RENT Magazine Q3 '24

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.

AAOA RENTAL HOUSING CONFERENCE OCT 16!

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SUMMER 2024

UNDERSTANDING TRUSTS AND 1031 EXCHANGES PAGE 38

RATIO UTILITY BILLING LEGAL ASPECTS Q&A PAGE 5

HOW TO RENT TO THE CREDIT INVISIBLE & NON W-2 APPLICANTS PAGE 18

A DOZEN WAYS TO CONFIRM AN APPLICANT’S INCOME PAGE 76

GETTING SMARTER ABOUT PROPTECH AND SMART TECHNOLOGY AN INTERVIEW WITH CRIS KIMBROUGH

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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 Allen Artcliff-Cronrod Anthony Simonie Ashley Wilson Brandon Rush Cris Kimbrough Dana Dunford Daniel Sharabi David Johnston DeShon Swafford Dean Pelman Dr. Michael Threatt Erica Walters Frank Jachetta Gita Faust

CONTENTS

Gordon Burns Jason Kogok Jason Wolf Julie Anne Peterson Taylor Avakian Kathelene Williams Katie Douglas Kim Lisa Taylor, Esq. K’Dia Brooks

05 10 14 18 23

RATIO UTILITY BILLING LEGAL ASPECTS Q&A

IMPORTANT 1099 UPDATES FOR LANDLORDS IN 2024

Lauren Lieb Leah Maher Michael Currie Mike Butler Mike Lapsley Nancy Abrams Rhianna Campbell Richard D. Gann, JD Robert Friedman Sarah Epstein Scott Varney Scott Wymer, Ph.D. Shiral Torres Stephanie Anderson Tara Samuels Terrie Schauer, PhD Tracey Merrell Vikas Gupta

MAKING RENT COLLECTION EASIER AND MORE RELIABLE

HOW TO RENT TO THE CREDIT INVISIBLE AND NON W-2 APPLICANTS

TOP 8 LEASE ADDENDUMS THAT PROTECT LANDLORDS

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Welcome! AAOA’s mission is to deliver legendary service to our members. This promise is backed by a 20-year track record of providing fast, accurate credit reports and background screenings for America’s landlords, real estate brokers, property managers, real estate owners and apartment building owners. This quarter’s RENT brings you a plethora of articles meant to help you in the renting process, from advertising vacancies, tenant screening and leasing to renting to the “credit invisible,” collecting rents and the rising challenge of evictions. Our panel of experts provide their wisdom about creative networking and we offer a view on how AI and algorithmic tools may present concerns under the Fair Housing Act. Cris Kimbrough of SKBM shares her knowledge and thoughts on PropTech and connectivity in this issue’s interview. As always, we track which celebrities have been buying and selling this quarter along with the latest in 1099 updates. It’s AAOA’s commitment to provide continuing personal service to our members for the next 20 years and beyond, so please let us know what’s on your mind. Happy reading!

UNDERSTANDING THE MODERN RENTER: HOW TECH ATTRACTS THE BEST TENANTS AND RELOCATORS

CELEBRITIES ON THE MOVE

1031 EXCHANGES 38

UNDERSTANDING TRUSTS AND

44 56 62 52

17 CREATIVE TIPS FOR EXPANDING YOUR NETWORK

GETTING SMARTER ABOUT PROPTECH AND SMART TECHNOLOGY: AN INTERVIEW WITH CRIS KIMBROUGH

AAOA RENTAL HOUSING CONFERENCE

AI, RESIDENT SCREENING, AND ADVERTISING: HUD’S 2024 COMPREHENSIVE FAIR HOUSING GUIDANCE GREEN RENTALS: EMBRACE SUSTAINABILITY AND BOOST LONG- TERM PROFITS

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THE RISING CHALLENGE OF EVICTIONS DUE TO LATE RENT

A DOZEN WAYS TO CONFIRM AN APPLICANT’S INCOME

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LEGAL ASPECTS Q&A RATIO UTILITY BILLING

In June, attorney John List and Livable’s Annette Gallagher presented a webinar to AAOA on the legal aspects of Ratio Utility Billing (RUBS). They discussed the basics of Ratio Utility Billing and provided information for property owners looking to start billing tenants for utilities using ratio billing. Attendees were polled about whether or not they include utilities with rent at this time. About 40% said they do.

It’s important to get started recovering utilities from residents as much as possible for a few reasons:

• Ratio Utility Billing provides residents with accountability for their use, driving conservation behaviors and saving housing providers money on utilities overall. We are firm believers that if you tie a tenant’s consumption to their wallet, they’re going to use less. The majority of Housing Providers have historically absorbed the rising cost of utilities. With RUBS, you can finally share accountability with your tenants in a fair and accurate way.

• In many markets in the United States, utility bills are rising at faster rates than rent can be increased to accommodate them.

• Billing for utilities increases your net operating income and the value of your property over time.

• Rent control is becoming more popular in many areas, and that can limit your ability to begin ratio billing. Housing providers who are already enrolled in ratio utility billing are often grandfathered in under rent control provisions, but starting after one is passed can be much more difficult.

John List covered these and other aspects of RUBS on the webinar, including a lease addendum for RUBS that is available to AAOA members.

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What were some of the most commonly asked questions about RUBS and the law? Note: the following information is not legal advice nor intended to replace the advice of a local attorney who is an expert in landlord-tenant laws in your area. It is for educational purposes only.

What utilities can I bill for using RUBS?

It depends on your local laws. Many municipalities or states prohibit billing for electricity or gas, unless it’s for a common hot water heater or boiler. But you can, generally speaking, bill for water and sewer, trash pickup, landscaping, shared internet access/Wi-Fi and cable, pest control and other utilities. Always check with your local public utility commission office and your local attorney to make sure you are in compliance with all applicable laws and regulations.

What can I do if a resident doesn’t pay their utility bill through RUBS?

As with any other unpaid debt, you have options.

• You can serve a notice to “pay or quit” or “perform or quit.”

• You may, depending on state laws, be able to withhold an unpaid utility balance from the resident’s security deposit.

• You can also take them to small claims court or

• Assign the debt to a third-party debt collection agency.

While Livable and similar platforms don’t collect those debts or report to credit bureaus, we do assess late fees each month the balance is overdue, so that should be part of your calculations.

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Can I make a profit off the utilities my residents use?

Do we have to give residents notice before we start billing them for utilities using RUBS? a profit, you’re now potentially a utility provider in the eyes of the state. That comes with potentially costly regulations you’ll have to abide by, such as water quality testing. Not unless you want to risk being regulated as a utility provider. If you’re just recovering your costs plus any “defensible fees” such as late fees, ACH fees, platform fees, etc., then you’re within your rights as a housing provider. When you move past those guardrails to make Yes. That’s why AAOA provides you with a lease addendum you can give your residents. Many municipalities today require that RUBS can ONLY begin on lease inception or renewal. Check with your local attorney to find out when you can start to bill and how much notice you must provide ahead of time. Can we back charge past residents for utility charges from their past occupancy? Check with your attorney. It depends on where you are, but if they’re no longer your tenants and they weren’t supposed to pay them separately, that could be difficult to justify. If you have a small multi-unit building, can you add one unit at a time as residents turn over? Yes. Again, check with your local attorney to make sure you’re maximizing your earning opportunity while staying in compliance with regulations and ordinances.

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Can I have residents pay me directly while using Livable to do my billing allocations? Yes, your residents can pay you and then you will update the ledger in your Livable Pro dashboard to make sure accounts are current. You will pay the same fee as if they paid Livable, but you can pass that on to your residents as a defensible fee.

How do you calculate fees for each utility?

We have a shared, common area laundry that our residents pay to use. How would this be figured into RUBS? That depends… it may be calculated off simple square footage, or it can be calculated on occupancy (all residents, not just adults), in-unit amenities and other factors. Since you’re already recovering the costs of water and electricity when residents pay to use the machines, it’s unlikely that this could be considered a defensible fee. It could be double billing. Definitely ask your local attorney before beginning to include fees for this water with RUBS.

RATIO UTILITY BILLING CAN BE A BOON TO HOUSING PROVIDERS.

Ratio Utility Billing can be a boon to housing providers, especially in a landscape of rapidly rising utility costs. Get started as soon as possible before laws change and prohibit you from holding your residents accountable for their utility consumption, fairly and transparently.

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. To find out what Livable can do for your property check out livable.com or call 877-789-6027.

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IMPORTANT 1099 UPDATES FOR LANDLORDS IN 2024

Navigating the complex landscape of tax regulations is part and parcel of our profession. One area that continues to evolve and requires keen attention is the 1099 requirement for landlords. For 2024, several updates and crucial points must be understood to ensure compliance and optimize tax strategies. This article will provide an in-depth look at these requirements and offer practical advice for landlords.

1099 reporting requirements have a new threshold of $600 for rental income. It was previously $20,000.

Best Practices

• Before working with a service provider, collect a W9

• Pay contractors by credit card or a third-party payment network because a taxpayer does not report those payments on Form 1099 -NEC pursuant to Treas. Reg. §1.6041-1(a)(1)(iv)

• Keep copies for a minimum of 3 years

• Use software that offers e-delivery and TIN matching

FILING DATES Section 6071(c) requires you to file Form 1099-NEC on or before January 31, using either paper or electronic filing procedures. File Form 1099-MISC by February 28 if you file on paper, or March 31 if you file electronically.

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EXTENSIONS

File for an automatic 30-day extension using Form 8809 through the FIRE system at https://fire.irs.gov/. Remember, it must be done before the deadline. You can also mail Form 8809 and use certified mail to prove you did this before the deadline. Form 1099 is an IRS tax form used to report various types of income other than wages, salaries, and tips. For landlords, the most relevant forms are the 1099- NEC and 1099-MISC. Form 1099-NEC (Nonemployee Compensation) Used to report payments of $600 or more to independent contractors for services rendered in the course of your trade or business. Landlords must file Form 1099-NEC if they have paid $600 or more to service providers such as repairmen, plumbers, or cleaning services. Deadline: The deadline for providing the form to the recipient and filing it with the IRS is January 31, 2025. You don’t have to file a 1099-NEC for maintenance work done by a corporation. Tip: Pay by a third-party app that will issue a 1099-K.

FOR LANDLORDS, THE MOST RELEVANT FORMS ARE THE 1099-NEC AND 1099-MISC.

FORM 1099-MISC

Used to report various types of miscellaneous income, including rents. If you pay $600 or more in rent to a property manager or other entity, you may need to file Form 1099-MISC. Deadline: The form must be provided to the recipient by January 31 and filed with the IRS by February 28, if filing by paper, or March 31 if filing electronically.

THE 1099-K FORM

A document that reports payments you received for goods or services throughout the year. These payments can come from: •Credit, debit, or stored value cards, such as gift cards (payment cards) •Payment apps or online marketplaces, also known as third-party settlement organizations (TPSOs) These organizations must complete Form 1099- K and send copies to both the IRS and you.

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PENALTIES Failure to file a 1099 does not automatically mean your deduction will be disallowed. However, there can be penalties that add up quickly. The penalties are subject to interest. For further reading on this topic, here are primary source references: •Welch v. Helvering, 290 U.S. 111 (1933). •Edwards v. Comm., T.C. Summary Opinion 2007-182 •Nurumbi v. Comm., T.C. Memo 2021-79 Penalties start at $60 for 2024. View the full list here: https://www.irs.gov/payments/information- return-penalties

Key Changes and Considerations for 2024

1. Threshold for rental income reduced to $600

2.Electronic Filing Mandate: Starting in 2024, any business or landlord filing 10 or more 1099 forms must file electronically. This change aims to streamline processing and improve accuracy. 3.Enhanced Penalties: The IRS has increased penalties for failing to file correct information returns or furnish correct payee statements. It’s crucial to ensure accuracy to avoid these steep fines.

Navigating the 1099 requirements can be complex for landlords, but with careful planning and attention to detail, compliance can be achieved efficiently. Staying informed about the latest IRS regulations and property tax changes for 2024 is essential. By leveraging the expertise of a tax firm and utilizing proper record-keeping practices, landlords can ensure they meet their obligations and optimize their tax positions. Remember, proactive tax planning and compliance can lead to significant financial benefits and peace of mind. If you have any questions or need personalized advice, don't hesitate to reach out to us.

STEPHANIE ANDERSON CEO & Co-founder Enrolled Agent, Certified Tax Planner Tax Prose Inc. www.TaxProse.com (805) 568-0703

Stephanie Anderson is an Enrolled Agent armed with a Bachelor’s in Accounting and a deep-seated commitment to maximizing your financial well-being. As a Certified Tax Planner, she possesses the expertise to design personalized tax solutions that revolve entirely around your unique circumstances.

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Give your tenants a modern living experience. Add Convenience by Eliminating Quarters from Your Paid Laundry Rooms.

PayRange offers a simple-to-install payment system that retrofits existing laundry machines for mobile payments, letting you ditch quarters and the hassle. No expensive hardware or network connectivity is required, making implementation easy.

Tenants pay with their phones instead of coins

In-app notifications for cycle completion

Encourages tenants to stay on-site for laundry

Flexible funding options offer convenience

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USING TECHNOLOGY FOR RENT COLLECTION One of the most effective ways to simplify rent collection is using rent collection software. These digital tools can handle many tasks, such as automating invoices, tracking payments, and sending reminders. The software reduces the workload for landlords and gives tenants an easy way to understand and pay rent online. By making rent collection easier and more reliable, landlords can save time, reduce stress, and improve tenant relationships. An efficient rent collection process isn’t just about securing your monthly income; it’s about creating a seamless experience for landlords and tenants. For landlords, managing rental properties comes with a unique set of challenges. Ensuring timely rent collection is often at the top of that list. MAKING RENT COLLECTION EASIER AND MORE RELIABLE

Benefits of Rent Collection Software:

Automation: Automatic invoices and payment tracking save time and reduce mistakes.

Efficiency: Consistent timely invoices and automated payment reminders help ensure a steady income stream.

Convenience for Tenants: Tenants can pay online and view their payment history, making it easier to manage their finances.

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AUTOMATED REMINDERS CAN HELP TENANTS REMEMBER WHEN THEIR RENT IS DUE.

AUTOMATING PAYMENT REMINDERS

Automation doesn’t stop with payment tracking. Automated reminders can help tenants remember when their rent is due. These reminders can be sent through email, text, or app notifications. This helps tenants stay on track and reduces the chances of late payments.

Tips for Automated Reminders:

• Send Multiple Reminders: Send reminders at different times, like a week before the due date, a few days before, and on the due date itself. Good software can manage all of these dates for you, handling the communication details.

• Use Various Channels: Reach tenants through their preferred communication channels, such as email, SMS, or app notifications. Sending emails to a young renter who only bothers with texting does no one any good.

• Personalize Messages: Include the tenant’s name and specific payment details to make reminders more effective and valuable.

OFFERING FLEXIBLE PAYMENT OPTIONS Offering flexible payment options is another crucial aspect of a smooth rent collection process. Different tenants have different financial situations, and giving them options can increase the likelihood of timely payments. By allowing tenants to choose their preferred payment method, you can cater to their individual needs and improve their overall experience. Most rent collection software supports a variety of payment methods, including bank transfers, credit cards, and ACH payments. Allowing online payments through these platforms provides a convenient solution for tenants, who can choose the method that best fits their financial habits. Some services even offer the ability to split payments, which is particularly helpful for tenants with irregular income schedules. Allowing tenants

to set their payment schedule while ensuring you, the landlord, get paid up-front in full is a great option. Always know what your rent collection system charges tenants for the various payment options. These payment fees can vary considerably from a flat fee to a percentage fee per payment, sometimes both. Percentage fees, in particular, can be painful for tenants when paying larger expenses like rent. It’s important to communicate these payment options to your tenants clearly. Providing detailed instructions on using each method ensures tenants feel confident and comfortable with the process. By offering flexibility and clarity, you not only make it easier for tenants to pay on time but also foster a sense of trust and cooperation.

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MOST RENT COLLECTION SOFTWARE SUPPORTS A VARIETY OF PAYMENT METHODS.

ESTABLISHING CLEAR POLICIES Having clear rent collection policies is crucial. A clear late payment policy encourages tenants to pay on time by outlining the consequences of late payments. Make sure your policy is easy to understand and fair to tenants.

Key Points for a Late Payment Policy:

• Grace Periods: Specify any grace periods before a payment is considered late.

• Late Fees: Clearly define the fees for late payments and ensure they comply with local laws. Some states do not specify a limit and others have strict limits. • Communication: Verbally explain all the payment policies in the lease when signing the lease and remind tenants periodically.

HAVING CLEAR RENT COLLECTION POLICIES IS CRUCIAL.

Consistency is vital when enforcing policies. Regularly review your rent collection processes to ensure they are effective and fair. Gather feedback from tenants to see where improvements can be made. Stay informed about new tools and technologies to keep your processes current.

CONCLUSION

Making rent collection easier and more reliable involves creating a system that benefits landlords and tenants. Landlords can create a smoother rent collection process by using rent collection software, automating reminders, offering flexible payment options, and establishing clear policies. These strategies save time, reduce stress, and improve tenant satisfaction. Implement these practices with rental management solutions like DoorSpot to make rent collection more efficient and enjoy the benefits of well-managed rental properties.

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.

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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.

PAGE 17 Schedule a Consultation | Visit Our Website | Call Us: (408) 569-0778

Priscilla Almodovar, CEO of the housing financing agency Fannie Mae, was recently quoted by CNBC about the housing difficulties of people who haven’t interacted with the credit system. She referred to them as “credit invisible.” Almodovar pointed out that being credit invisible “impacts people who want to buy a home...” What she did not address is that credit invisible people who are looking to rent a home also face the same roadblocks. Additionally, landlords are increasingly encountering applicants with non- traditional income sources, such as freelancers, gig workers, students, recent graduates, and non-citizens with limited credit histories. Renting to such non- traditional applicants, including those without a Social Security Number (SSN) or established credit history, requires a different approach but can provide access to a valuable pool of tenants. Here’s a guide to effectively renting to these unconventional applicants. HOW TO RENT TO THE CREDIT INVISIBLE AND NON W-2 APPLICANTS

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VERIFY EMPLOYMENT AND INCOME One of the first steps in evaluating non- traditional applicants is to verify their employment and income. This is especially crucial for those without a traditional credit history. Request recent pay stubs or a letter from their employer. Employers can often provide a detailed letter that includes the applicant’s job title, salary, and length of employment. If the applicant is self-employed, then you can request a tax return to see what their income was the previous year. You may also review their bank statements for consistent income deposits and REQUEST A LARGER SECURITY DEPOSIT OR EXPLORE ALTERNATIVES sufficient funds to cover rent. This provides a clear picture of their financial habits and reliability. For applicants with limited credit or rental history, consider requesting a larger security deposit to reduce your financial risk. This can cover potential damages or unpaid rent, but ensure compliance with local regulations on maximum allowable deposits. Alternatively, consider TheGuarantors’ Deposit Coverage as a flexible option. Instead of a traditional deposit, tenants pay a non-refundable fee, typically a fraction of one month’s rent. In return, landlords receive coverage equal to one month’s rent or more. This coverage addresses a wide range of potential issues—like damages, unpaid utilities, pet damage, eviction expenses, and legal fees—offering comprehensive protection throughout the lease term while lowering tenants’ upfront costs. If TheGuarantors covers any claims, tenants remain liable for reimbursing those amounts, maintaining their accountability under the lease.

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USE A CO-SIGNER OR GUARANTOR A co-signer or guarantor can significantly mitigate the risk associated with non-traditional applicants. Typically a family member or close friend with a strong credit history and stable income, this person agrees to take responsibility for the lease if the primary tenant defaults. This adds a layer of security and reassures landlords about the applicant’s reliability. However, not everyone can secure a personal co-signer or guarantor. In these cases, TheGuarantors can step in as the professional solution for a rental applicant who cannot satisfy the landlord’s requirements on their own. TheGuarantors’ Rent Coverage can cover up to the value of the entire lease if the resident defaults on their rent. Once the tenant moves out, is evicted, or the lease ends, the landlord can file a claim with the company to be reimbursed. Tenants are still responsible for repaying any amounts covered by TheGuarantors, maintaining their lease obligations. ACCEPT INTERNATIONAL DOCUMENTS For international applicants without an SSN, consider accepting alternative identification documents: To enroll your property for free and begin referring applicants to get coverage you can visit https://www.theguarantors.com/enroll- property. Passport and Visa: A valid passport and visa can serve as reliable identification. ITIN: An Individual Taxpayer Identification Number (ITIN) can sometimes be used in place of an SSN. This number is issued by the IRS to individuals who need to file taxes but do not have an SSN and can be a valuable tool in verifying an applicant’s identity. If the applicant has established credit history using and ITIN you can still pull a full credit and background check.

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VERIFY STUDENT STATUS

For students, verifying their student status is crucial. Request proof of enrollment from their educational institution to confirm they are currently in attendance. Additionally, consider:

Parental Guarantee: Have a parent or guardian co-sign the lease. This ensures that someone with financial stability is responsible if the student is unable to meet their obligations.

Professional Guarantor Service: Invite your renters to purchase a policy from a company like TheGuarantors to protect your rental income.

Student Loan Information: If applicable, review their student loan information to better understand their financial situation.

SCREEN AND EVALUATE APPLICANTS CAREFULLY Unconventional applicants may require more thorough screening:

Use Professional Screening Services: These services specialize in non-traditional applicants, providing access to international credit reports, employment verification, and more.

Consider a Trial Lease: Offering a short-term lease, such as six months, allows you to assess an applicant’s reliability, payment habits, and property care before committing to a longer term.

CONCLUSION

Renting to credit-invisible and unconventional earners requires flexibility and diligent screening. By verifying employment, considering larger security deposits or alternatives like TheGuarantors for both deposit coverage and rental income protection, and utilizing co-signers or professional screening services, you can broaden your tenant pool, reduce risks, and safeguard your rental income.

FRANK JACHETTA Director, SMB Platform TheGuarantors

Frank is a veteran in the real estate space with 17 years’ experience providing financial tools to landlords. He is currently expanding the reach of TheGuarantors’ industry-leading rent and deposit protection to independent landlords and real estate investors.

Legal Disclaimer : This information is for general purposes only and not legal advice. You should always consult a qualified attorney in your jurisdiction to ensure that your actions comply with all applicable laws and regulations in your area.

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8 TOP

LEASE ADDENDUMS THAT PROTECT LANDLORDS

The following are eight residential lease addendums that help protect landlords from tenant lawsuits, problems with the Fair Housing Act and other preventable legal situations.

• The tenant affirms that all furnishings and personal belongings will be inspected prior to being moved into the unit and are free of any bed bugs. Tenant agrees to continually monitor for the presence of bed bugs. • Tenants shall check their personal belongings before reentering the unit after staying at a hotel or another home, using public transportation, or visiting a public venue. Tenant must inform landlord of any apparent bed bug infestation. • Tenant shall provide landlord access to the unit within twenty-four hours of notifying landlord of a potential bed bug infestation. Tenant will allow access to any pest management company hired by landlord. • Tenant agrees to fully cooperate with landlord regarding all bed bug control efforts. If tenant’s unit, or a neighbor’s unit, becomes infected with bed bugs, tenant shall comply with all requirements by the landlord and/or the pest management company.

These addendums will help you:

Avoid fines and housing discrimination claims Quickly evict troublesome tenants Successfully collect unpaid rent and damages Avoid premises liability lawsuits Improve communication with tenants Avoid security deposit disputes

#1. BED BUGS Bed bugs enter dwellings by latching on to used furniture, luggage, and clothing, and by traveling along connecting pipes and wiring. The Bed Bug Addendum should contain the following provisions:

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• Cooperation includes evacuating the premises during and after treatment and following all post-treatment requirements to prevent any re- infestations. • In order to minimize the potential for bed bug infestation, tenant will avoid practices that frequently lead to infestation by not acquiring secondhand furniture or using another person’s vacuum cleaner. • Tenant shall indemnify and hold landlord harmless from any loss, damage, liability, attorneys’ fees, and costs that are the direct or indirect result of a bed bug infestation caused by tenant or any guests.

TENANT MUST INFORM LANDLORD OF ANY APPARENT BED BUG INFESTATION.

#2. CRIME-FREE/DRUG-FREE

#3. LEAD-BASED PAINT HAZARDS Housing built before 1978 may contain lead-based paint. Lead from paint, paint chips, and dust can pose health hazards if not managed properly. Lead exposure is especially harmful to young children and pregnant women. This “zero tolerance” addendum was upheld by the U.S. Supreme Court as enforceable. It allows landlords to evict tenants even if they were unaware that there was criminal activity by other occupants. It is a lease violation for any household member or guest or other person under tenant’s control to be engaged in violent or drug-related criminal activity on or near premises, regardless of the tenant’s knowledge. Before renting pre-1978 housing, landlords must disclose the presence of known lead-based paint and/or lead-based paint hazards in the dwelling and provide a federally approved pamphlet on lead poisoning prevention.

HOUSING BUILT BEFORE 1978 MAY CONTAIN LEAD-BASED PAINT.

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#4. MOVE-IN/MOVE-OUT CHECKLIST A move-in/move-out checklist documents the condition of rental property when tenants move in and when they move out. The condition of each room is noted, including the need for cleaning and repair of:

✓ Doors ✓ Ceilings ✓ Floors

✓ Refrigerator ✓ Range/stove/oven ✓ Counter tops ✓ Cupboards ✓ Smoke detectors ✓ Sprinklers ✓ Carbon monoxide detectors ✓ Blinds/shades ✓ Furniture ✓ Fireplace ✓ HVAC ✓ Fire extinguisher

✓ Carpeting ✓ Woodwork ✓ Pantry ✓ Walls ✓ Windows ✓ Sinks ✓ Garbage disposal

✓ Plumbing ✓ Electrical ✓ Microwave

Landlords benefit from the checklist because it minimizes potential security deposit disputes and facilitates having the unit ready for the next tenant. To withhold the security deposit or to sue the tenant, landlord has the burden of proof to establish the condition of the unit before the tenant took possession and when the tenant vacated the unit. The checklist identifies any damage caused by the tenant beyond normal wear and tear that will allow landlord to use the security deposit to pay for repairs and cleaning.

#5. PERSONAL GUARANTEE

If the tenant does not meet landlord’s income and credit requirements, a guarantor should be required. The guarantor unconditionally guarantees the full performance of the lease by the tenant, including the payment of rent and other charges. This guaranty will not be affected by any change in the lease, including any extension of time or renewals.

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#6. PET REGISTRATION

If pets are permitted, the registration form should contain the following information:

✓ Veterinarian’s name, address and telephone number ✓ Inoculations ✓ Contact for alternate care in case of an emergency.

✓ Pet type ✓ Weight

✓ Age ✓ Sex ✓ Color

DOGS SHOULD BE REQUIRED TO BE VACCINATED AND TREATED FOR FLEAS.

#7. SERVICE ANIMAL/ESA ADDENDUM Emotional Support Animals (“ESAs”), who are also referred to as assistance, comfort, or companion animals, alleviate one or more symptoms of a person’s disability. They are not trained for a specific purpose or for a specific task. Service animals, such as guide dogs, hearing dogs, and psychiatric animals, are trained to help people with disabilities by executing specific tasks like pulling a wheelchair, guiding persons Dogs should be required to be vaccinated and treated for fleas.

who are visually impaired, providing support during seizures, and calming individuals suffering from PTSD. Tenants with disabilities may request reasonable accommodations from leases with no-pet provisions. Allowing the animal to damage the property, be unleashed, persistently bark, or otherwise cause a nuisance or danger are grounds to evict the tenant, as is neglecting the animal.

#8. SMOKING POLICY

Due to the increased risk of fire and the known health effects of secondhand smoke, smoking of any product, including tobacco and marijuana, is prohibited in all areas of the

property, both private and common, whether enclosed or outdoors. Electronic cigarettes are also prohibited. This policy applies to all tenants, guests, and servicepersons.

For further information and the lease addendum forms, see the Twelve Lease Riders That Protect Landlords – Webinar.

ROBERT FRIEDMAN Partner Friedman & Ranzenhofer

Attorney Robert Friedman has represented landlords for over 45 years. His website WNY-Lawyers. com has a wealth of free legal resources for landlords, including videos, webinars, legal forms, blogs and guides. He attributes his success to client education, community involvement, and a reputation for cost effective, practical solutions to legal problems. He is the author of How to Survive Legally as a Landlord and The Upstart Small Business Legal Guide. He frequently lectures for AAOA and other real estate investor/landlord groups. Friedman & Ranzenhofer, PC was founded in 1955 by Bob’s dad, Fred Friedman, a Holocaust survivor and U.S. Army veteran.

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Rental owners draw ideal quality leads to tour their properties with streamlined showing tech. UNDERSTANDING THE MODERN RENTER: HOW TECH ATTRACTS THE BEST TENANTS AND RELOCATORS Every business relies on identifying and catering to their ideal target to succeed—and the rental industry is no exception. Landlords want tenants who are fiscally and socially responsible, punctual, respectful, calm, and orderly . While quite easy to describe, perfect tenants are hard to come by. Today’s tenants are tech-savvy, talented at scouring the internet for the best deal. They know their worth as an ideal candidate, and they’re looking for competent property management to compliment what they bring to the table. To attract high-quality tenants, match their energy by being skilled and courteous, and above all, offer convenience every step of the way into a lease. CHANGES TO WORK AND HOME LIFE MEAN CHANGES IN THE RENTAL GAME Over the past few years, there have been major changes in rental industry trends.

• More than 1 in 4 (26%) Americans moved out of state in the last five years.

• Long-distance interstate moves increased in 2022 compared to 2021, with around 4.9 million Americans making such moves.

• Around 16.1% of moves in the U.S. are due to work-related reasons (U.S. Census Bureau, 2023).

• The top reason cited for moving was for work, according to this survey.

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• Mid to late career professionals renting as a matter of personal choice rather than economic necessity. In the not-so-distant past, relocating renters tended to be young college grads or early-career professionals, likely single, and moving solo. While still a significant segment of today’s relocators, the mix of these renters is extremely diverse, including: With remote work and job creation in tech fields, today’s tenants are moving away from home ownership and are more inclined to relocate frequently.

Advantages of Relocating Renters:

• They operate with urgency. Relocators have a small window to tour available properties, and they have a deadline to make a decision. If a relocator is touring your property, chances are it’s only up against a handful of other rentals. The combination of less competition and the limited amount of time a relocator has to make their decision will lead to a swift close. • They’re independent and responsible. Moving a significant distance from familiar territory demonstrates these qualities and informs their handling of rental responsibilities, such as timely rent payments and maintenance of the property. They can, and prefer, to operate independently with little reliance on the property manager. • They’re financially stable. Most relocators are moving for work, indicating not only that they have a job, but that they’re highly committed to it. Additionally, many jobs offer financial relocation assistance. • They most likely have professional movers. Relocators typically use professional movers as they simply cannot split the move into several small trips and corporate relocation assistance almost always covers the cost. Professional movers do less damage and provide a smoother move. • Remote and “bleisure” workers are gentle to property. Short-term ”rental hoppers”, often remote workers, travel lightly and stay lightly. They are unlikely to alter any of the property significantly and are more likely to be quiet neighbors. If their remote work includes being on camera for virtual meetings, they are likely to be very tidy.

• Younger tenants moving to apartments instead of dormitories.

RELOCATING RENTERS CAN BE ESPECIALLY LUCRATIVE TENANTS Relocating tenants have traits and assets that make them great custodians of a rental property, but they often face challenges in finding housing. Utilizing property management tech that can lower their hurdles will make them more likely to choose your property. • Many choosing to rent given the barriers to purchasing a home, such as high housing costs, high-interest rates, and limited inventory. • “Bleisure” workers, a term that refers to blending business and leisure, seeking destination housing that complements remote work arrangements.

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BY ADAPTING TO RELOCATION PAIN POINTS, PROPERTY MANAGERS CAN MAKE THEIR PROPERTIES A SHOE-IN.

Keep in mind that not all relocators are able to visit their destination before move-in day. Virtual tours go a long way for them and family members. For relocators able to take a scouting trip, it’s completely unlike preparing for a local move with weeks or months to casually browse for a home. Desirable rentals don’t stay available long, thereby rendering advance tour scheduling hardly worth the effort. As a result, relocators usually get serious

with their listing search only a day or two before their trip. When they arrive, they can experience typical travel woes like exhaustion, jet lag, confusion with public transportation, etc. Modern solutions like self-tours and automated showing schedulers would make the process vastly easier, but have yet to become widely adopted.

Relocators face three major challenges:

Communicating efficiently with property managers

Scheduling multiple tours as quickly as possible within fixed dates

Structuring an agenda full of showings while considering travel times and proximity to other destinations

Planning a day of property tours in a new locale requires total focus, quick decision-making, and adaptation at every turn. It starts with reaching out to property managers.

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WHEN THERE’S A LACK OF DIGITAL OPTIONS AND ASSISTANCE, THE HUNT FOR A HOME FEELS MORE ARDUOUS THAN IT SHOULD BE.

Here’s what today’s tenants don’t want to deal with when looking for housing:

Inflexible showing schedules: With the rise of remote work and school, renters are more disconcerted by the need to adjust their schedules for the sake of someone else’s. Relocator Challenge: On a scouting trip, every showing is on a time crunch and affects the ability to seize other opportunities. Without automation or self-tours, every scheduling decision takes at least two schedules into account. With tedious scheduling dialogue to reach a set appointment for a showing, they must also consider proximity to other units on their hit list, as well as safety and efficiency on unfamiliar roadways as they literally map out their day.

Inefficient Communication: Relying on phone calls or in-person visits to communicate with landlords or property managers wastes a lot of time. Crucial information like dates, times, and locations are likely to fall through the cracks and it puts the onus on the renter to retain and keep track of the logistics. Calling and texting also brings up the subject of response times. Nobody likes phone tag, and it’s easy to miss a text or fail to hit send.

Relocator Challenge: These tenants particularly don’t want to carry and keep track of sensitive documentation while traveling. Frankly, they’ll think it’s unfair and outdated that their digital scans aren’t sufficient enough. They likely have another tour scheduled promptly before and after yours, and may not have the time to manually fill out an application on-site. This means they now have to take your paper application with them, keep it clean and uncreased, and either scan the whole thing themselves and email it to you or worse, physically mail it. Paperwork and Manual Applications: Physical rental applications are completely outdated, not to mention an extremely vulnerable and poor form of document and data retention. We all know that if we’re handed a paper application and a pen, we’re likely going to have to manually write out the same information over and over again. Starting the process with a manual step such as this could make your tenant assume you’re behind the times and a poor record-keeper.

Relocator Challenge: As relocators attempt to

maximize the efficiency of their scouting trip, juggling multiple conversations, addresses and appointment times in a short time can be painfully confusing and irritating—and they don’t want to save your number unless you become their landlord.

Lucky for them, there’s a lot in real estate tech aimed to make their lives easier. Lucky for us, the road to less stress and more automation goes both ways.

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PROPERTY MANAGEMENT TECH THAT ADDS CONVENIENCE FOR RENTERS MAKES US BETTER LANDLORDS

Competent tenants expect that the property rental industry is evolving and streamlining like everything else. They’re asking, “In this typically complicated and stressful process, what are you able to take off my plate?” For relocators, easy scheduling of showings is one of their highest priorities. A solid strategy to improve your property’s overall accessibility and availability.is to

assume that all renters are as crunched for time as a relocator. By peppering automation and new tech into every step of the rental process, we essentially help them help us. For every convenience you can provide to potential tenants, there’s a kickback for property owners:

What Renters Want

Kickback for Landlords

Thorough online listing descriptions with several high-resolution photos, and clear criteria for tenant qualification. The more filters they can put on a search, the better.

• Highly interested renters with fewer questions and positive expectations

• Secure, well-organized, and easily retrievable document and data retention

Online rental applications with payment processing and automated credit and background screenings.

• Saved time from multiple automated steps:

º Less manual application review

º No effort to arrange the screenings

º No trips to the bank

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What Renters Want

Kickback for Landlords

• No back-and-forth regarding schedules

Flexible scheduling options, with minimal necessary back-and-forth communication. Automated scheduling is ideal, and self-tours are game changing.

• Attract more interest and conduct more tours with less effort

• Automatic appointment reminders

• If you offer self-tours, save time spent on traveling to and from showings, waiting for arrivals.

CONCLUSION High-quality technology interfaces will only get more important from here on out. All modern renters, but especially the lucrative relocators, are counting on rental owners to minimize the effort it takes to find housing. Taking a step-by-step approach to modernizing your showing process should start with implementing the biggest timesaver first. That title goes to automated showing scheduling, no contest. By allowing interested renters to schedule tours on their time without the annoyance and complications of back-and- forth discussion, you quintessentially remove a hurdle from their path, while smoothing your own at the same time.

Click here to view the sources cited in this article.

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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CELEBRITIES

ON THE MOVE

Michael Jordan Michael Jordan recently purchased a 9100 square foot home in the golf club community of Bear’s Club in Jupiter, Florida. Comprising five bedrooms and six bathrooms, the residence is less than a mile from the 26,300-square-foot mansion the retired Chicago Bulls basketball great built 10 years ago on three acres across from the Bear’s Club golf course. Jordan’s new home offers a four-car garage, pool and a guest house. The deed recorded shows a sale price of $16.5 million.

King Charles III

HRH King Charles III of England has added a three- bedroom, 4.5-bath condominium on Manhattan’s Billionaire Row to his international real estate portfolio at a price of $6.63 million. The luxurious 3601-square-foot, 11th floor apartment features city views and access to an 82-foot indoor swimming pool, padel court and sauna. With 60 residences, 111 West 57th Street offers a secured, private port cochère, concierge, 24-hour doorman and children’s playroom.

Shohei Ohtani

Los Angeles Dodgers new pitcher, Shohei Ohtani, recently purchased a five-bedroom, 6.5-bath home just 20 minutes from Dodger Stadium. He paid comedian Adam Carolla $7.85 million for the La Cañada residence, which spans 7237 square feet. Included are a home theater, gym, pool, sauna and outdoor basketball court. Built in 2013, the house incorporates contemporary and midcentury modern design on one acre with an outdoor kitchen and a four-car garage.

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