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…

Legal Questions October 2015

Posted: 8th October 2015 by Melissa in Legal Questions
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FBS operates Rental Properties for Independent Owners utilizing Industry Best Practices which creates direct benefits to our Rental Customers. We have provided Superior Housing Alternatives now in our 5th Decade. Our available rental inventory changes daily. www.fbs-pm.com

As professional managers we must stay on top of local, state and federal laws, regulations and housing codes that are imperative to our clients and rental customers. We review and update our contracts, policies, forms and routines with the help of KTS (Kimball, Tirey and St. John).

Here are some situations we have asked Ted Kimball to weigh in on


Landlord/Tenant Questions & Answers

Ted Kimball, Esq. October, 2015

1. Question:  Can you tell me if someone needs any kind of certification or license to manage property in California? I want to hire someone to manage some of my smaller (less than 10 units) buildings. This person will accept rent, give out notices, handle complaints, and supervise maintenance work.

Answer: They are required to be a licensed real estate broker in order to manage property in California for a third party.  An exception is for a manager who lives on-site.

2.   Question:  Am I within my legal rights to ignore oral notices and demand written 30-day notice for a month-to-month lease termination?

Answer: Yes, California law requires termination notices to be in writing.

3.   Question: We do not have any HUD housing. When a Section 8 applicant asks us if we accept HUD housing, what is the best answer?

Answer: Indicate to the applicant that the property does not participate in any governmental assistance program at this time, but they are welcome to apply if they are willing to forego their subsidy.

4.   Question: One of our tenants paid us $50.00 per month rent less than what his lease required. We did not catch the mistake until after his third month.  He says he does not owe it because we waived our right to collect it when he paid his rent. Is he right?

Answer: Probably not. If your lease contained a non-waiver provision, it should be upheld in court. Even if your lease were silent on this issue, he would have to prove that you knowingly waived your right to receive full payment by accepting a lesser amount.

5.   Question: Is there a clear definition of what constitutes “ordinary wear and tear”? My husband and I are spending day and night trying to clean and repair our once beautiful home we rented out and need to know how much to charge back to our tenants.

Answer: There are not many legal guidelines on this issue so many judges use what they consider a common sense approach. We advise landlords to seek an opinion from the manufacturer of drapes, carpets, and appliances as to their expected lifetime assuming ordinary wear and tear. If the item needs replacing before that time, you can use this as a guideline to determine the pro rata amount to charge back to the tenant.

6.   Question: One of my residents recently had her phone line repaired. The telephone company charged her $60.00.  She did not notify us of the problem before ordering the repair. We could have made the repair ourselves at much less cost. The tenant wants me to pay the bill. What do you think?

Answer: California law deems owners of rental property responsible for the inside wiring to the property.  However, tenants must first give landlords notice of a needed repair and provide a reasonable time to make the repair before undertaking a self-help action. You shouldn’t have to pay more than what it would have cost for you to make the repair.

7.   Question:  Must 3-day notices to pay rent or quit be served to all delinquent tenants at the same time? We manage a large apartment community and sometimes have a multiple of notices to serve.

Answer: California law does not require that you serve 3-day notices to all delinquent residents at the same time.  It is a good idea to do so, however, in order to avoid the appearance of favoritism or discriminatory conduct.

8.   Question: Our tenants have a one-year lease. They gave me a 30-day notice of intent to vacate two months short of the one-year lease expiration. What should I do?

Answer: You should let them know in writing that a 30-day notice has no legal effect on their obligations under the lease and they remain liable for the rent until the lease expires or the date you are able to relet the premises, (once they vacate you have to use due diligence to relet), whichever comes first.

9.   Question: Our tenant’s children put a 6-inch hole in a plaster wall of the house they are renting. The tenant readily admitted that the children “might have been punching the wall a little.” What are our legal options?

Answer: You can serve a 3-day notice to perform conditions and covenants or quit to require the tenant to pay for the repairs to the wall.  If they do not comply with the notice, you should prevail in an eviction.


Past President’s Column

Posted: 2nd October 2015 by Melissa in Rent Sense

Past President’s Column
By Neil Fjellestad

The theme this month is safety and emergency preparedness. I have been invited inside industry companies across the U.S.usually at the behest of the key executive responsible for the performance of their frontline service providers. Rarely does the assignment stem from a concern for safety and/or emergency preparedness but within the advisory relationship these topics are discussed and/or issues discovered. These assignments usually get done by identifying the key areas to change, defining the solution, getting buy-in, designing an action plan, and coaching the team through implementation.
I have learned much in my attempt for positive change within all kinds of organizations, varied circumstances and with mixed results. I believe that a review of a handful of ideas and specific experiences might prove useful when applied to this theme.

In my experience if you want to create change in an organization you must first identify that which you are willing to change in yourself that leans into the kind of change you intend for the organization. As you seek to model new behavior you will discover the difficulty. Exemplary change doesn’t happen just because you decide. Such change requires a guiding principle; a concept that acts as a compass during a change of direction. Here’s an example. Often a rental owner feels entitled beyond what is reality. Questioned about an action they retort, “I can do what I want. I own the property.” Here’s a different concept to consider. Yes, you own the property but it is your renter’s home. It goes further than that. You are in the business of leasing out your property. Your renter is your customer to whom you have contracted to provide all the privileges of doing business with you: sole possession, quiet enjoyment all of which includes some expectation of personal safety, convenience and privacy. Surveys of residential rental customers verify that these are the psychological drivers enticing them to absorb their biggest financial commitment.

Our local fires in 2003 and 2007 taught us that while there are conditions over which we have no control a correct concept can shape an appropriate response under pressure. I remember vividly that my business partner and I took several calls from distraught out of area owners of individual rented homes in neighborhoods reported to be in the path of various fires. Some demanded that we go to the homes and secure them. Though acknowledging their concern we indicated that we would be staying off the roads as directed by local authorities. Likewise, we would not be going into neighborhoods restricted to residents nor breaking in to their homes. We would rely upon the renters to do everything possible under the emergency conditions to preserve and protect their home. This was the same message we delivered to renters as well. Sometimes a sensible communication consistent with a correct precept is all you have to keep the peace during the emergency.

Then there are other times when a condition can be an anticipated emergency. Over several years I visited New Orleans (pre Katrina) in the capacity of management consultant, educator and coach. One visit stands alone as it taught me more about the value of neighborhood, sense of community and character of the onsite frontline team. I was one of a consulting team that was brought in by a distant corporate ownership to evaluate the operational value of this senior apartment community; 239 homes. We were to determine team effectiveness and develop a recommended plan moving forward. This assignment was intended for 3-5 days and included living onsite. Second day in and everything is progressing. Relationship with the team was unexpectedly easy as the Property Manager had enjoyed a NAA designated course we had conducted several months previous. We were in a planning meeting when I asked if a TV that was playing could be shut off. I didn’t expect the answer which was that the team was on standby due to latest update on hurricane Georges which put us in its direct path. This was the preamble to the next 4 days of adventure, giving me unique experience I will always take with me. This was a study in effectiveness achieved when a team is on the same page. I wanted to join this team.

As the day went on ½ million people left N.O. as we methodically hunkered down. Fortunately, there was an onsite diner and we all ate whatever the cook had mind (and supplies) to prepare. The residents that stayed did so knowing that all that could be done was accomplished. Though in the last hour before projected landfall Georges took a dramatic turn away from N.O. there was still a tropical storm to weather for which we were grateful.
I know that the discussion of safety and emergency preparedness does not get a lot of attention until a situation presents itself that puts everything else on hold. When personal safety is breached and/or public well-being is compromised we abandon our routines, alter our present priorities, rethink alternatives and for some, redefine our future. Only after the situation is removed, resolved or past can we evaluate whether everything that could have been done, had been done. If not, why not. If we identify a list, what from that list would we prioritize to do differently, within what timeframe, and at what cost? Often, we want and need to get back to the rhythm of priorities ever present within the normal operational cycle. Left to these natural tendencies most realities remain unchanged but perhaps we, at least can remember: concept for a compass; consistency applied to practical outcomes; and communication throughout are all essential to managing the unexpected.


WOW!!!! What a turnout last night at the Educational Open House! Terry Moore covered the following topics:

- What are the benefits of rental ownership?
- Rental Houses vs. Rental Apartments
- Tax Benefits
- Benefits of Professionally Managing your Investment
- Becoming a Strategic Owner vs. Situational Owner

Thank you to Terry Moore for a fantastic presentation! What a great way to end our 2015 Educational Open House program! Thank you to our Owner clients, suppliers and all other attendees. We look forward to bringing you more in 2016!!!!

2015-09-29 17.20.08

2015-09-29 17.52.55

Ms Management

Posted: 22nd September 2015 by Melissa in Ms. Management

Q. I have been a regional inside a mid-size property management company for several years. I have also been active in AAMD, taking coursework for the CAM designation and serving on several committees. Now, some volunteer leadership opportunities are coming my way. I also look forward to other designations. However, my priorities and motives seem to be recently called into question by my employer. In my last evaluation at my company I was asked to defend my volunteer hours spent and value back to the company. My attitude and commitment about industry involvement has been consistent and fully supported by my company. What’s changed? Is it them or me that need to re-think the status quo?

A. Well I guess you know where I and many others stand about giving back to the industry that has given us so much. However, I have had to periodically re-evaluate my volunteer investment as a legitimate part of my professional and personal life. I would expect that you should as well. Do you value your employer’s opinion and believe they respect you? Why not ask for a transparent and direct conversation on this specific topic? It might be that the comments that you have mentioned originate because you have not put in the time and effort to have such an exchange.

Perhaps your company is re-evaluating the value of such involvement. Maybe someone has called it into question due to an employee lost to a competitor through introductions made at industry functions. Maybe a member company has utilized designated candidates as a backdrop for recruitment. If these concerns exist within your company it is because it happens and when a cost-benefit analysis is applied it could lead to negative conclusions. Don’t you want to contribute to these conversations by sharing how you think and feel? Perhaps you can round out the negative by sharing times and situations that your involvement has favorably introduced your company. Maybe, utilizing designated candidates as a qualifier for recruitment is valid because the education and the individual initiative needed to attend, participate and complete are that valuable? What if there are underlying problems that require addressing and/or safeguards put in place to preserve the value?

Here’s my point. Anything of real value benefits from re-thinking, fresh evaluation and thoughtful change by similar but divergent individuals and companies that continually want to improve. This is beneficial inside a company and an industry.

Past President’s Column- Sept 2015

Posted: 18th September 2015 by Melissa in Rent Sense
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Past President’s Column

In previous columns I have stitched together some of the regional economic data that spells out a renaissance era for local real estate investment. Consider the projected flood of potential renters based upon demographic trends. More specifically, employment is dramatically improved among millennials which does several things immediately: a) life-style upgrades which means they are able to rent on their own and with roommates b) millennials that are happy attract others of their generation from within the region and literally from around the world to join them. Looking at the other end of the spectrum; retirement planning priorities over home ownership among boomers help explain the unusual renter growth within the older generation as well. Then there are emerging federal immigration and military decisions that will attract people to our region; at least for the first generation as renters.

Though we are all aware that the housing supply has been distressed for nearly ten years the real news here is that housing planners, developers and builders will continue to miss the mark on any timely basis due to at least three problems: 1) environmental impact of housing is highest where most people want to live, work and play 2) neighborhood input/control of developmental process can bring housing progress to a standstill 3) everyone wants to believe that ‘for sale housing’ is the rule with ‘rental housing’ being the exception.

International institutional investors have had San Diego on their radar for some time. During the last decade and going forward there are new millennial regional economic drivers that will re-define and distinguish our financial reputation despite our inability to provide affordable housing alternatives. So, if you are currently an Independent Rental Owner you are in an important place at an opportune time. Turning your opportunity into a strategic business plan will allow you to “Retire on Rent” by improving your equity position, customer profile, physical property value and providing business operating consistency.

Re-invest Now

Rental property ownerships should be part of a long-term business plan. Many begin due to a ‘situation’ rather than a ‘strategy’. Examples abound: ownership comes suddenly as the result of death or divorce; not sure whether to sell so you rent it out to pay the mortgage; employment and/or other changes render you unable to sell at the right price or within the necessary timeframe so rent solves the immediate problem until a sale can happen. Regardless of the particular details becoming a rental owner was unexpected. You dislike every month you are an “accidental landlord” and over time you hate it, everyone and everything connected to the accident. With this attitude the only plan such individuals can entertain is to sell and “get control of their life back”.

Actually, ownership seen as negative needs a management upgrade rather than a pre-mature sale. Independent rental ownership along with other businesses that are well located, properly capitalized, and professionally managed are the leading source of wealth and retirement income among this country’s financially secure. So seeing your ownership as the solution instead of the problem is where your plan must start: you need your head straight, willing to believe that you can retire on rent.

Your rental property does not need to be perfectly located as long as it shares in the external economic forces mentioned above. The ownership capitalization method and terms do matter. At the onset it is important to be the decision-maker and that means independent ownership instead of some securitized ownership subject to the control and dictates of partners, a REIT, or other terms of equity or borrowed funds.
Though rental property can and should be purchased with leveraged equity there must be an ongoing plan to reduce debt and/or the equity of others until by retirement your rental property ownership is debt and partner free. This does not mean that because you are the final decision-maker you need to operate the rental property. You need to surround yourself with professional advisors and managers. This is a long-term business and wise investors buffer themselves from the drama and vicissitudes of rental operations. Advisors supply timely alternatives to decisions that could interrupt or extend your success.

Improve Customer Profile

In last month’s column I detailed the importance of constantly re-pricing rents to keep pace with the sub-market of each rental in your portfolio as well as defining each living space with individualized pricing. There are important reasons why this approach must be followed over time: first, the adjustment of renter profile to market conditions. We all know that the ability of rental customers to meet their financial obligations will adjust over time due in part on external conditions, household circumstances and personal life-style decisions made along the way. While our renters always have the option to legally change their residence to conform to their household preferences and limitations we as operators must professionally manage the rental business by looking for opportunity to improve the customer profile in order to optimize net operating income, customer satisfaction and operational effectiveness.
We manage our customer expectations by keeping our renters keenly aware of these competitive similarities and differences. We might think that we can successfully keep our renters isolated from the market and this is advantageous to us. First, in today’s consumer environment it is more likely that the independent rental owner is isolated. The renters are usually aware of the market and for whatever reason choose not to rock the boat. This absence of transparency in such an important market relationship will present itself in surprising ways as inconvenient episodes of hostile activity which is expensive, negative and usually avoidable. Like any business we depend upon our existing and potential customers to keep us aligned with their preferences, perceptions and expectations. Improving the renter profile is one key method by which professional managers consistently control operational outcomes over time.

Improve Property

Besides 24/7 rental business management every property also needs a physical improvement plan to preserve income, control expense, increase real estate value and optimize ownership return on investment. Such a plan will a) preserve income by increasing rental rates and provide better selection of qualified potential residents b) control expense by reducing recurring expenses and/or allowing operating team to attend to other resident requests c) increase real estate value by increasing the Net Operating Income which translates to favorable comparison with similar available rental property and d) optimize investment return due to perceived lower risk caused by internal and/or external forces.

Let’s look at an example. There is often an opportunity to replace appliances inside our rentals. A replacement program that is logically implemented and readily communicated is well received by residents that are inconvenienced by recurring appliance repairs. Modernizing appliances should reduce energy expense which is a shared benefit while a “replacement versus repair” policy appeals to an improved renter profile. In turn, respected/appreciated renters that can trust an action plan is underway stay longer contain costs within their control and more readily understand and keep up with market rental re-pricing.

Though we might make physical improvements to our personal residence for a variety of reasons we should be improving our rental property for business reasons. These might include: floorplan changes that re-configure for more or better usable living space; kitchen and/or bathroom upgrades; smart and/or green customization to a property’s interiors and exterior.
Retire on Rent

In San Diego between 45-50% of our region’s households will be making decisions to rent for the foreseeable future. These decisions are already set due to external forces. Such housing circumstances are creating new business opportunity for rental owners that recognize and capture the full potential of their business.

Past Presidents Column

Posted: 14th September 2015 by Melissa in Rent Sense
Tags: ,

Past Presidents Column
As seen in Rental Owner Magazine
By: Neil Fjellestad

Our theme for discussion this month is Planning and Strategy to create and refine Budgets for 2016. In my experience Independent Rental Owners do not rely on individual property operating budgets the same way as Institutional Ownerships. I have a friend that is a third-generation rental owner and now leads his family business. Over the years I have become acquainted with the internal workings of this family and the substantial company it operates. A company spread over four northeastern states, employing hundreds of people to control a substantial real estate investment empire which includes the daily hands-on operation of over 16,000 apartments and, until recently, without individual property budgets! However, my friend has always been quite clear about the expectations that he and the generations before him have for their rental property both for the rental operations and for the real estate value. He has grown up in and around a significant business that he continues to protect and expand. I mention this as an extreme example. Independent Rental Ownership is a state of mind, a philosophy that flows through to the operation of every rental. Regardless of what or how you chose to operate as a rental owner it should be with a specific purpose that you thoroughly understand and clearly communicate.

Let me help with my theory of real estate business ownership that I started developing as an Accounting major at SDSU back in ’67. It has evolved for sure but still serves me well now in my 5th decade of ownership. It looks like this.

“Independent Rental Owners, whether arriving at this ownership on purpose (Strategic Investor) or by circumstances not of your choosing (Situational Investor) have learned that you own a local business: rentable property is to be acquired, improved, held and maintained. This is fully utilizing what we must call “investment benefactors” including: renters “willing” to call our investment property their home for extensive periods paying “market rents” for the privilege; lenders that are “ready” to put up most of the “fair market property value” taking only a small interest charge for their money because they completely trust the real estate as their only collateral; then there are local, state and federal laws that are “able” to protect our ability to enjoy income tax benefits now like much riskier businesses while deferring other taxes as well as any “estate plan” could.”
“While leverage is a wonderful way to begin our acquisitions you should be strategically reducing loan balances until you own your rental properties debt-free and professionally managed so that nearly 70% of rent collected becomes part of your retirement income wherever and however you choose to spend your retirement. We call this – “Owning Your Retirement.” Obviously, you want to optimize both property rent and value, taking full advantage of your “benefactors.”

“Not obvious is why you would sell or otherwise dispose of your properties. We’re unsure why an independent rental business owner would want to reduce his/her hard earned equity by triggering taxes and transaction costs that will become due.”

Note: It is my initial fascination with leverage and 1031 exchanges that has probably evolved the most. There are certainly situations that call for both though I no longer see either as foregone “what every smart investor does.” I should state that after a definitive count some years back I realized that by the time I was 30 I had closed more than 2000 transactions for myself and others as a buyer, seller or transaction broker. Most of these involved 1031 exchanges of apartment buildings. Usually the management and maintenance after close of escrow were keys to the success of the investment. Later, in my 30s I continued to expand my horizons (an additional 1800 transactions) as an investor acquisition expert becoming the largest buyer of individual owner occupied homes and operating them as rentals. All of this done in Arizona, with leverage and carefully designed investment criteria, substituting in individual investors along the way. This was accomplished during an extremely turbulent decade for the national real estate economy. My take-away included the unexpected realization that often smaller property including single houses and condos worked better for independent investors. The constant was not the type of real estate investment, but rather the management and maintenance that brought success. I also saw the need to continually develop and improve systems for everything.

So, I’m more concerned that budgets reflect ownership purpose and operational best practices. I’m also concerned that independent owners and those that represent them hold themselves accountable for customer satisfaction and property improvement. I think it is useful when select financial highlights are shared with the entire operating team. Let me ask, do you think that if the maintenance team as an example understands the financial impact of their daily routines it could enable their attitude and sense of urgency? If our onsite teams are routinely taught the rental business that employs them would they feel part of something important? I can show you plenty of evidence from companies across many industries that support the idea that trust is the catalyst for both customer and employee satisfaction. Effective communication that is direct and transparent (delivered to the customer it is called marketing; delivered internally it is called education) can be an essential tool especially in the rental business to build and maintain trust.
Now I realize that many Independent Rental Owners have suffered during the great recession and there are still market complications from that time. However, your ownership controls housing and as such should never represent a second-class experience for your renters. It is also no excuse for poor planning and no budgets that require accountability for ‘performance standards’ today with strategies to get to ‘best practices’ in a timely fashion. Next column I’ll take up Revenue Management and Customer Relationship Management.


Thank you to those who voted again this year! We are proud to continue the highest level of customer satisfaction!

We would also like to acknowledge our employees. Every day brings difficulties, challenges and surprises but each of you meet those with determination to exceed expectations!

2015 has been a great year!


Legal Questions September 2015

Posted: 8th September 2015 by Melissa in Legal Questions
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FBS operates Rental Properties for Independent Owners utilizing Industry Best Practices which creates direct benefits to our Rental Customers. We have provided Superior Housing Alternatives now in our 5th Decade. Our available rental inventory changes daily. www.fbs-pm.com

As professional managers we must stay on top of local, state and federal laws, regulations and housing codes that are imperative to our clients and rental customers. We review and update our contracts, policies, forms and routines with the help of KTS (Kimball, Tirey and St. John).

Here are some situations we have asked Ted Kimball to weigh in on

1. Question: We rent a house to a family. My husband helped the tenant move a washing machine into the laundry room and noticed that the tenant’s defective hoses had leaked water onto the sheetrock. We want to have the sheetrock repaired. Can we deduct the cost from his security deposit and then send a 30-day notice for the tenant to reinstate that amount?
Answer: It is better to request the tenant to pay for the damage repair and keep your deposit intact until after they leave. If they do not pay, serve them a 3-day notice to perform covenant or quit to pay for the amount of the repair.

2. Question: I heard that if a tenant is using drugs on a property, the landlord can be charged on a drug charge, is this true?
Answer: A landlord can be cited for maintaining a drug-related nuisance if he or she does not take reasonable steps to remove the illegal drug activity from the property. The local enforcement agency must first advise the landlord of the nuisance.

3. Question: A tenant claims her attorney told her that since she did “quit” after we gave her the 3-day notice, she is not responsible for the balance of the rent for that month. Is she correct?
Answer: Her attorney is wrong. Even if a tenant “quits” pursuant to a notice to perform or quit, the tenant is still liable for lost future rent.

4. Question: Is the legal age for leaseholders over 18 or over 17?
Answer: The legal age to contract in California (including leases) is 18 or over. However, if the under age person is “emancipated” (is or has been married, in active military duty or by court order) he or she does have the ability to enter into binding contracts and leases.

5. Question: I am evicting a married couple. My attorney says that we have served the lawsuit on the wife personally and the husband by substituted service. What does this mean and what difference does it make?
Answer: A lawsuit for unlawful detainer can be served either personally or by substituted service by giving a copy of the lawsuit to a person at least 18 years of age at the subject property or at the usual place of employment of the defendant.

6. Question: I have tenants who have a written rental agreement for their apartment. They pay
$785 per month. They also rent the garage at $50, but there is no written agreement for the garage, either separately or in the rental agreement. If we give the tenant a 3-day notice to pay at $835, would it be enforceable in court?
Answer: Since the terms of the garage rental are unclear, it would be safer to serve two 3-day notices, one for the apartment rent and one for the garage rent. They could be served simultaneously.

7. Question: I have a tenant who has rented from me for a couple years. Her husband left the family. She asked me about Section 8. Would it be discrimination if I did not choose to get involved with Section 8?
Answer: You do not have to participate in the Section 8 program and it is not considered discriminatory to make that decision. Source of income protection only applies to payments that go directly to the tenant.

8. Question: If I suspect drug activity in an apartment, can I evict the residents?
Answer: Yes, but unless you are on a month-to-month agreement, you must have evidence of the drug-related activity. Otherwise, you may serve a 60 or 30-day notice to quit based upon your suspicion.

9. Question: I am planning to rent to three adult roommates. I know they all have to fill out separate applications. But, how do I handle the security deposit? Do I ask each tenant for 1/3? Answer: You should charge one deposit and not account for it until all tenants vacate. Make this clear in your lease so that if one tenant vacates, it is up to his or her former roommates to get reimbursed.

10. Question: I have reason to believe that a single tenant has moved out from my rental property and has an arrangement with a third party couple now in residence. How do I best legally remove them and take back my apartment?
Answer: You can serve a 3-day notice to perform conditions and covenants or quit if your lease has a prohibition against subletting or assignment of the lease, or, if there is a provision limiting residency to named occupants.

11. Question: I have an applicant for an apartment who informed me that she had bad credit because of her ex-husband’s irresponsibility. Her current employer has offered to co-sign. Is this a good idea to accept him as a co-signor, and how would this be done?
Answer: You should first determine whether or not you are going to have a policy of accepting applicants with bad credit on the condition they have a co-signor, in order to stay within fair housing laws. You should then decide what criteria the co-signor must meet, such as credit history, income, residency in the local area or at least in the state. Finally, require the co-signor to sign a separate guarantor agreement reviewed by legal counsel.

12. Question: We lease out a condominium and do not wish to renew the lease when it expires. Should we give a 90-, 60- or 30-day notice? What form should we use to terminate the lease?
Answer: California law does not require any notice prior to a fixed lease expiration. However, examine your lease since many leases do require a notice of intent of non-renewal. Typically, they are for 30 days. It is always a good idea to communicate your intentions to your tenants as early as possible and document the communication.

FBS wishes you a Happy Summer!

Posted: 19th August 2015 by Melissa in Video
Tags: , ,

KTS Legal Questions August 2015

Posted: 7th August 2015 by Melissa in Legal Questions
Tags: , ,

FBS operates Rental Properties for Independent Owners utilizing Industry Best Practices which creates direct benefits to our Rental Customers. We have provided Superior Housing Alternatives now in our 5th Decade. Our available rental inventory changes daily. www.fbs-pm.com

As professional managers we must stay on top of local, state and federal laws, regulations and housing codes that are imperative to our clients and rental customers. We review and update our contracts, policies, forms and routines with the help of KTS (Kimball, Tirey and St. John).

Here are some situations we have asked Ted Kimball to weigh in on

1.Question: Can we use a recent Section 8 inspection report as a standard of habitability in an eviction case?

Answer: The court will allow any relevant evidence that tends to prove the condition the premises during the time in question. Since the purpose of the inspection is to qualify the unit as habitable and in compliance with HUD regulations, the report may be considered as evidence of the condition of the premises at the time of the inspection, but the custodian of records may have to testify as to the accuracy of the report.

2.Question: One of our tenants recently requested that we paint the inside of her apartment. She has threatened to do it herself and deduct the cost of the paint from the rent if we do not have it painted within the next two weeks. Is she legally able to carry out her threat?

Answer: Unless the condition of the walls rendered the premises uninhabitable, the owner is under no obligation to paint the unit at the request of the tenant.

3.Question: Several of our tenants have complained to us about the neighboring property. The people who live there work on their cars in the driveway at all hours, and have loud and wild parties almost each weekend until dawn. What are my legal responsibilities?

Answer: You have a right to inform the owner of the neighboring property and request their assistance, in resolving the problem. Recommend that your residents contact the police during the time of the disturbances.

4.Question: What is the most useful information on the tenant’s application for collection purposes?

Answer: The most useful for locating former residents, are the social security, driver’s license and license plate numbers. For collection on judgments, current employment and bank account records are the most valuable.

5.Question: I rent out a condo that I own. Are the rules and regulation of the homeowner’s association automatically applicable to my tenant?

Answer: Not automatically; your residential lease should incorporate by reference the CC & R’s of the homeowner’s association and all rules and regulations. That way if there is a breach of the association rules, you can serve an appropriate notice to perform or terminate the lease.

6.Question: What is an estoppel certificate? The owner of the property I manage requested that each of the tenants sign an estoppel certificate. I did not want to appear unknowledgeable.

Answer: An estoppel certificate is a document signed by the tenant certifying that the major terms of the lease are true and correct. Estoppel certificates are sometimes required during the sale of rental property so the buyer knows that the tenant understands and agrees to the major terms of the lease.

7.Question: Can we legally restrict the number of automobiles our tenants can park on the property? There is open parking but some of our tenants have four or five cars.

Answer: You have the right to control the number of automobiles that the tenant may park on the property. Clear guidelines should be given in writing and equally enforced.

8.Question: After serving a tenant with a three-day notice to pay rent or quit, what is my next step if the tenant does not comply? Serving a thirty-day notice?

Answer: Your next step would be to file the unlawful detainer (tenant eviction) in the proper court. Each court has geographical boundaries, so you should make sure you are filing the action in the court of proper venue.

9.Question: We allow pets on our property but only in certain units. Sometimes there are no pet units available. Is this policy legal?

Answer: It is in the landlord’s discretion to allow or not allow pets or to allow them only in certain units. Just make sure your policy does not apply to assistive animals which are not considered pets.

10.Question: A tenant’s child broke a glass shower door. Can I charge the tenant for the repair of the door?

Answer: The tenant is liable for any damage done by its invitees, guests or other occupants of the premises. The tenant should have to pay for the repair of the door.

11.Question: After a tenant moves out and gives their change of address to the post office, how long are the landlords responsible for any correspondence that may still arrive at their former address?

Answer: You should let the post office do their job and if the forwarding address has expired, give it back to the post office and indicate that the person no longer resides at the mailing address. We do not recommend you help accommodate your former tenant by playing “post office.”

12.Question: I need to know the depreciation schedule of new carpeting in a home where the tenant lived for one year. The tenant put 5 cigarette burn holes in the carpet and spilled wax on the corner of this brand new carpet.

Answer: California’s security deposit law found in Civil Code Section 1950.5 states that the resident is responsible for damage above normal wear and tear. If the carpet needs to be replaced after one year and it should have lasted for five years, most judges will allow you to charge the resident 4/5 of the total replacement costs.

13.Question: I have a tenant who smokes outside his apartment. Can I request he not do that? There have been issues with cigarette butts on walkways and it also affect the tenant’s next door to him as they always close the kitchen window when he smokes.

Answer: You can create a non-smoking policy for all or part of the premises, so long as you are consistent in its enforcement.

14.Question: I have a roommate situation. One roommate has moved out. Am I required by law to give back half of the security deposit to the one who has moved out?

Answer: California law does not require landlords to return the security deposit to one tenant if they move out before the remaining tenant(s). Landlords are not required to account for the use of the security deposit until after they have recovered possession of the property unless otherwise agreed at the inception of the lease.

15.Question: At my property, we are currently doing renovations, and have notified all the residents that there will be noise and water shut offs. One resident said they are entitled to rent discounts because of the situation, is it true?

Answer: There is no “automatic” reduction in rent allowed for temporary shut off of water, and/or noise created by renovation or routine maintenance.