Chapter 14 Tenant and Owner Relations

I. Tenant Relations A. TENANT EDUCATION In California and several other states, if a lease is negotiated in Spanish, then a Spanish translation must be provided to the tenant. B. RENTING TO FRIENDS AND RELATIVES Your relationship with tenants should be on business basis only. C. ROMANTIC ENTANGLEMENTS Don’t get involved with a tenant or rent to anyone you are involved with.

I. Tenant Relations (cont.) D. TENANT COMPLAINTS You should keep a record of every tenant complaint. It is NOT enough to be technically honest with answers, you should be scrupulously honest when servicing tenant complaints and other aspects of tenant relations. E. LET THE TENANT GO

I. Tenant Relations (cont.) F. DEATH OF A TENANT G. WAITING LIST You must be meticulous in following the order of the waiting list of your prospective tenants when taking applications for units and qualifying prospective tenants.

I. Tenant Relations (cont.) H. TENANT’S RIGHT TO REPAIR Many states allow a residential tenant to make repairs and deduct the cost from the rent in cases where the repairs are necessary for habitability and the lessor has failed, after reasonable notice, to make the repairs. A court might even consider failure to repair within 24 hours after a notice is served to be a reasonable period.

I. Tenant Relations (cont.) I. TENANT PAINTING J. WASTE K. EXTENDED TENANT ABSENCE L. CHANGE IN TERMS/END OF TENANCY For a month-to-month tenancy, the lessor can change the rent or other terms of the tenancy. However, a notice (usually 30 days) is required to do so.

I. Tenant Relations (cont.) M. NEVER HAVE SURPRISE CHARGES N. FAILURE TO TAKE POSSESSION O. SURRENDER OF LEASE There should be a written surrender agreement. P. THE FIRST EXCUSE Q. THE ELEVEN MONTH YEAR In management, you have a duty to the owner.

I. Tenant Relations (cont.) R. EVICTION 1. Quit or Pay Rent 2. Quit or Cure 3. Quit A partial payment accepted after the three-day notice will also invalidate the unlawful detainer action.

I. Tenant Relations (cont.) S. RENT AFTER NOTICE T. MENACING CONDUCT BY A LANDLORD IS PROHIBITED U. CONSTRUCTIVE EVICTION V. RETALIATORY EVICTION You must avoid any appearances that an eviction is retaliatory.

I. Tenant Relations (cont.) W. PHYSICAL EVICTION Resorting to inappropriate eviction methods may subject you to costly lawsuits. Damages for cutting off utilities, for example, are often set by state statues. X. SEIZURE OF PROPERTY

I. Tenant Relations (cont.) Y. PAY THEM TO LEAVE An advantage to a tenant, in agreeing to leave, is that their credit report would NOT show an eviction. Z. MITIGATION OF DAMAGES A landlord can sue a former tenant for rent as it becomes due, but CANNOT sue for the entire amount owed on the lease because the actual damages have yet to be determined.

II. Alternatives to Litigation Today, litigation is only one of the ways used to resolved different types of controversies Not only are contractual rights being decided outside of the courts, but also certain types of property rights

II. Alternatives to Litigation (cont.) A. ALTERNATIVE DISPUTE RESOLUTION (ADR) Before they’ll hear a case, California court judges routinely require litigants to go to negotiation, mediation, or arbitration, to save judges time and taxpayers money Advantages of ADR Speedier Less expensive Use of an expert as the decision maker Proceedings are confidential Decisions are final and not appealable Less formal

II. Alternatives to Litigation (cont.) B. NONADJUDICATIVE AND ADJUDICATIVE ALTERNATIVES NONADJUDICATIVE – parties are encouraged to voluntarily enter into agreements that settle the controversy ADJUDICATIVE – mirrors the judicial process in that a third party decides the controversy, much as a judge does in court

II. Alternatives to Litigation (cont.) 1. NEGOTIATION NEGOTIATION – is a voluntary process where parties attempt to settle their conflicts in a peaceful manner Distributive Integrative

II. Alternatives to Litigation (cont.) 2. MEDIATION MEDIATION – a neutral third party assists the parties in voluntary negotiating a settlement to their dispute by helping them recognize their interests involved Advantages to Mediation Parties retain greater control of proceeding Parties know soon if the matter and issues may be resolved, and differences narrowed The process is quicker and less expensive, if it is resolved

II. Alternatives to Litigation (cont.) 3. ARBITRATION ARBITRATION – the parties agree to submit the dispute to a neutral third party for a final, binding decision, unless agreed otherwise Binding Non-binding

III. Owner Relations A. COMMUNICATIONS Owner questions, letters and calls must be promptly acknowledged and questions answered fully and honestly. B. FIDUCIARY DUTIES 1. Loyalty 2. Confidentiality Once two people have been told something, it is on the verge of becoming public knowledge.

III. Owner Relations (cont.) B. FIDUCIARY DUTIES (cont.) 3. Fair and Honest Dealing 4. Full disclosure Failing to inform an owner of any information you had (other than confidential) of a type that an owner could reasonably be expected to want to know would be a violation of your disclosure duty. 5. Reasonable Care and Skill You have a duty to use the reasonable care and skill that an owner would expect and that a property manager should possess. 6. Obedience

III. Owner Relations (cont.) C. UNDERESTIMATING COSTS AND OVERESTIMATING INCOME “Low-balling” has NO place in property management. D. RELATIONSHIPS WITH OWNERS

III. Owner Relations (cont.) E. HOMEOWNER ASSOCIATION MANAGEMENT Homeowner associations are often hotbeds of politics with groups wanting to usurp the present association management. F. VIOLATING THE LAW If an owner asks you to prepare any false document or report, or to pay any bills where the recipient is NOT entitled to the monies as a property expense, don’t do it. Such activity could also lead to suspension or revocation of your real estate license. G. SUING A PRINCIPAL

Chapter Summary Tenant Relations Alternatives to Litigation Owner Relations