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Do Not Lock Out Your Tenant in DC

System - Friday, April 6, 2018

High-Profile Eviction is a Good Reminder: Do Not Lock Out Your Tenant in DC

A DC couple is in hot water this week because of a high-profile eviction.

 

CNN is reporting today that the landlord who rented a room in their Capitol Hill House to the EPA head, Scott Pruitt, for $50 per night locked him out of their house “after becoming increasingly frustrated with him as a tenant”.

 

Unfortunately for Vicki and Steven Hart, who “were political donors to Pruitt when he was an Oklahoma state official” and according to the CNN article, only charged Pruitt “$6,100 for the room over six months, a rate significantly lower than market value, a seeming attempt to avoid further scrutiny may have created more trouble for the couple.

 

The Harts violated the rights of their tenant by evicting him in this way. According to the DC Eviction Code, “No tenant shall be evicted from a rental unit for any reason other than for nonpayment of rent unless the tenant has been served with a written notice to vacate.” In other words, tenants’ rights in the District of Columbia require eviction notices to be executed through the court system and delivered in writing--a requirement that would even apply if Mr. Pruitt had overstayed his lease.

 

And, ABC News reported that the Harts did not have a basic business license, which is required for any rental of residential housing in the District of Columbia, including short term or long term rentals, the entire dwelling or just a room.

 

Simply put, the Harts broke the law when they rented the room without a license and again when they changed the locks. And since Scott Pruitt is no stranger to filing lawsuits, I'd hate to be in their position. But this type of oversight isn’t unusual for inexperienced landlords. There are dozens (if not hundreds) of regulations and guidelines in DC that are often inadvertently broken or overlooked even by the best-intending and most conscientious owners.

 

If you are renting your house or condo in the District of Columbia, don’t make the same mistakes! Call us at 888-857-6594 for a free consultation to evaluate your property, current rental situation and to receive a proposal to convert to professional rental management.  We have your back!

Exteme Cold Challenges

System - Monday, January 20, 2014

Have you Checked In With Your Tenants?

 

As winter storm Janus approaches and news outlets announce impending doom, Weather Channel predicts that 84 Million people will be impacted on the East Coast.  That is a lot of disruption that will have ripple effects in terms of everyone’s lives. As you scramble to ensure you have provisions, children will have activities while at home due to school closures, and you can finish those work projects at home, have you thought about our tenants?

 

Forecasters are predicting 5 inches of snow in the city and several inches more in the Northern suburbs.  If your rental is a condo the tenants won’t be impacted that much because the association will take care of any problems.  For other dwelling types have you clarified with your tenants who is responsible for snow removal and treating the sidewalks? Are they capable to shovel long stretches of deep snow? 

Even worse for landlords are the several days and nights of sub-zero temperatures that are predicted following the snowfall.  Bitterly cold air that will last through the end of the week presents conditions that are not typical in this area. Our housing stock and heating systems are often not designed to withstand bitter cold for more than a few days.

 

To prepare your rentals and tenants for this extreme weather first make sure that the heating systems are operating correctly.  DC regulations require equipment be able to maintain indoor temperatures of at least 68 degrees during the day and 65 degrees at night in all occupied rooms and bathrooms.  If your heating system is not able to do that in periods of colder temperatures what is your back up plan?  We provide portable oil-filled electric radiators in homes that need to supplement the rental unit’s heating system.  If the heat is out completely, you may need to house the tenant elsewhere until it can be fixed.  Don’t rely on heating companies to solve problems during the extreme weather - they may not be able to get to your rental promptly due to a backlog of calls.

 

Encourage your tenants to prepare for the cold by changing the air filter if they have not done that recently (for gas forced air or heat pumps).  A dirty air filter can cut down on the efficiency of the heating unit and the air flow. Educate your tenants that heat pump systems are not designed to keep the house toasty warm when the temperatures are below freezing. The use of the Emergency Heat setting can help to heat the space up quickly, but will also run up their electricity bill.  Make sure that they understand their utility bills will be impacted by the weather and that is normal.

 

In older houses or those with extensions are you aware of water lines that could be prone to freezing? Even insulated extensions may have problems.  With the recent polar vortex even two nights of sub-zero temperatures caused water pipes to freeze and burst.  Make sure your tenants know this, keep the area heated, and turn on faucets in affected areas so that the water trickles constantly. Get them involved and committed to help prevent problems down the road. It may cost a bit more in water, but it could save thousands of dollars in repairs by preventing water lines from rupturing.

Building Wealth with Rental Real Estate

System - Monday, October 7, 2013

The following was published 10/24/2013 in Metro Weekly.

Many potential sellers in the last few years have had to face the question of whether to sell or rent out their house or condo. This has been a particularly difficult situation coming on the heels of record property values of the late 2000s.  The prospect of selling the property for less than it was bought for is forcing many potential sellers to opt for renting their property. This is what I call becoming a landlord by chance, not by choice.

 

The good news is that holding real property for rental can be a lucrative investment strategy. There are multiple advantages to the owner of a rental including additional tax deductions, long-term appreciation, and supplemental income in retirement. This approach does require patience as the value of your asset will grow over time.  And, if the finances work out for your particular case, you can grow your wealth without contributing any more money out of pocket.

 

Did you know that all expenses related to the property are considered deductible from the rental income collected?  These include repairs, maintenance, HOA fees, redecorating expenses, management fees, mortgage interest, and bills from legal and tax professionals.  At the end of the month (or year) will your income exceed your expenses?

 

Per current IRS guidelines, owners of rental real estate are permitted to deduct depreciation expense as part of the calculation to determine the taxable income earned on the rental. While it is true this expense will need to be recaptured upon selling the asset, the impact on your overall taxable income can be significant. For instance, the annual depreciation expense on a $350,000 property can yield a reduction in your taxable income of over twelve thousand dollars.

 

There are few financial opportunities available to the average American that permit a modest investment of the owner’s capital in a relatively low-risk environment in return for owning an asset worth tens of times the initial investment.  Of course you don’t really “own” the property until the mortgage is paid off and therein is the opportunity. A tenant or multiple tenants over time can bring your cost of ownership to zero while you continue to pay your mortgage.  There will be repairs and replacements of equipment, but your property and rents will appreciate over time. Eventually you will end up being the owner of an asset that is worth a great deal more than your initial cash contribution.

 

How does this make your rich?  Imagine if your mortgage is projected to be paid off when you turn 55, 60, or 65 years old.  Will you sell the property at that time or continue to be a landlord?  Suddenly, you will be collecting - and keeping - the majority of the monthly rent income at the same period in your life you want to have additional income.  Will you continue to work full time at that age or will you be able to live off of the income generated from your investments?  What if you had purchased multiple properties over time?  How much income would they collectively generate each month for you?

In 2033 when the rents collected from your rental properties are helping you to enjoy a standard of living above your peers, having decided to hold onto that condo or house twenty years prior will look in hindsight to be a good idea.

 

For more information about investing wisely in rental real estate we highly recommend the “Rich Dad, Poor Dad” series of books by Robert T. Kiyosaki.

The Importance of Being Grateful

System - Sunday, March 24, 2013

 

 

Today I am grateful for being an early riser and being self-employed.  Our springtime winter storm Virgil blessed us with a beautiful landscape which would disappear in a matter of hours.  It is amazing to me how a walk in the park can be awe inspiring and help us humans to bring our lives into perspective.  I might have missed this experience if I were rushing off to go to an office building in downtown DC to sit in a cubicle for eight or nine hours.

 

As a landlord I am grateful for the circumstances that permitted me to be a property owner when many struggle to make ends meet. I sometimes need to remember to be grateful that I have tenants in my properties who pay their rent on time each month and when troubles arise, that I have the experience and training to handle it with courage and respect.  I am grateful that super storms passed my area and did not cause damage to my properties and for an insurance company agent relationship of many years that ensures when I do have damage I am covered.

 

As I modify my thoughts to being grateful for what I have it helps me to shift my thinking in business dealings, negotiations, and problem solving.  By not letting my ego get the best of me I can be grateful for finding solutions - whether a security deposit dispute with a tenant or responding to negative feedback.

 

If I am grateful for having an aging property in a very desirable neighborhood I feel better about investing money to keep that asset attractive and performing financially well for years to come.

 

If I am grateful for finding talented professionals who will help me drive my real estate investment from break-even to financially positive, I can feel more confident letting it go to their care. 

 

If I am grateful for a handyman who is always at the ready, no matter the day or time or event, I can practice more patience with him and better appreciate the value of his character.

 

Confidence, Competence, Determination and Hard Work are a requirement to be successful in my chosen industry of residential property management.  I am grateful these characteristics come naturally to me and that my clients sign on with confidence in my ability to get the job done.

 

What are you grateful for?

 

 

Are you exempt from Rent Control?

System - Wednesday, March 13, 2013

Did you know that all rental units in the District of Columbia are automatically subject to rent control unless they registered as exempt?  Under the Rental Housing Act of 1985 and subsequent amendments housing providers (landlords) are responsible to register their rental units with the Rental Accommodations Division (RAD) which administers the Act.  If you don’t register your rental unit it is automatically under rent control laws which not only have restrictions on the frequency and amount of rent increases allowed, but also extensive disclosure and filing requirements.

 

Most small or independent landlords will be able to register as exempt from rent control using one of the more common exemptions permitted:

-- Units that are subsidized by federal or DC funds
-- Units that are built after 1975
-- Units owned by a natural person who does not own more than four rental units in the District of Columbia (LLCs and other business entities cannot claim exemption)
-- Units which had been continually vacant since 1985


In order to register your unit with the RAD you need to submit Form 1 - RAD Registration Claim of Exemption Form along with the confirmation letter and receipt provided by the DCRA showing that you have applied for a business license for the rental. There is no electronic or digital process for this. You must visit the RAD office located in Anacostia at 1800 Martin Luther King Avenue SE to submit the paper form.

 

If you are not able to claim exemption under the Act, we highly advise that you first contact an expert such as a Landlord Tenant attorney or a DC licensed property manager prior to registering your unit.  It is very important for you to have the details of the requirements and implications of registering your unit if it is going to be subject to the act. It will also better prepare you for your visit to the RAD.

 

For information and forms go to www.dhcd.dc.gov/service/rent-control

 

 

New DC Lead Based Paint Disclosure Requirement

System - Saturday, June 2, 2012

This past week the District of Columbia Department of the Environment issued new lead based paint disclosure forms that fulfill the District’s disclosure requirements as well as some of the federal disclosure requirements. The District's definition is more restrictive than the federal definition:

 

1) Lead-based paint hazard - any paint in a deteriorated condition that is presumed to be lead-based paint

 

2) Presumed lead-based paint - any paint in a pre-1978 built domicile

 

Owners must disclose information related to the property about the presence of lead-based paint, lead-based paint hazards, and any actions ordered by a District agency whenever the owner should “reasonably know” about such things. The illustration provided in the instruction guide states:

 

If an owner has not given his or her pre-1978 property a new coat of paint in the past twenty years, it is reasonable for the owner to know that the paint is no longer in intact condition. Therefore, the owner must disclose that lead-based paint hazards are present on the interior and/or the exterior of the property, in the form of deteriorated presumed lead-based paint.

 

In addition, the District law includes any pre-1978 dwelling unit. There are some exemptions, but these don’t apply to most small landlords.

 

if the landlord learns of the presence of lead-based paint once the tenant is residing at the property, the tenant must be notified within 10 days and the tenant must receive the Federal Lead Warning Statement and the lead hazard pamphlet entitled "Protect your Family From Lead in Your Home (EPA 747-K-94-001) unless the tenant has received it already in the previous 12 month period.

 

District law also requires that landlords disclose to their tenants what their rights are under the lead law. Per the Department's site, this must occur “whenever the tenant executes or renews a lease for the unit and whenever the owner provides notice of a rent increase.”  For more information and materials, go to "About the District's Lead Law" on the Agency's site.

 

Key points to keep in mind:

  • Disclosure must occur before a tenant is obligated to lease the property
  • The owner must disclose any lead-related records or reports to the prospective tenant
  • The DC disclosure form is designed to satisfy both the Federal and District disclosure requirements
  • The owner must disclose location of any known lead-based paint
  • The owner must disclose location of lead-based paint hazards that the owner should “reasonably know” about
  • The owner must list any pending actions related to the property that have been ordered by a District agency
  • The owner must disclose the tenant's rights under the lead law at each rent increase, lease renewal, or new lease signing.

Getting Past "No".

System - Saturday, May 26, 2012

Working with uncooperative or unruly tenants is like parenting. You want to scream sometimes but know it is better to not lose your cool. Whether it is announcing a rent increase or wanting to tour the property for an inspection, uncooperative tenants can be nerve wracking. The first line of defense to avoid conflict is to screen out difficult people when choosing a tenant. Sometimes they still slip through and tenants can even "turn" once they have been in the rental awhile.   Here are some tactics to take when you suspect that your communications are breaking down.

 

First, keep in mind how your tenant is going to receive the message or request.  Avoid setting yourself up for a negative reaction because you don't give them enough notice, you are harried and don't spend time to explain things thoroughly, or you start with a defensive tone because you suspect they won't react well. Be transparent in what is needed, why, and be grateful for their assistance.

 

Know the rights and responsibilities of both landlords and tenants in your jurisdiction.  This is the bedrock for standing your ground.  If you have a good understanding of local regulations and your lease, not only will you know what is reasonable, but you can also avoid misinformed or manipulative tenants influencing your judgment. You will have the confidence to stand firm and change the dynamic. Don't be shy to ask for what you want and expect in a firm but polite manner.

 

Take the high road if things get choppy. If you find yourself feeling defensive remember taking the high road can help keep the emotions at bay and keep you focused on problem solving. Sometimes you have to tame your own ego that wants to leap out and strangle the other party.

 

Keep in check the manner in which you are communicating and make it professional.

Don't forget to engage the other party.  Finding out what is important to them or why they are reacting the way they are may give you valuable insight to defuse a tough situation.  Find common areas of agreement as a foundation to improve the communications and get to what your ultimate goal is.  Ask questions. Try not to judge. In most cases you won't need to escalate matters.

 

Sometimes tenants do act like children and you ask yourself how they function in the world. The good news is that you don’t need to be friends or even like each other. You do however need to work together to keep the rental relationship functioning. The obligation falls on the landlord, much like the parent, to take the lead on making that happen.

Inaugural Post - Screening Potential Tenants

System - Thursday, May 17, 2012

How do good property managers help to reduce the risk of problem tenants in your property?  They assist you with a thorough screening of potential candidates using objective tools and smart systems.  People who apply for your rental should not be considered without checking out their financial and behavioral histories.  While there are federal and District of Columbia laws to combat discrimination in housing based on a number of characteristics, having an understanding of how sound the applicant is will be critical to determine whether you wish to move forward with a lease.  There are two key areas to consider.

 

Financial

How can you determine the candidate's likelihood to pay the rent? In this case past behavior is a great indicator of future behavior.  If they have a good record paying bills and keeping their credit strong, it is highly likely they will not be late or skip rent payments. The most common tool to assess the past behavior, if sometimes flawed, is a consumer credit report. These reports give an indication of how good the candidate has fulfilled his or her obligations to make payments when due on different credit instruments or bills as well as the debt load they carry at present.  At times there are legitimate reasons why someone's credit is flawed, so be open to explanations from the candidate and consider that in your decision. A marginal credit score can be compensated with a strongly positive report from a previous landlord verifying that the candidate was not late on rent payments.  Also, ask for proof of their income to ensure that they receive enough on a regular basis to be able to afford living in your property.  As a rule, the gross monthly income should equal 2-3 times the monthly rent.

 

Behavioral

Another area to screen candidates is to talk to previous landlords.  Ideally we talk with two previous landlords if reachable and relevant (we don't interview family members where they lived). Find out how their payment history was, how well they took care of the property, if they were cooperative with the landlord, if they had consistent maintenance or attitude problems, did they bring in pets or other breaches of the lease, etc.  Sometimes it helps just to know what to expect even if you decide the new information is not enough to warrant you declining the applicant.  If the candidate does not have a previous landlord because they owned their home, ask questions about maintenance and upkeep to get an indication if they'd be a good fit for your property.  In general, homeowners make good renters.  Sometimes young people or those from other countries will not have the ability to furnish prior landlord information and in these cases we ask them to provide letters of recommendation.

 

One can never be 100% certain there will be no problems once a tenant moves into the property however with a concerted effort and a little bit of time, an accurate assessment of the riskiness of accepting each candidate is attainable.


Contact Us

Columbia Property Management
P.O. Box 92488
Washington, DC 20090-2488

Owner
Scott Bloom

Call Us
888-857-6594

Fax
202-600-8165

Email Us
info@Columbiapm.com


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