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…

FBS Hosts first Educational Open House!

Posted: 27th March 2015 by Melissa in Education
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Our first open house last night was a great success! Thank you to those that attended! We hope you walked away with some new and valuable information!

For more information about future events email melissa@fbs-pm.com

open house 1

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Rent Sense: What Does 2015 Mean to Me?

By Neil Fjellestad and Chris DeMarco

We want to share some data points that might be great news for your independent rental ownership, in 2015 and for several years to come. Because these are often shared separately over several years and not always presented within your context these data points and/or factoids remain undiscovered to our rental business. Let’s connect some dots.

Let’s consider this demographic fact. In the last U.S. century 1965 was the largest national high school graduating class. In this century we have matched or exceeded this national class size several times so far in the initial 15 years. This group of millennials is primarily renters that have been held captive during the recessionary lag in job creation and employment upward mobility. With the recovery maturing, so will their rental requirements. Trading up among renters will happen more readily than in the “for sale” segment. Floorplans, feature-benefits, common areas, neighborhoods, walkability, public transportation and drive times are all up for review.

Let’s look at the other end of the demographic spectrum. The age of the typical first home buyer is currently 31 years. The age of the typical repeat or trade-up home buyer is 52 years. Many of these potential repeat buyers do not physically need bigger homes and are not sufficiently motivated by perceived financial benefits to tie themselves to more real estate. Their primary financial goal is having enough income to retire within a reasonable timeframe. In more cases, they might be motivated to sell as the market comes back but then take other steps to invest toward retirement goals. In a separate lifestyle decision more boomers are becoming “renters by choice.” In other households, finances and/or credit circumstances that were created or exacerbated by the “great recession” require them to tailor their housing requirements and convert to rental alternatives.

Now, let’s complicate this picture with a surge of immigrants that generally start as renters in our communities. Regardless of how this “immigration” political football rolls you can be sure that certain employment facts will play out: a) most surviving employers have held back employment growth until they feel the confidence of several years of recovery b) pending ideas and entrepreneurs to drive them will create another generation of companies requiring new employees and generating a new source of competition for wages and benefits c) segments that were damaged in the recession like construction will come back and will compete with a continued surge in infrastructure repair and build out d) we need all the employable workers inside our borders whether “legal” or “illegal” e) we will probably continue to bring a growing percentage of our manufacturing and energy exploration back home f) in addition, we will need a steady flow of young people that like math and science which we need to import g) there are “hot spots” all over the world where young people that want to live and/or get ahead need to get out of where they are while back in the U.S. we often have not naturally produced sufficient and/or sufficiently motivated workers.

These and other data points will result in a flood of new potential renters in high employment centers that provide full economic support for this primarily young adult demographic with fun-loving boomers in the mix; such as southern California regions.
To be continued….. There’s more to consider, including the current and future supply of rental housing. Will existing single homes recently added to the rental inventory stay as rentals or will these be converted back to the “for sale” inventory? How about rental housing developers, will they anticipate and supply the rental stock necessary? How about the attitude of the” post-recession new generation” of renters? How much can they afford? What will be expected from their landlord? These are questions to be considered in a sequel.

KTS Legal Update March 2015

Posted: 13th March 2015 by Melissa in Legal Questions
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Landlord/Tenant Questions & Answers
Ted Kimball, Esq. March, 2015

1. Question:
Our tenant owes us back rent and is stating that he is probably going to file bankruptcy. We’ve been trying to work with him but are getting nervous now. Do we lose all the back rent if he files bankruptcy?

It depends. If he files a Chapter 7, there is little hope. If he files a Chapter 13, you may receive all or a portion of the back rent.

2. Question:
If a tenant’s rent is due on the first day of the month and there is no grace period, what is the earliest date I can serve a 3-day notice to pay rent or quit?

You can serve a 3-day notice to pay rent or quit when the rent is legally delinquent. California law requires that one business day must expire before the rent is considered delinquent. So, if the first day of the month falls on a weekend or holiday, you must wait until the day after the first business day expires before serving the notice. If the first day falls on a business day, the notice can be served on the second of the month.

3. Question:
If the landlord accepts a rent payment from someone other than the lessee, does that give them any rights?

It could if they are occupants of the property. This could convince a court that they are now tenants under a verbal agreement.

4. Question:
There was a grease fire in one of our rental units due to a tenant’s lack of knowledge of cooking. What is my obligation to provide alternate accommodations for this tenant? Am I required to keep her as a renter?

You are not obligated to put the tenant up. You may have a right to evict her based upon waste of the unit, which requires a 3-day notice to quit.

5. Question:
The tenants living in one of our apartments signed a one-year lease which states that there will be no pets allowed. They now have two cats in the apartment and are only in the second month of the lease. We served a 3-day notice to perform covenant or quit. They have chosen to leave. The rent for the entire month was paid. Are they entitled to the prorated amount of rent for the unused portion of the month?

No, they are liable for the remainder of the lease or up to the time you relet the premises, whichever occurs first.

6. Question:
My tenants paid an extra deposit for a pet. They gave away the dog after 2 months. Now they are asking if the pet deposit could be returned.

You do not have to account for the use of the deposit until 21 days from the date they return possession of the premises, so don’t refund any of the deposit.

7. Question:
I rented an apartment to a young man; he signed a one-year lease and paid the deposit and first month’s rent in full. He moved in today and less than 24 hours later, he is requesting to get out of his lease because another apartment that he prefers became available. Is there any kind of buyer’s remorse on signing a lease?

Your tenant is obligated to pay rent through the lease term or until the time the premises are relet, whichever occurs first. There is no buyer’s remorse.

8. Question:
In one of my books on landlord/tenant law, it says I can require the tenant to keep up with all building and health codes instead of me in exchange for
lower rent. Does this mean I would not be liable for any habitability defects?

California law requires that all residential landlords have given an implied warranty of habitability of the premises that cannot be waived by the tenant. The only exception is if the tenant agrees to make necessary repairs to render the property habitable in exchange for a rent reduction during the time of uninhabitability.

9. Question:
My tenant claims he paid the rent by mailing us a money order. We never received it and he says we should have received it. Who would bear the loss if we do not find the missing payment?

Under most leases, it is normally the responsibility of the tenant to ensure the landlord receives payment. Since it is up to the tenant to choose the method of delivery, he or she bears the risk that the payment is in fact made. However, some landlords will determine the method of delivery. In those cases, the landlord may bear the risk that the payment reaches the landlord.

10. Question:
One of the recent applicants to our apartment community claims he is paid “under the table”. How do I verify his income?

You really can’t, and because he is committing fraud, you should not consider this a legal source of income. If they fail to otherwise qualify, deny his rental application.

11. Question:
One of our tenants was recently arrested and has not paid the rent. We served a notice by “nail and mail” and it has been over three days. How do we serve the unlawful detainer (eviction) on the tenant while in jail?

Most jails will allow your process server to serve the tenant while in jail. It can take several hours before they are able to pull the inmate up, but your process server can be waiting for him or her and legally serve them while incarcerated.

12. Question:
One of our residents served us with a written 30-day notice and has failed to vacate after 30 days. Can I start the eviction process or must I serve a 30-day notice first?

If a residential tenant serves the landlord with a written 30-day notice and the rental term is month-to-month, the landlord may immediately file an unlawful detainer (eviction) action in court on the 31st day, providing the 30th day fell on a business day.

Ms. Management

Posted: 20th February 2015 by Melissa in Ms. Management

Ms Mgmt,

Q- Here’s my situation. I’ve been hired by a start-up PM Company that is going to go from 0 to 2500 apartment homes in the next 3 months. My task is to efficiently transfer this portfolio and bring these communities into a normal operating region. Obviously, this was presented to me as a unique career opportunity. I’m excited and prepared. However, any help you could provide is appreciated.

A – I’m pleased for you. This is definitely a challenge that will test your leadership and management skill set. Let’s break it down. Your ability to plan needs a complete inventory of resources and challenges. This means that each community has a thorough review of the financials, a detailed property walk and conversations with key people. From these inputs you will get a sense of the resources and challenges you can count on for an initial 90-day plan. Now organize the initial 90 days with an experiential checklist that you can utilize for orientation, communicating expectations, and evaluating results.
Since I don’t know the people or resources available to you I can’t predict how much hiring will be needed but I can predict that well designed job descriptions and performance standards for all your key employees at each community level is an important initial priority.

These documents will give structure to your expectations. If you utilize these consistently in your initial conversations with existing staff at each community you can discover the culture that is in place and how to respond to people and circumstances. In your hiring interviews you can design and ask experience based questions that reveal your needs as well as the skills and attitudes of each candidate. Your orientation and ongoing coaching communication will be direct and your intentions will be transparent. Quality verbal and written communication gets you a quick start to realistic goals and objectives for the initial 90-day program and becomes the basis for goal selection and performance review for each 90 days thereafter. You need to build a defined reputation for your region to insure your leadership is followed. Hope this helps and enjoy this unique opportunity to excel.

KTS Legal Questions- Feb 2015

Posted: 5th February 2015 by Melissa in Legal Questions
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FBS Apartments, Condos and Homes For Rent in 69 zip codes throughout the S.D. Region

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:
My tenant moved in a few years ago with a roommate, and they paid the security deposit together. One roommate moved out and another roommate moved in.  At that time, the rent was increased and they paid some additional security deposit. Who is entitled to the security deposit when the unit is vacated?

You should make the check out to all of them unless you receive in writing from any one of them that he or she has relinquished all rights to the security deposit to the others.

2.    Question:
Can a small claims court action regarding a security deposit dispute be appealed?

If the action was in small claims court, you can only appeal if you were the defendant, and then the case is heard all over again before a different judge.

3.    Question:
Under a twelve-month lease on a single family home, if a tenant breaks a window and does not repair it after a week or two, can we take the money out of the next rent payment?

It is better to fix the window, or require the tenant to fix the window with a licensed contractor.  If the tenant refuses to pay for or fix the window, serve a 3-Day Notice to Perform Conditions and/or Covenants or Quit. If he/she refuses to pay or fix the window in three days, you can commence the eviction.

4.    Question:
We have a tenant who has been in the unit for one year and has painted it dark purple. Can I charge the resident for returning the paint color to white when he vacates the unit?

Yes, if you have a lease provision against making alterations without your consent. You can only charge the actual cost of turning the paint from purple back to white.

5.    Question:
After sending a tenant an itemized disposition of security deposit, (there is a balance due to us), how long must I wait before taking her to court? Should I contact her one more time before doing so?

You can take the tenant to court immediately, and if your lease was written, the time within which you must bring an action is 4 years. It is always a good idea to attempt to resolve the issue first before seeking court action.

6.    Question:
A former tenant is threatening to sue us over the security deposit we returned. They cashed the check yesterday.  Does that mean that they “agree” with the amount?

No, they can still cash the check and claim you owe them more of the deposit.

7.    Question:
One of my tenants vacated the apartment without paying the water bill. Will I have a problem getting the water turned back on? I do not want to pay for my tenant’s delinquent bill.

Thanks to the California Apartment Association, local water departments cannot charge the owner of rental property for unpaid bills incurred by former tenants of the property.

8.    Question:
If an owner serves a 3-Day Notice to Pay or Quit upon a tenant and the tenant decides to move out, can the owner deduct from the security deposit the amount that was demanded in the 3-day notice plus the next month’s rent that would have been due if the tenant had given the contractually required 30-day notice before leaving?

Yes, California law allows a landlord who has a month-to-month lease with a tenant who vacates without notice, to charge rent up to thirty days after the premises were abandoned, unless relet within the 30-day time.  In that event, the landlord may only charge rent up to the day it was relet. The unpaid rent may be deducted from the tenant’s security deposit.

9.    Question:
One of our tenants claims we owe him for the loss of his food stored in his refrigerator. The refrigerator broke down, and we had it fixed within two days.  Do we have to pay for his food?

Not unless your tenant could prove that you were negligent in the maintenance of the refrigerator or knew or should have known it would break down.  Landlords are not the insurers of their tenant’s property loss.  Smart tenants purchase renter’s insurance to cover these types of losses.

10.    Question:
I am an owner of a duplex and I suspect my next door neighbor is dealing drugs. I have a 6- month agreement with him that is not up for several more months. What can I do?

First, call the police and inform them what you know about the illegal activity. Work with the police to gain enough evidence that will allow you to proceed with an unlawful detainer (eviction).  If you can prove the illegal activity, the law allows the owner to serve a 3-Day Notice to Vacate.  Failure to comply with the notice will give rise to an action for unlawful detainer.

11.    Question:
I rent out a condominium unit and I have a problem with people leaving half way through a one year lease.  How do I collect my lost rent?

In order to collect your unpaid rent, you could sue your former tenants in small claims court. Once you receive a judgment, you could go through formal collection procedures such as garnishing their wages or levying on their bank accounts.

12.    Question:
I heard that unless your rental agreement requires rent to be paid in advance that it is not owed until the end of the month.  Is this true?

Under California law monthly rent is not due until the end of the month unless the lease or rental agreement require the rent to be paid in advance. That is why virtually every written rental agreement contains that language.

13.    Question:
I rent a garage to two young men under a 6-month lease and I suspect that they are living there. I specifically told them they could use the garage for storage of their personal property only.
What can I do?

In California, an owner of rental property can limit the tenant’s use of the property for specific purposes. If the tenant uses the rental for something else, he could be evicted. If you could prove that the tenants were residing in the garage, you could serve them a 3-Day Notice to Perform or Quit, followed by an eviction if they fail to stop using the garage as their residence.

Rent Sense as seen in Landlord Magazine

Posted: 3rd February 2015 by Melissa in Rent Sense
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“Rent Sense” is a syndicated column respected and enjoyed throughout California by independent rental owners, serious real estate investors, industry professionals and savvy renters of choice. In this month’s issue of Landlord Property Management Magazine Neil Fjellestad and Chris DeMarco discuss why pet-friendly rentals are a choice that needs to be fortified with appropriate policies requiring communication and enforcement. Rental ownership is absolutely the investment of choice for individuals that have the stamina and the sense to buy and hold. Long-term rental ownership requires professional management as well. Neil and Chris are teaching what they know from more than four decades of RE investment, operating rental properties and the real estate related businesses that support quality housing. They still possess the passion that drives their daily involvement with people and property.


Legal Questions Jan 2015- Part 2

Posted: 27th January 2015 by Melissa in Legal Questions
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11.I have been a resident manager for over four years and would like to know what a manager can do other than evict when a tenant continues to cause disturbances, e. g. loud music, singing, throwing cigarettes over the patio, etc…

The threat of eviction sometimes is enough to convince a tenant to respect the quiet enjoyment of the neighboring property.  Calling the police for extraordinary disturbances may also serve to quiet down an unruly tenant. If all else fails, you may consider eviction before other residents decide to move.

12.    Question:
I agreed to allow a resident to move in even though he could not pay the full security deposit. He was supposed to pay one third of the deposit each month. He made the first two payments but has now failed to make the third and final installment. What type of notice should I use?

The law provides that in the event of a breach of the lease other than non-payment of rent, a three-day notice to perform conditions and/or covenants or quit be utilized.  Like a three-day notice to pay rent or quit, this notice only allows the resident three days to comply or be subject to unlawful detainer litigation.

13.    Question:
I have a tenant who never pays his rent until he receives a three-day notice. We normally serve notices on the eighth of the month even though the rent is due on the first.  He is on a one-year lease and I don’t know my legal rights.

You can try serving him with a three-day notice to pay rent or quit earlier than the eighth of the month. If he fails to make payment within the three-day period you have the right to refuse the rent and commence eviction proceedings.

14.    Question:
One of our tenants has a guest who has been verbally abusive to me whenever I ask him who he is visiting. We have a large apartment community with many amenities and we need to be careful that complete strangers are not using our facilities. What can I do?

A tenant is responsible for the conduct of his guests.  Rude conduct and behavior for enforcing reasonable rules may lead to your decision to not renew the tenant’s lease when it expires. If it continues or escalates to a major disturbance, an eviction can be filed.  Be sure you are not asking “some” guests who they are visiting to avoid claims of discrimination.

15.    Question:
I have a tenant who always “races” his car in the parking area. We have families with small children and a posted five mile per hour speed limit. What can I do to make him stop?

Creating safety hazards on the premises in a continuous manner may be good grounds for eviction based upon the nuisance activity. If the reckless manner in which he operates his vehicle continues after warnings, a three-day notice to quit may be served.

16. Questions:

I have a tenant who left her window open when it rained causing water damage to the floor. She said she did not have to pay for the damage because we have insurance for this type of thing and we did not lose anything. What should I tell her?

Your insurance has nothing to do with a tenant’s responsibility for negligence.  If your insurance paid for the damage, they would have the right to be reimbursed by the tenant who caused the water damage.  You would also be able to recover the deductible you paid.  If the tenant has renter’s insurance, he/she may be covered for this type of loss.

17.    Question:
We had to evict a real trouble-maker recently, but he keeps coming back to the property to use the swimming pool and jacuzzi.  He is not anyone’s guest and some of the residents are frightened of him. What should I do?

Calling the police for a criminal trespass and disturbance of the peace is the first recommended action.

18.    Question:
I have a suspicion that one of our tenants falsified his application by giving me a different name and social security number than his own.  If I can prove this, what are my rights? I have a six- month lease and he just moved in.

If you could prove the falsification and you would not have rented to him had you known the true set of facts, the lease would be deemed based upon fraud and set aside. You could bring a successful unlawful detainer (eviction) lawsuit to regain possession of the premises.

19.    Question:
My evicted tenant left the property voluntarily three days before the sheriff was scheduled to do the lock-out.  Is it wise to keep the appointment or should I just cancel?

In some cases, it only appears that the tenant has vacated voluntarily.  A wrong guess could lead to problems.  Many property managers elect to meet the sheriff for the official lock-out. Some property managers decide on a case-by-case basis whether or not to take possession prior to the sheriff’s arrival.

Rent Sense in Apartment Magazine

Posted: 21st January 2015 by Melissa in Rent Sense
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“Rent Sense” is a syndicated column respected and enjoyed throughout California by independent rental owners, serious real estate investors, industry professionals and savvy renters of choice. In this month’s issue of Apartment Management Magazine Neil Fjellestad and Chris DeMarco discuss why rental ownership is absolutely the investment of choice for individuals that have the stamina and the sense to buy and hold. Long-term rental ownership requires professional management as well. Neil and Chris are teaching what they know from more than four decades of operating rental properties and the real estate related businesses that support quality housing. They still possess the passion that drives their daily involvement with people and property.




The view of San Carlos from Cowles Mountain in 1969


Low vacancy means rising rents in SD

Posted: 19th January 2015 by Melissa in Uncategorized

Click below to read the article in the latest Union Tribune