When can I raise the rent? Are there rules on how much of an increase I can charge?

Answer

Absent any rent control restrictions, a landlord’s right to raise rents depends upon whether a tenant has a fixed-term lease agreement or has a month-to-month rental agreement.

Raising rent for an existing tenant is a somewhat different issue than setting the rent for a vacant unit.

When considering whether to raise the rent for existing tenant, whether for extension or renewal of a long-term lease or with proper notice for a month-to-month tenant, there usually can be no specific criteria other than some basic principles and each case must be considered on an individual basis.

The decision for a specific case must be based on a number of factors, including:

• The known and unknown possible issues regarding condition of the unit,
• Local market conditions,
• The current rent compared to market, and
• The known history of the existing tenant compared to the uncertainty of the next one.

The most basic thing that must be considered is what amount of increase would motivate the tenant to move.

Tenants will usually not leave over a reasonable increase that still leaves the rent slightly under market because moving is costly in a number of ways including the following:

• It requires time and expense to locate an acceptable new unit,
• There will usually be some overlap in tenancy, meaning a period of paying rents and utilities for both units,
• Time and money will be required to make the physical move,
• Time and effort will be required to clean the old unit,
• Acceptable replacement unit might be as high as or higher than the current unit,
• Significant funds will be required to pay the security deposit and first month’s rent for the new unit,
• Phone and utility transfer costs,
• There is a possibility that some or all of the old security deposit will not be returned, and
• The new landlord may turn out to be less tolerant than the old landlord.

How large a percentage rent increase will trigger a move depends on a number of factors, including:

• The current market situation as seen by the tenant,
• The income and assets of the tenant,
• How busy the tenant is with employment, business, and/or social involvements, and
• The personality of the tenant.

Larger rent increases can often be justified because of property improvements or added amenities.

It is almost always true that it is better to give periodic small increases rather than large occasional ones. This is primarily because no single small increase will be sufficient to trigger a move.

The percentage of increase that should be given depends on a number of factors including the following:

• The time since the last increase,
• How far the subject rent is below current market rent,
• The rate at which rents are rising,
  • The known quality of the current tenant compared to the unknown, but likely, quality of a replacement tenant considering current market conditions, and
  • The landlord’s tolerance for a vacancy.

Landlords are prohibited from raising rents as retaliation against a tenant exercising a legal right and/or raising rents in a discriminatory manner.

How much rent can I charge?

Answer

A critical component of a landlord’s business is the setting of rents. The net cash flow from a rental property depends on the rents collected less the expenses of ownership and operation of the property. Additional cash flow usually results from tax savings due to depreciation deductions.

Except in those of jurisdictions that have rent control, the landlord has the right to set rents at any amount he chooses. However, rent that is too high can add to the length of time a property sits vacant. Prolonged vacancy means additional costs that cannot be offset by a subsequent rental. Rent that is too low can bring more applicants, but many of those may not be qualified under the landlord’s rental standards. If the landlord’s costs are not met by the rental rate, it may not make sense to offer a low rent rate to avoid vacancy, and then lose money from such a low rate.

Most landlords set rents at amounts in a range that is consistent with the market rent, the rent for comparable available units in a specific area. A common practice is to charge a rent amount that is at or slightly below the market rate for similar units and amenities in the neighborhood. Studies have shown that tenants who feel their rent is set at a fair rate are less likely to become troublesome tenants and in fact have a longer tenancy stay than the average.

Setting the rent much above the market price has a number of implications. First, it is likely a landlord will receive fewer applicants from his advertising efforts. Tenants searching for a new rental can very quickly determine the value of a given type of unit in a particular area. For many, maybe most, tenants, a rent being even only 10 percent above market will eliminate the unit from their search. Second, fewer applicants means a reduced pool of screened prospects from which to select a tenant. This may require that a landlord adjust his rental standards in order to fill the vacancy or be willing to accept a vacancy remaining on the market for a longer time by maintain the current rental standards.

The best way to determine market rents is to perform a market survey. This can be as informal as talking with fellow landlords of neighboring properties. Or, a more inclusive survey could be checking various online rental listings and local classified ads, personal visits to available rental units or researching local real estate market data. In general, the more surveying and collection of information, the more closely a landlord can determine market rent. However, a landlord must be certain that he is comparing similar properties in the same area. As a rule of thumb, for comparison purposes, a landlord should pick the properties that most renters are likely to consider for their next move.

The decision regarding how much rent can be charged cannot be reached by using simple formulas. Rent rates always depend on several factors:

• Market conditions – that is, supply and demand for property of the location, type, and condition of the landlord’s property,
• What the subject property offers in amenities and updates compared to the competition,
• The state of the local economy,
• Marketing efforts to attract qualified applicants,
• The size and depth of the applicant pool, and
• Government restrictions.

The bottom line is that the market will generally determine the amount of rent and that amount may be higher or lower than what was possible at a previous time.

Question

I own a rental house. Although the lease agreement states that no pets are allowed, the tenant’s dog damaged the plastic water supply line where it enters the house resulting in water damage in addition to the broken line. What can I do?

Answer

It depends on a number of things, including the terms of the lease agreement, particularly whether or not the “no pets” clause is adequately written and, potentially depending on a particular judge, and possibly whether or not it specifies that eviction will result from noncompliance. It can also depend on whether you took immediate action regarding the dog upon first discovering its presence on the property, as failure to have done so can indicate a waiver of the lease clause.

Assuming the “no pets” clause is adequately written, there is no “waiver” issue, and you wish to get rid of the tenant, you can terminate the lease by serving the tenant with an “Unconditional Quit” notice, if such a notice is allowed in your state. If the tenant does not comply by vacating within the time specified in your state, you can initiate an eviction proceeding. If the court of jurisdiction allows, you may be able to ask for money damages in the amount of the cost of repairs in the same complaint (ask the office of the court clerk).

If you wish to keep the tenant and have him/her pay for the damages, you can serve him with a demand for immediate reimbursement for damages and serve the “Cure or Quit” notice if payment is not received forthwith or instead file a lawsuit for damages without terminating the lease.

In the meantime, if you have not already done, you should take photos of the damages, make notes regarding the matter, and/or have them seen by the person you will hire to make the repairs if not you. Also, if you have not already done so, you should immediately have the damages repaired. Not doing so might allow the tenant to claim constructive eviction and break the lease or sue you for damages because of loss of water service. It is quite likely that the tenant, being the cause of the problem, would not win in court on such a complaint, but that could depend on a number of factors including the exact facts of the case and whim of a judge. Another advantage of having it repaired is that you will have the exact amount of repair cost for your claim against the tenant.

Finally, if your state’s statutes do not provide for an “Unconditional Quit” notice, you would have to proceed using a “Cure or Quit” notice, the potential “cure” being immediate payment by the tenant for costs of repairs. For either type of notice, if the tenant refuses to comply with the notice within the time period provided for in your state, you would file for eviction.

If you are not experienced in court proceedings, you should consider utilizing a competent landlord-tenant law attorney, preferably one experienced in representing landlords in the particular court of jurisdiction.

Question

I own a rental home that I wish to list for sale. The lease includes the following clause:

12. INSPECTION OF PREMISES. The Landlord and/or Landlord’s agents shall have the right at all reasonable times during the term of this Agreement and any renewal thereof to enter the Premises for the purpose of inspecting the Premises and all buildings and improvements thereon. And for the purposes of making any repairs, Landlord may deem additions or alterations as appropriate for the preservation of the Premises or the building. Landlord and its agents shall further have the right to exhibit the Premises and to display the usual “for sale,” “for rent” or “vacancy” signs on the Premises at any time within forty-five (45) days before the expiration of this Lease. The right of entry shall likewise exist for the purpose of removing placards, signs, fixtures, alterations or additions, but do not conform to this Agreement or to any restrictions, rules or regulations affecting the Premises.

Does the BOLD section mean I cannot list it for sale until the lease is within the 45 day period of expiration? Also, if I sell the property do I need to negotiate a buy out of the exiting lease with the tenants?

Answer

State laws do not limit and lease agreements usually do not limit the landlord in marketing for sale or leasing a tenant occupied property. However, this particular clause does appear to limit the landlord to within 45 days prior to lease expiration for displaying signs for either selling or leasing. In view of the opening sentence of the clause, one could argue that giving the landlord the right to do so within the 45 days does not eliminate the right to also do so earlier because it does not explicitly forbid doing so. However, contrary to what one sees on TV and in the movies, such technicalities seldom work in real courts.

Even if the words are taken to limit signs, the words do not limit listing of the property. In fact, the words do not even prohibit showing of the property to potential tenants or buyers at any time, whether before or within the 45 day period. Most leases have a specific clause allowing the landlord or his agents to enter the property for a variety of purposes, usually including showing the property to potential tenants or buyers and some states provide that right by statute. Assuming your lease agreement has such a clause, you should compare this clause with the BOLD one to see if it clarifies or conflicts in a way that might create ambiguity and possibly render the clause unenforceable.

I think that the most certain way to resolve the issue might be to encourage cooperation by providing some incentive to the tenant. Perhaps, unbeknownst to you, the tenant would be interested in terminating his lease early and early termination could be traded for modification of the clause. Otherwise, payment of some nominal amount of money might encourage cooperation.

Trying to market an occupied rental unit is usually not a good idea. Tenants can refuse to fully cooperate, leading to refusal to allow entry when an agent and client show up at an agreed upon time. When word gets around, agents will cease marketing the property. A tenant’s serious failure to cooperate can only be resolved by evicting the tenant for default on the lease agreement, something that can take months to accomplish. Furthermore, tenant occupied properties often do not show well and will result in lower offers or none at all.

The best way to market a rental property that will result in the  best price with the least hassle is to wait until it is vacant – either because of lease expiration or having done a lease buyout – and not list it until all necessary and/or desired cleaning, repairing, and/or improving has be fully completed.

If you want to retain the right to market a rental while occupied by a tenant, I strongly suggest that you rewrite the clause to more clearly state what you wish it to say in a way that is unambiguous and not open to interpretation.

Unless the lease agreement has a specific clause requiring a buyout or otherwise terminating an existing lease (not often seen), leases go with the property. That is, both the tenant and the new owner must abide by all terms of the lease agreement. When there is significant time left on the existing lease, this can mean that the property will not be of interest to any potential buyer who wants to personally occupy the property.

Finally, you don’t mention the state where your rental is located. There are only about a dozen states that don’t have a statute requiring a minimum advance notice period for entry to a rental unit, typically being from 24 or 48 hours. Accordingly, it might not be legal for your lease to provide an “unnoticed entry” for any reason except for an emergency.

Landlord’s No Smoking Policy

Does a no-smoking policy benefit multi-unit housing? Many landlords think so. A no smoking rental policy can help protect the landlord’s investment in the property and the health and safety of his tenants.

As landlord, there is a legal duty of care to tenants to exercise reasonable care in the management of the property to help protect persons and property from unreasonable risks of harm. A landlord has the right to prohibit dangerous, harmful, and damaging behaviors on the rental properties. Accordingly, a landlord establishes his rental business policies and practices to reduce known risks, manage operating costs, and fill vacancies. A no smoking policy is a rental policy, developed in a manner similar to other rental policies, to help protect the business and support its goals.

The most commonly asked question regarding a no smoking policy is whether it is legal for a landlord to prohibit smoking on the rental property and in the rental unit. Landlords have the legal right to set rental policies on how a tenant may use the rental property. A no smoking policy is an example of a limitation of the tenant’s use of the rental property just as a no pets policy is a limitation on the tenant’s use of the property.

There is no state or federal constitutional right to smoke. Smoking is not a protected characteristic under any federal, state, or local fair housing laws. Smokers are not a protected class under federal Fair Housing Act regulations.

A landlord can legally establish a no smoking policy for his rental properties. However, the no smoking policy cannot be a “smokescreen” for illegal discrimination against prospects, applicants, and tenants and must be developed and administered in a non-discriminatory manner that is compliant with applicable landlord-tenant statutes.

A no smoking policy is a no smoking rule, not a no smokers rule. The no smoking policy applies to the activity of smoking, not to the individual’s status as a smoker. Smokers can apply and qualify for tenancy per screening and selection criteria. What they cannot do is smoke inside the building or in other areas as specified in the no smoking policy, such as outdoors, balconies, or patios.

A smoke-free property provides benefits to landlords. Considerations for implementing a no smoking policy include:

Potential Cost Savings

Turnover costs to renovate a unit that was occupied by a smoker can be twice as much or more than normal renovation costs depending upon how long the tenant smoked in the unit and how long the tenant lived in the unit.

While ‘wear and tear” expenses cannot be charged to any tenant moving out, there can be additional repairs or replacements needed to restore a smoker’s unit to rentable conditions. There will be extra costs to clean and/or replace carpeting, flooring, or tile, replace window coverings, repair or replace surfaces with burns or stains, clean, prime, and paint walls and ceilings to cover stains or odors, replace air filters, clean ventilation ducts, and thorough cleaning of appliances and fixtures to remove smoke grime and odor.

Care should be taken to document move-in/move-out conditions of the rental unit so as to correctly and adequately document security deposit deductions for tenant damages.

Building maintenance costs may be reduced as less cleaning is needed to keep indoor common areas clean and sanitary. The life cycle of mechanical systems may be extended if systems, such as air handling systems, are able to operate more efficiently and require less maintenance and repair. Building utility costs may be lower as a result of system efficiencies.

Building grounds maintenance costs may be reduced once debris from discarded smoking materials is eliminated.

Potential Insurance Savings

A nonsmoking policy may qualify the property for a lower insurance rate. Some insurance companies may give a premium reduction to landlords for having a smoke free property.

By prohibiting smoking on the premises and in the unit, it is very likely that fewer smoking-related claims will be filed with the insurance carrier. This could also mean savings as reflected in a lower insurance premium.

Property Management

A no smoking policy can have a positive impact on the business bottom line. Studies have shown that tenants, both smokers and non-smokers, prefer smoke free properties. Smoke free is a market driven, highly desirable amenity that tenants are willing to pay more for. Prospective tenants are drawn to properties advertising a no smoking policy. Market studies show vacancy rates are lower and days on market are shorter for no smoking properties. A no smoking policy not only attracts tenants but helps to retain tenants.

Considerations must also be given to:

Impact on Property Values

Smoke free properties are more attractive to future buyers. Tobacco smoke can be damaging to structures and fixtures and not easily remediated. The resale value of the investment property could be lowered because of residual smoke damage. Some potential buyers may not even consider properties that have extensive smoking-related issues.

Fire Hazard Risk

There is a very real danger from smoking-related accidents and careless handling of smoking materials. Smoking is a leading known cause of fires, resulting in injury, death and property damage. According to studies, careless smoking is the most common cause of death in home fires and the third leading cause of fire injuries in the United States.

Legal Obligations

As noted above, landlords have a legal duty of care to provide reasonable standard of care for health and safety of their tenants. Landlord-tenant statutes obligate the landlord, under the warranty of habitability, to provide safe and sanitary rental living conditions. Additionally the tenant has the right under the covenant of quiet enjoyment, to be free of nuisance or harassment.

It may be that landlords are potentially more liable by law for not having a “no smoking” policy. Tenants are more knowledgeable about health risks and more savvy about legal options to protect their health. It is well documented that exposure to secondhand smoke causes serious health issues. Tenants who develop health issues caused or exacerbated by exposure to secondhand smoke may file legal action against the landlord if the landlord fails to take appropriate steps to resolve the issue.

Tenants have been able to recover against landlords for failing to protect tenants’ rights for safe habitable living conditions. State courts have ordered significant rent reductions, judicial termination of leases or other penalties under legal theories of nuisance, breach of warranty of habitability, and breach of the covenant of quiet enjoyment.

Fair Housing Act / Americans with Disabilities Act

Non-smokers with serious breathing disabilities or smoke allergies may have legal protection under the Fair Housing Act (FHA) and the Americans with Disabilities Act (ADA). Landlords may be obligated to take reasonable measures to lessen damaging effects on such individuals.

The federal Fair Housing Act (FHA) prohibits housing discrimination based on race or color, religion, sex, family status, national origin, or disability. The Fair Housing Amendments Act expanded coverage of the FHA to prohibit discrimination against people with disabilities including those with severe breathing problems which are exacerbated by secondhand smoke.

People who have a physical or mental disability (including breathing) that substantially limits major life activities or have a record of such disability, or are regarded as having such a disability are protected by the Fair Housing Act.

Landlords must provide reasonable accommodation to tenants with disabilities. A reasonable accommodation is a change in rules, policies, practices, or services that may be necessary to afford a person with a disability the equal opportunity to use and enjoy a dwelling. Failure to provide a reasonable accommodation may be construed as discrimination.

Potential remedies may include repairs or modifications to the building which do not impose an undue burden on the landlord, or smoke free policies for the building including total bans on smoking in the building or portions thereof.

Smoking is not recognized as a disability. It cannot be used to request reasonable accommodation.

Health and Safety Concerns

Tobacco Smoke

The U. S. Surgeon General has declared that there is no safe level of exposure to tobacco smoke. Exposure to tobacco smoke, direct or secondhand, causes adverse health outcomes.

Some jurisdictions now require landlords to notify renters or purchasers about a building’s smoking policy. Several municipalities and a few states have adopted a smoking policy disclosure ordinance or statute requiring property owners of multi-unit rental properties to inform prospective residents of the smoking policy on the property, whether it is smoking-permitted or smoking-prohibited. Such disclosure may help the prospective tenant or buyer make a more informed housing decision.

Secondhand smoke

Exposure to secondhand smoke can lead to disease, disability and death. Smoke cannot be contained once it is in the air. Smoke infiltrates all areas regardless of the use of ventilation systems, air cleaners or purifiers.

Secondhand smoke is the exhaled smoke and other substances emanating from the burning of tobacco products that have been exhaled, or breathed out by the person smoking. It is a known carcinogen, classified as a toxic air contaminant, in the same class of contaminants as asbestos, lead, and vehicle exhaust.

Case law has held landlords responsible for exposing tenants to secondhand smoke.

The only way to stop secondhand smoke is to ban smoking altogether.

Thirdhand Smoke

Thirdhand smoke is residual nicotine and other chemicals from second hand smoke that is left behind on a variety of household surfaces. Thirdhand smoke can cling to hair, skin, and clothes. Thirdhand smoke can be found in furnishings, carpets, walls, household dust, or other common objects and surfaces where smoking occurred. Residue can be found long after smoking has stopped. The residue builds up over time, becoming progressively more toxic. Resistant to the normal cleaning procedures, thirdhand can’t be eliminated by airing out the room, opening windows, using fans or air conditioning, or restricting smoking to only certain areas of the dwelling.

As with second hand smoke, the only way to protect nonsmokers from thirdhand smoke is to create a smoke-free environment.

Bedbug Awareness

Bedbug Awareness Week is an annual public outreach campaign by the pest management industry to help educate consumers about bedbugs, bedbug protection measures, and treatment protocols. This year’s awareness week was June 5-11.

For reasons of consumer health, safety, and peace of mind, bedbug infestations are a serious concern that should not be ignored by the consumer or a provider of consumer goods or services.

There has been a significant resurgence in the past few years of bedbug infestations. Bedbugs have been found in hotels, motels, resorts, public housing, private housing, business offices, public health agencies, law enforcement agencies, government agencies, hospitals, nursing homes, daycare centers, schools, retail stores, worship centers, public libraries, public transportation, fitness centers, campgrounds, laundromats, and movie theaters. Bedbugs can be found anywhere that provides a food source and a suitable environment to call home.

An infestation of bedbugs is not a reflection of an owner’s, manager’s, worker’s, occupant’s, or guest’s housekeeping standards. Bedbugs are no one’s fault. Anyone can have bedbugs.

However, the perceived social stigma of bedbugs and the reluctance to divulge such a fact contributes to the difficulty of prompt assessment and treatment of the infestation. Housing and lodging providers in particular must keep vigilant in their inspection and mitigation procedures to provide required health and safety standards for tenants and guests.

Bedbug infestations have been reported in every state. Many states and a few cities have taken the initiative to enact comprehensive bedbug legislation to prevent, manage, and control bedbug infestations. In states with bedbug laws landlords must incorporate specific additional policies for disclosure and mitigation of bedbug infestations. Such statutes make it clear that “a landlord may not offer for rent a dwelling unit that the landlord knows or suspects is infested with bedbugs”. Correspondingly, “tenants may not knowingly bring materials that have been infested with bedbugs into a rental unit.”

Consumer education is important to identify, report, and treat bedbug infestation. An Arizona landlord for example has the obligation to “provide educational material to existing and new tenants. Educational material may include (1) a description of the measures that may be taken to prevent and control bedbug infestations, (2) general information about bedbugs including a description of appearance, (3) description of behaviors that are risk factors for attracting bedbugs (such as purchasing or using discarded mattresses, furniture, clothing, or traveling without taking proper precautions against transport of existing infestations, and (4) information as provided by federal, state, or local health agencies or housing agencies.”

Whether states have or have not enacted specific bedbug legislation, states still regulate health and safety standards under landlord-tenant statutes. The statutes of most states require that the landlord of a residential unit must maintain the unit in a safe and sanitary (habitable) condition. In general, the rental unit must comply with state and local building and health codes that materially affect tenants’ health and safety. There are federal standards of habitability as required by the U. S. Department of Housing and Urban Development (HUD) and additionally state and local habitability requirements, which can be more stringent than federal standards.

Even in states having no specific habitability statute, courts have held that all residential leases contain an “implied warranty of habitability.” In general, bedbugs are considered a habitability issue. Housing regulations in many jurisdictions explicitly require the landlord to keep the premises free from insects, bedbugs, rodents and vermin.

Tenants have a right to know whether rental properties have a history of bedbugs. Is a landlord obligated to disclose that history? Some states and local jurisdictions have laws requiring landlords to disclose a property’s bedbug history. If the landlord fails to disclose the property’s bedbug history, tenants may employ legal remedies such as breaking the lease, withholding rent, repair and deduct expense as allowed by statute, and/or filing a lawsuit against the landlord for damages and distress.

Who pays the costs of mitigation of a bedbug infestation? In general, the landlord has the duty and responsibility under habitability statutes to mitigate the problem. In Florida, landlords are required to take reasonable steps to exterminate bed bugs within the rental property while New Hampshire law provides the landlord shall bear the reasonable costs of mitigation of an infestation of bed bugs, but may recover those costs if the tenant is responsible for the infestation. However while tenants can be liable for mitigation costs, it may be difficult to determine the true source of the infestation and assess responsibility. Multi-unit apartment buildings in particular require thorough inspection and applicable treatment of each unit. Bedbugs will travel from one unit to another unit if all units are not inspected and treated.

The tenant may be held financially responsible for bedbug mitigation of a single family residence. If not addressed by specific statutes, a landlord may incorporate specific lease agreement clauses detailing tenant duties and responsibilities for bedbug mitigation of single family homes.

The best course of action is to address the issue promptly and professionally. Even when the law does not require professional treatment of bedbug infestations, self-help treatments are rarely effective and ill-advised as they come with increased risks to health and safety. Misusing pesticides or trying treatment methods promoted on the Internet can be dangerous and may cause new or additional problems.

The Environmental Protection Agency (EPA) website lists some self-help treatment methods for bedbugs that should NOT be used, such as:

• Mixing pesticides with other pesticides or ingredients.
• Using diatomaceous earth that is not a registered pesticide product.
• Using rubbing alcohol – this compound vaporizes quickly, is flammable and has caused numerous house fires when used to try to control bedbugs.
• Using carbon dioxide, propane, helium or other unregistered gases to fumigate bedbugs, even in an enclosed bag.
• Using a pesticide in a way that doesn’t follow the label. As examples:
  • Using inside a pesticide labeled for outdoor use.
  • Buying pesticides from unreliable sources.
  • Applying pesticides (including mosquito repellents) to the body. EPA has not registered any pesticides or repellents for use on human skin against bedbugs. Applying a pesticide to the skin could result in poisoning.
  • Using too much pesticide or applying pesticide more often than the label allows.
  • Applying pesticides to a bed, furniture, or clothing if these surfaces are not listed on the label. This might result in accidentally poisoning to the consumer or the consumer’s family.
  • Using too many fogger products at once which could lead to a fire and/or an explosion.
  • Using pest strips in a manner not on the label. There have been incidents where consumers became ill after overexposure to pest strips.

• Do-it-yourself heating treatments such as space heaters and fireplaces – these have been known to burn down homes.
• Do-it-yourself freezing treatments such as freezers, fire extinguishers or opening the home to cold air – these methods may not get cold enough to kill bedbugs.
• Hiring an applicator with no or little experience in controlling bedbugs.
• Hiring an applicator that does not provide a follow-up inspection and repeat treatments if needed.

Because of the difficulty of eradicating the creatures, professional treatment is highly recommended to confirm a bedbug infestation and develop an aggressive, integrated pest management plan.

No one wants bugs; certainly no one wants bedbugs. Landlords must be prepared to deal with pest issues such as insects, bedbugs, rodents and vermin in managing their properties. Preparing a comprehensive pest management plan that is incorporated into rental policies and procedures is prudent and practical. The plan may contain different procedures for managing different types of pests. A bedbug plan will be based on integrated pest management techniques to mitigate an immediate issue and control possible future issues.

Before developing a bedbug plan landlords must first educate themselves on the subject. Not every bug is a bedbug, not every bug bite has been caused by a bedbug. However, landlords should err on the side of caution. Dismissing signs of pest infestation or ignoring tenant complaints about “bugs” may set the stage for liability claims and future litigation.

Bedbug information is readily available from a number of printed and media sources that can be used to educate property management staff and tenants. State statutes may require landlords to provide educational material to tenants and applicants.

A bedbug management plan must be specific and compliant to the laws and regulations that apply to the property location. Regular inspection of rental premises is key to proactively control and manage pest issues. Prompt response to issues with professional treatments can help protect tenants’ health, safety, and rights of habitability.

To effectively manage a bedbug problem, a “no fault” policy is the best course of action. No matter how bedbugs got there, they must go. Placing blame on a tenant does not resolve the issue. Tenant cooperation is necessary to adequately mitigate and manage the issue. Tenants should be advised of scheduled inspections, treatment methods, and what to expect during inspection, treatment, and follow-up procedures. The tenant has the right to quiet enjoyment of the rental premises and the landlord must respect and comply with tenant privacy and right of entry requirements per landlord-tenant statutes.

Question

I am owed back rent from a property in Washington State by a tenant that has now moved to Idaho and a second person on the contract that was a guarantor that lives in Iowa. Both signed the contract. I’d like to take possibly both to small claims court. Do I do this in Washington, Idaho or Iowa? The person in Iowa is most likely to pay so I’d like to take her to court first. If I win a judgment against her, is she responsible for the full amount or only half?

Answer

You ask a question that requires considerable knowledge of the laws of all three states, each of which may be significantly different and may even have conflicting procedures regarding the level of court where one must file suit regarding interstate actions. This last issue could in itself make the cost of proceeding toward obtaining a judgment against the ex-tenant or the guarantor costly and time consuming, possibly even significantly more costly than the accepting the loss. For example, it is possible that you would have to hire an attorney in one or more states.

The research that would be required to adequately respond to the matter is way beyond the scope of this forum. I don’t know if you’ve had occasion to utilize the service of an attorney lately, but even if you consider that your damages amount to several thousand dollars, it would be very easy to spend more than that amount for attorney fees and court costs before your case even went to trial. Furthermore, if the ex-tenant or guarantor decided that spending money on an attorney was preferable to paying you, it might be necessary for you to appear in a court in his/her state and be represented by an attorney in that state.

However, I will discuss some of the issues that you might face, some of which might require use of one or more attorneys.

Typically, you would file a lawsuit in the county where your claim took place, but this might also depend on laws of the other states. Then you must know where the ex-tenant can be found and be able to have the ex-tenant(s) served with the complaint as required in the state where the person is located. The ex-tenant must be properly served in order for a court to hear the case.

Assuming that you have or can obtain the ex-tenant’s and/or the guarantor’s current address or place of employment and you are willing to pay a process server to serve him/her, it is possible that the person would not show up at the hearing in your local court, in which case, if the judge was satisfied that the service was legally proper under the laws of both states you would likely get a WA judgment by default.

However, even though you file an action in WA small claims court and are able to serve the ex-tenant, the ex-tenant may be able to file a court action to have the case moved to a higher court, a court where he’d likely be represented by an attorney and for which you would also need to hire an attorney. You feel that the guarantor is more likely to be the person you want to sue. I assume that’s because you determined thorough screening of both the tenant and the guarantor that the guarantor had more income or more assets. However, if you take the guarantor to court, whether or not you are successful in winning a judgment may depend on a number of factors including the adequacy of your guaranty agreement. Even if you obtain a judgment, it may not be easy to find things you can attach. Assuming a properly written guaranty agreement one can normally collect everything from a guarantor as one can collect from the primary debtor.

A judgment obtained in one state can in theory be collected in another state through the usual processes of garnishing wages and/or attaching assets (e.g., bank accounts, personal property, or real estate owned). However, there can be reasons why the court of the other state might refuse to honor the judgment. Some small claim courts in some states will not handle out-of-state suits, requiring them to be done in civil or state courts. Or, the other state’s court may rule that you can only collect if you catch them visiting in WA.

Furthermore, even if the other court allows your judgment, finding something of value to attach or finding where the person works in order to garnish can be difficult at such a distance and would almost certainly require additional expenditures because you would likely have to hire people to do some of the work you could do yourself if they were still living, working, and banking nearby in WA. There are also various exemptions and limitations at state and federal levels regarding garnishment of wages and attachment of assets.

It is possible that the other state would allow you to file suit in that state even though the event occurred in WA, but that would also increase costs because you would likely have to spend time and money to appear in that court or hire an attorney in that state, with still having to travel there for each hearing, perhaps even multiple times.

There are many other possible issues that could be discussed, but the main thing is that you must know the laws of both WA and the other states regarding the various issues. Even then, you must consider that a particular judge might not strictly follow the law and a costly appeal might be necessary.

The bottom line is that you must decide whether or not to pursue the matter through the courts based on the amount of money you can prove is owed to you, whether or not you know where you can have the ex-tenant and/or guarantor served, and whether you have a good idea regarding the degree to which the ex-tenant and/or guarantor is willing to avoid paying you.

You don’t state whether or not you can prove that you made a demand for payment from the ex-tenant. Usually, this should be done along with the detailed accounting required under WA law for the portion of the security deposit not being returned to the tenant. As I assume you know, WA requires that the accounting for amounts not returned and balance of deposit be returned within 14 days. Failure to have done so or to have violated some other requirement of WA security deposit law could result in a countersuit by the ex-tenants that might result in financial damages being awarded to the ex-tenants.

If you wish to proceed, you should consider consulting a competent and experienced attorney, preferably one who regularly represents landlords in the court of jurisdiction for your rental property. A brief half-hour consultation should be relatively inexpensive and allow you to have quite a few questions answered if you go prepared with specific questions.

If you are in a position where it just doesn’t make sense to sue your ex-tenant because the amount owed is too little compared to the possible costs or if the ex-tenant or guarantor is not currently collectible, there are still things you can consider doing.

If you think it likely that you will end up with a default judgment because the tenant or guarantor are not particularly knowledgeable about the law and are unlikely to return to WA and if you are willing to spend the relatively low amount it costs to obtain such a default judgment because you know where they can be found by a process server, you might just go ahead and file against both, with the idea that if there is any counter-action by the defendants you can cancel the lawsuit. Even if you get a default judgment against one or both, but don’t consider it worthwhile to try to collect on the judgment at this time you can “docket” the judgment, a very simple procedure in most jurisdictions and cost very little. The judgment will accumulate interest at the rate of 10% or more per year in most states, meaning the amount owed to you will double approximately every 7 years. The judgment should show up on credit reports when the defendant attempts to obtain a real estate loan or any other type of high dollar credit. Those to whom they are applying for credit just might require them to pay the amount owed to you before approving their loan.

There is something else that be done at even lower cost and which may be just as useful as the strategy of the previous paragraph and at even less cost. After having made unsuccessful adequate written demands against the ex-tenant and guarantor, with proof of their receipts of the demands, report each to one or more major credit bureaus. You must, however, be certain of having followed proper procedures in order to avoid legal actions against you. Asking about those issues when consulting an attorney should reduce this risk. While one must be a credit bureau member to report to it, there are providers of services to landlords which can get the report on record. Our Web site once provided such a service. However, I don’t know whether the service is currently available or, if it is, don’t know the procedure or cost of the service. I suggest that you phone our Member Support (866-666-8833) regarding availability of the service.

Deciding whether or not to sue an ex-tenant for past due rent and/or damages is often not an easy decision even when another state is not involved. A lot of information and knowledge needs to be considered in order to determine if it’s worth the time, effort, money, and possible stress to follow through with a lawsuit. Basically, it depends on the amount owed you after considering the security deposit available to you, the realistic expected cost of pursuing the matter, and the chances of ever collecting even after you have a judgment.

Question

Are there any guidelines regarding collection of and amount limitations for late fees in California?

Answer

From brief research, it is my understanding that the following applies to late fees in CA residential leasing.

First, I’ll mention that, in order to minimize various potential problems related to rent payments, a landlord’s lease agreement should spell out key rent rules, including at a minimum:

• the amount of rent per rental period
• how and where rent is due (e.g., by mail to the landlord’s business address)
• the date when rent is due, including what happens if the rent due date falls on a weekend date or holiday if other than the exact date
• how rent should be paid (usually check, money order, cash, and/or credit card, but other methods are or will likely become available)
• the amount of notice landlords must provide to increase rent
• the amount of any extra fee if the rent check bounces, and
• the consequences of paying rent late, including late fees and termination of the tenancy.

Some form of rent regulation (including rent mediation) now exists in a number of California jurisdictions (17 the last I heard), including Los Angeles, San Jose, and San Francisco. While San Diego doesn’t regulate rent, it does require a “just cause” (legal reason, usually meaning a lease default by the tenant such as nonpayment of rent) for a landlord to evict a tenant. Rent control ordinances almost always restrict the amount of rent that can be charged and when or under what circumstances the rent can be increased and the amount of rent increased. Some ordinances may also control late charges and/or other items listed in the above bullet points.

Rent is legally due on the date specified in the lease agreement. If the rent isn’t paid on or before that date, then, absent any grace period within the lease agreement, the landlord may begin charging the tenant a late fee. A late fee will be enforced under California law only if (1) specific language is included in a written lease agreement and (2) the fee is a reasonable estimate of the amount that the lateness of the payment will cost the landlord.

In spite of what’s stated in the CA Civil Code and mentioned above regarding late charges , some additional research determined that there are differences in opinions among attorneys regarding what a court might consider reasonable because there have been contradictory court decisions regarding the issue. There even appears to be a decision wherein the judge ruled that late charges are not allowed in residential leasing. In view of the issues, if I were collecting late charges in CA I would err on the low side of reasonable and have a written breakdown regarding my estimated costs due to late payment of rent so as to be able to justify the late charge specified in my lease agreement if ever necessary. It is never worth spending significant hours and dollars if the matter might end up in court when you would collect only a relatively small amount of money related to other landlord financial issues.

If you wish to have more confidence in a number for your lease agreement you should consider consulting a competent and experienced attorney who specializes in landlord-tenant matters, preferably one who usually represents landlords in the court of jurisdiction where your property is located and would be the one you would hire to represent you in court regarding such matters if ever necessary.

Question

Tenants notified me on the 19th of month that they would vacate the premises by 1st of month, only 6 months into a 1-year lease. It actually required until the 4th of the month before they had removed all their belongings and turned over their keys. Can I keep all their deposit since the lease was not completed?

Answer

You do not mention the state in which your rental property is located nor do you provide other details that might apply to your specific situation, so I can only answer in generalities.

What you can do may be dependent on a number of factors related to landlord-tenant laws of your state, clauses in your lease agreement, and tenant and/or landlord actions.

I will assume that there were no issues that would have allowed the tenant to legally break the lease – e.g., your failure to correct any defects related to habitability about which the tenant had complained – or issues that might serve as a possible defense in court against your claim of the tenant being in default of the lease – e.g., violation of his right to privacy.

Whether you can “keep the entire deposit” may depend on the details of the matter. In general, in most circumstances the landlord can keep amounts from the security deposit to cover unpaid rents, damages to the property, and additional expenses incurred from the tenant breaking the lease agreement. Examples of the last item are a leasing commission paid to a real broker for finding a replacement tenant and/or additional advertising now required.

Accordingly, if the tenant was otherwise current with payment of rent, the maximum lost rent would be for the 4 additional days he remained in possession of the unit into the new month. If you had a deposit that was within the maximum allowed by state law you could apply any remainder to physical damages and to any costs related to the lease being broken by the tenant, including advertising for filling the vacancy and/or any leasing commissions you pay obtaining a new tenant.

You indicate that that they removed all personal property and didn’t leave any behind, so I won’t discuss abandoned property laws, which vary significantly among states.

Amounts owed the landlord for unpaid rent, the costs of cleaning, repairing physical damages (not including normal wear & tear), and other items that exceed the amount of security deposit are theoretically recoverable through a lawsuit if you can find where the tenants are currently located so that they can be served with a complaint and you can obtain a judgment in the court of jurisdiction. One can sue a person and then collect a judgment even if the person moved to another state, although it is not usually worth the expense of doing so for a few hundred dollars.

You must also be certain that you provide the tenant with a detailed accounting for any deductions from his deposit and if financial losses are greater than the deposit, a demand for payment of the balance, the demand potentially necessary in order to file a lawsuit. The accounting and any refund due the tenant must be provided within the period required by law in your state. Failure to meet the requirements can result in significant financial penalties against the landlord if the tenant pursues the issue in court and wins – e.g., double or treble damages in some states.