striving to provide great customer service, and be fair and respectful of their tenants. That is why when a tenant offers a gem of a rave like this, we simply have to share it.
http://www.yelp.com/biz/lightner-property-group-san-francisco#hrid:dGwqmj2JzFPW-x-8MqoEig

-Ms. Merrie

Rental Trends in Bay Area - Business Week

Our own Art Swanson is quoted in this Business Week article, by Prashant Gopal

In most housing downturns, rental markets thrive. This time, a glut of properties has put the brakes on rent hikes in many cities. For many Americans, as property values sink and mortgage interest payments rise, the dream of homeownership has turned into a nightmare. In the past, however, one group of people who have tended to ride out real estate downturns are landlords, who can raise rents while potential buyers sit on the sidelines waiting for conditions to settle. But not this year. Rent growth in 2007 actually went flat in some metro areas hardest hit by the housing meltdown. "What we will see is more of a return to where we were before the huge boom in homeownership," says Rob Massey, vice-president of industry development for Rentals.com. "In cases where you don't see the rental market rebounding, it's because of an oversupply of properties." Saturated Metro Markets It's no surprise that rents are rocketing up in healthy urban job centers with limited room for new apartment construction such as San Francisco, San Jose, New York City, Seattle, and the District of Columbia. But other metro areas with slow job growth such as Denver, Boston, Dayton, Memphis, and Detroit experienced a continuing trend of weak rental growth, according to a ranking of effective rent increases in 2007 for large metro areas compiled for BusinessWeek.com by Manhattan-based real estate research firm Reis. In many Florida metro areas, vacancies increased last year, and rents, following significant increases in 2005 and 2006, leveled off. That's good news for people who might have lost their homes in a foreclosure; there are plenty of places for them to rent. The state, which has one of the highest foreclosure rates in the nation, is also dealing with a ballooning inventory of rental properties. Investors who found they couldn't unload their condos after the housing bubble collapsed instead began scrambling to find tenants and started undercutting traditional apartment complex owners to fill units. Some landlords began offering one or two months of free rent to convince tenants to sign leases, says Robert Smith, president of Smith Equities Real Estate Investment Advisors in Orlando, Fla. "It's all negotiable," Smith says. "A lot of people out there are trying to get your lease." Condo Conversions Revert to Rentals Many rental homes were taken off the market during the housing boom when they were converted into more profitable condos. Investors paid a premium of up to 50% to buy apartment buildings because they expected to make a big profit by selling them as condos, Smith says. When the housing market collapsed, investors who had started conversions tried to lure tenants back or simply were forced into foreclosure, he says. "There's just more supply out there available for people to rent," says Avery Klann, senior vice-president for Apartment Realty Advisers in Boca Raton, Fla. "Over time those houses will be sold, and you'll start to see very strong rent growth in apartment communities as well." Phoenix and Las Vegas, two other slumping real estate markets with a heavy concentration of investment properties, have been relatively flat for the past couple years. Rent growth in Miami also slowed in 2007 despite relatively tight apartment vacancies. The vacancy rate in Miami was 4% last year, and the average effective rent increased 2%, to $1,063, according to Reis. Coastal Cities Command a Premium Miami has stronger job growth than other South Florida communities and a larger proportion of new luxury condos, which don't compete with average apartment rentals, says Hessam Nadji, head of research for Marcus and Millichap. In other coastal cities where the job market, housing market, and population growth have been robust, rent increases have accelerated. San Francisco was the top-ranked metro area for rent hikes last year. The effective rents jumped 10.3%, to $1,764, in 2007, compared with a 7.7% increase in 2006 and a 3.8% increase in 2005. Art Swanson, chief operating officer for Lightner Property Group, which manages more than 300 apartments in San Francisco, says tenants in rent control apartments are unlikely to move out, so "a lot of people coming from out of town are paying the higher prices." Swanson says there's heavy demand for entry-level apartments, particularly studios, which are commanding higher rents. "People are looking to take less to spend less," Swanson says. "They're being more budget-conscious." Sam Chandan, chief economist for Reis, says he expects rents throughout the nation to begin moderating. "When people's pay is growing more slowly—like during an economic slowdown—renters become more price-sensitive," Chandan says. "Rent gains will remain healthy and stable, but it's unlikely that they will accelerate significantly." Check out the BusinessWeek.com slide show to find out which cities saw the highest and lowest apartment rent hikes in 2007.

Hands-Free Cell Phone Policy

If your Resident Managers use a vehicle during working hours make sure you have a "hands-free" policy in place. Effective July 1, 2008, Senate Bill 1613 will prohibit California drivers from using hand-held cell phones on any state road or highway. Any time your employee is “on the clock” you are responsible for their actions. I strongly recommend you create a written policy regarding their compliance with this law before July 1st. This covers you in case they are fined or have an accident while driving while not "hands-free". You will have a stronger defense that you were not at fault if you have a written policy in place. If you need some assistance in drafting this document, please let me know. - Ms. Merrie

Ms. Merrie Makes News With First National Bank

Not to toot my own horn, but it is not every day that I am in the news. If this does not add to my credibility, what does? FORBES and ABC!!!
-Ms. Merrie
http://finance.abc7news.com/abc?Account=kgo&GUID=1583046&Page=MediaViewer&Ticker=FNBG

http://www.fnbnorcal.com/boardmanage.asp

http://www.forbes.com/finance/mktguideapps/personinfo/FromPersonIdPersonTearsheet.jhtml?passedPersonId=1128296

Answers To 2008 Laws for Property Managers and Owners

Major 2008 Laws for the Property Owner/Manager:
1. Minimum Wage Is Up in California to $8.00/hour, while the San Francisco minimum wage increases to $9.36/hour.
2. AB 650 Annual Notification to Employee of Earned Income Tax Credit requires any California employer who is required to provide unemployment insurance, to notify all their employees (this will include all on-site managers) that they could be eligible for the federal Earned Income Tax Credit (EITC). The notification is due within one week (before or after, or the same time), of providing an annual wage summary such as the annual Form W-2 or Form 1099 to the employee.
3. Senate Bill 1613 requires Use of Hands-Free Devices While Driving. Employers of an on-site manager should implement policies in accord with this new provision, making it clear that whenever they use an automobile during the performance of their resident manager responsibilities, they must not use a cell phone unless it is a hands-free device. It is essential that you have a written policy requiring their compliance with the law for your protection. (If you would like assistance in developing a Cellular Telephone Use Policy, contact Lightner Property Group.)
4. Assembly Bill 14 amends existing nondiscriminatory provisions to be consistent with the Unruh Civil Rights Act (Civil Code section 51, et seq.) and Government Code section 11135. In the future, AB 14 will automatically update other non-discriminatory provisions whenever protected classes in either the Unruh Civil Rights Act or Government Code section 11135 are modified or amended. Property owners should review their policies and procedures to insure that their business practices have no “hidden” or unintended discriminatory results.
5. Larger management companies and apartment complexes with 25 or more employees are now required, per Unpaid Leave for a Soldier’s Partner, to provide unpaid leave to spouses and domestic partners of on- leave military personnel who are returning from a combat zone. See California Assembly Bill 392 for details.

That is the scoop for '08. Remember, if you need clarity in these matters, we have over 20 years of experience writing policies and serving as an expert witness in property management cases.
-Ms. Merrie
http://www.lightnergroup.com/

Available Rental Apartments List in Bay Area

As part of our philisophy in providing helpful information to the public, we have created a FREE Available Rental Apartments broadcast email. Simply sign up at http://www.lightnergroup.com/html/listings_info_.html

WE DO NOT SELL addresses, so you can feel comfortable signing up.
-Ms. Merrie