Welcome!

Posted: 4th January 2012 by Melissa in Uncategorized
 

Welcome to the FBS Rent Sense Blog. We will be posting weekly Rent Sense Articles written by Neil and Chris. These articles can also be seen in major publications such as the San Diego Union Tribune. Our goal is to bring quality information to help counsel those already in or interested in the industry. Check back each week to see what is new and exciting in the Property Management world.

“Nearly half of all the housing in San Diego is offered for rent. This condition has existed locally for decades and will continue for the foreseeable future. It is imperative that rental owners and rental residents respect the other for their important role in the essential segment of our local economy. The more informed each are about their respective rights and responsibilities as well as changes in the marketplace the more realistic are the expectations. That just makes good sense; Rent Sense.” – Neil,  2008

Where your home matters…

Happy Halloween

Posted: 31st October 2014 by Melissa in Uncategorized
 

Short Video from Day 1 hosted by FBS!

Posted: 28th October 2014 by Melissa in Video
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day one release

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Rent Sense in the Seaside Courier!

Posted: 23rd October 2014 by Melissa in Rent Sense
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Legal Questions October 2014 Part 2

Posted: 22nd October 2014 by Melissa in Legal Questions
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7.    Question:
Is there any way to impose a rent increase on tenants with a lease or do you have to wait until the lease is expired?  Can you raise rents on specific units and not all units?

Answer:
You have to wait until the lease expires unless the lease term contained an automatic rent increase. If there is an objective business reason, you can raise rent on some units and not others, as long as it does not violate fair housing laws.  Many owners increase the rent on the tenants’ anniversary dates.

8.    Question:
I have a tenant who has been late with the rent on a number of occasions.  I charge him a late fee and he pays it. When his lease expires, do I have to renew?

Answer:
Unless you are in a rent-controlled city, you are not required to renew a tenant’s fixed term lease and do not need to have or state a reason for non-renewal.

9.    Question:
We want to give notice to vacate to a renter of a garage who has been in occupancy for over one year.  Can we give a thirty-day notice or does the sixty-day notice rule apply for garages as well?

Answer:
You can give a thirty-day notice. Sixty-day notices are only required for residential property when the tenant has been in possession for one year or longer and the rental agreement is month-to-month.

10.    Question:
My tenant fixes his motorcycle in the living room of his apartment. I have warned him that he did not have a right to use our apartment as an auto repair shop.  He says as long as he leaves the apartment clean, he has the right to work on his motorcycle. What should I do?

Answer:
You should review your lease to see if he is breaching any particular condition of promise.  If not, and you are on a month-to-month tenancy, you could threaten to serve him with a thirty-day notice to quit, or to change the terms of tenancy.  If you are not on a month-to-month tenancy, you must find a breach and serve a three-day notice to comply.  If he fails to meet the demands of the notice, the eviction lawsuit may be filed.

11.    Question:
I am the resident manager of an apartment complex where we only offer one year leases.  After six months, one of our residents gave me a thirty-day notice because he lost his job.  I informed him that a thirty-day notice is not effective during a long term lease, so he wrote me a letter saying he was leaving because of the loud noise coming from the swimming pool late at night. He said his attorney said he could legally do this.  Is this true?

Answer:
It appears that the real reason for leaving is his inability to continue to pay rent, but even if there was disruptive behavior in the swimming pool, he could not legally quit the premises unless he could prove that you were negligent in maintaining peace and quiet in the apartment community.

If you took reasonable steps to maintain the quiet enjoyment of the property, the resident is required to pay you for the remainder of the lease term.

12.    Question:
Are the laws any different between “motels” and “apartments”? Where could I get a booklet or more information on this matter?

Answer:
The laws are significantly different between motels and rental housing. For instance if a motel customer fails to pay, the police can be immediately called to remove the customer. In a residential rental dwelling such as an apartment, however, the owner must go through the tenant eviction process to regain possession.  You may be able to obtain information from the California Lodging Association and the California Apartment Association.

13.    Question:
I am an owner of several small apartment buildings. What legal responsibility and liability does an owner have for changing locks when changing tenants?

Answer:
An owner or manager of rental property is held to the same standard of care that would be required by a reasonable and prudent owner or manager in like circumstances.  In other words, if one of your residents claims they were robbed or injured by someone who had a key to their apartment, they could claim you were responsible. They could prevail in court if the trier of fact believed that a reasonably prudent owner/manager would have changed the locks when the former resident vacated the rental unit.

14.    Question:
I have been asked by another property manager if a former tenant of mine caused any problems and if I would rent to him again.  I suspected that he was a drug dealer or at least a drug user but I cannot prove it. What can I tell her?

Answer:
If you are unsure, you should remain silent.  From a legal point of view, it is always safest to say nothing.  However, if you choose to do so, you should only reveal information, if any, that you know to be true and can be documented. When making a recommendation, you are always running the risk that the person you are referring to believes you are defaming their good name. Making timely notes of what you said and who you spoke to, will be valuable if you are questioned about the conversation in the future. Discuss only facts that pertain to compliance with your lease or rental agreement.

15.    Question:
I suspect there are at least five people living in a one-bedroom apartment in one of our units. The lease only allows three persons and they have not paid rent. I want to serve a three-day notice to pay rent or quit, but I do not know all of their names. What should I do?

Answer:
If you serve a three-day notice, address it to the occupants for which you have the names and also to “all others in possession.” If they pay the rent, however, you may have agreed to the additional people living there. If you do not intend to allow their occupancy, you could also serve a three-day notice to perform conditions and/or covenants or quit requiring that the

additional people vacate within three days.  If either or both of the notices are not complied with, you can commence with an eviction in court.

16.    Question:
A tenant of three years recently vacated with only a verbal two-week notice.  Can she be charged for unpaid rent? She did not have a lease agreement and never signed anything stating that she would give a thirty-day notice.

Answer:
If the rent is paid monthly and there is no term stated in the lease, written or verbal, the law presumes you are under a month-to-month agreement which requires a thirty-day written notice to terminate. If no written notice was given, the former tenant owes rent up to thirty days or until the time you relet the premises (you have to try), whichever occurs first.

Legal Questions October 2014

Posted: 15th October 2014 by Melissa in Legal Questions
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Kimball,Tirey&St.JohnLLP

Landlord/Tenant Questions & Answers
Ted Kimball, Esq. October, 2014

1.  Question:
A new tenant signed a six-month lease.  Now, he claims he feels unsafe because of an incident at the property and wants to terminate the lease. The tenant claims he has a 72-hour period to rescind the lease after it is executed. Is this true?

Answer:
There is no 72-hour right of rescission for residential leases.

2.    Question:
Is there a law on the length of time a resident must reside in an apartment not to be charged for paint or carpet when they move out? What are the guidelines?

Answer:
No, the tenant can always be charged for painting or carpet cleaning and/or replacement that is beyond ordinary wear and tear.

3.    Question:
I served a three-day notice on my tenants and they paid $300 of the $1050 that was due.  Do I have to serve another three-day notice to start the eviction?  Should I have accepted payment?

Answer:
You did not have to accept partial payment but since you did, you must start over with a new notice.

4.    Question:
We have a one-year lease with a tenant that will expire in four months. If we sell the house now, and the buyer wants to move in, would we be able to break the lease?

Answer:
The buyer “steps into the shoes” of the seller and the lease is binding upon the new owner.

5.    Question:
I allowed a tenant to move-in and pay the security deposit in several payments. They are not able to make the final payment. What can I do?

Answer:
You can serve a three-day notice to perform conditions or covenants or quit.  If the tenant fails to pay the deposit within three days from legal service of the notice, you can commence the eviction process (unlawful detainer).

6.    Question:
Is the procedure for evicting a tenant from a garage any different than for a tenant who lives in a residential unit? Is delivering a notice to a post office box legally acceptable?

Answer:
The eviction process is the same. The notice should be mailed to the post office box and another copy attached to the door of the garage the same day. Even though it may not be delivered, send another notice via mail, same day to the garage, since the code literally requires mailing and posting to the rented premises.

 

San Diego Property Management 92007 – Encinitas, Leukadia, Cardiff, Olivenhain

Fjellestad, Barrett & Short (FBS) is the San Diego north county property management company of choice for residential properties, rental homes, condos, townhomes and apartments for rent in Encinitas, Leukadia, Cardiff and Olivenhain. FBS fills more residential vacancies, collects more rent and supervises more property maintenance in 92024 and 92007 than other San Diego north county property management companies.

Fjellestad, Barrett & Short (FBS) established its complete property management and advisory services in 1972 and has been operating rental properties throughout San Diego for independent rental owners in an exemplary manner that recognizes renters as their preferred customers as well. In the early 1990s, due to a growing emphasis on north county rental homes, condos, townhomes and apartments for rent a central office for the company was established in the heart of Rancho Bernardo that is operated by local staff that specializes on FBS properties north of SR-52 and that have invested their careers at Fjellestad to be leaders in this area of San Diego property management.

The San Diego Better Business Bureau recognizes Fjellestad, Barrett & Short (FBS) as an accredited local business and has awarded FBS an A+ rating. Read a BBB reliability report on Fjellestad. Whether you are an independent rental owner needing property management in Encinitas, CA 92024 and 92007 or a renter looking for the best rental housing alternatives within Encinitas, Leukadia, Cardiff, Olivenhain or other San Diego north county cities there is one property manager that stands out – Fjellestad, Barrett & Short (FBS).

These ZIP codes feature the upscale north county coastal neighborhoods of Encinitas, Leukadia, and Cardiff by the Sea. Also included are the once rural but now exclusive neighborhoods of Olivenhaun. These ZIP codes are located south of Carlsbad and La Costa, west of Ranch Sante Fe and north of Solana Beach. These combined neighborhoods were incorporated as the city of Encinitas in 1986 but retain separate community personalities and identities.Today, this area supports a growing population of 62,000 (36% renters) inside its 20 square miles. The single largest industry is the growing of ornamental flowers; particularly poinsettias. This unconventional crop adds unique visual beauty to the popular coastal region and is celebrated with an Annual Fall Festival held in downtown Encinitas every November. There is also The Wavecrest Woodie Meet at Moonlight State Beach held every September; the world’s largest rally of wooden bodied vehicles. In addition, there is the internationally renowned surfing spot; Swamis.

Main thoroughfares are: Pacific Highway, El Camino Real, Rancho Santa Fe north and south; La Costa Avenue, Leukadia Blvd., Encinitas Blvd. east and west. Regional commuters have ready access to I-5. Local and regional public transportation is provided by the North County Transit, the Metrolink, the Coaster and the Sprinter (modern rail link to Escondido).

Rental options in Encinitas, Leucadia, Cardiff and Olivenhain include many housing alternatives from affordable to ultra-luxury. There are large to mid-size apartment communities; small rental properties; individual condos within established condominium communities as well as a growing selection of single homes for rent sprinkled throughout these neighborhoods.

KTS Legal Questions September 2014

Posted: 1st October 2014 by Melissa in Legal Questions
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Kimball,Tirey&St.JohnLLP

To “Batch” or Not: That is the Question

Shawn Bankson, Esq.

September 2014

 

We frequently get questions from residential landlords about whether it is acceptable to “batch applications” from prospective residents. “Batching” refers to the process of taking in multiple applications for an available unit, screening each application against the landlord’s rental criteria, and then comparing the applications against each other in order to select the “most qualified” applicant for tenancy. That may sound like a perfectly reasonable business practice (and the practice itself is not presently illegal), but unfortunately, batching applications and selecting the “most qualified” applicant can sometimes raise potential fair housing concerns.

 

Why the attraction to “batching” applications?

Usually, the landlord’s reasoning for this practice is to select the applicant whose income is the greatest, believing that this person is most likely to pay the rent. However, if management’s true concern is to have the most financially stable residents, the better practice from a fair housing perspective would be to create more stringent rental criteria, such as increasing the income-to- rent ratio that is required in order to qualify.

 

What are some of the fair housing risks in “batching”?

In a fair housing case based on refusal to rent, the applicant only has to prove four facts to have a prima facie claim:

  •  He or she is from a protected class,
  •  He or she was denied housing,
  •  He or she met the landlord’s rental criteria, and
  •  A unit was available at the time the application was screened.

 

We recommend that a landlord adopt a policy of “first come, first qualified, first served” when processing applications. The first completed application that meets the landlord’s rental criteria should then be offered the unit. This ensures that the landlord will process and accept applications in the most neutral, objective way possible: chronological order.

By comparison, batching might invite subjectivity. For example, how many applications are accepted before the batch is processed? In what order are the applications processed within the batch? What if multiple applicants meet all the rental qualifications? How would one objectively choose between them? And most importantly, how would management prove that an applicant’s protected class status did not enter into the decision to deny that applicant over another  qualified applicant who was not from a protected class? Inviting subjectivity invites liability.

 

What’s the best way to avoid (and defend, if necessary) a discrimination claim airing during the tenant selection process?

  • Have all policies and procedures (including rental criteria) documented in writing to demonstrate the consistency with which the property is managed.
  • Make sure there is nothing in the tenant selection process that would cause an applicant to claim that the landlord treated him/her differently because of the applicant’s protected class status, such as race, color, nationality, disability, or any of the other classifications. This includes ensuring that a “first come, first qualified, first selected” policy is implemented consistently.
  • Be able to demonstrate that the applicant was treated the same as all other applicants in the selection process, by having written, non-discriminatory rental criteria that are followed consistently with all applicants. Clear, written rental criteria make the application screening process a very transparent, objective exercise and provide the landlord’s primary shield when defending a fair housing claim.
  • Compare the first submitted application against your written rental criteria. If the application meets the criteria, approve the application and offer the applicant the apartment.
  • If the applicant conditionally qualifies, offer them an opportunity to rent with conditions (such as a higher security deposit or a co-signer). Make sure your qualifications for conditional acceptance are also in writing.
  • If the first applicant doesn’t meet the criteria, deny the application in accordance with the relevant laws and move on to the next application in order of receipt.

Bottom Line

Ultimately, a landlord’s goal should be to apply a well-thought-out screening process to all applicants that is objective and non-discriminatory, and that the rental criteria are applied equally to all applications. That might not happen when applications are batched because an applicant may be subjectively selected or rejected. Save yourself the cost of fair housing defense and select residents in the most neutral way possible: “First come, first qualified, first served.”

 

Kimball, Tirey & St. John LLP is a full service real estate law firm representing residential and commercial property owners and managers. This article is for general information purposes only. Laws may have changed since this article was published. Before acting, be sure to receive legal advice from our office. If you have questions, please contact your local KTS office. For contact information, please visit our website: www.kts-law.com. For past Legal Alerts, Questions & Answers, and Legal Articles, please consult the Resource Library section of our website.

 

© 2014 Kimball, Tirey and St. John LLP

 

Rents to jump over next five years
By Jonathan Horn

Rent_t540

 

Over the next five years, rents in San Diego County are expected to rise almost twice as fast as they did in the preceding decade, according to projections by CBRE.

From 2004 to 2014, the average rent in San Diego County rose from $1,242 to $1,542 per month, a 24 percent increase. By 2019, the average rent is expected to hit $1,830 per month, 19 percent more than the current average, said Dixie Hall, a CBRE apartment specialist.

“If we weren’t under supplied, we’d have much higher vacancy and we wouldn’t be seeing the rent raises that we are,” Hall said. “And we wouldn’t be seeing people paying $2,000 for a one bedroom.”

Speaking to about 200 people at a panel held Thursday by the San Diego County Apartment Association and the Certified Commercial Investment Member San Diego chapter, Hall said demand for rentals has increased because of three major factors: millenials are moving out of their parents’ homes, previous homeowners now choose to rent, and others still have credit issues from the Great Recession and can’t qualify for a mortgage.

The vacancy rate in San Diego County is about 3.7 percent, below a stable market, which would have vacancies around 5 percent, said moderator Robert Vallera, senior vice president of VOIT real-estate services. Another report, released Thursday by Cassidy Turley, calculated San Diego County’s vacancy rate as 2.6 percent, second lowest in the nation after San Jose.

CBRE reports that it is tracking 8,600 new units under construction, with 1,600 of them downtown. That’s where most of the demand for new units exists, said Peter Burley, who directs the Rosenthal Center for Real Estate Studies of Chicago.

“The millenials are distinctly urban, preferring public transportation, walkable neighborhoods, flexible work environments and easy access to social interaction,” he said. “They don’t drive.”

Hall said the new units being built, while expensive, are highly amenitized, with fire pits, pool decks, barbecues, large gyms and clubhouses. “You would want to live in these properties,” she said. “Residents today want to socialize, they want to be outside, they don’t want to be trapped in their apartment.”

Marco Sessa, senior vice president of Sudberry Properties, in charge of the expansive Civita mixed-use community in Mission Valley, said developers have a hard time responding to the demand for more units.

“It’s almost impossible to get things approved and it takes a very long time,” he said. “Unfortunately even with the amount of deliveries that are expected in the next few years, it is by far the demand exceeds the supply, not because we don’t want to build it but because it’s very difficult to get those projects actually out of the ground.”

KTS- Legal Questions Sept 2014

Posted: 16th September 2014 by Melissa in Legal Questions
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Kimball,Tirey & St.John LLP
Landlord/Tenant Questions & Answers
Ted Kimball, Esq. September, 2014

1. Question:
I recently purchased a triplex, and the escrow will be closing in a couple of days. The tenants are currently on a month-to-month rental agreement. Do I have to wait until the end of the month or can I serve a 30-day notice as soon as I take possession of the property?

Answer:
You can serve a 30-day notice at any time in a month-to-month tenancy. You do not need to wait until the end of the month. You are also entitled to rent for the 30-day time period. If all of the tenants in the unit have been a resident for more than one year, a 60-day notice is required to be served.

2. Question:
I have heard five different answers from five different people. Please, tell me what I can legally deduct from my tenant’s security deposit.

Answer:
Rights and obligations regarding a residential tenants’ security deposit are governed by California Civil Code Section 1950.5. It is clear that you can use the deposit for cleaning, delinquent rent and damages above ordinary wear and tear. What is considered ordinary “wear and tear” is subject to a variety of opinions by judges. In order to convince a court that the damages were extraordinary, check-in and check-out records of the condition of the apartment, pictures, receipts and opinions from those who did the work make the job of determining ordinary wear and tear easier for the court to decide.

3. Question:
I have filed an eviction against one of my residents for failing to pay rent for the last two months. I served the notice on a Saturday and someone said I had to serve it on a business day. Are they right?

Answer:
No. A 3-day notice for breach of the lease can be served on any day. The tenant has three full days to comply, but the last day of the notice must end on a business day.

4. Question:
I am a manager of a 56-unit complex. One of the tenants informed me that his girlfriend moved in. I gave him an application and told him to have her fill it out and then return it to me. It has been ten days and I have not gotten it back.

Answer:
If the lease prohibits the assigning or subletting of the premises without your permission, you can serve a 3-Day Notice to Perform Conditions and/or Covenants or Quit, detailing the violation. The notice should require that they either turn in the application or she must vacate the property within the 3-day period. If they do not comply with the notice, you could commence eviction procedures.

5. Question:
I served one of my tenants with a 3-Day Notice to Pay Rent or Quit. He did not comply so I served a 30-Day Notice to Quit. If the tenant does not move out by the 30th day, should I call the sheriff to evict him?

Answer:
The sheriff will not evict your resident unless you have gone through the unlawful detainer lawsuit and produced a judgment for possession. You could have filed the unlawful detainer action after the 3-day notice expired; you did not need to give the tenant an additional 30 days.

6. Question:
I recently received an application from a young married couple. He is twenty but she is only seventeen. I told her she was too young to sign the rental agreement and he had to qualify on his own even though she was working. She said because she was married, she was qualified to sign. I never heard of this law. Is she right?

Answer:
California recognizes an individual’s right to enter into binding contracts if they are eighteen years of age or older, in active duty in the military, married, or are emancipated by order of the court. You therefore should treat her the same way as you would any other adult applicant.

7. Question:
A couple recently applied for one of our vacant units. They have jobs but do not quite qualify for the unit (they need to make three times the amount of the rent). They said that his father would be willing to co-sign as a guarantor in order to qualify. How should I work this arrangement on the lease?

Answer:
Guarantor agreements are separate and distinct from the lease and may be rendered void if the lease is modified without the knowledge or consent of the co-signor or guarantor. Carefully drafted guarantee agreements can eliminate this risk.

8. Question:
One of my two tenants on the lease moved out due to a job transfer. The remaining tenant would like to stay and pay the entire amount. Do I need to write up a new lease or simply prepare an addendum stating the remaining tenant is solely responsible?

Answer:
You can either have the tenant sign a new lease or just keep the current one in place. There is no need to have a new lease drawn up unless you are changing some of the terms and the current resident is in agreement. Each resident is already obligated to pay the entire amount of the rent under most leases if they have a clause that states the residents are “jointly and severally liable” for all requirements under the lease including the payment of rent.

9. Question:
The money judgment I received in my unlawful detainer (eviction) case does not include physical damages made to the apartment. Since I already filed a money judgment, will that prevent me from getting a judgment for the damages made to the apartment later?

Answer:
The unlawful detainer judgment only allows a judgment comprised of rent up to the time of possession, or if a trial, up to the date of trial, court costs and attorney’s fees. Any other item owed by the tenant can be pursued in small claims court.

This article is for general information purposes only. Laws may have changed since this article was published. Before acting, be sure to receive legal advice from our office. Ted Kimball is a partner with Kimball, Tirey & St. John LLP. The law firm specializes in landlord/tenant, collections, fair housing and business and real estate, with offices throughout California. Property owner’s and manager’s with questions regarding the contents of this article, please call 800.338.6039.
© 2014 Kimball, Tirey and St. John LLP