By Matt Donnelly, Buildium, Boston, MA

A hotel is the traditional destination of choice for an individual or family going on vacation. But that seems to be changing. Today rental homes are all the rage, at least among U.S. travelers.

That’s the upshot of TripAdvisor’s fourth annual vacation rentals survey. Nearly half (49%) of those who responded to the survey plan to stay in a rental home in 2013 as opposed to a hotel, up 9% from 2011. “The survey results show that rental properties continue to be a very desirable accommodation option among U.S. travelers,” said Brooke Ferenscik, director of communications at TripAdvisor.

When asked why they were opting for a rental home instead of a hotel, 82% of respondents cited savings and last-minute deals as the two biggest reasons. In terms of benefits, those renting homes vs. hotels cited access to a full kitchen/laundry room (31%) and more living space (27%) as the two biggest advantages. And what do renters look for in a vacation home? A private beach (25%), amazing view (18%) and private pool (18%) topped the list.

So what does this all mean for you? Here are a few things to consider:

• Do you have any properties that might be suitable as vacation rentals? Note what prospective renters desire in a rental home.
• Think about staging or preparing the rental. Vacationers will be expecting a fully furnished and equipped home when they arrive.
• Will your rental be seasonal or year-round? In some markets it might make sense to lease the home during the off season in order to maximize your revenue stream.
• What will you charge? Note that vacationers want the feeling of a home away from home, but depending on the area, you may not be able to charge a premium price for the home. Consider what area hotels and even other rental homes charge. Also consider last-minute deals to fill vacancies.

What’s your experience with vacation rental homes? Please leave a comment below to continue the conversation.

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

From time to time, a property owner or possessor will give permission to others to use or rent out parts of her property and put things on it. A soda machine, a vending machine, a gas line, or even a pipe trestle. Those who use that land in this manner have a duty of care to third parties to prevent injury. The same duty that the possessor has.

Here is a fun fact pattern. The land possessor runs a horse farm. He rents out horses to be ridden on the property. A customer asks for a mild horse. The land possessor gives the customer what he believes to be a mild horse. The customer takes said horse out for a ride. Said horse is not mild. Said horse goes where it wants to go and takes the customer along with him. Injury ensues:

“Plaintiff and his wife rode under the trestle along the indicated road, with plaintiff’s horse in the lead. After proceeding about 400 feet to the north at a walk, plaintiff turned his head to the left and called to his wife. As he made this movement, plaintiff’s horse suddenly reeled about to the left and began racing back on the road toward the trestle, gaining speed as it went. Plaintiff attempted in vain to control or stop the horse by pulling back on the reins as hard as he could with both hands, but the horse kept going faster, passed plaintiff’s wife and ran around the bend in the road toward the trestle. Immediately before the accident and at a distance of some 8 to 10 feet from the trestle, plaintiff noticed some underhanging beams stretching over the traveled area at a height of about 6 feet. Plaintiff was then lying flat in the saddle, with his head held down as far to the right as he could get it and his left shoulder pointing upwards. His left shoulder and neck hit a stationary object such as the understructure of the pipe trestle, and plaintiff blacked out. When he regained consciousness he was lying immediately to the south of the pipe trestle, approximately 5 feet from the nearest substructure of the trestle and immediately south of the traveled area under the trestle. As a result of the accident, plaintiff is permanently paralyzed from the waist down.”*

Not what the customer asked for or intended. Setting aside the interesting discussion of the owner’s responsibilities regarding knowledge of his horses in making recommendations (i.e., knowledge of the propensities), there is a holding in here that helps landlords defend against property-related lawsuits.

The parties installing that pipe trestle were defendants to the case as well, owing the injured plaintiff the same duty of care regarding that pipe trestle as the possessor. It turned out that there was no duty — again, due to the no-longer-applicable classifications. But the principle will help the landlord identify the culpable party in any such lawsuit.

*Palmquist v. Mercer, 43 Cal. 2d 92, 97 (1954)

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submission do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.

By Linda Day Harrison, theBrokerList, Chicago, IL

Whether you like it or not, online marketing is here to stay. Don’t think that tomorrow you’ll wake up and not have to deal with it or worry about it, like a fad. No such luck. Burying your head in the sand and hoping that it’ll go away is not likely to help either.

So what is a person to do who doesn’t want to do anything, but deep down they know there are some minimum things they should be doing for the “greater good” of their company and future generations of that company?

Well, my first rule of thumb is to advise the person in charge of the company to protect the brand. Okay, so what on earth does that mean? What it means is to get your name secured in the top online marketing platforms out there, and if you don’t have a domain or blog, get the name registered as well.

What sites am I referring to? The major sites include Facebook, Twitter, YouTube, LinkedIn, and Pinterest. All of these sites offer customized URL links and, depending on your business, there may be others as well. Again, you ask, what does that mean? It means these labels or URL links are a pattern of letters or numbers or whatever your name is composed of. If someone else in another geography, company, or industry has a similar name, they may beat you to it, so grab it now.

For instance, if your company name is Markington Real Estate Services, you will want to secure the following URL customized names:

http://www.facebook.com/markington-real-estate-services

http://www.youtube.com/markington-real-estate-services

http://www.linkedin.com/company/markington-real-estate-services

http://www.twitter.com/markington

http://www.pinterest.com/markington

These are only examples, and whether you wish to use these services or not depends on your business. However, the names are going quickly, and those with more common words or names will not have much of a selection when they do decide to select a name to match their brand.

If you’re a new company, it’s strongly recommended that you do your homework before you start your new property management company. Research the name and find out if the name is available across the various social media platforms. Do not select a name until you determine the availability of these sites, as well as the domain name for the company website and blog.

I have seen so many companies make the mistake of selecting a name, incorporating the name, and then later determining there is no chance to obtain a cohesive name across all customer touch points. What does this mean? If your name is Markington, people are going to search Markington. That’s it. The letters are the online link back to you and your content. If you are marketing apartments, offices, and retail, and you’re looking for new building owners, they are going to search for Markington.

If you think it’s easy to get good SEO for three or four different variations, you’re mistaken. It’s hard enough to build your SEO with a single name, let alone a variety of configurations.

If you are set on a name and there’s no other way around it, think of creative ways to abbreviate or create acronyms with your name, again, being consistent and creating a brand with the abbreviation or acronym.

So if your company name is Markington Real Estate Services, consider MRES or MarkRES, etc. The other way to do it is with a geographic reference, say MarkingtonAZ, etc. Use caution, as the letters you are permitted may be limited. For instance, with Twitter, the number of letters is defined on their support pages for the real name, different than the username. Also note, with Twitter, the real name can change as often as you wish, but the username is fixed. Click here for more information.

How long can real names and usernames be?

• - Your username can contain up to 15 characters.
• - Your real name can be 20 characters long.

The bottom line is that all of the sites work together to let customers find you. It’s important to plan and think ahead. At present, Twitter, Facebook, LinkedIn, and YouTube are not going anywhere. Based on that information, it’s prudent as a company executive or business owner to protect your brand and get your URL before somebody else grabs it and makes it that much harder for you to have the name that is so near and dear to you and your customers.

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

“The childish propensity to intermeddle was the characteristic which the [property possessor] should have taken reasonable precautions to guard against.”* Sometimes the courts come up with lyrical gems that get right to the heart of the matter. Through pages and pages of drivel, more often than not there is one pithy sentence which sums up the whole case and rule. I often wonder why the esteemed appellate justices do not just give us the facts of the case and the one pithy sentence. The books would be a lot smaller and cases a lot clearer.**

The above quote comes from a case which held both a tenant and the janitor the tenant retained liable for personal injuries to a three-year-old. The proof was that the tenant was in charge of a school. The tenant also, in the same building, housed families. (It was a hotel, and the tenant was the United States Navy). The tenant retained a janitorial service to clean said school on the weekends. Said janitorial service did so. Sometimes, they would stack the furniture — desks and chairs — in a pile. (To make cleaning the floor easier?) One weekend, a child was present in the school. Not a stretch, considering the building also contained living quarters. He climbed up on the furniture pile and promptly fell out the window. From the fourth floor.

The case had a lot to do with outdated and inapplicable classifications of the child — whether his activity of playing on the furniture made him a “trespasser.” But the case did have confirmation of the agency liability principle, which should help exonerate the tenant for a good deal of liability for the injuries this contractor arguably caused. Here it is: “One who carries on an activity on land on behalf of the owners in possession is subject to the same liability and enjoys the same immunity from liability, for bodily harm caused thereby to others as though he were said owner.”***  Translation: the folks hired to do work on the property are not immune from liability because the owner hired them. They are liable. If they are insolvent, or cannot be located, then maybe the owner will assume their liability. If the owner also had control over the activity (arguably always?), they may have some independent percentage of fault.

*Roberts v. Del Monte Properties Co., 111 Cal. App. 2d 69, 74, 77 (1952)

**And the lawyers less numerous?

***This quote is not as pithy as the one that opened this post, but it is arguably as important.

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submission do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.

A guest post by Sara Thompson, Gresham Sanitary Service, Gresham, Oregon

You have probably seen these homes on TV, or maybe you’ve seen them in person. People known as “hoarders” compulsively accumulate any and all kinds of things in their homes until it is packed to the ceilings with their every possession. Hoarders usually have an inability to let go of unnecessary items and clean their environment. In some cases, hoarders’ homes become dilapidated and dangerous. If you are managing such a property, this can present a serious problem, but with careful planning and consideration, your house can be habitable once again.

Dealing With a Hoarding Problem
People who become hoarders are in need of help, both with the situation at hand, and in terms of dealing with the disorder. Concerned family members and friends should have the hoarder examined by a doctor, and perhaps consult a therapist.

Helping the hoarder also involves completely cleaning out and organizing the home. Piles of clutter can make a home unlivable, creating both safety and sanitation issues. Thus, it’s critical for the home to be cleaned and organized before more problems arise. Possible issues involve fire (due to blocked exits, and huge amounts of paper and flammable objects) as well as the danger of illness from unsanitary conditions in the kitchen and bathroom.

Creating a Strategy
People who are involved with a hoarding cleanup project need to develop a strategy for cleaning the home, as many hoarding situations can become overwhelming. The best strategy is to break the cleanup into several projects, thus making the cleanup more doable. Here’s a list of jobs that will need to be accomplished in order to clean a hoarder’s home:

1. Assess the situation. Take a look at the overall clutter in the home and prioritize the work that needs to be done. It can be helpful to start in a small places like closets and bathrooms. When one small space is cleaned out quickly, it can motivate you to move on to bigger tasks.
2. Sanitize the worst areas first. Some hoarders seriously neglect sanitation in the bathroom and kitchen, which can lead to health hazards. These areas should be cleaned out and sanitized first, especially if there are areas with pet or human feces. While this is often a disgusting task, it can go rather quickly because you shouldn’t have to sift through items worth keeping. Most of what is in a bathroom, like half-empty shampoo bottles and expired toiletries can be trashed without consideration. The cleanup crew should bring plastic bags, mops, rubber gloves and disposable cleaning items like sponges and wipes to deal with the cleanup.
3. Do a major decluttering of useless objects. Some objects in the home may be useable if cleaned. Other items, like leftover mail, old newspapers and trash, must simply be disposed of. The junk items should be thrown out first before dealing with reusable items.
4. Get a drop box from a waste disposal company to help deal with major junk items. These large waste containers can be rented by the day at reasonable rates, depending on the time frame and size of the container. Many companies will pick up the full container and dispose of the waste once the job is done.
5. Once the home has been cleared of waste items and sanitized, sort through the other items. Make three piles for clothing and other items, and sort them into piles of what can be reused once cleaned, what should be given to charity, and what can be sold.

Creating a clean environment for a hoarder is a healing and healthy act. It’s a great gift to give a person who needs help. It can also be very rewarding for you as a property manager when the home has become rentable again.

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

One of my practice areas is insurance coverage work. I represent people and help businesses work out issues with insurance companies regarding whether a particular lawsuit, loss, or claim is covered by insurance. For many people and businesses, insurance is a must and coverage is a matter of everyday life and business practice. Drive a car, get insurance. Own a home, get homeowners insurance. Run a business, purchase a CGL policy. Get business interruption coverage.

A gray area is when we are not quite acting as a person or a business. We are volunteering. We are working selflessly for others. For the common good. Sometimes we are paid. Sometimes we are not. The soccer league, church council, and the HOA cannot get along without us. There are important decisions to be made for the soccer league, for the church, and for the condominium complex.

But those decisions have implications! People are affected by them. People are denied permission to do things. The HOA must act if it has information. If the collective “it” of the HOA knows of a dangerous condition, act it must, as we know. But what if only some of the directors are aware of the dangerous conditions? What if that director or directors do nothing? And what if someone gets hurt?

He gets sued! And he could, in California, be personally liable for not acting on that knowledge. Yes, personally liable, separate and apart from the HOA entity on which board he serves. In a recent post we talked about a case that holds the HOA to the same duty as a landlord. That same case also involved a cause of action within the lawsuit against an individual director for ordering the removal of the installed lights (which were put in to deter criminal activity) and then failing to report the criminal activity to the board. Ordinarily, the law does not make the individual director responsible for the board’s actions. That’s one point of having the board. But when the individual director personally participates in conduct which is a “tort,” he can be joined as a defendant.

So this director was sued. And the lawsuit survived legal challenges. I hope he or the board bought Directors and Officers liability insurance!

Meanwhile, California has enacted some legislation that mitigates against liability for certain classes of directors in these situations. And we’ll discuss them in the next couple of blog posts.

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submission do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.

A guest post by Brooke McDonald, Apple Valley Property Management, Minnesota

As we all know, outsourcing is a risk that can turn out to either be the best decision you ever made or the worst thought to ever cross your mind. When it comes to property management, you have to decide: Am I willing to put the care of my rental property into the hands of a stranger? Will the investment be worth it?

The stereotyped and semi-popular sitcom Outsourced didn’t last long on NBC, but it aired long enough to remind Americans of a poignant truth: Any kind of outsourcing involves some kind of learning curve, frustration, and a little bit of humor.

Thankfully, outsourcing your property management does not have to be as hairy as Todd Dempsy’s struggles to run his Indian call center, nor will it require working with an office on another continent (unless you hire a property management company in another country, which we don’t advise). No, local property management companies can, in fact, be an incredible benefit to you as a property owner, saving you time and money and providing real estate expertise that can protect you from legal trouble.

When you think of the word “outsourcing” in terms of property management, get rid of the negative connotations you often hear. Retrain your mind to hear the word “outsource” in conjunction with “property management” and think smart, wise, and worth it.

Outsourcing can be an outstanding decision

Doing all the management yourself is a heck of a lot of work for you, but it’s all in a day’s work for a property management company.

In addition, property management companies have all the structures and resources in place to do an excellent job. They usually employ software that an average person might not have – software that allows them to collect rent, perform background checks, and advertise listings.

Here’s what hiring a property manager can save you:

• Valuable time. Property management involves a lot of time communicating with tenants, marketing properties, advertising online and in high-traffic areas, and conducting showings.
• Worry about legal issues. Property management is a big responsibility and can result in lawsuits if tenant/landlord law is not followed correctly. No one wants lawsuits – and the experts you hire will understand the laws and know how to avoid them.
• Burdens about quality. A company that takes care of properties for a living can be trusted to go about things the right way. They also won’t be doing it on the side or in their spare time (as you might, especially if you have another day job along with caring for properties). It’s their main focus. You can relax knowing they have it all under control, rather than constantly thinking you might be missing something.
• Money (in the long run). Although there is a cost to property management, in the long run they will be doing needed maintenance as time progresses, preventing major blow-ups and ensuring that the property has all the updates it needs. Property managers also have the potential to make more money on properties because they understand local real estate, potentially charging higher rent, filling vacancies faster, and taking advantage of any special deals on maintenance and advertising they might have as professionals.

Common objections to giving up control

You may be saying, “But I really love this apartment, and I want to make sure it’s taken care of the way I want it to be taken care of.” Giving up control of your rental properties might feel a little bit like handing a newborn to a random hospital visitor. It matters to you! Nothing is more important to you as the owner than running a quality business, keeping tenants happy, and providing excellent upkeep of your properties so your tenants have a great experience.

Often, too, the cost that comes along with outsourcing property management makes people wrinkle their noses. But it’s possible to soothe your objections if you consider the overall advantages of hiring professionals – and hire the right ones.

Having confidence in your property management company

When considering people to hire, consider the recommendations of friends, as well as reviews and ratings of local companies. Also, sit down with the company and ask questions. Just as you’d screen a summer nanny or a house sitter, you want to feel confident and trust the person you choose.

Here are several helpful questions to ask, with some thoughts on the reason to ask them.

1. How often will you inspect the property? You want your property manager to get into the property on a frequent basis and ideally not charge extra for these visits. The more often they are able to check up on things, the better job they will be able to do.
2. How frequently will I receive reports? The more you are aware of how things are going with the property, the better. A good property manager should issue monthly reports – anything else is slightly suspicious.
3. What are your fees based on? Ensure that the fees are based on rent collected, not potential rent charged. Also ask exactly what services are included, and make sure everything you are looking for is listed.
4. How do you handle vacancies? Will they fill them ASAP? Will they charge you if a property sits unfilled?
5. What are their methods for handling repairs and maintenance? Some companies provide receipts and expense reports to owners to show all that they have done on the property. Many also detail the types of repairs they can and cannot do. It is helpful to know this up front. Also discuss their spending procedures, and when they need to receive permission to spend money on your property.

The caveat to all this is obviously that outsourcing will prove a crummy decision if you trust the wrong folks to do it. You want to hire an expert company who will do the job right.

But if you pick the right kind of people who can take your property and run with it, well, who wouldn’t outsource?

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

That’s not the quote, is it? No that’s right, it’s not. The quote is “With great power comes great responsibility.” Notwithstanding, we discussed the immunity provisions granted by the California Civil Code with respect to a volunteer director’s conduct that might be considered a “tort.” So what the legislature gives, it also gives duties. That’s not the quote either. It’s something about what the legislature gives it also takes away. My right hand does not know what the left is doing, either, by the way. But I digress. Are you still reading this?

The same Article of the Act that provides immunity for such volunteer directors also sets forth affirmative duties that all HOAs must follow. They can give themselves “more stringent” duties, but at a minimum, they must: 1. review operating accounts quarterly; 2. review reconciliation accounts of association reserves; 3. quarterly review reserve revenue and expenses; 4. review account statements from financial institutions in which reserve funds are placed; and 5. every quarter review income and expenses for operations and reserve accounts.

There is a subset of requirements regarding reserve accounts, in place to protect the maintenance of the complex and its maintenance areas. Who can sign checks, how much has to be in the reserve, what it can be used for. But there is another affirmative duty that dovetails into the theme of our last two blog entries and indeed, a lot of these entries regarding landlords in general. That is the duty to inspect.

“At least once every three years” the HOA board is to have the premises inspected, visually, in a reasonably competent and diligent manner. This is in conjunction with keeping the right amount of funds in the reserve accounts. But included in all of these inspections are requirements of identifying costs of repairs, for the “repair, replacement, restoration, or maintenance” of any identified repair needs.

In essence, the HOA is required to document what needs work, what arguably could later cause injury or property damage, how much it will cost to fix, and even estimate how much longer such conditions will exist (useful life). This would be great evidence in a lawsuit. Sounds like a subpoena for documents to me. So if folks were hoping for the protections of immunity without corresponding responsibilities, they might have been reminded of another quote: “Be careful what you wish for, you just might get it.” That quote is right. I’m pretty sure of it.

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submission do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.

By Steve Boudreault, Buildium, Boston, MA

In Star Trek VI: The Undiscovered Country, Captain Kirk and Doctor McCoy are found guilty of assassinating the Chancellor of the Klingon High Council and are sent to the penal colony known as Rura Penthe. Upon arrival, the administrator of the facility informs the arriving prisoners, “Work well, and you will be treated well. Work badly, and you will die.”

This sentiment, paraphrased and without the threat of death, is a guiding principle of property management. If tenants behave themselves and follow the rules, the property manager can make their tenancy a pleasant one. If not, things can get ugly very fast.

There was a situation recently at a property in Virginia where the residents came close to rioting because of what they perceived to be shoddy property management. Management, for their part, claimed that the residents were disrespectful, slovenly, and constantly flouting the rules.

So as a property manager, what do you do when a situation turns ugly? You’ve all got to live with one another, right? If you say it’s them and they say it’s you, how do you come to an amicable resolution? Here are a few tips.

Document everything. If residents are accusing you of not performing your property management duties, be sure to have written documentation that states that you have been. And if, for example, residents are complaining about things not being repaired, photographic evidence of before and after can go a long way.

Isolate the problem. It’s very rare that an entire property rises up as one against management. Oftentimes it’s a single agitator, rallying other residents to the cause by pointing out minor issues and making mountains out of molehills. If there’s general grumbling, talk to your residents and see if you can trace the problem back to one or two malcontents.

Arrange town meetings. Gathering everyone together in an open forum is a great way to establish a dialogue, hear residents’ complaints, and keep everyone up to date on what’s being done and what will be done to fix things. Be sure to keep the reins tight, though. Meetings like these can easily degenerate into shouting matches if you’re not careful.

Property managers and residents live in an eternal state of careful balance. As long as everyone feels that their voices are heard and respected, that balance is maintained and everyone can live in harmony.

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

I like insurance law. Not many people do, but I do. But then again, I like heavy metal and not many people like that either. (Their loss. And my hearing loss. I digress). I like insurance law because it feels good to help policyholders obtain insurance coverage, and I am also rewarded when the insurance contract is upheld to enforce the mutual agreement of the parties — insurance coverage is denied because there was no agreement to cover a particular loss. I work with both policyholders and insurance companies and I see both sides of the equation. Sometimes the law interjects to help or hinder the implications of the insurance contract in real-world situations, such as when a volunteer HOA director participates in negligent conduct that leads to an injury.

In California, the Civil Code has some statutes that protect the volunteer director from the liability scenario we discussed last post. As a refresher, that director participated in conduct that was arguably negligent with respect to known criminal activity and ordered some lights installed in the common area removed. Later, someone got hurt and sued the HOA and that director for removing the lights and leading to a criminal assault. The director was a volunteer but nonetheless was potentially personally liable. Enacted a couple of years after that lawsuit, Civil Code §1365.7 provides some protection for similarly situated directors.

That section provides immunity for a volunteer director of a residential HOA, as long as the HOA maintains certain levels of certain types of insurance. If the HOA manages less than 100 units, there should be $500,000 of coverage for both general liability (i.e., CGL policy for the complex) and also for the directors (i.e., D&O — Directors and Officers insurance). As long as that insurance is maintained, and the person does not get paid for being a director, he will receive the benefit of this section. He also will have done the tort while in course and scope as a director, done in good faith, and without reckless or intentional conduct. The protections go away if that “volunteer” owns more than two interests in the development.

The net effect of these rules is that the volunteer director will not have to pay anything out of pocket when he otherwise might have had to. See? Insurance is fun!

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submission do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.