(678) 648-1244
Owner Portal | Tenant & HOA Portal   Facebook      
24/7 Maintenance

Property Management Blog

Is it too late to collect what I'm owed?

Todd Ortscheid - Tuesday, August 29, 2017
Sometimes we take on a new client who had a bad experience with a previous tenant who left the property owing money for either rent or repairs, and wondering whether it's still possible to go after that money.

Generally, as long as too much time hasn't passed, and you have documentation of what was owed, you can still go to court to try to collect what you're owed. There are two things you need to consider:

1. How much time has passed? You will need to file your case against the tenant in court before the statute of limitations for contract disputes has passed. In Georgia, for written contracts, this is six years. We won't even discuss verbal contracts, because they're pretty much useless for all intents and purposes in real estate matters. So, if it's been less than six years from when the tenant incurred the charges that you're owed, you should be good to go on this item. If it's been longer than that, then you're probably out of luck, but can always consult with an attorney to see if there might be some sort of special circumstances that would apply.

2. Assuming you're within the statute of limitations, the next element is evidence. As the plaintiff, the burden of proof will be on you to show that the tenant owes you the money. Depending on what exactly the tenant owes for, that evidence could be different things. If he owes you rent or late fees, you would probably need to present a copy of the lease and your rent ledger to the judge at trial. If the tenant claims that he made payment, he would need to show receipts, bank records, or some other form of evidence to refute your ledger. If you don't have a copy of the lease and a detailed ledger, though, you're pretty much out of luck trying to collect rent. For repairs, you'll need to have evidence of what the condition of the property was on move-in, and what the condition was on move-out. This could be as simple as a signed form that both you and the tenant signed on move-in and move-out, or it could be more detailed, such as date stamped photos or videos. The judge will probably also want to see receipts, invoices, or some other form of proof showing that you actually did incur the expenses for the repairs.

If you have all of that, you'll probably be filing in magistrate court, as the balance is likely to be under $15k. If your balance exceeds that amount, you'll need to file in superior court, which means you'll need to hire a lawyer. In magistrate court, you can represent yourself, although we would always recommend seeking out the help of an attorney if the money you're owed is significant.

Better yet, hire us and we can take care of this all for you with our in-house experts and our attorneys we always have on retainer! Give us a call.

Daily Late Fees

Todd Ortscheid - Friday, August 25, 2017
Sometimes a client asks us about daily late fees, perhaps because they've charged them themselves when managing their property on their own, or perhaps because a previous property manager charged them. We do not recommend daily late fees for several important reasons:

1. A late fee should hurt. It shouldn't be something minor that the tenant doesn't mind incurring so that they can pay someone else before you with their limited funds. You want them thinking of you as their primary person to pay on time every month. Making the late fee hurt as much as possible is a great incentive to make them pay you before paying their other creditors. So charging a modest fee up front and then a smaller daily fee defeats this purpose and could encourage bad behavior from the tenant.

2. Courts generally won't allow you to charge more than 10% of the rent as a late fee in total for the month. This means that if you want to charge a daily fee, you're severely restricting the up-front late fee that you charge on the first day the rent is late. This is bad, as it reduces the incentive for the tenant to pay on time. You want that first late fee to hurt.

3. The administrative burden is a pain. It's pretty easy to charge a flat late fee on a set day of the month. But keeping track, accurately, of a daily late fee is a lot more difficult. And you don't want to make mistakes, because that gives the tenant something to argue if you file eviction. Going before a judge, you want to make sure that you've done everything perfectly and the tenant's behavior is the only thing in question.

For these reasons, we recommend charging one late fee, on the 3rd of the month, and making it the maximum generally allowed of 10%. This provides a powerful incentive for the tenant to pay on time, it's easy for you to keep track of, and judges like the simplicity.

If you'd like us to worry about these things so that you don't have to keep up with it, please give us a call or send us an email, and we'll be happy to manage your property and take care of all the headaches for you so that you can just collect your check.

Using Security Deposit for the Rent

Todd Ortscheid - Tuesday, August 22, 2017
Your tenant is either behind on their rent, or their coming up on their last month of their lease, and they want to use their security deposit to cover it. There’s only one acceptable answer to this request: NO!

Let’s look at each situation individually. The tenant is late on the rent, and they want to use their deposit to cover all or a portion of it. This is a horrible idea for the landlord. You have nothing to gain from this. You can already see that the tenant is in financial trouble because of his request, so if you allowed him to now use his deposit to cover the rent, it’s unlikely to completely resolve his financial difficulties, so he’ll just fall behind again next month or the month after, and now you don’t have any security deposit left to cover the court costs and attorneys’ fees to get him evicted. Your generous nature has now put you in a horrible situation.

Second situation, the tenant wants to use his deposit to cover the last month’s rent. Horrible idea for you as the landlord. If you allow this, then you now have no money to cover any damage that the tenant may cause to the property. Or worse, what if the tenant doesn’t actually vacate like he’s supposed to at the end of the lease? Now you’ve used his deposit to cover the rent, and you’re stuck filing an eviction to get rid of him because he won’t leave with no money to cover the costs.

The security deposit is for one purpose and one purpose only: the cover any costs that the tenant owes after vacating the property at the end of the lease. That’s it. It should never be used for anything else. Any smart landlord should have a zero tolerance policy on this point.

Of course, if you hire us to manage your property, the security deposit will be held in our trust account and we can worry about all of this for you. Give us a call!

Hiring the Cheapest Management Company

Todd Ortscheid - Saturday, August 19, 2017
You're probably looking for a management company, otherwise you probably wouldn't be reading this blog. So what should you do? Should you just select the company with the cheapest monthly management fee? Probably not, for several reasons.

First, you should take note that the monthly management fee, which can be either a flat rate or a percentage of the rent, is only a part of what you'll be paying for any management company's services. Depending on which company you hire, you could also be paying setup fees, marketing fees, mileage, leasing fees, renewal fees, maintenance fees, etc. Some companies even try to hide these fees from you by burying them in the fine print scattered all over the contract. So if pricing is important to you, it's necessary to look at the full picture instead of just the management fee. You'll likely find that a company with a bargain basement management fee has much higher costs for their other fees. This is frequently the case with companies that have a "flat rate" monthly management fee. We see this from some of the franchise operations and the bigger national companies, mostly. They lure you in the door with a $79 flat rate monthly management fee, for example, but then they gouge you with other fees that companies like ours aren't charging, such as setup fees (in other words, you pay them up front before they've even done any work). It may be smart marketing, but it's also a bit disingenuous, to put it kindly.

But more importantly, is price really the most important factor when you're talking about someone managing what is probably your most expensive investment asset? Would you hire a mutual fund manager who only charged a 1% fee, but who only earned you 2% a year, instead of hiring someone who charged a 2% fee but who earned you 10% a year? Obviously the latter is the better option, even though he charges double for his services. What you want is expertise. That's true when you're hiring someone to manage any of your investments, including real estate. Especially real estate, in fact. It's important to examine many facets of the management company you're considering. How long have they been managing property? Do they specialize in property management, or is it just a small side business to their primary sales business? How many properties do they manage? How many employees do they have to look out for you? Are they doing yearly inspections of your property, or do they only see it at move-in and move-out? What sort of tenant screening process do they use? The list goes on and on. It's important to analyze the total picture of the management company and not just the price. You may find that the least expensive company offers you the worst value.

Give us a call and we'll be happy to discuss not only our pricing, but also our extensive experience and our full service management product.

Filing Eviction - How Soon?

Todd Ortscheid - Tuesday, August 15, 2017
Something that differentiates us from our competitors, and from most property management companies even outside of our markets, is how quickly we file evictions when a tenant hasn’t paid. When we take over accounts from other management companies, we frequently see that those companies aren’t even charging a late fee until after the 5th, and in many cases not filing eviction until a full month after the rent was due. Quite frankly, this is insane, and it is not in a landlord’s best interest in our view.

Most leases have a security deposit of one month’s rent. That means if everything goes south and the tenant stops paying, you have only one month to get rid of that tenant before it starts costing you money out of your own pocket. And that’s before you take into account the attorneys’ fees and court costs for an eviction, which can easily exceed $1k if you’re an individual landlord, and even with the deep discounts we receive from our attorneys still usually cost around $500. So in reality, you already start the game with less than a month of leeway before your own wallet starts to get hit. Why on earth would you give the tenant a full month of free rent before filing the eviction? Well, we don’t.

When we’re managing a property, the rent is due on the 1st, there’s a late fee if the rent isn’t paid by the 2nd, and we’re filing eviction on the 8th (or the next business day). If a tenant pays half the rent before the 8th, we will usually give them some extra time to pay the rest, but that’s the only leeway we give. Sob stories don’t pay mortgages, so it doesn’t matter to us what the reason is that the tenant hasn’t paid. Either they pay, or they have to go.

We make this policy very clear to the tenant up front so that they know that they have to pay on time or face an eviction on their record. For this reason, combined with our screening criteria, we have relatively few evictions.

If you want someone on your side making sure that your tenants are paying on time, give us a call about managing your property.

Objective Tenant Screening

Todd Ortscheid - Friday, August 11, 2017
You may notice that we talk a lot about fair housing laws on this blog. There’s a good reason for that: violating the fair housing laws is a BIG deal, with BIG penalties. Making sure that you follow fair housing laws is one of the most important aspects of being a landlord.

With that in mind, we want to talk a bit in this article about standardizing the tenant screening process to avoid fair housing issues. For those not familiar, the term “fair housing” basically means not discriminating against people who fit into any of the government’s protected classes: race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents or legal custodians, pregnant women, and people securing custody of children under the age of 18), and disability. Keep in mind that some of these terms can be broad. For example, “sex” has been interpreted by many to include sexual orientation and gender identity. There isn’t always clear guidance from HUD on what exactly these terms all encompass, so it’s always better to be broad yourself in how you define them. Even though the law doesn’t specifically state that sexual orientation is protected, be on the safe side and never discriminate on this basis, and then you don’t have to worry about it. After all, someone’s sexual orientation isn’t going to affect whether they can pay you the rent or not, so why worry about it?

Now that we know what fair housing is and what sort of violations we’re avoiding, how do we put in place a process that protects us and ensures that all applicants are being treated fairly? The best thing to do is to put down a list of objective criteria that every applicant has to meet in order to qualify to rent your property. For example, a minimum credit score, a minimum income as a multiple of the rent, no history of unpaid debts to landlords, etc. Make sure that EVERY applicant is scored using these same criteria, and no exceptions are made because you just “have a bad feeling” about an individual applicant. Those sorts of subjective impressions getting involved in the screening process are what HUD and trial attorneys will look for. If EVERY applicant has to meet the same criteria, and those criteria have nothing to do with any of the protected classes in the law, then you can be certain that you’re complying with the law, being fair to everyone, and keeping yourself out of trouble.

If you hire our company to manage your property, all of this will be taken care of for you. So give us a call to take this burden off of your own shoulders.

Emotional Support Animals

Todd Ortscheid - Tuesday, August 08, 2017
Emotional support animals are a big bone of contention with some landlords who really don’t want any pets on their properties. However, it’s important for landlords to understand that these animals are not considered pets, and are in fact protected by federal law.

An emotional support animal (ESA) is protected by the Fair Housing Act because the animal is intended to assist with a disability. Some landlords get confused because the Americans with Disability Act does not specifically address ESAs, but this doesn’t really matter to a landlord. Because landlords have to comply with the Fair Housing Act, which protects all people with disabilities, an ESA is considered a “reasonable accommodation” for someone with a disability, no different than allowing a tenant to install a wheelchair ramp.

What this means is that you don’t have a choice when it comes to ESAs. If someone has a legitimate disability and they are assisted with that disability by the ESA, then you have to allow the tenant and their ESA. Not only that, but you cannot charge a pet fee (again, it’s not a pet), pet rent, or other additional fees that you wouldn’t charge any other tenant who didn’t have an ESA.

Now, that said, there are important things to consider here. First, you have to be on the look-out for scammers. There are people out there who take advantage of this law that is intended to help people who legitimately need service animals. If you search online, you’ll find doctors of questionable ethics who will even sign a letter for a fee saying that someone needs an ESA, even though they’ve never personally examined the person they’re writing a letter for. In fact, the doctor could be in California while the person buying the letter is in Georgia.

For this reason, we utilize a three-prong test for ESAs:

1. Does the person have a disability?

2. Does the service animal assist them in some way with this disability?

3. Do they have documentation from a doctor who has examined them certifying the answers to the previous two questions?

If the answer is yes to all of the above, then the animal is legitimate, and the tenant is entitled to the service animal without paying any additional fees. If the person cannot produce documentation from their doctor, then we stop right there and tell the tenant that what they have is a pet and not an ESA, and they have to comply with all of the requirements that any other person would have to comply with for having a pet. In some cases, this means that they can’t rent a particular property at all, because the landlord doesn’t allow pets.

As a strong advocate of fair housing laws, and a company that strictly adheres to them and prides ourselves on doing so, we are always more than happy to accommodate ESAs when a tenant has a legitimate disability. But when someone is trying to scam the system, they are doing a disservice not only to us and our client, but also to all of the people out there who do have a legitimate need for a service animal. That won’t be tolerated by us.

If you'd like to hire a company that can worry about all of these legal issues for you, give us a call or send us a message. We'll keep you out of trouble while you're renting out your property.

Fair Housing - Children

Todd Ortscheid - Sunday, August 06, 2017
Most people realize that discriminating based on things like race and gender are prohibited by law. However, we sometimes get requests from clients to not rent to people who have children. From their perspective, this is a reasonable request because they believe that children cause more damage to property. However, people with children are protected by fair housing laws in the same way that people of various races and religions are protected.

The way that the fair housing laws refer to this is by calling it “familial status.” What does familial status mean, exactly? Basically, you can’t discriminate against someone because they have children, are pregnant, or are planning on adopting children. In other words, if children are in any way involved, it’s protected. This means that not only can you not refuse to rent to people in this class, but you can’t even advertise in a way that would discourage people with kids from applying.

For example, an add that said something to the effect of “house is perfect for empty nesters or senior citizens” might be inferred to be discouraging people with children, or people who plan to have children shortly, from renting the house. This would not be allowed, and the advertisement might even draw the attention of the Department of Housing and Urban Development (HUD), which is the regulatory authority with the responsibility of overseeing fair housing compliance.

In fact, HUD, some special interest groups, and some civil rights law firms have been known to even test out landlords by calling and inquiring about renting while mentioning things that are covered by fair housing laws, to see if the landlord will deny or discourage someone in a protected class from applying. For this reason, you need to be very careful in how you word your ads and how you interact with potential renters. Anything that you write or say that could give someone the false impression that you are discriminating or even giving preference to certain groups could land you in hot water.

Our company prides itself on complying with all fair housing laws and going above and beyond to treat everyone fairly. If you’re looking for a company to manage your property so that you don’t have to worry about things like how to comply with fair housing laws, give us a call.

Remaining Rent from a Skipped/Evicted Tenant

Todd Ortscheid - Tuesday, August 01, 2017
We occasionally get asked by our clients if a tenant is responsible for rent after they’ve been evicted or skip out mid-lease. The simple answer is “yes.” However, as with most things where the law is involved, the simple answer doesn’t really give you the full story.

Let’s say you have a tenant with a one year lease. Six months into the lease, the tenant either abandons the property or is evicted for non-payment. The lease states that the tenant is responsible for the full year, so technically you could go after this tenant for that lost rent. But, a key exception is that the courts will not allow you to collect rent from two different tenants for the same property at the same time. Since it’s likely that you’re putting a new tenant in the property when the old one leaves, this means that you can only hold the old tenant responsible for the rent during the period of vacancy. As a practical matter, this means that you would have to wait until the property is re-rented to find out how much time of vacancy the old tenant was still responsible for, then file a civil action against the tenant or submit the debt to a debt collector.

The next question that comes up is whether you can hold the tenant responsible for the entire remainder of the lease if you don’t re-rent the property. The answer from most judges would be that it depends on the reason that the property was not re-rented. If the reason is that the market is awful and you can’t find a new tenant, then a judge is likely to award you the rent for the entire term of the lease. But if the reason is that you simply didn’t make any effort to get the property re-rented, the judge will likely say that you made no effort to mitigate your loss, and therefore can’t hold the tenant responsible This may seem unfair, as a contract was in place for a set period of time and a set amount of rent, but it is how the courts will generally view the matter.

As a practical matter, we rarely have evictions or abandonments from the tenants that we screen, and we are able to re-rent properties usually in only 2-3 weeks when they do occur. Therefore, actual lost rent is minimal when a tenant splits or is evicted. But whatever it is that you’re owed, we will submit to our collection agency for collection, and they will make every effort to collect using whatever legal means are available to them.

If you’ve experienced a bad tenant skipping out or having to be evicted and are looking for professional management and tenant placement, please give us a call.

GTL Real Estate
120 Village Circle
Senoia, 30276

(678) 648-1244

Office Hours: 8am - 5pm

Affiliate Logos NARPM

All Property Management Featured Manager

Quick Contact

Atlanta Property Management | Atlanta Homes for Rent | Cities Served

Copyright © GTL Real Estate. All Rights Reserved. PMW Services powered by Free Rental Site | Sitemap