By Brooke McDonald, VSM Real Estate, St. Paul, MN

The unique nature of older properties makes renting them out a bit of a challenge. While newer homes and apartments boast modern conveniences, older properties sing charming songs from an earlier era. They just don’t build ‘em like that anymore, the old fogies mourn. There’s truth to it: People are truly not able to recreate the age and qualities of an older home, unless you take the expensive route and custom build and design a home.

The challenge of preparing old properties for market fits the analogy of a beauty pageant like a glove (an old-fashioned Grandma glove, no less). Not only is your contestant up against the fierce competition of the newly-remodeled-three-car-garage-whirlpool-tub crowd, but her charm and character need to make a fast impression.

Most real estate agents and property owners emphasize that the most important marketing strategy is to foresee common buyer objections and address concerns with renting an older property. What can you do to showcase your elderly gem’s best qualities and minimize any concerns from cautious renters?

The best of old and new

Old homes are stereotypically smelly and dark, with out-of-date appliances, peeling paint and dirty carpet. Property owners may be tempted to scrap it all and invest heavily in renovations. The key, however, is to retain the character and uniqueness your old property boasts but equip it for modern living as best you can. Conducting a deep clean, ensuring the working order of major home systems and making small renovations will go a long way to beautifying your old property.

• Make sure it looks good on the outside. Eliminate a new renter’s concern that the property is falling apart by making any big property renovations that must take place – like a new roof, chimney repairs, new windows, new siding, etc.

• Check mechanical systems (water supply lines, drain lines, heating system, circuits, etc.). Make sure everything’s working like it should so that renters do not worry that something will break in the middle of the night.

• Update ancient appliances. Ensure that everything works, and buy new appliances to replace near-death ones. Consider consulting a designer to make sure you choose appliances consistent with the home’s character.

• Freshen up the bathrooms and kitchen. These rooms sell a house. New coats of paint, new hardware on the cabinets, and perhaps new countertops or mirrors all go a long way in maintaining the charm and loveliness of the property. Nobody likes the look of kitchens or bathrooms that are in disrepair, dark or dingy. You can update these without a huge investment. For the showing, set out new towels, soap and flowers.

• Know the story. Time permitting, take a look at the history books, old newspaper articles and library archives. Having interesting tidbits on hand to share with your potential renters will help people value the property more. It’s not a bad idea to create some marketing materials specifically for telling the story. Often, older properties are located in areas with rich history and great ambiance.

• Have a property inspection done. Do this before renters show up in order to give relief to suspicious prospects who think a big bad issue will crop up at any moment.

Once you have your older property all spruced up, it’s time to show it to potential renters. What are the secrets to showing an older rental property? That’s the topic of, “How to Show Older Rental Properties,” my next blog post.

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

I recently had a neighbor suggest to me that we jointly fund a new fence along my side of the property that adjoined his. The fence was dilapidated here, but nowhere else. I was open to the idea, but wondered why I should share in the cost if this was the only place my fence was having problems. On all of the other adjoining property lines the fence is fine. Why this one? Maybe because his property was six inches higher than mine on his side of the fence and was pushing into mine? Fences are frustrating.

So why would you want to build one on property you rent? There would appear to be no common law duty in California to erect fencing to prevent entry onto your rented property to prevent injury or property damage. (Check your local laws to see if they are in accord). Some scenarios might compel it — to keep third parties away from a pool or electrical hazard. But absent some kind of foreseeable danger, there would not be a requirement at law.

Indeed, could it promote new obligations if the landlord builds a fence? Certainly, the landlord would have to maintain that fence, once built. He would not want to build a dangerous one. One with loose boarding. With nails sticking out. Or a ladder leading right to barbed wire. And if the landlord builds a fence on his residential rented property, he would have to maintain it to prevent little tykes who reside therein from busting loose onto adjoining property and getting injured.

Wait a minute. What? He would? Yes. If, say, there was a creek on nearby — but not owned — property, and the landlord put the fence up to keep his tenants away from the creek, the act of creating this fence is an act of exercising “control” over the adjoining land, thereby suggesting a duty to prevent injuries on that adjoining property. Cases in California have held a duty in such scenarios.

This is contrasted in those situations where there may be a dangerous condition nearby and the landlord does not erect a fence, such as near a busy road.  There, the landlord does not owe a duty because he did not exercise any control over the busy road by erecting a fence. The plaintiff, in one case which found no duty on the part of the landlord, ”was one of many children residing in an unfenced apartment complex that fronted on a busy road. He was injured when he walked off the premises, into the road, and was struck by an automobile.”  McDaniel v. Sunset Manor Co., 220 Cal. App. 3d 1, 10 (1990).

So is it better not to erect a fence at all? As we lawyers like to say, it all depends on the facts and circumstances of the particular property and tenants. Since ATPM blog readers are responsible types, there is a strong argument to be made that the erection of a fence to prevent injury on an adjoining property is not only the right thing to do, but one which will prevent injuries (and thereby lawsuits). These loyal readers will not let their fences fall into disrepair, and thus avoid the problem altogether.

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submissions 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

It’s about time that Buildium’s top wordsmith started writing blogs for All Things Property Management. So here I am and here we go!

I’m going to use my first ATPM blog to connect property management to my number-one passion: Star Trek. Specifically, Star Trek: Deep Space Nine (DS9).

Deep Space Nine focused on the space station of the same name, in orbit around a planet called Bajor. Originally an outpost of the evil Cardassians, it was built using Bajoran slave labor during The Occupation, which lasted nearly 50 years. When the Bajorans finally ousted the Cardassians, Starfleet sent officers to take over administration of the station, and try to help Bajor and the Bajorans get back on their feet.

The wrinkle comes in with the discovery of a stable wormhole that connects the area of space right around Bajor to the distant and completely unexplored Gamma Quadrant. Now instead of being at the end of a quiet cul-de-sac in space, Deep Space Nine is at the crossroads of a major interstellar highway. That’s progress for you.

So what connections does Deep Space Nine herself have to property management? I’m glad you asked:

• Responsibility. The station was built by Bajorans for the Cardassians but is administrated by Starfleet. So one of the first questions was this: Whose responsibility is it to clean up and repair the station, which the Cardassians were so kind to trash before they left? Is it the owner’s responsibility or the manager’s? Well, since this is science fiction (heavy on the fiction) the responsibility is shared. (Good luck getting that to work in real life.)
• Ownership. At one point later in the series, the Cardassians returned and reclaimed the station. Sure, they’re evil, but the station did belong to them. Should they have a claim to it? It’s in orbit around Bajor, so does that make it Bajoran property? Back here on Earth, when a property changes hands from one owner to another, it can be confusing and frustrating for property managers when they’re not sure to whom they’re answering.
• Tenancy. Deep Space Nine houses the staff who work there, but it also houses the merchants who operate businesses on the Promenade, visitors, dignitaries, allies, and pretty much anyone who’s passing through. And despite the kinder, gentler nature of Star Trek, not all races get along and things sometimes get heated. Similarly, property managers can face the challenges inherent in renting to people of different cultures, backgrounds, and beliefs.

Though fictional, DS9 dealt with many of the same issues that today’s property managers deal with. And though the writers were probably blissfully unaware, they taught us a thing or two about cooperation and compromise when it comes to running a property. Hopefully we can all take something away from it.

But only if we all watch it.

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

I enjoyed philosophy classes in college. I enjoyed thinking about such questions, as: If a tree falls in the forest and no one hears it, does it make a sound? I enjoyed even more Bart Simpson’s reply to the question: What is the sound of one hand clapping? (He immediately held up his one hand and patted his fingers against his palm, making a muted clapping sound).

My enjoyment of these questions has found a natural outlet in the law. The law ostensibly provides you with an answer, whether it be found in a book, or in a code section, or recommended by experts. So it is one of those questions today that is our focus: If a tenant hurts himself in an apartment and the landlord did not know about the condition which caused the injury, was the landlord at fault?

As is always the case, the answer in law is perfectly clear: it depends. There is a duty to inspect premises when the property is given to the tenant. Landlords are in the best position to assess the relative safety of the property before the tenant takes control, so they should inspect and repair as needed. The inspection should comport with general negligence principles – i.e. be “reasonable” and make it “reasonably safe.” *

Yes, but how do we know if it is reasonable? Well that answer is clear and simple and straightforward: it depends. It depends on the facts of your case! In California:

“The burden of reducing or avoiding the risk and the likelihood of injury will affect the determination of what constitutes a reasonable inspection. The landlord’s obligation is only to do what is reasonable under the circumstances. The landlord need not take extraordinary measures or make unreasonable expenditures of time and money in trying to discover hazards unless the circumstances so warrant.”**

Clear as mud, right? So we fall back on common sense. If you are intimately familiar with the property you are about to rent – having lived there for five years – your duty to inspect probably is not great. You know what works, what does not, what is likely to injure (hopefully not much), and what is not. You know where the cracks in the slab in the garage are. In contrast, if you are not familiar with the property, you ought to conduct a more thorough inspection. If you just bought the property and have not had extensive time with it, you might consider a more thorough inspection. You might document what you find and give it to the tenant in writing, or repair as required.

Obviously, as we’ve discussed previously, if the inspection uncovers something dangerous, you ought to repair the condition before giving possession to the tenant. But if there is an open and obvious condition that is itself a warning to and is patent to the tenant that it is dangerous, the landlord might not be liable for any resultant injuries.

And further, if one possesses legal title but does not yet have control – that key word in our liability analysis – they cannot be held liable for injuries. If they have no opportunity to inspect and/or repair, their liability is usually precluded.

*Swanberg v. O’Mectin, 157 CA3d 325 (1984)

**Mora v. Baker Commodities, Inc., 210 Cal. App.3d 771, 782 (1989)

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in these blog submissions 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 Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

Even after our little spigot fiasco, my father and I are speaking again. In fact, it did not take long. We both bonded over the fact that later that night, my wife and I walked out of the George Clooney movie, The Descendants. My wife and I both were bored out of our minds and had little empathy for a guy who owned all of Hawaii. I mean, really? I’m supposed to feel sorry for this guy?! Dad, being generally anti-Hollywood, applauded our decision to vacate the movie theater in favor of the bar next door.

We got to talking, and we agreed that in the future, it would be best if I not ask him to do repairs on our house. It’s not really something I should delegate to him. We decided on the McCarthy “non-delegable duty of repairs” rule – I must do my own repairs.

By operation of law in California, a landlord also has a non-delegable duty regarding repairs. If the negligent – grossly negligent one might argue – repairs my father attempted were on a tenant’s dwelling that I rented out, I still would be liable for any injuries it caused. So if the tenant got hurt from this negligent repair, they could still sue me.

A landlord cannot escape liability for his repair duties by having someone else do the repairs. This duty to repair is “non-delegable.” Thus when a landlord hires a plumber, or other handyman to do a repair, if the plumber or handyman does not do it correctly, and an injury results, the landlord is still liable. Some examples of cases which held the duty to repair as non-delegable, and exposed the landlord to liability include:

• Sink in a school bathroom
• Water heater
• Roof
• Elevators
• Proper waxing of floors

Thus when a landlord hires a subcontractor in California to perform repairs on these or other fixtures, but does not repair them correctly, liability will attach for any later injuries.

The landlord certainly can seek redress from the subcontractor. If the plumber messes up the repair and injury results, when the landlord gets sued, he can sue the plumber (full employment of attorneys act, its true).

In many cases, the contract between the landlord and the independent contractor should cover such instances. It should spell out – expressly – who is responsible for what and that the independent contractor will be responsible to hold the landlord harmless from any suits. We’ll talk about contractual provisions with respect to some of these duties in later 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.

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

Well, hello there and happy 2012 to you all. It has been a little bit of time since we have had a chance to chat. I will beg your forgiveness for being pre-occupied with year end duties, and a jury trial in Visalia, California that preoccupied my time and has prevented me from indulging in the blogging world. Now that I am able to focus, I want to talk to you about every one’s favorite topic – repairs – from everyone’s favorite perspective – a lawyer.

But before I do, I’ll share with you how I spent my New Year’s Eve. It’s a story that pretty much exemplifies why it is important to have a good handyman at your disposal. And why it is important that you not rely on your father to do repairs at your home or your leased property.

As is the case with a lot of you, my parents came to see their grandchildren for Christmas. They did not come to see me or my lovely wife. They wanted to see my kids while they are still cute, and say and do precious things. I recognize this and accept it. My little brother will soon benefit from this phenomenon. For the first time, my parents will actually go to see him in the cesspool (I mean lovely city) that is Los Angeles*.

As payback for this parental neglect, I frequently use the visits as the opportunity to enlist my father in helping me with home repair. This time, I had a leaking external water spigot in the back yard that was opening the spigot – if you will – on my water bill. So I asked dear old Dad to assist, knowing (but always forgetting) how he does these things.

He waited until December 31, 2011 to start. He waited until 4 p.m. in the afternoon to start. He had a 7 p.m. dinner appointment with friends. After assessing the situation, he decided that we may as well replace the spigot in the driveway because it was the same vintage and bound to fail soon, too. So off to Orchard Supply we went and purchased our replacement parts. We successfully installed the new spigot in the back yard in about 10 minutes.

The driveway spigot proved more challenging. We could not get it off. Not easily anyways. We did manage to get some of it off – the rest remained rusted and in place. The problem with only getting part of the spigot off and not all of it was, in this case, that there was no way to stop the water from escaping. Unless we turned the water off. So we did.

Not a big deal. Except that we did not have the tools to get the rest of it off. Except that OSH was closing. Except that Dad was going to a dinner party in about 20 minutes. Except that OSH was closed on New Year’s Day. Except that we have three little ones that need frequent bathing. Except that we needed to be able to flush the toilets. Etc. So Dad goes under the subfloor looking for a close out valve for this particular water line. Mom is at the doorway wondering when she is going to the dinner party. My wife is wondering what is going on. Dad swears like its 1984 and he’s working on the VW bus. Then throws his hands up and says, “I have to go to the dinner party.”

Lucky for me, my neighbor, who is a handyman, was home and looking for some extra cash. An hour and a $150 later, problem solved. Negligent repair made non-negligent. Water on. Kids clean. Toilets flushable. McCarthy residence, habitable.

And so it is, too, your landlord’s responsibility to make your property “habitable” by competent repairs. A landlord’s failure to maintain and repair the dwelling he has rented you entitles you to, in some cases in California, refrain from paying rent related to the dilapidated condition of the dwelling**. If the failure to repair interferes with the tenant’s ability to live in the dwelling, they may be free from rent obligations until the situation is corrected***.

So clearly, the lesson of this blog post is: do not let your father do repairs at your house or any rental properties.

*He’s actually in Redondo Beach, which is cool. And where John Travolta’s character in Pulp Fiction resides.

** Stoiber v. Honeychuck, 101 CA3d 903 (1980)

***Green v. Superior Court, 10 Cal.3d 151 (1974).

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submissions 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.

Time is of the essence in the property management business. Let’s face it, there are just never enough hours in the day to get everything accomplished. So, for many, the notion of taking time out for training and other sorts of continued education (whether it be about real estate rules and regulations or maintenance tasks) seems like a nice idea, but also completely unrealistic.

When considering such matters, though, it’s important to apply a bit of foresight to the decision-making process. Following are just a few examples of common property management scenarios where spending time up front might just save you a whole lot of time (and sometimes money) in the long-run.

Computer and Software Training
Incorporating financial and record-keeping software into your property management program can save you a ton of time in the long run, whittling formerly drawn-out tasks such as rent collection, payment recording, and maintenance tracking down to just a few clicks of the mouse. But installing new property management software and learning how to navigate it can be a daunting prospect. Taking time to learn the ins and outs of navigating office software that automates tasks and keeps electronic records is always time well spent. You’ll literally save yourself hundreds of hours down the line.

Learning Basic DIY Tasks
Having a stable of good repairmen to call when the need arises is crucial to keeping your tenants happy. And, certainly, you should always call in the experts when it comes to major or complex repairs. But the truth of the matter is, there are just some things you can do on your own. And, in some cases, it’s quicker and cheaper to take care of minor glitches and quick-fixes on your own. Consider investing your time in learning some basic DIY tricks of the trade so that when small repairs come up you can take care of your tenants quickly and inexpensively.

Organizing Your Office
No one works well in a cluttered environment. And even if you think you do, chances are you’ll save yourself a whole lot of time in the long run if you know exactly where to locate a file or document when you’re looking for it. Investing a bit of time into office organization is one of those things a lot of us think about, but few of us rarely do. Setting aside a half-day every quarter to really get things organized will make everything run smoother in the long-run. And the truth is, most of us are more likely to keep things organized once they’re already tidy. The more diligent you are about organizing on a regular basis, the smoother everything will run and the less you’ll actually have to do once that next organization day rolls around.

Ultimately, think of your time as an investment. Just as you sometimes have to spend a little money to increase the value of your property, sometimes you have to spend a little time to increase the value of your business.

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When it comes to tiny property repairs, a molehill can very easily become a mountain if it’s not resolved quickly. Whether you’re a DIY kind of person or would prefer to have a contractor or handyman take care of your property’s repairs, time is of the essence. Not only is it important to take care of repairs and maintenance quickly for your tenants’ sakes, but also for your bank account’s. In so many cases, a little problem that goes unaddressed can turn into a big, expensive problem not so far down the line.

Budget for the unexpected.
As we’ve discussed before, setting money aside for those unexpected repairs that always come up sooner or later is one of the smartest moves you can make as a landlord. No matter how good your intentions are, it’s almost impossible to move on any repair quickly if the funding simply isn’t there.

Move quickly, no matter how innocent an issue appears.
Cracked plaster? Leaking roof? Chipped window? All of these are examples of “little” issues that are easy to set aside, but will only grow with time. Cracked plaster can easily begin to crumble, resulting in a much bigger mess. A leak can expand and run rampant, causing significant water damage. A tiny window chip can quickly spread, leaving no other option than a complete window replacement.

Maintenance and small repairs go hand-in-hand.
There are some maintenance duties that count just as much as repairs, and should be performed just as efficiently. Cleaning gutters on a bi-annual basis, for example, is critical. Sure, it may not seem like the most pressing job, but you’ll save yourself a lot of money in the long run. Other regular maintenance work that staves off big repairs includes: draining your water heater (once a year); cleaning stove grease filters (every time a tenant moves out); and turning off the water for exterior water faucets (every year when the temperature dips below freezing).

Keep the basics on-hand.
If you choose to take the DIY route when it comes to repairs and maintenance, make sure you have the basic tools you’ll need to complete a range of tasks on-hand. You’ll be much more likely to take care of things quickly if everything you need to do it is easily accessible. Click here for tips on putting a basic home repair tool kit together—and, of course, you can add to this kit over time.

Have a professional in mind ahead of time.
Much as it pays to budget for problems before they happen, it also pays to research handyman and contractor options ahead of time. If you already know exactly who the man for the job is, you won’t have to waste any time once the need for a repair crops up.

Repairs don’t have to be a big deal. But they may well become one if not addressed in a timely manner. Having a plan of action in place before repair items ever arise and a no-holds-barred attitude about addressing them immediately is a great way to save yourself a lot of money in the long-run.

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Property maintenance and major repairs are the keys to positive income. Following are some additional resources for keeping your properties well maintained, increasing your revenue, and reducing your long-term costs. Talk about a winning situation!

• Property manager Paul Dizmang put together this great video about maintaining a rental property maintenance checklist.
• Making sure your properties are well maintained during the harshest of seasons is key to catastrophe prevention. Acknowledging the 18 point of inspection from Lorraine Sinner’s list will help prevent such catastrophes.
• Many don’t realize the importance of maintaining vinyl siding. Be in the know and clean your vinyl siding on a regular basis.
• The St. Louis County Public Works Department maintains a great property maintenance checklist that breaks tasks down according to exterior area, exterior structure, and interior structure.
• Do you need to replace kitchen appliances? Upgrade to green-approved appliances to save money and the planet.

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