RENT Magazine discusses the latest investing, legal, screening, and tech trends in the rental industry. Contributors include attorneys, tax experts, investors, and real estate influencers. Stay in the know and read RENT Magazine for FREE.
WINTER 2024
Cost Segregation Specialist Yonah Weiss
Property Management Influencer Tony Sousa
RE Social Media Influencer Reid Bennett
New RE Book Rhianna Campbell
Multifamily Broker Robert Knakal
AAOA’s Best of 2023 Awards
New RE Podcast Drunk Real Estate
RE Marketing Expert Anthony Simonie
RE Accounting Expert Gita Faust
RE Equity Expert Esther Reizes-Lowenbein
Investment Expert Josh Etress
Section 8 Expert Michael Threatt
New RE Book Pamela Goodwin
Multifamily Investment Coach Matt Picheny
New RE Book Charles Dobens
RE Podcast Julie Holly
Investment Course Jason Kogok
RE Content Expert Jesse Futia
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THE OFFICIAL PUBLICATION OF THE AMERICAN APARTMENT OWNERS ASSOCIATION
AAOA.COM
TEAM
VP Robbie Cronrod Editor in Chief
Alexandra Alvarado Contributing Editors Allen Artcliff-Cronrod Nancy Abrams Contributors Amanda Han, CPA Brad Barth, Esq. Daniel Sharabi David S. Fisher Kathelene Williams, Esq. Lauren Lieb Leah Maher Nancy Abrams Richard D. Gann, JD Robert Friedman, Esq. Scott Wymer, Ph.D.
CONTENTS
05 08 13 18
TOP TEN STATES FOR RENTAL INVESTMENTS IN 2024
Pamela Goodwin Charles Dobens Rhianna Campbell Reid Bennett Tony Sousa Julie Holly J Scott Kyle Wilson Mauricio Rauld AJ Osbourne Robert Knakal
6 CHANGES LANDLORDS ARE MAKING IN 2024 TO COMBAT RISING VACANCY RATES
UTILIZING AI FOR BETTER LANDLORD-TENANT COMMUNICATIONS
Jason Kogok Matt Picheny
Josh Etress Jesse Futia Gita Faust Anthony Simonie Esther Reizes-Lowenbein Michael Threatt Yonah Weiss Lisa Cozzi Margaret Stagmeier Kevin Taub Terrie Schauer
BREAKING FREE FROM 1031 EXCHANGES: THE BENEFITS OF DEFERRED SALES TRUSTS IN TODAY’S REAL ESTATE MARKET
21
NAVIGATING UNREASONABLE ACCOMMODATION REQUESTS IN PROPERTY MANAGEMENT
Shiral Torres David Evans Norm Spivey Gary Gregory Staci Slattery Karen Biazar Ashley Wilson
24
HOW YOU CAN AVOID MUNICIPAL EFFORTS TO BILL LANDLORDS FOR UNPAID UTILITIES
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Welcome to 2024! The first RENT issue of the year wouldn’t be complete without 2024 Real Estate Predictions from our panel of experts and RENT Magazine’s Best of 2023 Award winners who have demonstrated excellence in the rental industry. Check out who won! We’ll also fill you in on the Top Ten States for Rental Investments and how to deal with rising vacancy rates, ever-increasing multifamily insurance rates, and municipal efforts to bill landlords for unpaid tenant utilities. Also covered are tax strategies such as the Deferred Sales Trust and how to reduce your tax bill this season. In addition, you’ll learn how to comply with the new Corporate Transparency Act requirements and how to avoid emotional support animal fair housing lawsuits. Are you ready to try AI? Technology expert Scott Wymer shares a step-by-step guide to using AI to handle difficult landlord-tenant communications about unpaid rent, maintenance, and more. Lastly, our article, How to Prepare Your Children to Inherit Your Properties, will help you prepare your heirs to continue the generational wealth you have created. We hope that 2024 is a rewarding year for you!
AAOA’S BEST OF 2023 32 29
CELEBRITIES ON THE MOVE
42
9 COMMON MISTAKES TO AVOID WITH EMOTIONAL SUPPORT ANIMALS
47 52 60
HOW TO PREPARE YOUR CHILDREN TO INHERIT YOUR PROPERTIES
2024 REAL ESTATE INVESTING PREDICTIONS
HOW AN AAOA COUPLE WENT FROM HOUSE HACKING TO A THRIVING PROPERTY MANAGEMENT TEAM
63
$500/DAY FINE LOOMS FOR RENTAL PROPERTY OWNERS WHO IGNORE NEW CORPORATE TRANSPARENCY ACT REQUIREMENTS
74 71 66
AAOA TENANT SCREENING JUST GOT EVEN BETTER!
MULTIFAMILY INSURANCE COSTS ARE THROUGH THE ROOF
5 CLEVER WAYS INVESTORS CAN SAVE ON TAXES AFTER THE YEAR HAS ENDED
PAGE 3
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The real estate market is complex and influenced by various factors, but some trends are more likely than others to exert meaningful pressure on the performance and value of rental property. TOP TEN STATES FOR RENTAL INVESTMENTS IN 2024
After decades of positive population and economic growth, a reversal of fortunes (particularly in California) has forced many investors to reconsider the long-term prospects for West Coast residential
rentals. Conversely, non-coastal Western states, Texas, and the Southeast have all benefited from positive trends, partially at the expense of the Golden State.
Migration Patterns A continued outflow of residents from the West Coast due to factors like high living costs, job opportunities, or quality-of-life issues, have already impacted housing demand. A long-term decrease in population may lead to a surplus of available homes, putting downward pressure on prices. Economic Challenges Job losses, punitive taxation, wage stagnation, and/or economic uncertainty can lead to a slowdown in the real estate market and potentially lower property values. While lower homeownership rates may prop up rental occupancies in the short term, landlords of SFR rentals may no longer enjoy the same long-term appreciation potential. Elevated Interest Rates If higher interest rates persist, borrowing simply may not be an option for many households in states where homeownership (or buying a first rental property) is already expensive. Basic laws of economics dictate that higher debt costs will decrease demand—particularly among first-time homebuyers—thereby driving down prices for entry-level homes (the same types of properties that represent most of the rental market). Natural Disasters and Climate Change The West’s susceptibility to natural disasters like wildfires, earthquakes and droughts also impacts real estate values. Properties in high-risk areas may see decreased demand or face challenges in obtaining insurance, affecting both their net operating income and future market value.
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State and local policy makers on the West Coast are consistently adversarial to landlords and business owners. Through a combination of exorbitant taxes, wasteful spending and egregious regulations, these states have managed to repel employers and employees alike in massive numbers. There is little reason to believe these trends will change. Outside of a few isolated pockets of coastal wealth that defy broader market forces, it is difficult to justify the long-held assumption that West Coast
property values will always increase axiomatically. Where, then, should one look to invest in rental housing? Using a blended score based on population growth, job growth and tax climate , below are the top ten states for real estate investment in 2024. California was 36 th on this list and 48 th in terms of tax climate (ranked only behind New York and New Jersey for worst taxes).
OVERALL RANK*
POP. GROWTH
JOB GROWTH
TAX CLIMATE
STATE
1 2 3 4 5 6 7
2 6 3 5 7 4 1
1 5 3 2 7 6 38
8 4
UTAH FLORIDA ARIZONA IDAHO NORTH CAROLINA TEXAS NEVADA COLORADO GEORGIA SOUTH CAROLINA
14 16 9 13 7
8 9 10
9 8 10
12 13 14
27 32 29
* Excludes states with populations of less than 2 million.
If you are considering relocating your real estate equity to another state, start by giving your current property a quick check-up: https://1031- capital-solutions.involve.me/yield-calculator. By
estimating the current yield of your rental property as a percentage of your equity, you can make a more educated decision whether to keep, sell or exchange your current property.
RICHARD D. GANN, JD Managing Partner 1031 Capital Solutions (800) 445-5908 1031CapitalSolutions.com
Richard (Rick) Gann is an attorney, licensed real-estate broker, and general securities principal specializing in 1031 exchange solutions and he is co-author of the book How to Retire from Being a Landlord.
Disclaimer : This is for informational purposes only, does not constitute individual investment advice, and should not be relied upon as tax or legal advice. Please consult the appropriate professional regarding your individual circumstance. Statements concerning financial market trends are based on current market conditions, which will fluctuate. Past performance is not indicative of future results. Securities offered through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Advisory services offered through Concorde Asset Management, LLC (CAM), an SEC registered investment adviser. 1031 Capital Solutions is independent of CIS and CAM. Sources: Population growth: http://www.usa.com/rank/us--population-growth-rate--state-rank.htm
Job growth: https://www.usnews.com/news/best-states/rankings/economy/employment/job-growth Tax climate: https://taxfoundation.org/research/all/state/2024-state-business-tax-climate-index/
PAGE 6
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The automation of rental property management has revolutionized how landlords operate, streamlining tasks and enhancing efficiency beyond measure. From showcasing vacancies to collecting rent, landlords are automating nearly every aspect of their business, saving time and resources while improving tenants’ experiences. In the digital age, there’s simply no going back once tech has advanced. A modern touring and renting procedure makes all the difference to today’s tenants, and we may be heading into a renters’ market. To combat this, landlords can identify where antiquated practices are replaceable with tested tech. 6 CHANGES LANDLORDS ARE MAKING IN 2024 TO COMBAT RISING VACANCY RATES
6.6% asserts that the national rental vacancy rate has reached The United States Census Bureau
13.8% This is a increase from the average vacancy rate in 2022
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1
Garnering Interest with Virtual Tours
Virtual tour software showcases available units online, giving an elevated remote experience for inquiring tenants. People are doing more research than ever and are more likely to schedule an in-person tour after a virtual tour than with a listing that leaves them with questions. This saves time for both parties and widens the property's reach beyond geographical limitations – a huge plus for potential renters moving a plane ride away. PEOPLE ARE DOING MORE RESEARCH THAN EVER AND ARE MORE LIKELY TO SCHEDULE AN IN- PERSON TOUR AFTER A VIRTUAL TOUR.
2
Simplifying and Screening Tenant Applications
Digital application collection allows applicants to submit documents and information electronically. Integrated background check tools streamline the selection process and ensure a thorough assessment. With AAOA’s own tenant screening app, applicants can also pay a screening fee, and landlords receive notifications immediately to view completed credit and background checks. Tenants that are less tech-savvy or new to renting often fail to satisfy these requirements prior to in-person tours. While landlords prefer to hold firm, sometimes a gut feeling or an extended vacancy leads to letting their guard down. For that reason, this solution is very effective in tandem with tour-scheduling software, as it brings these requirements to their immediate attention and bars them from skirting this step before touring.
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Streamlining Property Tours 3
The most time-consuming part of filling vacancies, and arguably the most difficult for landlords, is the scheduling and execution of in-person tours. It takes time to line up the availability of all parties, travel to the property and run the tour - all while running the risk that the potential tenant arrives late, doesn’t arrive at all, or fails to meet rental requirements after the fact. Self Tour technology, like InstaShow, advertises listings and allows renters to tour the property after they have passed background checks and submitted all the necessary documentation. This software eliminates the need to arrange a mutually available meeting time and gives renters the freedom and flexibility to tour vacancies when it is convenient. This alleviates countless pain points for renters, such as typical stop-start communication around scheduling, juggling work and personal schedules, and organizing background checks and application data on one platform. Once a user has their profile verified, they can schedule tours via the app within the listing’s parameters, notifying property managers immediately. The software then facilitates a secure and seamless experience with real-time identity verification before using Bluetooth technology to allow access to the property. The software tracks their experience as they walk through the unit and for added security, can pair with smart cameras to enable real time surveillance and 2-way communication.
SELF TOUR TECHNOLOGY, LIKE INSTASHOW, ADVERTISES LISTINGS AND ALLOWS RENTERS TO TOUR THE PROPERTY AFTER THEY HAVE PASSED BACKGROUND CHECKS AND SUBMITTED ALL THE NECESSARY DOCUMENTATION.
Click here to learn how to get self-touring set up for FREE
Digital lease agreements can be signed and stored securely online. This eliminates the hassle of printing, scanning, mailing, and maintaining documents, making it convenient for both landlords and tenants. Most property management platforms charge for this feature, while others, like Innago, offer it for free. Automating Lease Signing 4
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Facilitating Rent Collection 5
Online portals or apps for rent collection automate monthly payments, ensuring timely and consistent transactions. Tenants can set up automatic payments, reducing the risk of late or missed payments. Landlords can track payment histories, send reminders, and generate reports effortlessly.
Enhanced Communication and Maintenance Requests 6
Integrated communication tools maintain consistent and transparent communication with tenants. Automated messages for rent reminders, lease renewals, or general announcements can be scheduled, fostering a proactive and professional relationship. This can include centralizing maintenance requests, thereby allowing tenants to submit issues for review. Landlords can track these requests, assign tasks to maintenance staff or contractors, and monitor the status of repairs, ensuring timely resolution and tenant satisfaction. CONCLUSION Modernizing the rental property management process offers landlords unparalleled efficiency, convenience, and organization. To harmoniously transition into using these kinds of software, finding platforms that offer many solutions in one place is ideal. However, the all-in-one platforms are by far the most expensive. Therefore, it may be optimal to consider one platform to streamline advertising listings and facilitating tours, and
another, like Doorspot, that begins with signing the lease and encompasses ongoing communication for just $54/month. Embracing these technological advancements automates the rental process, improves tenant satisfaction and ultimately contributes to a more successful and profitable business.
LEAH MAHER Marketing Consultant InstaShow | Boxlty Access Systems
Leah is a marketing consultant and copywriter in Pennsylvania, currently working with InstaShow to articulate how their software solutions are designed by and for real estate professionals to make their lives easier. With a degree in Media Studies and Business from Temple University, exploring and understanding the symbiosis between society and technology is a longtime passion for Ms. Maher.
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DEFER CAPITAL GAINS Without Doing a 1031 Exchange
Quite often, investment property owners feel very stuck. They’d like to sell their highly appreciated property and use the funds to pay o debt of other properties or simply invest in another financial vehicle and retire, but if they sell, they are faced with a steep tax bill.
Great News! There are multiple ways to defer capital gains taxes! Join our webinars and learn more about your options.
REGISTER FOR A FREE TAX STRATEGY WEBINAR
PAGE 17 Schedule a Consultation | Visit Our Website | Call Us: (408) 569-0778
UTILIZING AI FOR BETTER LANDLORD-TENANT COMMUNICATIONS Every landlord knows communicating complex and challenging issues to their tenants is not easy. It is not difficult to identify what some of the worst of these issues are: 1) Persistent nonpayment of rent; 2) Rent increases; 3) Security deposit disputes; 4) Maintenance delays; 5) Noise complaints and other violations. Luckily for landlords, many tools are available to help with these issues in tenant communications. WHAT IS OPENAI’S CHATGPT?
AI, or Artificial Intelligence, is very much in the news today and is a marvelous tool for helping with and improving your writing. One of the most popular AI-assistive tools right now is ChatGPT. We are going to focus on how to utilize a free subscription to ChatGPT to improve messaging to your tenants.
So, what is ChatGPT? ChatGPT and similar tools are programs that are trained to learn about subjects, such as human communication, by analyzing billions of examples. They build an “understanding” of patterns and their use. With all of this, they are actually very good at writing based on prompts or requests that are given to them.
Go to https://chat.openai.com/auth/login to sign up for a free account.
USING CHATGPT AS A WRITING ASSISTANT
In order to use these tools well, there are a few basics that you have to understand:
1. Use them as writing companions, and never as a ghostwriter for you. 2. Always review and edit output before use. 3. Check for “Hallucinations.” (These are reasonable seeming facts that AI programs are notorious for creating.)
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As you use these tools, it is always good to remember the computing axiom “Garbage In - Garbage Out.” This means you should carefully feed the AI the outcomes, details, and context it needs to write for you correctly. One of the best things to do is to ask the AI itself what it wants. For example, you might type a prompt like this to ChatGPT:
I am going to have you help write some email communications to my tenants. What information will you want me to provide to you?
To which ChatGPT replies with this list
1. Purpose of the Email 2. Specific Details of the Issue or Topic 3. Tenant’s History or Background 4. Desired Outcome or Action 5. Tone of the Email 6. Any Legal or Compliance Notes 7. Urgency or Deadline 8. Additional Context
Most of these parameters are pretty self-explanatory, and you don't have to provide extensive details. Remember that these AIs are trained to interpret from context. You don't even have to provide all those items; the software will try its best to work with whatever you give it. One item, in particular, needs more explanation: the “tone.” This is a very important factor and the real value of using the AI engine in the first place.
The types of writing parameters that you should generally provide to ChatGPT are:
1. Desired tone of voice. 2. Size of output: Generally either word or character count. 3. Writing level: It is often recommended to use an “8th Grade” writing level for most common correspondence. 4. Style parameters: “Use shorter sentences”, “Use Oxford commas”, etc.
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Regarding the “tone”: You can just ask ChatGPT to describe the tones of voice that it feels are best for landlord-tenant communications:
If I was a landlord requesting help writing short-form messages to my tenants about hard topics like late rent, notice violations, property damage, etc., which tones would you recommend and why?
And it would generate this list:
1. Professional and respectful 2. Clear and direct 3. Firm yet empathetic 4. Solution-oriented 5. Informative
GETTING LOTS OF EXAMPLES FOR A MESSAGE You could obviously specify in a prompt what tone you wanted:
“Please rewrite that in a “solution-oriented” tone.”
But an even better solution would be to truly take advantage of this writing machine and instead tell it to provide multiple samples in the tones it thinks best. You might do that with a prompt like:
“I am a landlord. Please help me write a sample email to a tenant: • Issue being addressed: repeated late rent violations. • Notes on past tenant behavior: Tenant can be belligerent when confronted. • Context: This is the second notice I am sending and further violations will lead to serious repercussions like the termination of their lease • Desired result from correspondence: 1. Tenant fully understands that further violations will result in eviction 2. Rent gets paid on time in the future. Please write me 3 different copies of this using the tones or voices that would achieve the best results. Please identify the type of voice or tone used for each example.”
PAGE 15
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FINAL TIPS AND TRICKS Finally, let’s talk about some practical tips for making the most of ChatGPT:
Please write me an instruction manual about how a landlord could generate a wide variety of email sample texts for a given situation. Please be explicit in terms of: - The prompts that should be used - The information that should be provided - Any parameters that should be set, and - Sample of the exact commands that should be issued to ChatGPT to make it all happen.
If you are using a single session with ChatGPT for multiple outputs, be sure to give them ChatGPT labels so you can reference individual outputs in later instructions.
“Please label this output as ‘First’.”
You get faster responses from ChatGPT if you work outside of core business hours, when it is less busy. Remember to save your sessions in the ChatGPT software so you can use the content at a later date and also annotate how you used ChatGPT in the past. Remember that it is called “Chat” for a reason. Any project should be a conversation. Ask it to revise, rewrite, and make corrections. The last thing is to note that if you are not sure what you should do to get good output, just ask ChatGPT for help:
Happy Chatting with your friendly AI.
Note: We did not have room to include the detailed output responses from ChatGPT in this article. They can be found on the writer's blog at: https://www.doorspot.com/blog/ landlord-use-chatgpt
SCOTT WYMER, PH.D. COO and Co-Founder DoorSpot (502) 480-1897
Scott is a landlord himself and has a great interest in PropTech. Having evolved into a software guy over the last 25 years, he is very excited about the company DoorSpot, which he co-founded. He is active in designing the innovative feature set DoorSpot offers fellow landlords in the property management space.
PAGE 16
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BREAKING FREE FROM 1031 EXCHANGES: THE BENEFITS OF DEFERRED SALES TRUSTS IN TODAY’S REAL ESTATE MARKET Although 1031 exchanges have their place, there are many reasons people don’t want to transact one under current conditions. Let’s explore a potentially better alternative, the Deferred Sales Trust. To obtain the tax deferral using a 1031 exchange, a seller must jump through multiple hoops in the tax code. You must buy another property of equal or greater value—whether you want to or not. In today’s market that may mean you sell high and then buy high. This also may make less sense today given that interest rates are the highest in over two decades. AVOIDING 1031 REQUIREMENTS
What if you don’t want to buy a property right away to replace the one you sold? The Deferred Sales Trust has absolutely no 1031 requirements. You can sell your property today, defer the capital gains tax, state tax, depreciation recapture and the Medicare tax today and have an unlimited amount of time to buy another property under better buying conditions. While waiting, the seller can receive a 5% cash flow on the sales proceeds.
What if you have partners and they want to sell? Say you have three other partners, and you want to sell. The two older partners want to sell and defer their taxes. The two younger partners want to take the money and run to Vegas. Unless the two younger partners decide to defer taxes, a 1031 exchange will not work. But wait! The Deferred Sales Trust can come to the rescue. The two older partners can defer their taxes using a Deferred Sales Trust and the other two partners can go to Vegas. Everyone gets what they want. What if you want to take advantage of depreciation when you want to buy another property? As you know, there are a number of 1031 hoops to jump through when buying a replacement property. One of those hoops includes depreciation. When buying a replacement property, you do not get a new depreciation schedule. You may get a partial depreciation schedule.
THE DEFERRED SALES TRUST HAS ABSOLUTELY NO 1031 REQUIREMENTS.
What if you want to retire from real estate? With a Deferred Sales Trust you can sell today, defer taxes today, retire today, and generate a larger pretax lifetime retirement income than if you paid taxes first.
PAGE 18
One of the reasons to buy a multifamily property is for the depreciation opportunities. But when transacting a 1031, you are limiting those income sheltering opportunities. However, that’s not the case with the Deferred Sales Trust. When buying another property using a deferred Sales Trust, you get another full depreciation schedule. Since you get a new depreciation schedule every time you buy another property, you can use cost segregation to shelter more income on every property. By using cost segregation and the Deferred Sales Trust, the new Dynamic Duo, you can potentially create more real estate wealth than when using a 1031 exchange. What if you need liquidity in the future? Say three years in the future, there is a medical emergency, and you need $100K. A 1031 exchange will not give you the liquidity you need, but you can get that amount of money out of the trust. Perhaps you have another investment, and you are taking a capital loss on that investment. You can take an equal amount of capital gains out of the trust tax free to offset the capital loss.
WHEN BUYING ANOTHER PROPERTY USING A DEFERRED SALES TRUST, YOU GET ANOTHER FULL DEPRECIATION SCHEDULE.
CONCLUSION It’s always to the seller’s benefit to be able to make decisions in real time based on different current economic situations. In a 1031 exchange, you must make all your decisions at the beginning of the process, but you can make decisions at the right time when using the Deferred Sales Trust. These are just a few examples that the Deferred Sales Trust can bring to your situation. To find out if a Deferred Sales Trust is right for you, call (713) 702-6401 for a complimentary consultation.
DAVID FISHER Founder and Tax Strategist Creative Real Estate Strategies (713) 702-6401 david@cresknowsrealestate.com
David studied accounting at the University of Texas and has been in the financial services profession since 1977. In 2010, David formed Creative Real Estate Strategies. Using his extensive background in insurance, investments, estate planning, taxes and charitable giving, David has been able to create numerous strategies that have helped his clients buy and sell millions of dollars of real estate in a more beneficial way than they might have otherwise done.
PAGE 19
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NAVIGATING UNREASONABLE ACCOMMODATION REQUESTS IN PROPERTY MANAGEMENT Property management professionals are dedicated to ensuring equal housing opportunities, which includes accommodating the diverse needs of residents. A key component of this commitment is understanding and responding to requests for reasonable accommodations and modifications. However, this raises the question: How do property management companies navigate unreasonable accommodation requests? UNDERSTANDING UNREASONABLE
ACCOMMODATION REQUESTS There are two situations in which an
accommodation request is deemed unreasonable. First, if it imposes an undue financial burden on the property. Secondly, if it requires a fundamental alteration of your program or services. Let’s break down these two different criteria to better understand the implications as well as the best practices to employ when faced with such situations.
THERE ARE TWO SITUATIONS IN WHICH AN ACCOMMODATION REQUEST IS DEEMED UNREASONABLE.
PAGE 21
UNDUE FINANCIAL BURDEN
FUNDAMENTAL ALTERATION OF THE PROGRAM A fundamental alteration to a property’s program is when a request would require a property to provide services outside its existing scope. The response depends firstly on the property type . As we know, modifications are paid by the property if it is federally funded or subsidized, whereas the cost would be the responsibility of the resident in a conventional property. Also, the financial capacity of the property management company would come into play. If denying a request for financial reasons, property managers must be prepared to substantiate the financial burden, a process more challenging for larger companies or properties given their greater access to resources. A request may pose an undue financial burden if it incurs excessive costs relative to the property’s resources. For example, a resident with a disability requests a comprehensive renovation of their apartment unit to make it fully accessible. This includes widening all doorways for wheelchair access, installing a roll-in shower, lowering all countertops and cabinets, and adding specialized accessibility equipment throughout the unit. This request, which involves significant structural changes, can be prohibitively expensive and may even affect surrounding units. For example, a resident with a disability requests that the property management company provide on-demand personal assistance services. This includes tasks like cleaning and assistance with getting to and from their parking area. In general, a request like this goes beyond typical property management responsibilities, making it a fundamental alteration to its program or services offered.
EACH REQUEST SHOULD BE EVALUATED SEPARATELY.
ONE-SIZE DOES NOT FIT ALL
These types of requests may seem to set a particular precedent in the minds of housing providers. But caution is needed. Each request should be evaluated separately and carefully and shouldn’t be arbitrarily denied. Ensure that you are working well within the realms of federal, state, and local laws. If you are unsure, then consulting with a fair housing attorney is always a best practice.
PAGE 22
DENYING A REQUEST - THE NEED FOR DOCUMENTATION Even if a request is deemed unreasonable, it’s crucial to engage in an interactive process with the resident to explore alternative solutions. Documentation of steps taken is imperative. An interactive process can take on many forms but generally includes discussing alternatives to the request to see if a resolution can be achieved. Alternatives usually include moving to another unit or help acquiring additional assistance. Whatever UNREASONABLE ACCOMMODATION REQUESTS - KEY TAKEAWAYS a property chooses to do, they should document their attempts to work with the resident should their actions ever be called into question. While property managers are committed to accommodating the needs of residents, requests requiring extensive and costly renovations that can pose an undue financial burden or a request that would require a property to provide services outside its existing scope may prove to be unreasonable. reasonable or unreasonable—clear policies and procedures are a must. Treat each one with individual consideration and be sure to communicate each step of the process with the resident making the request. And of course, careful documentation and ongoing training should be part of every company’s requirements. That being said, when dealing with accommodation requests—whether
WHEN DEALING WITH ACCOMMODATION REQUESTS— WHETHER REASONABLE OR UNREASONABLE—CLEAR POLICIES AND PROCEDURES ARE A MUST.
KATHELENE WILLIAMS Attorney and President The Fair Housing Institute
Kathi Williams is one of the founders of Fair Housing Institute. FHI is the accomplished vision of Kathi who views its educational courses as the best method housing providers can use to accomplish compliance and avoid litigation. Kathi is also a partner in the Law Firm of Williams Edelstein Tucker, P.C. providing defense and preventative representation for the housing industry in all civil rights matters. During the many decades Kathi has been advising her housing provider clients, she developed a unique understanding of the most effective methods of communicating fair housing best practices through training.
PAGE 23
HOW YOU CAN AVOID MUNICIPAL EFFORTS TO BILL LANDLORDS FOR UNPAID UTILITIES In municipalities across the U.S. a growing concern has emerged regarding unpaid utilities in rental properties. Many landlords have found themselves grappling with the financial burden of unpaid water, gas, and electricity bills left behind by tenants. To address this issue, some municipalities have implemented measures to hold landlords accountable for unpaid utility bills, while others are exploring solutions to prevent this situation from occurring in the first place.
THE RISING ISSUE OF UNPAID UTILITIES Financial strain has hit Americans coast to coast. Rising utility costs are part of it. That can sadly cause tenants to leave utilities unpaid when they move out, which then causes greater strain on the landlord and the municipality providing the utility. Water/sewer/trash are more common to be unpaid than electric or gas because the private providers are faster to cut those services off entirely. This issue not only affects individual landlords but can also strain municipal resources as the unpaid utility bills accumulate over time. When tenants vacate a property without settling
their utility bills, whether with municipalities or utility companies, landlords are often left to foot the bill, which can be a significant financial burden. In Casper, Wyoming, for just one example, the city is considering holding landlords accountable for bills they cannot collect.
WATER/SEWER/TRASH ARE MORE COMMON TO BE UNPAID THAN ELECTRIC OR GAS.
“The thought process behind this is that the city wants to reduce how much of the burden of unpaid charges they shoulder,” Casper City Manager Carter Napier said. “When those bad debts are written off by the city every year, the rate payers absorb them through the utility rates.”
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LANDLORDS ARE OFTEN LEFT TO FOOT THE BILL, WHICH CAN BE A SIGNIFICANT FINANCIAL BURDEN.
EFFORTS TO BILL LANDLORDS FOR UNPAID UTILITIES
UTILITY BILLING ORDINANCES
Some municipalities have enacted utility billing ordinances that hold landlords responsible for unpaid utility bills left behind by their tenants. These ordinances typically require landlords to be registered with the local utility company and receive copies of utility bills for their rental properties. If a tenant fails to pay their utility bill, the landlord can be held accountable for the unpaid amount.
LIEN ON THE PROPERTY
In some cases, municipalities have the authority to place a lien on the rental property if utility bills remain unpaid. This means that the property cannot be sold or transferred until the outstanding utility bills are settled. Landlords may find themselves in a challenging situation if they wish to sell the property but have unpaid utility bills attached to it.
REPORTING TO CREDIT BUREAUS
Some municipalities have agreements with utility companies to report unpaid utility bills to credit bureaus. This can negatively impact a landlord’s credit score and financial reputation, making it difficult for them to secure financing or new tenants in the future. Most utility companies don’t report to credit bureaus except in extreme circumstances, but that may change.
COLLECTION AGENCIES
In certain instances, unpaid utility bills may be turned over to collection agencies, which can pursue the landlord for payment. This can lead to legal action and further financial consequences for landlords.
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HOW LANDLORDS CAN AVOID GETTING INTO THE SITUATION
While the efforts to bill landlords for unpaid utilities are becoming more widespread, landlords can take proactive steps to avoid finding themselves in this challenging situation: Thorough Tenant Screening One of the most effective ways to prevent unpaid utility bills is through thorough tenant screening. Conduct background checks, review rental history, and require references from previous landlords to ensure potential tenants have a track record of responsible utility bill payment. Include Utility Responsibilities in Lease Agreements Clearly outline in the lease agreement who is responsible for paying utilities. Make it the tenant's responsibility to set up utility accounts in their name and ensure timely payments. Additionally, specify the consequences of non- payment in the lease agreement. Utility Deposit or Prepaid Arrangement Consider requiring tenants to provide a utility deposit or set up a prepaid arrangement to cover potential unpaid utility bills. This deposit can be used to settle any outstanding balances left by the tenant upon moving out. Sometimes municipalities and utility companies require this if the bill is in the tenant’s name. If it’s in the landlord’s name, then the responsibility is on the property owner to get an equal deposit from the tenant. Check local laws to see if that’s an option. Regular Monitoring of Utility Accounts Stay vigilant by periodically checking utility accounts to ensure they are in the tenant's name and that payments are being made on time. If there are any discrepancies or unpaid bills, address them promptly. Communication with Tenants Maintain open communication with tenants regarding their utility responsibilities. Remind them of due dates and encourage prompt payments. Address any issues or concerns promptly to prevent the situation from escalating.
CONSIDER REQUIRING TENANTS TO PROVIDE A UTILITY DEPOSIT.
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Utility Billing Services Some landlords opt for utility billing services that allow them to directly bill tenants for their share of the utilities. This can help streamline the process and ensure that each tenant is accountable for their usage. Livable, for example, offers landlords the opportunity to recover utility bills from their residents while maintaining distance when it comes to reminders, sending bills, etc.
UTILITY BILLING WORKS FOR ALL PROPERTIES
In a multifamily situation, Livable’s algorithms can fairly and accurately apportion utility bills based on unit size, occupancy, in-unit amenities and common area amenities.
For single-family owners, Livable’s
platform takes them out of the equation for billing, collecting and more. Efforts by municipalities to bill landlords for unpaid utilities highlight the growing concern surrounding this issue.
But landlords can take proactive steps to avoid finding themselves in a situation where they are held responsible for unpaid utility bills. Thorough tenant screening, clear lease agreements, communication with tenants, and regular monitoring of utility accounts are essential practices to prevent this financial burden.
LIVABLE, FOR EXAMPLE, OFFERS LANDLORDS THE OPPORTUNITY TO RECOVER UTILITY BILLS FROM THEIR RESIDENTS WHILE MAINTAINING DISTANCE.
By being proactive and diligent, landlords can protect their investments and maintain healthy landlord-tenant relationships. To find out what Livable can do for your property check out livable.com or call 877-789-6027.
DANIEL SHARABI CEO & Co-founder Livable
Daniel Sharabi is the CEO & Co-founder of Livable, a utility management company with software solutions designed to save money, as well as the environment. Daniel’s immersive experience working within a multitude of sectors in Silicon Valley offers a homegrown advantage in his vision of leveraging technology to provide benefits for all: the property owner, property manager, the tenants, and our environment.
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CELEBRITIES
ON THE MOVE
Kendrick Lamar The 17-time Grammy-winning rapper recently settled into his new Brooklyn three-story penthouse atop Pierhouse, also home to Matt Damon, Amy Schumer and Ed Sheeran. With a purchase price of $8.6M, the 3,140-square-foot home offers the Pulitzer Prize-winning rapper 4 bedrooms, 3.5 baths and 2,000 square feet of outdoor space, including a private rooftop overlooking the East River and Brooklyn Bridge Park. The building also boasts a doorman, concierge, gyms, a meditation studio, a children’s playroom, a pet wash, bike storage and on-site parking.
Zoe Saldana
Saldana has purchased a 9,670-square-foot 1930s-era Spanish Revival-style mansion on 4.7 acres in Montecito, CA, for $17.5M. With sweeping views of the Pacific ocean and Santa Ynez mountains, the historic 5-bedroom estate is appropriately known as Casa De Buena Vista, the House of Good Views, and retains the original tilework, windows and light fixtures. Other on-site amenities include a tennis court, pool/spa and cabana, an attached two-bed, two-bath apartment, guest cottage with an ocean view, an art studio with a kitchen and bath, and a pair of three-car garages.
David Spade
David Spade just spent $9M on a newly built Corona Del Mar, CA, home before it hit the market, which means unfortunately, there are no pictures available of the property. A contemporary single-story residence in the prestigious Cameo Highlands area, the home offers four bedrooms and 4.5 bathrooms in about 3,800 square feet of living space. The house includes an open floorplan with an atrium entryway, a media room, a large office, a central great room and a European-style kitchen with premium SubZero and Miele appliances. An infinity-edged pool and spa, a state-of-the-art solar panel system, and a loggia- covered patio are highlighted by expansive sea views.
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CELEBRITIES
ON THE MOVE
Terry Bradshaw NFL Hall of Famer Terry Bradshaw recently sold his $22.5 million, 744-acre ranch in Thackerville, Oklahoma, just north of the Oklahoma-Texas border. Custom built for Bradshaw, the equestrian and cattle ranch includes a rustic six-bedroom, 8,600-square-foot home, swimming pool, 2,600-square-foot manager’s home, four-bedroom bunk house, multiple barns, a two-story doghouse, riding trails, and eight stocked fishing lakes. There is an outdoor entertaining patio which spreads over approximately 1,000 square feet and is equipped with a full kitchen, bar, fireplace, hot sauna and fire pit. There is also a main office with a full kitchen, bathroom, and fireplace.
Ariana Granade
Hidden behind a lengthy gated driveway and shielded by tall hedges and trees, Ariana Grande’s secluded Hollywood Hills home has been sold for $8.3M to Benito Antonio Martinez Ocasio, better known as rapper Bad Bunny. Since it was an off-market transaction, details and photos are scarce. Built in 1946 on the side of a steep hillside, the home is a small cottage, just 1600 square feet, with three bedrooms and two bathrooms and was extensively renovated in 2020. There’s also a very large outdoor patio, plus a two-car attached garage and a dark-bottom swimming pool. Set in the popular Bird Streets above the Sunset Strip, the property is just 1.5 miles from the home she purchased from Cameron Diaz last year.
Bob Dylan
Citing lack of use, Bob Dylan has sold his beloved 16-bedroom Scottish Edwardian Country mansion, Aultmore House, for $3.9M. The estate occupies over 18,000 square feet that includes four living rooms, marble fireplaces, a billiards room, multiple kitchens, offices and a dedicated music room. Built in the early 1900s, both native and imported materials, including limestone, marble, brickwork and local woods, were used in the detailing. The 25-acre grounds of Aultmore House offer a manicured garden retreat, a Victorian greenhouse, an orchard and a croquet lawn. Four cottages are also found on the property, which is situated in Cairngorm National Park in the Scottish Highlands.
PAGE 30
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We are excited to share AAOA’s Best of 2023! These awards recognize the best- of-the-best, from investors to authors to podcasters. Join us in celebrating the contributions of these leaders who have made a significant impact on the rental industry in 2023. AAOA’S BEST OF 2023
PAGE 32
AAOA’s Best of 2023 Awards
Blaze Your Own Trail by Pamela J. Goodwin
COMMERCIAL REAL ESTATE - BOOK
Author Pamela J. Goodwin compiles advice from the top 20 women leaders in commercial real estate to help you maximize your earning potential. Each leader answers 15 questions such as, how they got started in the industry, best negotiation tips, biggest failure and lesson learned.
Pam is one of the topmost recognized experts on commercial real estate with more than 30+ years of experience. Click here to order this book
REAL ESTATE INVESTING - BOOK
How to Own 1000 Apartments in Five Years by Charles Dobens
Multifamily investing is not easy, but it is simple when you have a guide who has been involved in billions of dollars of multifamily investment deals as an attorney, a consultant, and a mentor. Author Charles Doben’s condenses his many years of experience in the industry and introduces readers to his state-of-the-art system for multifamily businesses, the MultifamilyOS™. Take the first step in getting started and learn multifamily business the RIGHT way.
Click here to order this book
This book explores 11 key chapters that include diversifying revenue streams, increasing client retention, enhancing brand image, tapping into tenants as a lead source, and more. Each chapter provides valuable insights, and practical tips to help your real estate team thrive in a dynamic and competitive market. The Best Kept Secret of How Property Management Can Boost Real Estate Team Profits by Rhianna Campbell PROPERTY MANAGEMENT - BOOK
Over the last 19 years Rhianna Campbell built, grew, and then sold a multimillion-dollar property management business, consisting of over 700 residential rental units, over 1000 association units, along with a construction, maintenance, and design company. Click here to order this book
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AAOA’s Best of 2023 Awards
MULTIFAMILY SOCIAL MEDIA INFLUENCER
Reid Bennett
Reid Bennett, CCIM serves as National Council Chair of Multifamily Properties for SVN International and a Senior Vice President for SVN – Chicago Commercial. Reid prides himself on understanding the nuances and analysis of multiple unit apartment dwellings and low-income Section 8 and Section 42 communities. Reid has successfully leveraged LinkedIn to keep his 16,000+ followers informed on the latest developments in multifamily. In 2016, 2018, 2021 & 2022 Reid received the
Partners Circle Award, which is the top honor from SVN where he was ranked in the top .02% among all 1,200+ SVN advisors in the world for the fourth time. A graduate from the University of Iowa, Reid also has achieved the highly coveted designation of Certified Commercial Investment Member (CCIM).
Connect with Reid
PROPERTY MANAGEMENT INFLUENCER
Tony Sousa
Tony Sousa, VP of Marketing Relations and spokesperson for RPM Living, is a respected industry thought leader, providing unique and experienced perspectives on today’s most relevant topics. Tony has extensive and diverse multifamily experience, working in California and Texas markets. He’s led experienced teams across the country, working on a range of asset types from value-add to luxury Class-A assets. Tony has a unique background as a TV journalist prior to his experience in multifamily. He is
passionate about people, operations, technology, culture and his family. Tony is currently on the Board of Directors for the San Antonio Apartment Association (SAAA) and a committee member on the Texas Apartment Association’s Education Foundation.
Connect with Tony
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