Landlord Attorney Corner: Separating Tenant Security Deposits from Landlord General Account

landlord, 11 November 2009, No comments
Categories: Landlord Attorney Corner, rent/deposits

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I recently received this question resulting from my article “NJ Landlords: Remember the Security Deposit Interest Deadline” :

“I deposited a security to my own account instead of an escrow account. I know under such conditions the tenant could ask that their security be used as rent. However, they have to let me know in writing AND give me 30 days to either give them their interest or notify them of where their security deposit is or both. Could I, within these 30 days, immediately open an escrow account, therefore invalidating their request to use the security deposit towards their rent.”

To answer this question with legal competence, I asked attorney Rob Gleaner, Esq. to help us with an answer. Here is Rob’s response:

“You are correct that New Jersey law requires a separate escrow account. I would suggest that you immediately open one. You will need your tenant to sign a W-9 form (available on the IRS web site) and also provide you with a copy of his drivers license. Both of these are required by banks. If you only have one tenant, a passbook or similar account would be fine. If you have several, some banks offer a “lump sum” account that divides up all of the money, tenant by tenant. You would want to talk with your banking representative to determine which is best for you. However, you should get this done immediately.

Keep in mind that this information is given based on the facts that you have provided. And no one can rely on advice from an attorney who has not been retained. In order to be able to rely upon any advice, you need to meet with and retain an attorney who is experienced in Landlord/Tenant law, who will be able to give you advice after a full and comprehensive interview. Before you do anything, you should contact an attorney for a full consultation. Good Luck! Rob Gleaner”
(Editor’s note: Robert Gleaner, Esq. can be reached at http://www.ragpc.com/ )

Regards,
Steven A. Boorstein
Landlord/Author
www.LandlordBusinessInsider.com
www.ManageRentalProperty.com
www.HowToBuyRentalProperty.com

HUD Fair Market Rents for 2010 – How current are your rental rates?

landlord, 02 November 2009, No comments
Categories: HUD, rent/deposits

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Every year HUD publishes their FMR (Fair Market Rent) data. HUD (US. Department of Housing & Urban Development) uses this data to figure out what the standard payments are for their Housing Choice Voucher program, including Section 8 tenants. I think this provides a wealth of information for landlord who want to know if their rents are competitive.
Each year they estimate FMRs for 530 metropolitan areas and 2,045 nonmetropolitan county FMR areas. They are required, by law to publish these annually by the start of the fiscal year, which is on October 1st.

The FMRs are estimates of gross rents, which include the rental unit/building plus the cost of all tenant-paid utilities, except telephones, cable or satellite television service, and internet service. So, keep this in mind when you look at the rents you charge. HUD will generally pay less if the tenant has to pay the cost of some or all utilities. like gas, electric and water.

In order to figure out what these rental rates are, they look at data such as the Decennial Census, provided by the American Community Surveys (ACS) and the American Housing Surveys (AHS) provided by the Bureau of Census. HUD updates the base year FMRs to “fair market” each year by also using local and regional CPI data for rents and utilities.

This is the link to the 2010 HUD Fair Market Rents

If you want to see FMR data for previous years, as well as the HUD FMR Overview, you can find it at HUD’s site
here.

That’s just one great tool that smart landlords can use to keep their rents current!

Regards,

Steven Boorstein

Author/Landlord

Landlord Business Insider – The Way SMART Landlords Do It!

Landlord Attorney Corner: Municipal Violations

landlord, 13 October 2009, No comments
Categories: Landlord Attorney Corner, legal issues/liability

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Here’s the first of a new kind of post for Landlord Business Insider– relevant articles written by attorneys for landlords. For now, at least, I’ve titled these articles as “Landlord Attorney Corner.” For the first one I asked Robert A. Gleaner, Esq., a local attorney whom I know, to do an article on issues that landlords may face with municipal violations. One of the areas in which Rob specializes is the legal side of property management issues. So, here’s an educational article to help make you smarter about a municipal violation issue that you might face, sooner or later, in managing your rental properties… by attorney Robert A. Gleaner, Esquire:

You come home from work one night and you find, in the mail, a ticket telling you that you are being cited by the Municipal Code Official because the grass is too long at your investment property. Unbeknownst to you, there is a Municipal Ordinance requiring the grass to be kept less than 8″ in height. You quickly drive down to the property that you have rented to that nice couple and you see what the Code Official saw: High grass!

When you call your tenant, he tells you that he was on vacation and then he got sick and yes, he did not have a chance to cut the lawn, as required by the Lease. You tell him about the ticket and he promises to get it cut. The issue remains – Who is responsible for the cost of the ticket? And how will it be defended?

The good news is that if the grass gets cut and you go into Court with the problem resolved, you may be able to convince the Prosecutor to recommend a dismissal of the ticket. In that case, you may walk away with a very minimal fine or maybe even just pay the court costs. Remember that just because you have a clause in your lease that requires the tenant to cut the grass, (or any other municipal requirement – eg., snow removal, trash cans being put out too early…), it is still your responsibility. You may want to consider a clause in your lease requiring the tenant to compensate you for any fines (and maybe even your time) if you are required to attend Court to resolve any issues created by the tenant.

*******************************************
The above general information has been provided by Robert A. Gleaner, Esquire, an attorney licensed to practice in New Jersey and Pennsylvania. However, no one can rely on advice from an attorney who has not been retained. In order to be able to rely upon any advice, you need to meet with and retain an attorney, who will be able to give you advice after a full and comprehensive interview. Before you do anything, you should contact an attorney for a full consultation. Feel free to contact Rob at http://www.ragpc.com/.

Renters Increasing Faster Than Rental Property Supply

landlord, 21 July 2009, No comments
Categories: landlord skills, management and motivation

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Image by Center for Neighborhood Technology via Flickr

Yet another good reason to consider rental property ownership…

In a recent article published on the Multi-Housing News website (March 26, 2009), President and CEO of Associated Estate Realty Corp, Jeffrey Friedman noted that over the next 10 years there are expected to be 450,000 new rental households per year. However, on the supply end of the equation, the number of new apartment starts is only around 200,000. “We know there is no overbuilding,” says Freidmen. If this trend continues, he notes “In fact, there will be half as many new apartments built as new renters coming into the market.” >

Another observation he makes is that the current unemployment level in the US will probably keep vacancy rates in the 5-8% range and make it more difficult for landlords to raise rents while unemployment levels remain high.

You can read the full article at http://www.multihousingnews.com and search for “New Renters Will Outstrip the Supply of Apartments Despite Economic Downturn, Says Associated Estates CEO”, March 26, 2009.

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