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MA Real Estate CEU Course - Residential Rentals: Landlord/Tenant Issues_2-10-14
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MA Real Estate CEU Course - Residential Rentals: Landlord/Tenant Issues_2-10-14

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  • Using the correct form to list – do not use exclusive right to sell
    Set expectations about what you are going to do – use Key Form with Landlord and as a checklist for yourself later.
    Have Landlord complete Tenant Lead Notification so you have it on file to give to prospective tenants
    Cannot discriminate against children unless 2 family/owner occ
    Law provides must give prospective tenant lead notification and take application if desired. Landlord responsible for de-leading prior to tenant taking occupancy or getting interim compliance.
    Be Clear about compensation with Landlord and on Listing Agreement
    Marketing the rental Listing
    In MLS
    In Craigs List
    Make sure not to use discriminatory language
    Smoking vs. Section 8
  • Decide if you are going to choose to work with Tenants that call the office
    Difference between servicing the tenant to find a place and showing them your rental unit
    Showing your Listing
    Provide Lead Paint Notice to prospective tenant
    Provide application for each person over 18 who would be residing there
    Do and say the same things to ALL tenants that you show your listing to
    Showing Tenants Properties to locate housing
    Provide “Tenants rights and responsibilities” pamphlet
    Let them know about the possibility of Credit and References being pulled
    Discuss fees for assistance (1/2 month rent, can waive if List agent offering, Credit run cost, etc)
    Do not determine or suggest which areas a Tenant should or should not consider
  • One full application for each adult over 18 residing in property
    You can collect fee for credit report running from tenant – just let them know up front
    Make sure application is signed and Social Sec # is on there before sending to Suzanne for run – obtain copy license from applicant as well
    Fax to Suzanne’s Key Vmail all applications w/copy of check for credit run and give admin the check (if you do not, you will be invoiced for the credit run)
    Call References as agreed with Landlord (housing, personal and employment)
    Document all reference input from calls for Landlord
    Review Credit – get assistance if uncertain
    After done with diligence above, present all applications at once to Landlord with pertinent information
    Provide prospective tenant with response. If applicant declined due to credit, give tenant a copy of credit report.
    Keep credit report in file – place in secure location (with admin) as opposed to in your personal possession – if you ever lost that info, you are subject to serious fines and penalties.
  • One full application for each adult over 18 residing in property
    You can collect fee for credit report running from tenant – just let them know up front
    Make sure application is signed and Social Sec # is on there before sending to Suzanne for run – obtain copy license from applicant as well
    Fax to Suzanne’s Key Vmail all applications w/copy of check for credit run and give admin the check (if you do not, you will be invoiced for the credit run)
    Call References as agreed with Landlord (housing, personal and employment)
    Document all reference input from calls for Landlord
    Review Credit – get assistance if uncertain
    After done with diligence above, present all applications at once to Landlord with pertinent information
    Provide prospective tenant with response. If applicant declined due to credit, give tenant a copy of credit report.
    Keep credit report in file – place in secure location (with admin) as opposed to in your personal possession – if you ever lost that info, you are subject to serious fines and penalties.
  • Clarify up front whether Landlord wants a Lease (one year typical) or a Tenancy at Will.
    Complete Lease or Tenancy at Will form using application and MLS listing form
    Give draft of agreement to Tenant and Landlord for review prior to signing
    Make sure the Landlord understands you cannot discriminate against anyone in the protected classes as well as indicating that the Landlord will not take Section 8
    Review Landlords responsibilities for Last Months Rent and Security Deposit
    - Last Months Rent – requirement to pay interest annually
    - Security Deposit – up to one additional months rent
    - must complete Apartment Condition Statement and obtain
    all signatures
    - Landlord must put in separate account and notify tenant of
    location and account number within 30 days
    - Landlord must pay interest on Security Deposit annually
    - Landlord has 30 days to return Sec Deposit or notify Tenant of
    retention plans (following the rules at that point)
    Without all this – good possibility if went to court, landlord won’t keep security deposit
  • Transcript

    • 1. Residential Rental: Landlord/Tenant Issues RE09R07 Practicing Safely & Lawsuit-Free!
    • 2. Residential Rentals • Disclaimer: This presentation is based upon Massachusetts law and the best information available through the Real Estate Licensing board and the local Boards of Realtors and the Rental Housing Agency. This presentation does not constitute legal advise and is no substitute for individual legal advise by a competent attorney who is familiar with the landlord/tenant laws of your state and the specific details of your situation. All Brokerages specifically recommend that its clients seek out legal counsel prior to entering any contractual agreement in this area.
    • 3. Introduction • Providing Rental Representation for Clients • Practicing Rentals within the scope of the Law – Legal Compliance • CYA
    • 4. Residential Rentals • Mandatory Consumer-Licensee disclosure a. Not required by law in rental of property b. You still have an agency relationship with the landlord, tenant or both and need to maintain your fiduciary awareness to them.
    • 5. I. License Requirements: A. License required. •“No person shall engage in the business of finding dwelling accommodations for prospective tenants for a fee unless such person is a licensed broker or salesperson.” B. Exception – a managing agent under contract •“A managing agent (or employees of that agent) under contract with the owner of the real estate in the regular course of their employment is not required to be licensed.”
    • 6. II. Written Fee Disclosure A. First personal meeting to discuss all rental property. B. Disclosure to include: 1. Whether the tenant will pay a fee for rental services 2. The amount of the fee 3. Manner and time of when the fee is due to be paid. 4. Is the fee payable regardless if tenancy is created. 5. Signature of broker/salesperson with license # & date 6. Signature of prospective tenant or refusal to sign noted.
    • 7. II. Written Fee Disclosure(cont.) C. This fee disclosure requirement applies to ALL residential rentals. D.The fee disclosure MUST be kept on file by the broker for three (3) years and is subject to audit by the licensing board. ***See the attached MAR Broker’s Rental Fee Disclosure form
    • 8. III. Rental Listings A. Exclusive – ● In writing ● Include Addendum **Standard Right to Lease Agreement-attached **ERA Key– Sample Lease agreement Addendum-attached: *This form clarifies what you are going to do for the Landlord and contains a hold-harmless clause.
    • 9. III. Rental Listings B. Open, non exclusive •Not recommended •Often not in writing
    • 10. IV. Leasing Process A. Screening tenants • Key word --- Consistency! Have ALL applicants follow the same process. • MAR - Prospective Tenant information form attached 1. Personal credit report – only with written authorization. ($10.00 fee per adult - paid by tenant) • C.O.R.I. reports --- ???
    • 11. IV. Leasing Process A. Screening tenants – continued… 2. Fair Housing/rental concerns – refer to handout 3. Check tenants prior rental history – 2 landlords back! 4. Check employment history, salary, continued employment… -- general rule of thumb – 25% of income to go to rent 5. Landlord meets tenants personally. -- I always try to check out where they currently live.
    • 12. IV Leasing Process B. Environmental 1. Lead Law a. Tenant Lead Law Notification - attached -- sign two copies, give one to the tenant b. Tenant Certification Form - attached -- sign 2 copies, give one to the tenant c. Provide tenant with copies of the most recent reports, if any.
    • 13. B. Environmental Lead Law – continued d.Duty to De-lead or encapsulate. e.Cannot refuse to rent to a tenant because they have children under 6 years old f.May have to pay for tenants temporary lodging during de-leading. g.Financial assistance ($1,500 tax credit per unit) on Mass state income tax.
    • 14. IV. Leasing process C. Preparation/Delivery of the premises 1.Inspection by owner & agent. (take lots of pictures) 2.MAR Statement of Condition - attached 3.Abandoned property – return to tenant? 4.Board of Health inspection -- a BOH sign off could act as a “violation free baseline” if a tenant claims there are problems later.
    • 15. IV. Leasing process D. Safety & Habitability 1. Warranty of habitability (heat, water, fuel, etc…) 2. State Sanitary code a. maximum # of occupants b. extermination – maintain free of rodents, insects, etc…) c. Kitchens – sink, stove/oven, facilities for a refrigerator d. Heat -- including fuel unless a written agreement. e. Water – must pay for unless separately and properly metered
    • 16. IV. Leasing Process 2. Sanitary Code – continued… f. Hot water g. Structural elements – weatherproof, watertight, rodent proof… h. Snow removal – all means of egress safe and operable. i. Garbage and rubbish j. Smoke & CO2 detectors must be present and maintained. k. Locks – all entry doors (and windows) must be capable of being reasonably secured against unlawful entry and properly fitted with an operating locking device.
    • 17. V. Leases A. Written versus Oral -- two reasons for written agreements 1. Oral agreement is only as good as the memory and honesty of the parties 2. Take advantage of explicit provisions -- sublet, occupants, key, access -- sanitary code ( who pays for heat?) -- pets, smoking, etc…
    • 18. V. Leases B. Requirements for a valid lease 1. Offer and acceptance 2. Consideration 3. Capacity to contract 4. Legal objective
    • 19. V. Leases C. Types of Leases (tenancies) 1. Fixed term tenancy -- written lease -- date lease ends -- amount of rent -- what the rent includes -- typically 1 year, but can be any other term. ** Standard Residential Lease 2. Self extending lease - attached
    • 20. V. Leases 3. Tenancy at Will -- “month to month” -- either party may terminate by given notice in advance at least one rental period or 30 days, whichever is longer. -- may be written or oral….writing provides much better protection *** MAR Tenancy at Will Agreement 4. Subsidized Tenancy - attached
    • 21. V. Leases D. Lease provisions 1. Quiet enjoyment 2. Water metering 3. Late payment penalties 4. Escalation clauses (taxes, heat, etc..) 5. Utilities
    • 22. V. Leases E. Lessor (Landlord) Access 1. Limitations 2. Who may enter 3. Purpose of entry 4. Timing (statutory 24 hours?) 5. Key? 6. “Reasonable Notice”
    • 23. V. Leases F. Unenforceable lease provisions 1. Tenants waiver of rights 2. Landlord exemption from law 3. Limitations on children 4. Landlord “hold harmless” 5. Requirement of landlord “periodic access” 6. Cannot waive habitability 7. Landlord cannot transfer utilities without consent 8. Lessor reprisals
    • 24. VI. Deposits A. Maximum allowable payments 1. First months rent 2. Last months rent 3. Security deposit 4. Lock/key deposit B. Illegal deposits 1. Cleaning deposits, pet deposits, reverse penalties, timing of late fees, etc…
    • 25. VI. Deposits C. Security Deposits 1. Property of the tenant 2. Separate account 3. Written receipt required 30 days *MAR 4. Written 5. Interest payment required (5% or actual interest received) on anniversary date. receipt - attached Statement of Condition - attached
    • 26. VI. Deposits D. Last months rent 1. Written receipt required - attached 2. Required terms of written receipt 3. Interest required 4. Rate of interest 5. When interest is due
    • 27. VII. Terminating tenancies A. By agreement/fixed term lease B. Terminating tenancies at will / 30 day or rental period C. Notices to Quit - attached • 14 day notice to quit for non-payment • 7 day notice to quit for other than non-payment D. Retaliation/self help eviction
    • 28. VII. Terminating Tenancies (cont.) E. Summary Process F. Storing property/abandoned property G. No Lockout without court order
    • 29. VIII. Wrongful acts of Landlord A. Dangerous conditions B. Failing to reimburse for authorized repairs C. Failing to comply with housing codes D. Demanding money for real estate taxes E. Failure to make agreement clear and simple F. Depriving access without court order
    • 30. VIII. Wrongful acts of Landlord (cont.) • Imposing interest for less than 30 days late • Failing to disclose late payment sanctions • Interference with quiet enjoyment of tenant
    • 31. IX. Vacation Rentals (two types) A. Rentals for 100 days or less for vacation or recreational purposes generally exempt from many of the laws regarding residential rentals B. Rentals for 31 days or less for vacation or recreational purposes are generally exempt from lead paint law requirements so long as no chipping or peeling lead paint exists in the dwelling unit and the tenant has received the short term vacation rental notification.
    • 32. Rental Wrap Up
    • 33. Taking the Rental Listing • Exclusive Right to Lease • Setting Expectations of Landlord • Tenant Lead Notification form • Where to market Rental Listings • Offering of Compensation • Following legal guidelines in ads
    • 34. Working with Tenants • Charging a fee for locating a rental for a tenant • Proper treatment of tenants – equal opportunity • Forms/documents to assure tenant receives
    • 35. Processing the Applications • Completion of Applications • Running Credit and Fees for doing so • Calling of References • Rejection or Acceptance of Applicants • Documentation of Activities • Security of Documentation
    • 36. Processing the Applications • Signing of the Lease • Positive ID (license) at signing of lease OR if tenant declined and requests credit report • Bank check for monies (if close to tenancy) – to assure funds are secure
    • 37. What your Landlord Needs to Know • Lease vs. Tenant at Will • Collection of Up Front Monies • Section 8 and Discrimination • Proper accounting of Last Months rent and Security Deposit • Security Deposit Enforcement
    • 38. Summary • Rentals can be a good source of additional income • Rentals can be another source of Liability • Practice Carefully…… • Tenants some day become Buyers!
    • 39. More Information • Landlord Rights and Responsibilities Tenants Rights and Responsibilities • MAR Hotline (through your Manager)
    • 40. More Information • 1. Legal Tactics: Tenants’ Rights in Massachusetts by Annette Duke (writing from a tenant’s perspective). Published by the Mass Law Reform Institute • 2. The Massachusetts Landlord Survival Guide, Seventh Edition by Philip Lapatin and published by the Greater Boston Real Estate Board • 3. The Successful Landlord  by Maribeth Perry published by the Central MA Housing Alliance Inc. • 4. Landlords' Rights and Duties in Massachusetts, Joseph P. Diblasi
    • 41. Links • http://www.mass.gov/Eoca/docs/LandlordRights.pdf • http://www.mass.gov/Eoca/docs/TenantsRights.pdf • http://www.mass.gov/Cago/docs/Consumer/Landlor • http://www.gis.net/~groucho/landlord.html • http://www.massrha.com/
    • 42. Landlord Organizations & Support Massachusetts Rental Housing Association •Worcester Property Owners Association •Southern Worcester County Landlord Association •MetroWest Property Owners Association •Greater Lowell Landlords Association •Eastern Middlesex Property Owners Association •Lawrence Landlord Association Great for Agents TOO!

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