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

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First Open House of 2016! Join Us!

Posted: 18th January 2016 by Melissa in Rent Sense
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Legal Questions Jan 2016

Posted: 13th January 2016 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: In our lease agreements we require tenant’s to pay their rent on the first of the month. If the first falls on a holiday, such as Labor Day, do you have to give the tenant’s until midnight on the second to pay the rent or can you still enforce the late fee as of midnight on the first?
Answer: Rent is not delinquent unless one business day has expired from the date the rent is due. So if the first is a weekend or holiday, the rent is not late until after one business day has expired.

2. Question: I own a fourplex. Unit B has two cars, one is broken down. What kind of demands can I place on B about the broken down vehicle?
Answer: You can create a lease term by requiring all vehicles to be in operable condition or they will be towed. To put this into place, you need to either serve a thirty day notice of change of terms to a month to month agreement, or wait until the lease expires and have the new condition in the renewal lease.

3. Question: I rented a condominium unit to a couple on a year’s lease. After one month, they had to move out to take a job out of state. My daughter wants to move in and that’s all right but she will not be paying me rent. Does the tenant still owe me the rent for the lease?
Answer: Under California law, a tenant who vacates early is liable for the remainder of the lease period unless the premises are re-rented or otherwise taken back by the landlord. When your daughter moves in, the tenant is relieved from further payment.

4. Question: Can I bill my tenant for excessive water usage if I can prove they neglected to fix two leaky faucets for over three months?
Answer: Most rental agreements and California law require the tenant to maintain the premises in good condition and repair. Failure to meet their obligations would therefore be a breach of the lease and you should be able to recover all losses suffered, provided you have sufficient proof.

5. Question: Our tenant’s lease is up in six weeks. Can we serve a thirty-day notice at the beginning of the last month of their lease if we do not want to renew?
Answer: Unless your lease requires a thirty-day notice of intent not to renew, California law does not require either the tenant or landlord serve a thirty-day notice to terminate a fixed term lease. If the tenant remains in possession after the lease expires without the landlord’s permission, an immediate unlawful detainer action can be filed.

6. Question: When not renewing a one-year lease, do I have to give the tenants a reason for not extending their lease?
Answer: California law does not require landlords to give their tenants a reason why they are not renewing the lease, unless the property is situated in a “just cause” rent controlled jurisdiction.

7. Question: How can you enforce the pool rules where someone continuously leaves underage children in the pool area?
Answer: This is a safety issue and you should be able to address it. However, it needs to be handled carefully in order to avoid potential claims of discrimination based on familial status. If you encounter this type of situation, we recommend that you get specific legal advice from one of the attorneys in our fair housing practice group.

8. Question: New tenants moved in last month. The wife now wants me to take her name off the lease because she is moving out and getting a divorce. They agreed to a one-year lease. What can I do?
Answer: You are not legally required to release the wife from liability under the lease. If you do, and the husband is unable to pay or declares bankruptcy, you would not be able to pursue your losses from the wife.

9. Question: One of our tenants owes us for past due rent, and part of his security deposit. He has given us a check for the amount of the rent, but I want to first apply it to the deposit and then serve a three-day notice to pay rent or quit for the unpaid balance. Is that legal?
Answer: Yes, but only if the tenant did not designate where the money was to be applied on his check, or other written correspondence. You could avoid the issue by applying the payment to rent and then serving a three-day notice to pay the balance of the deposit, or quit. Failure to pay could lead to a successful eviction.

10. Question: What can you do about a tenant being cruel to an animal such as keeping a large dog in small quarters outside with the dog crying in the rain, cold and heat?
Answer: You have a right to report any criminal or inhumane acts occurring on the rental property. If the mistreatment constitutes a crime, you could evict the tenant for carrying on illegal activity on the premises.

11. Question: Is a phone text an official written notice for a 30-Day Notice?
Answer: No, a 30-Day Notice has to be in writing and physically deliverable to the tenant in person, or by serving another person of suitable age and discretion on their behalf or by posting a copy on the door and mailing a copy.

12. Question: Is the Removal of Roommate form still valid even if one roommate does not sign?
Answer: If the landlord allows the current tenants to substitute another person for one of the residents, many landlords use a “removal or roommate” form. All adult occupants of the premises should sign the removal of roommate form to avoid potential liability.

Happy Holidays from FBS!

Posted: 22nd December 2015 by Melissa in Video
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Legal Questions Dec. 2015

Posted: 9th December 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: What are my legal rights regarding maintaining a full deposit on a unit when one roommate moves out and another stays? My understanding is that I am entitled to maintain the full deposit while at least one of the original tenants remains in residency, and it is that remaining person’s responsibility to refund the deposit.
Answer:
Unless your lease provides otherwise, you do not have to account for the use of the deposit or do an inspection until you regain possession of the unit. The roommate who vacated is not entitled to a refund or inspection at this time unless your lease specifically requires it.

2. Question: One of our tenants wants her security deposit refund in cash as the other roommate on the lease has moved out of state with no forwarding address. If the missing roommate’s name is on the refund check, the remaining tenant is concerned that she cannot cash the check.
Answer:
You can either make the check out to both tenants or have one tenant send you a notarized statement that he/she is relinquishing all rights to the deposit to the other tenant. Otherwise, you face potential liability to the one who did not receive the deposit.

3. Question: Does the acceptance of rent from someone who is not on the lease mean I’ve accepted him as a tenant?
Answer:
Accepting a third party check does not by itself necessarily indicate that you have accepted this person as a tenant. It is a good idea to indicate that this is being received on behalf of the tenant and does not indicate any tenancy relationship between you and the check writer.

4. Question: I am having a bit of a problem with a repeat visitor on my property. He is a young man who knows a lot of the children who live here. It has been brought to my attention that he has been selling marijuana on our property, but I have not personally seen this. Can I keep him off of the property based on this information?
Answer:
If he is not visiting one of your tenants, he is trespassing. If he is visiting one of your residents, they are responsible for his conduct. In any case you should call the police.

5. Question: I have a resident who moved in this last month. I have had a lot of noise complaints about him from other residents. I have also issued three warning notices for noise and the cleaning of this patio. He has a one-year lease. What can I do?
Answer:
If the disturbances rise to the level of a public or private nuisance (major, continuous disturbances to neighbors), then you could serve a Three-Day Notice to Quit based upon the nuisance.

6. Question: I have tenants who recently divorced. The husband has moved out. Can we take him off the rental agreement?

Answer:
It is not in your best interest to take him off the lease as he is still responsible for the lease payments even though he moved out. To remove him, you would need to get his permission and consent.

7. Question: Is there a smoke detector ordinance that requires an owner to perform an annual smoke detector inspection in each unit? If so, what is the purpose of the smoke detector agreement?
Answer:
California state law does not require an annual inspection of a smoke detector inside a rented unit; however, the owner is responsible to maintain and test smoke detectors in common stairwells or other common property of the apartment community. Tenants are required to notify the owner of an inoperable smoke detector in their unit.

8. Question: One of our employees said she believes that a tenant’s rental agreement must be signed in the owner’s or agent’s presence, or notarized, or it will be invalid.
Answer:
California rental agreements do not have to be notarized or signed in front of the owner or owner’s agent.

9. Question: Can I ban alcohol in the pool area?
Answer:
You can control the common areas of the premises so you could ban the use of alcohol in the pool area.

10. Question: Do I give a sixty-day notice on a month-to-month tenancy for a rent increase of 10%?
Answer:
No, a thirty-day notice is all that is required unless the increase is more than 10% of what the rent was one year ago.

Rent Sense featured in Rent Magazine

Posted: 3rd December 2015 by Melissa in Uncategorized
 

rent mag

 

Past President’s Column
Neil Fjellestad

Several times during this year I have tried to emphasize the singular regional opportunity being given to independent rental owners, real estate investors and business entrepreneurs during the next 5-10 years. I get some push back from some economic advisors that decry our state’s political leanings, at risk infrastructure and rabid anti-business regulators. They insist that business cannot thrive in this hostile environment and would avoid California at all cost. Rather, their emphasis is how many people are leaving the state seeking better employment opportunities, affordable housing and/or an enjoyable retirement.

Meanwhile, headlines tell us our prisons are filled beyond capacity, our social services are overrun by those here illegally, our education systems are expensive failures, our governments at the state and local levels are held captive to public pension debt. We are reminded every time a business or an industry is threatened by rising costs of doing business here, how broken our legal system has become and how antagonizing/non-productive regulators have become in a seemingly singular purpose to justify their existence.
So it would seem to be a valid question looking forward – Is California no longer the golden state? More to the point, does it still make sense to own and operate rental property in California? First, let’s set the stage by reminding that I have been in real estate-related businesses for more than 46 years. I am home grown and my business experience has taken me throughout the U.S. spending time with people and property in at least 28 other states. When I graduated from SDSU I started as a broker with a San Jose-based real estate investment, brokerage and management company that was expanding to a second office in southern California. During my first decade in business I analyzed and walked income property interacting with real estate experts throughout California. I bought, sold and exchanged properties for individual and institutional investors from one end of this state to the other. So, if you detect a bias please know that it is an informed bias.

Is California Shrinking?

By 1965 California became the most populous state in the U.S. and with 39 million people in 2015 we still are and by a huge margin; currently home to 8 of the 50 most populous cities in the country. It is true that we are currently growing at a slower pace but economically the gap between our state’s gross product and the rest of the nation is expanding; 43% larger than #2 Texas and more than #3 New York and #4 Florida combined. California provides nearly 13% of the U.S. economy which comfortably dominates any other in the world. Reality check- if our state is being ranked with the world’s leading economies it is virtually a dead heat with #7 India.

Is California Losing Its Edge?

We need to realize that nearly 750 companies including some of the largest and most profitable private and public entities have been founded in California. Currently, there are over 450 such companies headquartered in California. Again, it is the margin between California and every other state that is remarkable. To make this more real take a moment and think of an industry and bring to mind the top competitors in that industry. Some examples to get you started – Android or Apple; Jamba or Naked Juice; eBay or Instacart; Del Monte or Dole Foods; Health Net or Kaiser; Adidas or DC Shoes; Bechtel or KB Home; See’s Candies or Ghirardelli Chocolate; Yelp or Snapchat; Western Mutual or Farmers Insurance; Levi or Gap; Safeway or Trader Joe’s; GoPro or YouTube; Netflix or Pixar; Lucasfilm or Lions Gate; Cheesecake Factory or Fleming’s Steak House; 24 hour Fitness or Jazzercise; Facebook or Pinterest; Instagram or Google; Intel or Oracle; Cisco or Intel; Qualcomm or HP; LinkedIn or Twitter; PayPal or Craigslist; Northrop Grumman or General Atomic; Jack-in-the-Box or Taco Bell; Agilent Technologies or Adobe; Pandora or iTunes; Illumina or Amgen; Samsung Media or Yahoo; Isis Pharmaceuticals or 23andMe. We could keep going. Some are household names while others are unfamiliar to you. Some are subsidiaries of multinational giants while others are upstarts and the landscape changes constantly though mergers, buy-outs and spin-offs. Here’s the takeaway. These are all California companies that are at the leading edge of their respective industries.

Now add to this the California universities that are connected to these industries and the immigrating international students that want to change the status quo and are attracted to this connected system as their method of choice. “In a widely followed ranking of world universities that emphasizes the sciences, six California institutions were ranked among the top 20. Stanford, Caltech, UC Berkeley, UCLA, UC San Diego and UCSF all made the list.

The 2015 Academic Ranking of World Universities was just released by the Center for World-Class Universities at Shanghai Jiao Tong University, a public research university located in China. There are many other rankings, but this one is considered one of the most authoritative, especially for the sciences. The U.S. leads the list overall, accounting for 16 of the 20. The United Kingdom boasts three, and New York and Massachusetts each count two. But California stands head and shoulders above the rest of the United States and the world with nearly a third of the top institutions.
California has a history of public and private investment in higher education, openness to immigrants and an innovation economy. As a result those bright minds have real opportunities for future employment and entrepreneurship. From Silicon Valley to Hollywood to San Diego’s biotech mesa, companies are learning from the state’s world-class universities and eagerly employing each year’s graduates.” California’s Amazing Worldwide Lead in Higher Education, an opinion piece by Chris Jennewein.
Is California in Crisis?

While there is no doubt that we are in crisis all around us we should add some perspective. In many cases we are facing challenges similar to other states but in different proportion due to our relative size and/or growth momentum. California consumers are often more educated, travelled, demanding and impatient. Such consumers require more value, cost-benefit and faster fulfilment, delivery and service after sale. In a social context we are facing big problems: the cost-benefit of government programs at all levels; delivery of public health and safety; multi-cultural and generational approaches to career, education, immigration and transportation. Then there are essential costs that stayed fixed and dependable for so long such as energy and water resources, environmental considerations, infra-structure and housing alternatives that no longer can be taken for granted.
The stage is set to confront difficult problems needing honest discussion among rivals, strategies that include adversaries, and determination to serve interests other than our own. The good news is that such problems attract the best minds, encourage innovative solutions and create new opportunities. Big problems pave the way for discovery, bi-products and leadership. This is an ideal lab for scientists, engineers and entrepreneurs. Due to the dominate position we hold and the upside potential we enjoy, forward is the only choice for #1.
What’s the Urgency?

We cannot procrastinate or cling to nostalgia for yesteryear. We can look forward with an acceptance of our state’s singular position in the country and the world. We must conform to our duty to lead. We must recognize the challenges of the present as a means to the strategic result of maintaining and extending our success into this new millennial century. Then, the path forward will include vision, devotion to purpose with willingness to risk capital and careers.

We need to re-discover our future. California has thrived on diversity – geographically, culturally, socio-economically, politically and ideologically. Some things seem urgent to a few while other essentials are needed by all. We must sort out the difference and manage our expectations realistically.

Thank you for Choosing FBS

Posted: 24th November 2015 by Melissa in Video
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This week is about giving thanks!
You have a choice in Property Management and we appreciate that you consider us. We hope you will take few minutes to watch this video about why we want you to choose us!

This video is a tribute to those who continue to work with FBS!

Thank you for choosing FBS!

Legal Questions Nov 2016 Part 2

Posted: 23rd November 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

10. Question: One of our tenants is moving out, but the roommate wants to stay and invite a friend of hers to take the out-going tenants’ place. How do we indicate this on the lease? Answer: One way is to draw up a new lease, assuming the new person meets your rental standards, with new signatures unless you want to hold the vacating tenant responsible for the remainder of their lease. In that event, simply add the new tenant to the lease and have them sign.

11. Question: Our tenants deposit their rent directly into our bank account. This has worked well because we know exactly when the rent has been paid. Now we need to evict for non- payment of rent. Can they still deposit the rent and if so, have I hurt my case?
Answer: Acceptance of rent after an unlawful detainer action (tenant eviction) has been filed is a waiver of the right to evict in most cases. To avoid this possible defense, write your tenant a letter documenting that you are not going to accept any more rent at this time. Periodically check your deposits and if rent was paid, send it back as soon as possible.

12. Question: I am a first time landlord and I rented my condo with a two-year lease. Now I need to sell and have been told that my tenant is the one with all the rights. What are my rights?
Answer: You have the right to sell the property and the buyer would “step into your shoes” as landlord and must honor the lease. The tenant must also allow access to the property to prospective purchasers, agents, etc…

13. Question: I am considering leasing to a corporation for use by their relocating personnel and/or short time visitors. Who/what do I name as the tenant (s) to assure that any future legal action can be handled expeditiously?
Answer: List the corporation and all occupants who are 18 or older as tenants on your lease documents.

14. Question: Can tenants change their locks without permission and refuse to provide a key to the property manager?
Answer: Most leases restrict any alterations to the premises without your permission or consent and most leases specifically restrict changing locks without the landlord’s permission.

15. Question: If a friend of a tenant appears to be living in the apartment, is there a time limit which allows me to compel the guest to fill out an application to be added to the rental agreement? Can the tenant have guests stay as long as they want?
Answer: If your lease prohibits subletting or assignment of the lease, or if your lease restricts the occupants to those named in the lease, the tenant could be in violation. You would need to prove that the person really moved in and was not just a guest. A common “guest” policy is two weeks.

16. Question: I do not know how to start the thirty-day notice to terminate. I have given a three-day notice for non-payment of rent, but I do not know what to do next.
Answer: If the tenant has not complied with the three-day notice, there is no reason to serve a thirty-day notice. Instead, you may start the unlawful detainer process in court immediately.

17. Question: My question concerns residents who deposit their check in the rent drop box after the due date. The lease provides that rent is due on the first and if it is not received by the fourth it is considered late and a $25 late fee is imposed. On the morning of the fifth, the rent drop is emptied and any checks received after that time are deemed to be late. Each month there are a few residents who put an earlier date on the rent check and drop it in after the fourth. How should we respond to this situation?
Answer: It makes no difference when the check is dated. If the check is delivered after the fourth, the tenant owes the late charge. By dating the check earlier, it only raises a question of proving when the check was first received. So long as you can demonstrate to the satisfaction of the court that the check was delivered late, you should be able to enforce the late charge.

 

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Legal Questions Nov 2016 Part 1

Posted: 9th November 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: If I gave a resident a thirty-day notice of rent increase which ends on the tenth of the following month, can I charge the resident pro-rated rent for the first nine days at the daily rental value before the rent increase and the other twenty one days at the daily rental value of the increased amount?
Answer: Yes, the rent increase is effective thirty calendar days from the date of service of the increase. The notice has to be for sixty days if the rent increase is more than ten percent from what it was one year before.

2. Question: Is there a “rule of thumb” for carpet depreciation?
Answer: It depends upon the quality of the carpet. You need to find out from the manufacturer the life span of the carpet under “ordinary wear and tear.” If it has to be replaced before that time, it may have been subject to extraordinary wear and tear and then the tenant would be held liable for the loss of use of the carpet.

3. Question: If the contract says no pets, but does not specify fish, can I stop a tenant from keeping a 150-gallon aquarium?
Answer: Fish are considered pets by most judges so they are violating the lease by having a 150-gallon tank. A small goldfish bowl may not constitute a major breach, but a 150-gallon tank most likely does.

4. Question: I have a former tenant who claims, since she had a one-year lease, she is not obligated to give a thirty-day notice.
Answer: There is no statutory requirement that a thirty-day notice of non-renewal be given during a fixed term lease, but if the lease requires a notice of non-renewal and she fails to give one, she is in breach of the lease and can be liable for any losses you suffer as a result.

5. Question: Can an apartment community charge a monthly pet rent and pet deposit to have a pet?
Answer: Yes, so long as it does not apply to service animals for the disabled.

6. Question: How does one collect on a judgment against a former resident?
Answer: A judgment can be collected in a variety of ways: wage garnishment, bank levy, seizure of non-exempt personal property and sale are the most common. A judgment debtor examination can also be used to locate assets, and if the debtor fails to appear, a warrant is issued for their arrest.

7. Question: One of our tenants was recently arrested and is incarcerated. How does this affect his lease? Is it considered abandonment?
Answer: The incarceration of a tenant does not have a legal effect on the tenant’s right under the lease. If the tenant breaches any part of the lease agreement, such as non-payment of rent, the landlord may take legal steps to evict, and can serve notices to the tenant while in jail.

8. Question: One of our residents is a day sleeper and complains about the noisy children next door. They are under school age and I don’t know how or if I should enforce excessive noise. Answer: Most courts recognize that apartment living is in closer proximity than single family homes and occupants must be more tolerant of disruptions, considering also the time of day or night and the cause of the disruption. If the noise the children make is not excessive for daytime tolerance, it is likely there is no violation of the lease or community rules. Having another witness to the noise would be helpful to see which side you end up on!

9. Question: One of our month-to-month residents gave a thirty-day notice to vacate the unit and now it is the thirtieth day and he refuses to move. What can I do now? Do I have to serve him with my thirty-day notice?
Answer: If the tenant’s notice was in writing, the tenant is legally bound to vacate the unit within the thirty-day time frame. Failure to do so allows you to immediately file an action for unlawful detainer (tenant eviction).