American Apartment Owners Association

Passive Income Is Great, But Are You Really Cut Out To Be A Landlord?

Mon, 06/12/2017 - 2:03pm

The idea of buying an investment property to rent out and collect some passive income sounds good, does it not? After all, being a landlord is one of the greatest and most time-tested ways to build long-term wealth. Especially when rents just keep on rising, which means more money for rental owners. According to Apartment List’s National Rent Report, they “are up by 2.1% compared to their December 2016 level” and have risen each month of 2017. “In addition to the growth the national level, rents are increasing in most of the nation’s biggest markets,” they said, with “some individual markets seeing substantial increases.”

But, you have to do it right. And doing it right may not be as easy as it seems. The rental reality check includes:

Your tenants might be turn out to be lunatics. They may refuse to pay their rent or even leave your property.

Those are obviously worst-case scenarios, but that doesn’t mean you don’t have to prepare for them. Expecting the best and not preparing for the worst is a recipe for rental disaster. Doing a thorough background check and collecting a sufficient security deposit are key protections. Bigger Pockets has a few more suggestions to “protect newbie landlords against bad tenant situations.”

You’ll have to collect rent

Your tenant’s late rent check isn’t just an inconvenience. For some property owners, it can mean not paying the mortgage on time, which will mean incurring late fees and dinging your credit. Having several months of reserves in the bank to cover anything that might come up with your rental or renter is key, but, for those owners who are cutting it close, including an iron-clad late-fee policy for renters should help to ensure it’s paid on time.

They may be slobs or they may be destructive… but are they worth it?

Yes, you’ve collected that security deposit, but it might not cover the damage left behind when tenants move out. Many landlords don’t like to rent to college students for this reason (Hello, nightly parties!). Another downside is that there is often a higher turnover because students may not stay in the same place for more than one year and they may also be looking for a shorter lease if they’re planning to return home for the summer.

The potential upsides:

Increased rent potential. “Off-campus housing is often paid for by the student’s parents, or even by the college itself, so you may be able to get a higher rental price for the property,” said The Balance. Investors look for rental property in college towns often key in on homes that have multiple bedrooms, which can further increase the price.

A reliable tenant pool. “With some student populations ranging from 20,000-50,000 and accounting for as much as 25 percent of a town’s total population, there is high demand for rentals for co-eds who want to live off-campus and are not in the market for purchasing their own home.” You can protect your bottom line by requiring a co-signor, especially for students who have no previous rental history and may also have no credit history.

You may get calls in the middle of the night.

The toilet overflowed and flooded the bedroom, and now you’re double-fisting a plunger and toolbox at 3am. If that sounds as painful as it is, or if you have minimal (or zero) home maintenance skills, you’ll probably want to read the next entry.

You may have to hire a property manager.

If your investment property is out of your local area, you may not have a choice when it comes to hiring a property manager. But if you’re looking to do as little as possible – or if you simply aren’t qualified – and don’t mind paying out a little of your potential profits, property management might be for you. “A typical property manager will interact directly, on your behalf, with applicants and tenants. Managers will usually market and advertise your rentals, meet with prospects to host showings, collecting rent, deposit money to your bank account, and coordinate repair issues” “They are also the first line of defense when responding to tenant complaints and will even stand by your side when you have to pursue an eviction or get sued.”

Still interested? Heed these tips:

Make sure you have enough money to put down. You already know that the more you put down, the less you’ll have to finance. But financing for rental homes may also require a larger down payment than you were planning. “If you’re borrowing money for your first rental house, you’re going to need at least a 20% down payment,” said “And if it’s your first rental property, your current income is going to have to be enough to handle the mortgages for both your residence and your new property.”

Don’t buy more home than you can afford. Yes, a higher-priced home may increase the potential profit every month, but it can also increase your potential loss. What if you can’t rent the home right away? What if there’s a lapse between renters? Keep in mind how much your carrying costs are so you can determine how much house you can really afford without counting on max rent every single month.

Don’t take a chance on an unfamiliar neighborhood. Your best bet when you’re just getting started is staying local, where you know the home values, the rental trends, the crime rates, and maybe also have some local resources that can help with renovation, maintenance, and yard work.

Don’t be greedy. This may sound like an odd tip if the idea behind owning rental property is to make as much money as possible, but if your asking price isn’t getting applicants in the door, you need to rethink your strategy. Consider this: “Every month of vacancy costs you 8.3% of your potential yearly revenue, so you would be better off renting every property one month faster for 5% less rent, two months faster for 10% less rent, and so on,” said TIME. In the end, it may make better financial sense to lower the price of your rental if you’re having trouble finding tenants.



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Top 3 Reasons 20-Somethings Should Invest in Real Estate

Mon, 06/12/2017 - 1:55pm

Investing in real estate can be a good way to diversify your portfolio. And it can be particularly appealing to 20-somethings who are comfortable taking risks and who want to earn bigger returns. If you’re in your 20s and you’ve toyed with the idea of becoming a landlord or putting money into a real estate investment trust, here are three key reasons to jump on the property bandwagon.

1. Real Estate Can be a Hedge Against the Market

If you pay any attention at all to the stock market, you know that things aren’t always stable. A great day of trading can be followed by a huge tailspin and it’s that volatility that makes 20-somethings so leery of investing. In fact, millennials are so cautious when it comes to investing in stocks that they’re keeping 70% of their portfolio in cash.

Real estate, on the other hand, offers an added layer of insulation against bumps in the market. The recent housing collapse aside, real estate tends to remain stable even when stocks tumble. If you’re not sold on putting a big chunk of your savings into stocks, investing in property can be a more lucrative alternative to letting your money sit in your bank account.

2. It Doesn’t Require a Huge Upfront Investment

Investing in private real estate deals is typically something that’s reserved for the elite, but that’s not the only way to add property to your portfolio. Twenty-somethings can begin investing in real estate (even if they don’t have a lot of money) by purchasing an investment property or getting into real estate crowdfunding.

With real estate crowdfunding, it’s possible to get started with as little as $100. The SEC recently finalized Title III of the JOBS Act, making it possible for anyone to invest through crowdfunding platforms, regardless of their net worth. That’s a plus if you’re in your 20s and you haven’t built up a sizable amount of wealth yet.

You could also buy a property and either fix and flip it or lease it out. Getting a loan in your 20s is easier than you might think and you don’t necessarily need a huge down payment. With an FHA loan, for example, you only need to put down 3.5% of the purchase price. If you can qualify for a USDA or VA loan, you may not have to make a down payment at all.

Now, there is one small catch to be aware of. These kinds of loans generally require the property you’re buying to be owner-occupied. If you’re thinking of going the low- or no-down payment route, keep in mind that you’ll have to live in the property before you can rent it out.

3. You Can Bump up Your Cash Flow

Perhaps the best reason why 20-somethings should invest in real estate is the immediate impact it can have on their bottom line. If you buy a home and then rent it out, for example, you’ve got a steady supply of income each month beyond your regular salary. If you decide to become a house flipper instead, you’ll have access to more money once the home sells.

Either way, that’s money you can use to pay down your student loans, save for retirement or put towards the purchase of your next investment property. That extra income can be a welcome addition if you’re just starting your career and you’re not making big bucks at your day job.

Real Estate Isn’t Risk-Free

Like any other investment, real estate comes with certain risks. For example, your tenant may flake on you halfway through their lease or your flipped property may sell for less than what you anticipated. Doing your research on the market and the property itself beforehand can keep your real estate investment from being a flop.


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More Americans Think It’s a Good Time to Sell a Home

Mon, 06/12/2017 - 1:52pm

With home prices zooming up with no end in sight, a record number of Americans think it’s a good time to sell a home.

About 61% of folks said there was no time like the present to put a home on the market, according to Fannie Mae’s National Housing Survey for May. That’s the highest percentage it’s been since Fannie began the survey in June 2010. (Fifty-seven percent of participants said it was a good time to sell in April.)

The monthly survey polls 1,000 Americans with more than 100 questions on their attitudes toward owning and renting a home, price changes in the housing market, and the health of the economy.

However, those high prices don’t mean that homeowners are going to rush to plant “For Sale” signs in their front yards.

“They [still] have to find a new place to move,” says Sarah Shahdad, a market insights researcher at Fannie Mae. “If they don’t see an affordable buying opportunity, they might be hesitant to list their homes for sale—even if they think it’s a good time to sell.”

The bank account–busting price tags of properties are also leading more people, about 33%, to think it’s not a good time to be a home hunter. That’s compared with 27% who thought it wasn’t an ideal time to buy in April.

“People who think it’s a bad time to buy are concerned about high home prices,” Shahdad says. “The supply of homes is tight, which is pushing up home prices.”

And nearly half of Americans, 48%, believe those prices are going to get even higher compared with just 8% who think they’ll go down, according to the survey.

That makes sense as prices are usually the highest during the warm-weather months, when competition is the fiercest. That’s because many folks want to move in the summer, before the kids go back to school.

“As long as the supply remains limited, that’s going to push home prices up higher,” Shahdad says.


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This is how squatters move into vacant homes — and scam renters

Mon, 06/12/2017 - 1:48pm

One morning in 2015, Jeannette Shaw went to her mother’s home with a mortgage inspector after her mother had moved out and given her power of attorney over her estate, court documents say.

But when she got to the home, someone was already living there.

The woman in the house, Stephanie Harris, told police Shaw’s mother rented her the home, even though both Shaw and her mother said they did not. She waved around a lease and showed a receipt for payment of $5,000.

Harris said she was scammed, but she could not provide the name of the person who rented her the home. Weeks later, she still refused to leave, so prosecutors charged her with burglary and forgery.

The case, which was the subject of an April Court of Appeals of Indiana decision, is emblematic of a problem that persists in Marion County. Even as the city tears down vacant homes and the economy improves, thousands of abandoned, or otherwise empty, homes stand in neighborhoods throughout Indianapolis — offering an opportunity for scammers.

About three or four times each month, fraud detectives are called to investigate what they call “home takeovers.”

In short, a con artist will locate a vacant home, whether it’s abandoned, foreclosed or simply for sale. Then, the scammer will either move in themselves or lease out the residence to unsuspecting renters, unbeknownst to the real owners.

“A lot of people will basically go out and look at an area to see houses for sale,” said Indianapolis Metropolitan Police Sgt. Steve Walters, who works in department’s fraud unit. “They put up a different Craigslist ad, change the locks and show them the house.”

The scammers often will break in and change the locks, furnishing the renter with keys and convincing-looking legal documents printed off the internet, Walters said. Homeowners, property managers or bank inspectors eventually will come by the house and find that it has been decorated, and sometimes even improved, with paint and housework.

The scam exploded several years ago, fueled by a perfect storm of a bad economy and the city’s problem with vacant and abandoned houses. For a while, police were getting called for “home takeovers” daily.

But even though authorities say they have cracked down on such cases, yielding a decrease in reports, police still battle such scammers several times a month — enough to keep the 12-detective fraud unit busy.

Victim or con artist?

Harris’ case is indicative of a challenge in dealing with these “home takeovers.” Police have to answer a tricky question: Who is the victim and who is the scammer?

“What was happening was creating kind of an unusual situation for patrol officers who would respond,” Marion County Prosecutor Terry Curry said. “They would arrive and automatically have conflicting versions of who owns the property and who has the right to be there.”

Sometimes, police will just allow people to vacate a property without filing charges. Other times, though, the squatter will dig in, and try to claim, “squatter’s rights,” Walters said.

While Indiana does have adverse possession statutes, they likely would never apply to home squatters, said Florence Roisman, a law professor at Indiana University Robert H. McKinney School of Law in Indianapolis.

In order to successfully claim land by adverse possession, Roisman said, the person would have to reside on the land for 10 years and have paid property taxes, among other difficult hurdles. It is generally cited in land boundary disputes.

“It’s referred to as the doctrine of legalized theft. It’s very ancient,” Roisman said. “It’s not a doctrine that courts like very much.”

In some cases, including that of Harris, investigators believed the culprit was the person living in the property. Harris appealed her convictions, arguing that the matter was a civil one, not criminal, but she lost the appeal.

In another recent bizarre case, a man was charged with squatting in an expensive home that was for sale. He was trying to convince his girlfriend he was a millionaire.

Other cases arise when squatters claim they are “sovereign citizens” who don’t follow state or federal law. In one case, Wendell Brown created a fake deed to an abandoned house, and filed a complaint against IMPD when officers kicked him out of the home, arguing that he is not subject to government statutes.

In other cases, though, police unearthed widespread schemes in which scammers would rent out vacant properties to handfuls of people, creating dozens of victims over the years, with stories like that of Terri Miller.

In 2011, Miller drove past her home, in foreclosure, on the city’s northeast side, court documents say. She noticed new lawn chairs sitting in the front yard. The windows had new coverings.

Someone was even receiving mail at her house, the documents say.

It was almost as if someone new had moved in, even though the home was owned by the bank, not set for a sheriff’s sale for another couple months.

That’s because someone did move in.

Miller knocked on the door, court documents say, and came face to face with a woman who told her she was leasing the home. Miller’s own personal items were gone. She found out later a scammer, Willie Hawkins, illegally took over her home and put her items in storage, court documents say.

Hawkins was sentenced in 2014 to five years in prison for defrauding at least 10 people.

Prosecutors tackled another sprawling case when they focused on David Garden after the Indiana attorney general received 45 complaints about the man. Garden was sentenced last year to six years in prison for scamming homeowners who were on the brink of foreclosure.

In a similar case, Sheila Amos was sentenced in 2013 to 34 years in prison for taking more than $24,000 from people who thought they were buying homes that Amos owned. Amos, though, was drilling out the locks in unoccupied properties and “selling” them. She targeted those in the Latino community for her scam.

The buyers in those cases truly believed they owned the home they were living in, Curry said. Some put money into the homes to improve them.

They lost the money they gave to Amos for the sale, and nearly lost the money they put into the home.

However, the prosecutor’s office worked with the city to allow some of the victims to legitimately purchase homes that were part of the city’s land bank for a nominal amount of $2,000.

Yet, the victims were scammed again when a city employee in charge of the land bank asked them for the money directly, several thousand dollars in cash.

Instead of paying $2,000, the victims paid about $4,000 to $5,000. The city employee went to prison.

But at least they got to keep the houses.

The vacant home problem

More than 3,000 homes in the city are vacant and abandoned, according to data from the city, updated as of May of last year.

That creates thousands of residences for scammers hoping to prey on people who are desperate for a home.

“We have to find a more efficient way to deal with all these abandoned properties,” Curry said. “It’s been a difficult issue to address.”

In Mayor Joe Hogsett’s second state of the city address in April, he vowed to increase efforts to tear down vacant homes. He noted that the city has demolished more than 300 buildings in the past 15 months.

The Indiana General Assembly, too, has taken a look at the problem of urban blight. Lawmakers last year proposed bills that would have required banks to clean up vacant homes after a foreclosure and allow city redevelopment commissions to take control of abandoned properties more quickly. The measures did not pass, except for one that established a pilot program in Lake County.

Overall, the legislature considers it a city issue rather than a state problem.

Still, as long as vacant properties proliferate, scammers likely will see an opportunity for an easy con.


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Investing in Short Term Rental Properties the Online Owner Way

Mon, 06/12/2017 - 1:34pm

If you’ve watched the meteoric rise of Uber and now other dispersed taxi services, it’s clear that there are major changes afoot in consumer-to-vendor direct contact business. The Uber driver uses a smartphone app to place themselves on and off duty, and those who want a ride can connect with them.

The same type of direct contact, though with a couple of wrinkles, is happening with sites like, and It’s a bit more complicated, simply because there is a security concern when a homeowner is renting all or a portion of their home to a stranger. However, using technology to verify identity, these sites are doing big business and growing rapidly.

The Advantages of Online Direct Booking

The first and most obvious advantage for the guest is that it’s usually much less expensive than hotels and other accommodations. The owner(s) handle their own guest check-in and checkout, and they handle cleaning and ready for new guests. There are no management costs other than the fees paid to the site where the property is listed. This means that the same amount of space that may run $100/night or more in a hotel could cost as little as half or less through these sites.

For this listing and processing fee, the homeowner(s) simply take the photos and post the description, with payment and credit card processing done through the website. Many list on more than one site. The process, after security issues are resolved, connect the owners with the guests via secure email for coordination of guest arrival and other communications.

The owner or investor in our discussion, can hire out the cleaning, and they can also use lockboxes for access. Extra cleaning fees are often added to the cost of the room or house.

In areas with tourism, colleges with visiting parents and other transient rental traffic, this can be a highly profitable investment niche. One actual example near the college in Tucson, AZ is a great tool for analyzing this type of investment.

The home has a courtyard and two small guest rooms with kitchenettes and baths. Guests can bring pets, and the courtyard is a plus, allowing higher rentals. The owners in this case live in the home and do their own management and cleaning. They maintain a busy and largely booked traffic flow for the two units, at around $70/night each. While these could be rented to students on a monthly basis, rents would be in the $500/month range, far less than even a reasonable occupancy on a nightly basis. In this case, the actual income is probably more like triple doing the nightly rentals.

In this example, an investor could purchase the property and place a monthly tenant into the main house with reduced rent for managing the guest traffic. That’s three rental incomes from one property, with most of your management hassles handled by a combination of the website and your entrenched tenant. It’s worth a look.


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How to Handle Service Pet Policies without Discriminating Part II

Thu, 06/08/2017 - 12:53pm

Let’s start the discussion and analysis with a hypothetical fact pattern discussed in Part I of this article last week:

Tenant Victor wants to have a service dog in his apartment. You are the resident manager of a mid-sized apartment complex of 50 units. Your property management company has a “no pet policy” in the apartment complex. Victor appears to be the model of good health. You get a letter that Victor claims to have a disability that requires the need of a service pet.  Victor claims that the nature of disability is confidential.

After speaking to Victor on the phone, he tells you that he desires to have a comfort animal in his apartment to calm his nerves, and the proposed pet is named “Vera.” His proposed comfort animal, Vera, is a small German Sheppard with no history of dog biting and no history of loud barking. Victor has taken the dog to obedience school and has made an effort to get the dog certified as a service animal to help him calm his frazzled nerves.

Can you request information and records about Victor’s claimed disability?  If a disability is not obvious, what kinds of information may a housing provider request from the person with a disability in support of a requested accommodation?

This is a sensitive topic to be dealt with kit gloves. A housing provider may not ordinarily inquire as to the nature and severity of an individual’s disability. However, in response to a request for a reasonable accommodation, a housing provider may request reliable disability-related information that

  • Is necessary to verify that the person meets the Act’s definition of disability. (e., has a physical or mental impairment that substantially limits one or more major life activities)
  • Describes the needed accommodation.
  • Shows the relationship between the person’s disability and the need for the requested accommodation.

Depending on the individual’s circumstances, information verifying that the person meets the Act’s definition of disability can usually be provided by the individual himself or herself (e.g., proof that an individual under 65 years of age receives Supplemental Security Income or Social Security Disability Insurance benefits or a credible statement by the individual).

A doctor or other medical professional, a peer support group, a non-medical service agency, or a reliable third party who is in a position to know about the individual’s disability may also provide verification of a disability. In most cases, an individual’s medical records or detailed information about the nature of a person’s disability is not necessary for this inquiry.

Once a housing provider has established that a person meets the Act’s definition of disability, the provider’s request for documentation should seek only the information that is necessary to evaluate if the reasonable accommodation is needed because of a disability. Such information must be kept confidential and must not be shared with other persons unless they need the information to make or assess a decision to grant or deny a reasonable accommodation request or unless disclosure is required by law (e.g., a court-issued subpoena requiring disclosure or a lawsuit is filed that puts the nature of the disability at issue.). So, as a property management company and landlord, specific disability information should be kept confidential from other residents and should be kept “under seal,” or labeled “confidential” so to speak, in the property management office. Use good professional judgment in keeping the file sealed and confidential.

In Victor’s case, it is important to obtain some basic information about the specific nature of the disability – this may be in the form of a doctor’s letter. If you don’t know anything or understand about the nature of the disability then you cannot assist and accommodate the tenant to be in compliance with the law.

Some disabilities may be obvious- others are not.  A mental, psychological, or emotional disability condition may be the hardest to notice or fully understand without a medical opinion.  The tenant may not want to discuss the condition unless he or she must do so. You should maintain limited confidentiality of the medical information if the tenants requests that you do so.   Also, if the tenant does not provide any documentation, the tenant may be claiming a disability fraudulently, just to get around a “no pet policy.” The claim of a bogus disability is more common than you think, as some tenants may take liberties to get special privileges at the apartment complex.

Can you request information about Vera’s demeanor as a service pet?  

It is a smart idea to do some investigation and ask the tenant to verify in writing whether the dog has any history of biting, snapping, or loud barking as to cause a nuisance to other tenants.   Has the dog itself been a victim of abuse? Has the pet had multiple owners or was ever abandoned? Ask the tenant if there were any issues with the dog at their prior residence, which may have been the city dog pound. Has the dog been formally trained? If a dog is properly trained and certified as a service dog, usually the dog is well behaved. Don’t judge the dog based on the fact it is cute or adorable. But you don’t get to know the dog’s personality until the dog stays at the property. You will learn a great deal about the personality of the dog after 30 days. You should see and meet the pet to get an idea of the pet’s personality.

If a doctor has diagnosed Victor with a mental disability or handicap, can you enforce the no pet policy to stop Victor from housing Vera the doggy as a service animal or comfort animal?

No, you are required by law to allow the pet if the pet is not a knowingly dangerous or a nuisance to other residents. Monitor the situation; you won’t know the pet’s personality until the pet has been tested in its new environment.

If you can verify Victor’s disability condition with some reasonable certainty, and don’t allow Victor to house Vera as a service dog, what can Victor do? 

Victor’s rights and remedies under California state law include, a person discriminated against on the grounds of disability pursuant to Cal Civil Code section 54.1 can ask the local district attorney, city attorney, the Department of Rehabilitation acting through the Attorney General, or the Attorney General to bring an action to enjoin the violation, civil penalties, damages, or to seek other remedies, or he or she may bring his own private legal action. (Cal. Civ. Code 55 and 55.1.).  The prevailing party in the action shall be entitled to recover reasonable attorney’s fees.

An aggrieved person may commence a civil action in an appropriate court not later than two years after the occurrence or the termination of an alleged discriminatory housing practice, or the breach of a conciliation agreement entered into, whichever occurs last, to obtain appropriate relief with respect to the discriminatory housing practice or breach. The computation of the two-year period shall not include any time during which an administrative proceeding under this part was pending with respect to a complaint under this part based upon the discriminatory housing practice or breach. (Cal. Gov. Code, 12980 and 12989.1.)

Under the dual federal law track, Victor may either file a lawsuit or may file a complaint with U.S. Department of Housing and Urban Development (HUD), not later than one year after the discriminatory act has occurred and HUD may pursue legal remedies on his behalf. (42 U.S.C. Section 3610 and 3612.) Vera may also pursue an action through the Civil Rights division of the U.S. Department of Justice as a referral from HUD to file a complaint on behalf of the United States in federal court.

42 U.S. Code  3612 (p) provides attorney’s fees and costs for the prevailing party for a discrimination complaint filed with HUD, an administrative law judge, or federal court.

This section provides, “In any administrative proceeding brought under this section, or any court proceeding arising therefrom, or any civil action under this section, the administrative law judge or the court, as the case may be, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney’s fee and costs. The United States shall be liable for such fees and costs to the extent provided by section 504 of title 5 or by section 2412 of title 28.”

Just a word of comfort – even if you get sued by the government for a disability discrimination claim, the claim can be settled if the government is reasonable. Most governmental offices want to settle cases with written settlement agreements, and not a lot of protracted litigation. The government does not have unlimited resources, and may want your company to implement a better management policy with respect to tenants who claim disabilities. However keep in mind, that plaintiffs can seek damages, penalties, and attorney’s fees and costs.

Should you charge Victor a pet fee for hosting Vera?

No.  Landlords may not require applicants or residents to pay a pet deposit for a service dog, psychiatric service dog, or support animal, even if they do so for other applicants or residents.

This is based on the policy statement contained in the Joint Statement of the Department of Housing and Urban Development and the Department of Justice Reasonable Accommodations under the Fair Housing Act.

This is a strange rule because a service or comfort animal can destroy an apartment as much as a regular pet that is housed by a non-disabled tenant. Shouldn’t the landlord be protected if the tenant moves out and the apartment has major damage from the pet? The law and authorities tend to view the pet fee as a discriminatory penalty.

If your real estate company approves Vera as a comfort or support animal, and Vera starts snapping or biting other residents in the complex or barking loud in the complex, what can you do?  

Although you are making every effort to reasonably accommodate Victor with his pet request, Victor is not the only person that you should be concerned with at the apartment complex.   Other residents have rights of quiet enjoyment under their rental agreements. If the Veras of the world are being a “nuisance,” and posing a risk of harm to others, you should speak to the tenant about the issue, and you should follow up and send the tenant a letter requesting to get control of the dog. The dog may need additional training or additional supervision.

Have positive and friendly communication channels with the tenant that is not adversarial. If that does not work, and you have to put the hammer down, you can also send the tenant a three day notice to perform covenant or quit to request that the tenant control the animal. If the tenant does not get control of the dog, or the tenant is snapping or biting, then you can call animal control authorities to file a complaint.

How can you prepare and train your employees and staff for these kinds of situations?  

The fact scenario presented about Victor and Vera is more common than you think. Now you have a flavor for the issues and state and federal disability laws. More and more tenants are trying to use the disability laws to obtain special accommodations. Some requests are legitimate and lawful, and others are manipulative and fraudulent. It is important to educate yourself on the issues so you are ready for this type of situation, and have a plan for dealing with it.

If your real estate company or property management company in Southern California needs counsel and additional in office training and administrative and legal support on the laws and regulations of disability and fair housing, please contact LA Real Estate Law Group to schedule a training session in your office.

Copyright 2017 Nate Bernstein, Attorney at Law. LA Real Estate Law Group. All Rights Reserved.

The author of this article, Nate Bernstein, Esq., is the Managing Counsel of LA Real Estate Law Group, and a member of the State Bar of California and his practice concentrates in the areas of complex real estate litigation, commercial litigation, employment law, and bankruptcy matters. The contact number is (818) 383-5759, and email is  Nate Bernstein is a 22 year veteran Los Angeles real estate and business attorney and trial lawyer. Mr. Bernstein also has expertise on bankruptcy law, the federal bankruptcy court system, creditor’s rights and debtor’s bankruptcy options. He previously served as Vice President and In House trial counsel at Fidelity Title Insurance Company, a Fortune 500 company, and in house counsel at Denley Investment Management Company. Nate Bernstein created, a leading educational resource on quiet title real estate litigation. Nate Bernstein is a local expert on real estate law and economic trends in the real estate and leasing market, business law, and bankruptcy law. Nate has personally litigated more than 40 major real estate trials, and has settled more than 200 complex real estate and business cases. 

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Investors: Here are the top markets to invest in rental properties

Thu, 06/08/2017 - 12:33pm

Home prices are outpacing gains in rental pricing, however rental prices are still showing increases from last year.

The most recent Home Price Index report shows rent prices increased in April, and compared them to home price growth.

“This has led home-price growth to outpace rent gains,” Chief Economist Frank Nothaft said. “Nationally, home prices were up 6.9% over the last year, while rent growth for single-family rental homes recorded a 3% rise through April, according to the Single-Family Rental Index.”

RentRange, a provider of market data and analytics for the housing industry, released data ranking the top metropolitan statistical areas by the highest average gross yield for single-family homes during the first quarter of 2017.

Some of the highest ranking metros were located in the Midwest and Northeast.

“The first step every investor should take when looking to invest in single-family rentals is to conduct due diligence by researching historical housing and rental data, the local economy and property-specific financial information like insurance, taxes, gross yield, net yield and cash flow,” said Dennis Cisterna, RentRange Data Services chief revenue officer.

“Today’s investor has a leg up on their predecessors because this type of information is now readily available in a way it was never before,” Cisterna said. “While many markets may have high yields, they may have quite different rent growth percentages and vacancy rates. A strong market would generally have a combination of high yields, low vacancies and high rent growth.”

Only four of the top 25 markets included in the high-yielding list show a decline in rent over the past year: McAllen, Canton, Columbia and Pittsburgh.

Here are the top five MSAs where investors will see the highest average gross yield:

5. Rochester, New York – 15.6%

Change in rent during first quarter: Increased 2.1%

Average vacancy rate: 5.9%

4. Youngstown-Warren-Boardman, Ohio-Pennsylvania – 15.7%

Change in rent during first quarter: Increased 5.3%

Average vacancy rate: 10.5%

3. Milwaukee-Waukesha-West Allis, Wisconsin – 15.8%

Change in rent during first quarter: Increased 3.8%

Average vacancy rate: 5.3%

2. Cleveland-Elyria, Ohio – 16.6%

Change in rent during first quarter: Increased 0.9%

Average vacancy rate: 8%

1. Detroit-Warren-Dearborn, Michigan – 17%

Change in rent during first quarter: Increased 0.9%

Average vacancy rate: 8.6%



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Boomers, Millennials, and the McMansions No One Wants

Thu, 06/08/2017 - 11:02am

As baby boomers look to downsize out of their suburban McMansions, a generational showdown is looming: Millennials might be coming into their own as the nation’s biggest group of first-time home buyers, but they aren’t exactly lining up with bids in hand for those large, expensive homes in the sleepier suburbs. Instead, they’re looking for a different kind of home—the same ones, in fact, that the empty nesters are looking to buy.

It’s a battle of the millennials vs. baby boomers playing out in the nation’s suburban housing markets.

Younger and older generations alike are gravitating toward smaller dwellings in more urban, walkable suburbs and cities, with restaurants and coffee shops around the corner. It’s leading to a real estate traffic jam: Increasingly, boomers are getting stuck, because most can’t buy the home of their dreams until they unload their current ones. And many millennials have neither the desire nor the means to help them out.

“What you have is everyone chasing the same type of home,” says Rick Palacios, director of research at John Burns Real Estate Consulting. “More and more buyers of all ages want to avoid having to deal with a huge yard and all the upkeep and the costs to maintain [a larger] home.”

It’s creating an odd imbalance in a real estate market—a disruption to what has long been considered the traditional generational housing life cycle. And it’s leaving many would-be buyers out in the cold.

Millennials seek a new kind of suburban community

There’s no question that millennials are moving to the suburbs. About 57% of buyers 36 and under closed on homes in the suburbs last year, compared with just 15% of those who became homeowners in cities, according to research from the National Association of Realtors®. But their vision of suburban living differs from the sprawling domains of the boomer generation.

For one thing, many younger Americans are reluctant to give up the excitement of urban life to settle down and start having kids. About 45% of millennials who plan to buy a home in the future are waiting because they aren’t ready to settle down yet, according to a survey of 24,000 millennial renters by the rental website Apartment List. (Other top reasons were not being able to afford to become homeowners and preferring to wait until marriage.)

So when they do make that move to the suburbs, millennials often seek more walkable towns that have many of the urban amenities they’re used to, like bike lanes, social events, and lots of shops and restaurants.

“What’s really attracting millennials are the communities that are bringing the urban flavor out to nonurban towns,” Palacios says. “They don’t want the traditional  massive homes and big yards. They want smaller homes and cool things to do.”

“It’s more important to have proximity to the lifestyle they want,” says Jason Dorsey, president and researcher at the Center for Generational Kinetics, focused on millennials and Generation Z. “Their living room is actually the park outside the condo.”

The type of home that everyone wants today

It’s not just the size of boomers’ homes that is a turnoff; it’s also the style. Times and tastes have changed, and today both boomers and millennials are attracted to modern, open floor plans—which aren’t common in the older homes that boomers are hoping to unload. Boomers like the flexibility of these spaces for aging in place, and millennials like the clean design.

And while they’re willing to compromise on size, millennials are less willing to bite the bullet on amenities. Weened on HGTV, they want high-end finishes, nice countertops, upscale appliances, and luxurious bathrooms.

“They’ll buy a smaller house with fancier amenities, close to town, rather than chase square footage,” Dorsey says.

Why boomers struggle to sell

All of these factors mean that while it’s a seller’s market in many areas, plenty of boomers are having trouble selling their homes, says Chris Porter, chief demographer and researcher for John Burns Real Estate Consulting.

Even if they want these larger homes, many younger buyers simply don’t have the financial means to buy them.

The average college graduate in 2016 owed a whopping $37,172 in student loans, according to Student Loan Hero, a website that provides tools for managing college debt. Plus, with less work experience and shorter credit history, they aren’t likely to qualify for a big mortgage.

As for Generation X, having weathered the Great Recession during what should have been their prime earning years, they now have to save for their kids’ college expenses, their retirement, and caring for their aging parents. So they’re not likely to trade up from their starter homes. And if they do, many prefer an easier-to-maintain smaller home in a community with activities they enjoy—just like those millennials and boomers, Dorsey says.

Meanwhile, since the boomers see their home as their nest egg, they’re not all willing to reduce their asking price and shortchange their retirement accounts, says Dorsey. So more of them end up staying put.

“There certainly was a lot of speculation about what would happen if the boomers tried to sell their houses en masse, and whether that would flood the market with a supply of large homes that the younger population didn’t want—or couldn’t afford—to buy,” Porter says. But “the boomers do seem to be moving less and aging in place more.”



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Property Management Social Media Explained

Thu, 06/08/2017 - 10:50am

If you’re a property manager trying to build an online presence, or you’re just trying to stay relevant in the ever-changing world of the internet, one thing that must be at the top of your mind is social media. There’s always a hip new platform available, and you’re probably wondering if you should be on it. Before you start creating new accounts, however, ask yourself these important questions:

  • Do I understand how the platform works?
  • Do I know what people are using it and how they are using it?
  • Is it clear how the platform can help my business?
  • Do I know how much time it takes to maintain, and is it worth my time?
Example Scenario: Instagram for Property Management Companies

Consider Instagram. This is a photo-based social network, so you’ll be posting photos and videos. Roughly six-in-ten online adults ages 18-29 (59%) use Instagram, nearly double the share among 30-to-49 year olds (33%). If you’re looking for tenants to occupy the properties you manage, it might make sense to upload pictures of the rentals you have available. That works to find tenants. But if you’re after owners, and you’re looking for new property management leads, it doesn’t make much sense and takes you away from other opportunities. Also, any vacancy photos and videos will have to be taken down manually once they’re occupied, doubling the amount of time required.

Principles versus Platforms

Marcus Sheridan spoke to us at the PM Grow Summit in January about Principles versus Platforms. In his talk, he mentioned that over the last 10 years, there were more than 70 social media networks or platforms that rose up, and only about 30 of them are alive today. Out of those, 12 are teetering on death. That tells you a lot about the amount of churn there is in social media.

People get enamored with the next social media fad (platform) that they ignore how it can help their business (principle). So, next time a new social media platform comes out be sure to ask yourself and research the above questions detailed in this blog.

What Do Facebook “Likes” Really Mean for my Business?

A common question we are asked is – how many likes should I have on Facebook? The real question is – what is the value of a like? There was an interesting article in the Harvard Business Review that talked about this.

There are two major misconceptions about Facebook likes:

  • The first is that a like equals new customers for your business.
  • The second is that someone who likes your business will get your business in front of their friends and family, who will also become your customers.

When digging deep into the data, we can see that merely liking a page doesn’t change a consumer’s habits or increase purchasing. Moreover, liking a page doesn’t get friends and family to become customers. The data also shows that the majority of people who like pages on Facebook or follow certain social media pages are already existing customers. So, those likes represent people who are already using a product or service. They like you in real life.

How to Use These Takeaways

Since we know that someone who likes your business page already likes you in real life and is probably an existing customer, getting a like is not the end game. So, what do you do? If they already like you, ask for a referral on your Facebook page. That’s one way to get something out of it. If getting more likes is still important to you, you can try targeting your existing clientele. Ask them to like you on Facebook.

With any social media, the objective is understanding what your business needs, and understanding how social media is a tool to help you obtain your goals. Social media has so many aspects to it that it can be overwhelming, but if you keep this in mind: “how will this help my business?” Social media won’t seem so confusing or daunting.



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Seattle ordinance would require landlords to give tenants voter registration information

Thu, 06/08/2017 - 10:45am

There are a few things on every checklist when you move, like updating your internet or making sure utilities are in order. For the civically-minded, there’s a mandatory item on that list: Updating your voter registration.

Washington State is all vote-by-mail, so for someone without an updated voter registration, it severely complicates getting a ballot in the first place. That’s further complicated for people crossing state or county lines.

A new ordinance, proposed Monday by City Councilor Kshama Sawant, would streamline this into the moving process by requiring landlords to give new tenants voter registration information.

The idea is pretty simple. When renters move into a new place, landlords are already required to give them a stack of papers, prepared by the Seattle Department of Construction and Inspections (SDCI), that outlines their rights as tenants. The ordinance would just add the voting information to that pile.

According to a summary by City Council central staff, voter turnout is lower among people who have moved recently. They cite census data that says only 21 percent of those who have lived in their current residence for less than a year reported voting.

The goal with this new ordinance is to help pick up that slack.

Sawant’s office collaborated with several groups that engage renters, voters, and marginalized communities, including the Tenants’ Union, Capitol Hill Community Council, Be: Seattle, LGBTQ Allyship, and Asian Pacific Islander Americans for Civic Empowerment (APACE) Votes.

“One of the biggest barriers to civic engagement that our community faces is the need for translated voter materials in limited-English-proficiency homes,” said APACE Votes’s Christina Reiko Shimizu in a statement. “This new rule would provide voter registration forms and information to all new tenants in the appropriate translated languages available.”

Despite the apparent simplicity, the ordinance is already getting pushback from landlord advocacy organization Rental Housing Association of Washington, weary at Seattle’s growing collection of landlord-tenant laws. (The group has two lawsuits pending over recent regulations: one over a cap in move-in fees, the other requiring landlords to accept the first qualified rental application submitted for a unit.)

“How many more pieces of paper will Seattle require landlords to give renters?” the organization sniped on Twitter. “Will notebooks be provided?”

The SDCI “Information for Tenants” document, an overview of landlords’ and tenants’ rights and responsibilities, is currently 15 pages long, or eight front and back. That doesn’t include other papers required by state building code, which depend on which building it is—but those are required by the state, not the city.

It’s too early to tell how long the new information would be, but the standard Washington State voter registration form, which includes information on how to register to vote and update voter registration, is two pages long—or just one page front and back.



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Many African-American, Hispanic Families Priced Out of Homeownership in U.S.

Thu, 06/08/2017 - 8:43am

According to a new study by Redfin, in 2016 just 18 percent of homes for sale in the 30 largest U.S. metros were affordable for middle-class Hispanic families and 14 percent were affordable for African-American families. Both rates were down 11 percentage points from 2012. This is compared to 30 percent affordable for those earning the median income for white households, down 12 percentage points since 2012.

Housing affordability declined over the same four-year period for the middle class as a whole, as home prices increased by 26 percent and household incomes edged up by less than 2 percent nationally. In 2012, 44 percent of homes for sale were affordable on a middle-class income; that share fell to 32 percent in 2016.

The study also found that in 2016, middle-class African-American and Hispanic families were virtually priced out of homeownership in Denver, Los Angeles, Portland, San Francisco, San Diego and Phoenix. In each of those metros, fewer than 5 percent of homes on the market were affordable on the median household incomes for African Americans and Latinos.

Still, Denver was home to the smallest racial gap in housing affordability in 2016. Less than 2 percent of homes for sale there were affordable to families earning the median income for African-American and Hispanic households, compared to just 8.3 percent for families earning the median income for white households. The racial affordability gap was largest in Minneapolis, where the typical white family could afford 66 percent of the homes for sale, compared to 5.2 percent and 24.8 percent for families earning the median income for African-American and Hispanic households.

Among the 30 largest metros, Las Vegas had the largest declines in affordability for families making the median African American (-26.5 points) or Hispanic (-24.6 points) household incomes from 2012 to 2016.

Also during this period, metros known for their relative affordability, like Atlanta, Tampa and Kansas City, saw double-digit declines in the share of listings that were affordable on African American and Hispanic median incomes.

St. Louis was the only metro that saw increases in affordability for both Hispanic (+5.4 points) and African-American families (+4.3 points). Interestingly, St. Louis was also the only metro where overall middle-class affordability, including for median-income white households, did not change significantly over this time period.

The Upshot

“American cities are at risk of losing both the economic and racial diversity that has been their hallmark,” said Redfin chief economist Nela Richardson. “Middle-class homebuyers are being priced out of America’s largest cities at an alarming rate, as the home affordability gap gets wider. Given the significantly lower rates of homeownership among African-American and Hispanic families, the reduction in affordable listings has even more dire consequences for income inequality when broken out by race.”

But there are solutions, according to Richardson: “For one, federal and state governments can do much more to be influential in local housing policy,” said Richardson. “That’s where the crisis starts-at the neighborhood level-when people vote against inclusionary zoning policies, making it difficult or impossible to build higher-density, affordable housing in a community. Federal and state governments can reward communities that change to inclusionary zoning practices by offering them infrastructure investments to improve the neighborhoods. That way, inclusionary zoning is more appealing to longtime residents.”


Source: worldproperty/

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Perks Student Renters Look for in an Apartment Community

Thu, 06/08/2017 - 8:40am

When college students start searching for and looking at off-campus housing options, they consider more than just rental rates, proximity to campus, and neighborhood safety. Now more than ever, student renters look for extra perks and amenities that apartment communities offer, wanting to get the most benefits included in their lease.

To entice more college student renters to choose your properties, you may want to consider adding certain features or including various amenities in the rent so more students pick your apartments. Here are some perks student residents look for in an apartment community.

1. Online payments

An amenity you may not have considered as a perk college student renters will be interested in is the easy ability to make payments online — whether it is rent, electric, cable, gas, water, etc. Many landlords still require renters pay each month by check either in person or by mail, which is annoying for college students.

When student residents are looking at off-campus apartments, include as a fringe benefit that you have an easy system or website for renters to pay bills online in a secured way. This will not only make it easier for you to get the rent payment on time but also your student renters will appreciate the convenience.

2. Inclusive Wi-Fi

Since college students are pretty much plugged in 24/7, offer high-speed internet in your apartment complex as a huge perk to draw student renters. Offering Wi-Fi throughout your complex with the cost built into the rent means your students don’t have to worry about finding an internet provider on their own that services the area and enables them to sit anywhere in your complex to connect to the Wi-Fi available.

While many property owners do not offer Wi-Fi to renters, providing it to your residents, even for an added fee each month, is a perk that student renters will love and notice since it means less work and hassle for them, plus a reliable internet connection.

3. Outdoor space 

Being able to hang out, study, or eat outside is a benefit many college students value when they are looking at apartments. If an apartment complex has an outdoor area with furniture, a grill, lighting, etc., it will make college student renters that much more interested in signing a lease with you.

Having an outdoor space will help your student renters connect and establish a sense of community and also be a nice benefit they can take advantage of during the warmer months. This area does not need to be super fancy, but simply having a place like this can be a great selling point and is an added perk appreciated by many college students.

4. Ample parking

A perk many students look for in an apartment complex is parking. Parking in or near a college is often difficult to find, which means you offering a place for student renters to park is something they will notice. Offering parking spots to renters, with either one spot included in the lease and another available to purchase or just offered for a fee to residents will entice student renters to seriously consider your property. If you don’t have a parking lot by your apartment complex, student renters would also appreciate the offer of subsidized or free street parking.

5. Laundry

Besides offering laundry services within your apartment complex, consider making the washer and dryer cheaper. Oftentimes, the machines provided are expensive — or do not work. Firstly, residents and potential residents will care if the laundry machines are in working order, so you should keep on top of that and not delay in fixing them if they do break.

Secondly, if there are only two machines for the entire apartment complex, it may be difficult for renters to find time to use them when they are not being used or when it is convenient. Investing in more laundry machines and ones that are durable will be much appreciated and student renters will take note of this when they are looking into apartments to rent. If you can also lower the cost of using the machines or make the payment more convenient, that will prove very helpful to renters as well.

Other perks you may want to consider implementing or offering include bike racks, bigger closets, larger kitchens, and an indoor common area that could be used for movie nights, studying, and apartment community-wide events. In any case, having the above-mentioned perks or amenities in your apartment complexes will increase the number of student renters interested in leasing from you and motivate them to renew their leases as they’ll be happy with the benefits your apartment complex affords them.



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How to Handle Service Pet Policies without Discriminating Part I

Mon, 06/05/2017 - 11:15am

How to prevent a “dog” of a case becoming a state or federal disability legal case against the landlord or property management company.

Let’s start the discussion and analysis with a hypothetical fact pattern:

Tenant Victor wants to have a service dog in his apartment. You are the resident manager of a mid-sized apartment complex of 50 units. Your property management company has a “no pet policy” in the apartment complex, with the exception of non-biting gold fish. Victor appears to be the model of good health. He works out at the apartment complex fitness center every day.   You get a letter that Victor claims to have a disability that requires the need of a service pet.  Victor claims that the nature of disability is confidential. In fact, he suffers from a psychological and emotional condition that has been diagnosed as “post Donald Trump Election stress disorder.

He has been diagnosed by a psychiatrist with a mental illness that includes depression and stress over the election result, and suffers depression when he watches CNN, FOX, and CNBC. The psychiatrist has diagnosed his condition as a disability that may last 4 years or 8 years depending on if Donald Trump gets reelected. He suffered a recent strange unexpected relapse when he learned of President Obama’s speech fee which required Victor to have medication. His neighbors, mostly registered republicans, are not fond of Victor. He is hypersensitive to political news events and outcomes for both parties. When he drinks tea from Starbucks he gets nervous because it reminds him of the Tea Party platform.

After speaking to Victor on the phone, he tells you that he desires to have a comfort animal in his apartment to calm his nerves, and the proposed pet is named “Vera.” He sent you an email with a picture of Vera. His proposed comfort animal, Vera, is a small German Sheppard with no history of dog biting and no history of loud barking. He purchased the animal from a pet store in Berlin called Sheppardco. The doggy was shipped in a crate from overseas to Victor’s doorstep.   Victor has taken the dog to obedience school and has made an effort to get the dog certified as a service animal to help him calm his frazzled nerves.

As a property manager, what issues should you be aware of?   

  • Victor may have real disability if it can be shown with basic minimal documentation.
  • If the disability can be documented with a doctor’s note, you will have to allow him to have a pet like Vera even though it is a “no pet” apartment complex.
  • If you take a hard line and discriminate against Victor because of his alleged disability, you could be sued by Victor, or the state or federal government for disability discrimination.

What CA state and federal housing laws apply to this situation?

California State Housing Laws that Protect Disabled Persons

Individuals with physical and mental disabilities have the right under state law to rent, lease, or buy housing accommodations free from discrimination due to a disability.  (See Chapter 1 for definitions of disability; Cal. Civ. Code, ” 51, 54, subd.(b), and 54.1; Cal. Gov. Code, ” 12926, subds. (i) and (k), 12955 and 12955.3.)

Cal. Civil Code Section 54.1 states in pertinent part,

“(6) (A) It shall be deemed a denial of equal access to housing accommodations within the meaning of this subdivision for a person, firm, or corporation to refuse to lease or rent housing accommodations to an individual who is blind or visually impaired on the basis that the individual uses the services of a guide dog, an individual who is deaf or hard of hearing on the basis that the individual uses the services of a signal dog, or to an individual with any other disability on the basis that the individual uses the services of a service dog, or to refuse to permit such an individual who is blind or visually impaired to keep a guide dog, an individual who is deaf or hard of hearing to keep a signal dog, or an individual with any other disability to keep a service dog on the premises.”

(C) (i) As used in this subdivision, “guide dog” means a guide dog that was trained by a person licensed under Chapter 9.5 (commencing with Section 7200) of Division 3 of the Business and Professions Code or as defined in the regulations implementing Title III of the Americans with Disabilities Act of 1990 (Public Law 101-336).

(ii) As used in this subdivision, “signal dog” means a dog trained to alert an individual who is deaf or hard of hearing to intruders or sounds.

(iii) As used in this subdivision, “service dog” means a dog individually trained to the requirements of the individual with a disability, including, but not limited to, minimal protection work, rescue work, pulling a wheelchair, or fetching dropped items.

Federal Housing Laws that Protect Disabled Persons

Federal disability laws and regulations also apply to this situation. The Fair Housing Act, 42 U.S.C. 3601 et seq., prohibits discrimination by direct providers of housing, such as landlords and real estate companies as well as other entities, such as municipalities, banks or other lending institutions and homeowners insurance companies whose discriminatory practices make housing unavailable to persons because of race or color, religion, sex, national origin, familial status, or disability.

The Fair Housing Act prohibits discrimination on the basis of disability in all types of housing transactions. The Act defines persons with a disability to mean those individuals with mental or physical impairments that substantially limit one or more major life activities. The term mental or physical impairment may include conditions such as blindness, hearing impairment, mobility impairment, HIV infection, mental retardation, alcoholism, drug addiction, chronic fatigue, learning disability, head injury, and mental illness.  The term “major life activity” may include seeing, hearing, walking, breathing, performing manual tasks, caring for one’s self, learning, speaking, or working. The Fair Housing Act also protects persons who have a record of such an impairment, or are regarded as having such an impairment.

Current users of illegal controlled substances, persons convicted for illegal manufacture or distribution of a controlled substance, sex offenders, and juvenile offenders are not considered “disabled” under the Fair Housing Act, by virtue of that status. The Fair Housing Act affords no protections to individuals with or without disabilities who present a direct threat to the persons or property of others. Determining whether someone poses such a direct threat must be made on an individualized basis, however, and cannot be based on general assumptions or speculation about the nature of a disability.

42 U.S.C. Section 3604(f) states in pertinent part that “as made applicable by section 3603 of this title and except as exempted by sections 3603(b) and 3607 of this title, it shall be unlawful—

(1)   To discriminate in the sale or rental, or to otherwise make unavailable or deny, a dwelling to any buyer or renter because of a handicap of—

(A)   that buyer or renter,

(B)   a person residing in or intending to reside in that dwelling after it is so sold, rented, or made available; or

(C)   any person associated with that buyer or renter.

It shall be unlawful to

(2)   To discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection with such dwelling, because of a handicap of—

(A)   that person; or

(B)   a person residing in or intending to reside in that dwelling after it is so sold, rented, or made available; or

(C)   any person associated with that person.

(3) For purposes of this subsection, discrimination includes—

(A)   a refusal to permit, at the expense of the handicapped person, reasonable modifications of existing premises occupied or to be occupied by such person if such modifications may be necessary to afford such person full enjoyment of the premises except that, in the case of a rental, the landlord may where it is reasonable to do so condition permission for a modification on the renter agreeing to restore the interior of the premises to the condition that existed before the modification, reasonable wear and tear excepted.

(B) a refusal to make reasonable accommodations in rules, policies, practices, or services, when such accommodations may be necessary to afford such person equal opportunity to use and enjoy a dwelling; or

Note that the language of the federal statute uses the term “handicap,”   Pursuant to 42 U.S. Code Section 3602 (h)

(h) “Handicap” means, with respect to a person—

(1)   a physical or mental impairment which substantially limits one or more of such person’s major life activities,

(2)    a record of having such an impairment, or

(3)   being regarded as having such an impairment . . . “

What is a “reasonable accommodation” for purposes of the Act that a landlord has to provide to a disabled person?

A “reasonable accommodation” is a change, exception, or adjustment to a rule, policy, practice, or service that may be necessary for a person with a disability to have an equal opportunity to use and enjoy a dwelling, including public and common use spaces. Since rules, policies, practices, and services may have a different effect on persons with disabilities than on other persons, treating persons with disabilities exactly the same as others will sometimes deny them an equal opportunity to use and enjoy a dwelling. The Act makes it unlawful to refuse to make reasonable accommodations to rules, policies, practices, or services when such accommodations may be necessary to afford persons with disabilities an equal opportunity to use and enjoy a dwelling.

To show that a requested accommodation may be necessary, there must be an identifiable relationship, or nexus, between the requested accommodation and the individual’s disability.

Are there any instances when a provider can deny a request for a reasonable accommodation without violating the Act?

Yes. A housing provider can deny a request for a reasonable accommodation if the request was not made by or on behalf of a person with a disability or if there is no disability-related need for the accommodation. In addition, a request for a reasonable accommodation may be denied if providing the accommodation is not reasonable – i.e., if it would impose an undue financial and administrative burden on the housing provider or it would fundamentally alter the nature of the provider’s operations. The term is “reasonable accommodation,” not “every accommodation.”

The determination of undue financial and administrative burden must be made on a case-by-case basis involving various factors, such as the cost of the requested accommodation, the financial resources of the provider, the benefits that the accommodation would provide to the requester, and the availability of alternative accommodations that would effectively meet the requester’s disability-related needs.

When a housing provider refuses a requested accommodation because it is not reasonable, the provider should discuss with the requester whether there is an alternative accommodation that would effectively address the requester’s disability-related needs without a fundamental alteration to the provider’s operations and without imposing an undue financial and administrative burden. If an alternative accommodation would effectively meet the requester’s disability-related needs and is reasonable, the provider must grant it.

An interactive process in which the housing provider and the requester discuss the requester’s disability-related need for the requested accommodation and possible alternative accommodations is helpful to all concerned because it often results in an effective accommodation for the requester that does not pose an undue financial and administrative burden for the provider.

Copyright 2017 Nate Bernstein, Attorney at Law. LA Real Estate Law Group. All Rights Reserved.

The author of this article, Nate Bernstein, Esq., is the Managing Counsel of LA Real Estate Law Group, and a member of the State Bar of California and his practice concentrates in the areas of complex real estate litigation, commercial litigation, employment law, and bankruptcy matters. The contact number is (818) 383-5759, and email is  Nate Bernstein is a 22 year veteran Los Angeles real estate and business attorney and trial lawyer. Mr. Bernstein also has expertise on bankruptcy law, the federal bankruptcy court system, creditor’s rights and debtor’s bankruptcy options. He previously served as Vice President and In House trial counsel at Fidelity Title Insurance Company, a Fortune 500 company, and in house counsel at Denley Investment Management Company. Nate Bernstein created, a leading educational resource on quiet title real estate litigation. Nate Bernstein is a local expert on real estate law and economic trends in the real estate and leasing market, business law, and bankruptcy law. Nate has personally litigated more than 40 major real estate trials, and has settled more than 200 complex real estate and business cases. 

Any statement, information, or image contained on any page of this article not a promise, representation, express warranty, or implied warranty, or guarantee about the outcome of a legal matter, and shall not be construed as being formal legal advice. All statements, information, and images are promotional. All legal matters are factually specific, laws change on a daily basis, and courts interpret laws differently. No express or implied attorney client relationship shall be inferred from any statement, information, or image contained any pages of this website. No attorney client relationship is formed until the client or the client’s representative, and the attorney signs a written retainer agreement.

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6 Tips To Being a Great Landlord

Mon, 06/05/2017 - 9:49am

As silly as this may sound, this quote is very applicable to landlords and even to property owners. You have to face a lot of demands, create lease agreements, screen tenants, market rentals, evict poor tenants, and much more. Landlords are more than just property owners. Don’t worry. Despite the fact that it may sound quite complicated at first, being a great landlord is feasible. We’ll help you.

6 Ways to Be a Great Landlord:

1. Make Sure Your Tenant Understands Everything If you have decided to accept an applicant, going through the rental agreement with your future tenant and making sure that they understand it completely is very important. Likewise, give them the opportunity to ask questions, review the lease, and make clarifications. You don’t want to face problems later on, just because your tenant didn’t fully understand what was indicated in the agreement.

2. Good Communication Is a Must We all hate being left confused, and your tenants are no exception to this. To be a successful property owner and landlord, you have to invest in tenant-landlord relationships; you have to be sociable. That means you’ll always be there when your tenant needs you, and inform them about important dates and schedule maintenance. By doing so, you’ll be able to keep the tenants updated and establishing good relationships will be second nature to you.

3. Be Flexible, But Not Too Flexible Despite the fact that you should build a tenant-landlord relationship, it doesn’t mean that you’d tolerate their late payments. Keep in mind; renting is a business agreement, and not a charity. However, if the late payments don’t happen often, and there was a reason why your tenant was late to settle their dues, a bit of human compassion and understanding could go a long way. For example, if your tenant got sick, lost his job, or something unfortunate happened in his family, try to be a little understanding, and this will pay off in the future.

4. Quality Over Quantity Although there will be instances where this might seem impossible, it’s important that you give your best to the property you’re renting. The quality of tenant you’re going to get will depend on the quality of home you are providing. Don’t take this wrong, we’re not saying that you should offer granite countertops, or something extremely extravagant. What we mean is that, you should offer a better-than-average home in order to stand out, and show that you’re reliable. As a landlord, you have to consider that the product you are offering is not limited to the rental property. What you offer is part of the package, and the way you manage your business will greatly affect how these people view your products. This being said aside from regularly updating your properties, make sure that you fix repairs promptly, stay professional, and be well organized.

5. Be a Trustworthy Landlord Can you confidently say that you are honest when it comes to dealing with these people? If not, then this would definitely show. Your tenants aren’t foolish, and they can easily feel if their landlord is taking advantage of them, or being untruthful. In order to be a great landlord, you should get your tenants’ trust, and this would encourage them to stay longer.

Aside from being trustworthy, you should also show that you have trust in them. Keep in mind, you’re all adults, and have the ability of being responsible and doing what needs to be done.

6. Timely Maintenance Is Important Based on surveys, the biggest complaint tenants have is that most of the rental properties they live in have poor maintenance. It takes forever for the repairs and maintenance to be done. Either way, for you to be classified as a great landlord, you should be able to ensure that quality and speedy maintenance are your top priority. This would improve your tenant retention and would even be a way to get new tenants easily.

Being a landlord doesn’t have to be complicated. You just need to have the knowledge and equipment to handle the problems you’re going to face. What is the best way to do that? You will learn best through education and experience. Read books, take courses, and even look for mentors who can help you become a great landlord. Though, aside from that, these tips mentioned above will make your landlord journey a little more enjoyable.



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Building Equity With Low-Cost Rental Properties

Mon, 06/05/2017 - 9:36am

Real estate investing is one of the best ways to create long-term success and build wealth. However, it does have the significant downside of being a business with a high capital threshold needed for entry. For potential investors with only moderate amounts of capital to invest, the options are somewhat limited, especially when it comes to building equity in properties.

There are, however, still ways to break into the real estate investment business without having hundreds of thousands of dollars to invest. One of these methods, usually pursued by investors who do not want the risk of borrowing larger amounts of capital, is to build wealth in equity by acquiring lower-cost rental properties.

How Can You Build Equity With Cheaper Properties?

Unless you live in a large urban area, there’s a good chance that the houses in your town or city fall into a wide range of different sizes and values, including within neighborhoods. Even in a neighborhood filled with medium- to large-sized houses, you can usually still find smaller homes.

If you plan to build equity with low-cost rentals, these are the homes that you should target. Say, for example, a given neighborhood is filled with three-bedroom houses that retail for an average of $75,000. Now suppose that one home in that neighborhood, perhaps one that was built before the others nearby, is a one-bedroom ranch worth only $20,000. A house like this, though it may be difficult to find, represents an opportunity for the real estate investor starting out with limited funds. At a low price but in a good neighborhood, such homes can retain a stable market value, allowing investors to slowly build smaller amounts of equity without spending more money than they are comfortable with.

Rental Opportunities

The kind of home just described also has significant potential as a source of a small rental income. Provided that the home is in a good neighborhood (which it should always be if you plan to use it as an investment), you can easily market it as an opportunity for someone who otherwise could not afford to live in that area to reside there at a lower cost.

Don’t be afraid to rent at a low rate. But make sure your mortgage payment, property taxes and maintenance are paid for by the rental income with at least some positive cash flow left over for yourself. Keep in mind that the kind of renters you will attract with such offers will often be younger people who are preparing to live on their own for the first time. Despite what many real estate investors think, however, younger renters, especially young professionals or college students, can be excellent tenants.

Building A Portfolio

With such lower-cost properties, it is obvious that one or two properties will not be enough to build up wealth in the long run or to create a livable rental income. In order to build on this model, you will need a portfolio of several such properties. Keep in mind with any additional properties to, again, produce at least some positive cash flow. As long as these properties can pay for themselves and yield some income with their own rentals, they are good mechanisms for building wealth through real estate equity.

Also keep in mind that you can, over time, begin to build toward larger and higher-paying properties with the wealth you accumulate in smaller properties. Using the positive cash flow from these properties or by selling one or more to liquidate the accrued value in equity, you can substantially offset the cost of buying a property that will be more profitable either as a rental or as a flipping opportunity. Whether you choose to move up to such properties or simply wish to maintain a portfolio of lower-cost rentals, always have a growth strategy in mind as you continue to build up your real estate investment business.

Although they will not make you rich overnight, small, low-cost rental properties are an excellent opportunity for the first-time real estate investor with a limited budget or an aversion to excessive financial risk. Over time, a portfolio of these properties can turn into an appreciable wealth of equity and can even be used to move up to larger real estate deals. Always remember, even with such low-cost rental properties, to carefully inspect the home and evaluate the cost of any maintenance or renovations that may need to be done.



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Nearly 7 Million Homes Are at Risk of Hurricane Storm Surge, Even as National Flood Insurance Program May Expire

Mon, 06/05/2017 - 9:29am

As the 2017 Atlantic hurricane season officially starts, the national weather agency in charge of tracking hurricanes says it could be another “above-normal” season, even as a federal flood insurance program that’s the only option for many homeowners will expire in September if Congress doesn’t take action.

The National Flood Insurance Program is the federal program administered by the Federal Emergency Management Agency that offers insurance policies for homeowners who live in areas where such insurance is required. In many places, there’s no private market alternative to the national program, and in many areas, some form of insurance is required by lenders.


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Millennials Favor Short-term “Vacation Moves”

Mon, 06/05/2017 - 9:23am

A new survey from moving giant Mayflower says that 2 in 5 millennials (those aged 18-35) have moved to a new city without any intention of permanently staying, calling them “vacation movers.”  Their study suggests that while they might flock to cool places (think Seattle, Portland, San Francisco, etc.) they don’t stick around and plant roots.  Interestingly, the 2017 Mayflower Mover Insights Study also said that over half (53%) of millennials say they’re likely to make a temporary, or “vacation,” move within the next five years and that 3/4 of them had a timeline in mind.  Sounds like they’ll make good renters.

Indeed….So, what are the top millennial moving destinations?

  1. San Francisco, CA.
  2. Los Angeles, CA.
  3. Washington, D.C.
  4. Seattle, WA.
  5. Chicago, IL.
  6. New York, NY
  7. Dallas, TX
  8. Denver, CO.
  9. Houston, TX
  10. Atlanta, GA.


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These colors can really boost your home’s value

Mon, 06/05/2017 - 9:17am

If you’re selling your home this year, don’t assume that a quick coat of neutral paint will do wonders for your sale price.

Interior painting can be a cheap way to boost curb appeal and attract buyers. Recent data from service site Thumbtack found the project costs home sellers an average $1,141 nationwide.

But a new report from Zillow found that which colors you pick could swing the sale price of your home by hundreds or even thousands of dollars. The site analyzed more than 32,000 photos from recently sold homes, making comparisons against similar homes with white walls.

So should you repaint your kid’s pink bedroom, or leave your blue dining room alone? Here are the MVPs (most valuable paints), and worst picks, for five key rooms.


Best color: Blue, particularly “light blue to soft gray-blue.” Homes with these colors sold for an average $1,809 more than homes with white-walled kitchens.

Worst color: Yellow, particularly “straw yellow to marigold.” Homes with these colors sold for an average $820 less than homes with white-walled kitchens.


Best color: Blues and purples, particularly “light powder blue to periwinkle.” Homes with these colors sold for an average $5,440 more than homes with white-walled bathrooms.

Worst color: White, particularly “off-white or eggshell white.” Homes with these colors sold for an average $4,035 less than homes with bathrooms of any other color.


Best color: Blue, particularly “light cerulean to cadet blue.” Homes with these colors sold for an average $1,856 more than homes with white-walled bedrooms.

Worst color: Pink, particularly “light pink to antique rose.” Homes with these colors sold for an average $208 less than homes with white-walled bedrooms.

Dining room

Best color: Blue, particularly “slate blue to pale gray blue.” Homes with these colors sold for an average $1,926 more than homes with white-walled dining rooms.

Worst color: Red, particularly “brick red, terracotta or copper red.” Homes with these colors sold for an average $2,031 less than homes with white-walled dining rooms.

Living room

Best color: Brown, particularly “light beige, pale taupe, oatmeal.” Homes with these colors sold for an average $1,809 more than homes with white-walled living rooms.

Worst color: Blue, particularly “pastel gray, pale silver to light blue, periwinkle.” Homes with these colors sold for an average $820 less than homes with white-walled living rooms.


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Feds take action to solve appraiser shortage

Thu, 06/01/2017 - 9:16am

Key government agencies finally addressed the critically growing appraisal shortage crisis that’s hampering the mortgage process, highlighting two alternative options to help areas that are facing a shortage.

Particularly, the alternative options are aimed at helping rural areas that are struggling with the availability of state certified and licensed appraisers.

 The problem goes much deeper than rural communities though, with most appraisers currently in their late 50s. And those who are in the field aren’t mentoring a lot of trainees due to the lack of compensation and benefit, along with lender restrictions.

As a result, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency issued an advisory that highlights two options to help insured depository institutions and bank holding companies facilitate the timely consideration of loan applications.

The groups were responding to concerns brought to light from financial industry representatives during the Economic Growth and Regulatory Paperwork Reduction Act review process, who attributed shortfalls in the timeliness of appraisals to shortfalls in the availability of state-certified and -licensed appraiser.

Under Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), appraisals for federally related transactions are required to be performed by individuals who meet certain state-certification or -licensing requirements.

However, the groups’ advisory points to two existing alternatives that may help in areas facing a shortage of appraisers: temporary practice permits and temporary waivers.

Here’s an overview of the two options:

1. Temporary practice permits

Temporary practice permits allow appraisers credentialed in one state to provide their services on a temporary basis in another state experiencing a shortage of appraisers, subject to state law. The advisory also discusses reciprocity, in which one state allows appraisers that are certified or licensed in another state to obtain certification or licensing without having to meet all of the state’s certification or licensing standards.

2. Temporary waivers

Temporary waivers set aside requirements relating to the certification or licensing of individuals to perform appraisals under Title XI of FIRREA in states or geographic political subdivisions where certain conditions are met. Temporary waivers may be granted when it is determined that there is a scarcity of state-certified or -licensed appraisers leading to significant delays in obtaining an appraisal.


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A Law Used To Stifle Landlords Is Reducing Affordable Housing In Washington, DC

Thu, 06/01/2017 - 9:12am

In Washington, D.C., an old law to protect renters is getting new attention. The Tenant Opportunity to Purchase Act, commonly known as TOPA, has become so controversial critics are asking that the law be re-examined. This is because some tenants are using TOPA to extract money from landlords, should a landlord decide to sell a building. At present, TOPA is holding up or blocking real estate transactions, causing grief for developers and homeowners and victimizing low-income residents stuck living in buildings owners are unable to sell but forced to maintain at a financial loss.

Ostensibly, TOPA was created to protect tenants’ rights, which is important in Washington where about 30 percent of the District’s 672,000 residents rent instead of own a home. On its most basic level, the 1980 law is simple. “Under TOPA,” one publication wrote by way of explanation, “prior to the sale of a housing accommodation, the owner must send, by first class mail, a written offer of sale to each tenant and the Mayor of the District of Columbia.” The letter must state the property’s asking price and the terms of the sale. “In the case of a single-family home, a condominium, or cooperative unit… the tenant has 30 days to provide a written statement of interest to purchase the property.” If no offer is made, the sale goes through. If an offer is made, “the tenant has a minimum of 60 days… to negotiate a contract of sale with the property owner.”

Originally, the law was envisioned, according to one source, as a way “to protect tenants from potentially advantageous landlords and buyers.” That is to say, the law was trying to stop a developer from buying a property rented by low-income tenants and converting it to high-end housing. While TOPA has served to slow down this type of conversion, it has had unintended consequences.

One problem arises from the fact that a tenant can state he is willing to buy a property, but he is not required to demonstrate the financial means necessary to buy it. Even more troublesome, a tenant can assign — in other words sell — his TOPA rights to a third party such as a lawyer or a developer. This creates a situation where an outside party can complicate the sale of a property either by holding up the sale or inflating the value of the TOPA rights or both. It also violates the spirit of the law if the point of the original legislation was to protect the ability of a tenant to keep his home, not produce a bidding opportunity where TOPA rights can be auctioned off to the highest bidder, which is what has started to happen in Washington.

Consider the drama surrounding the recent sale of a home on Capitol Hill. The homeowner put her house on the market and received an offer. But when she gave notice to her tenant who leased the basement apartment for $800 a month, the tenant executed her TOPA rights, holding up the sale of the house. When the homeowner offered the tenant $10,000 to buy the TOPA rights, the tenant rejected the offer because she had multiple offers from third parties. “[My agent and I] are accepting offers which consider the ratio of time I am able to stay in the home and the buyout amount,” the tenant wrote to the homeowner. The conflict ended up in court.

Because of such examples — and there are many — critics of TOPA call it “tenant blackmail”; defenders call it “tenant capitalism.” The bottom line is a tenant has the ability to cash in on the sale of a property without putting up any money of his own, since he can hold a potential sale hostage until he signs over his TOPA rights. This is in stark contrast to real estate laws in, say, New York City, where a tenant can buy his apartment when his building converts to a cooperative but he is required to actually purchase the unit. He has a financial stake in the deal in a way tenants selling TOPA rights do not.

Sometimes the tenants band together and form a tenants’ association, which will represent all tenants concerning TOPA rights. But often a tenants’ association serves to drag out the purchase process with little or no intention of facilitating a sale. Such was the case with Museum Square. “So far,” The Guardian reported in an article about the sale, “the… tenants’ association of Museum Square is half way through the TOPA process. Seizing on their right to buy first… tenants have managed to stay put by claiming the number ($250 million) issued by their landlord as a sales price did not constitute a bona fide offer — meaning it did not represent the buildings’ current market value (the number instead reflected the estimated value of the luxury building that would have been built in its stead).”

In another case, tenants living in the low-income apartment complex surrounding the Congress Heights Metro station have exerted their TOPA rights, blocking the complex’s sale. The owner of the buildings, Sanford Capital, has been heavily criticized in the media for failing to maintain the property when in fact the company merely wants to divest itself of the property by selling it. It’s being prevented from doing so by the tenants, who have filed a TOPA lawsuit, guaranteeing the current situation, unacceptable to both the owner and the tenants, will continue on.

According to media reports, summer interns renting a room and even squatters can claim and sell TOPA rights. Critics of TOPA believe D.C. Mayor Muriel Bowser should work with the City Council to reform TOPA to ensure that residents can exert their rights but not hold a sale hostage to a process that is being used to delay real estate transactions through extortion of landlords. Unless the law is changed, things will only get worse, slowing down the construction of new housing. Oddly enough, this won’t create more affordable housing in D.C. — as TOPA was designed to ensure — but make what housing is available even more costly.


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