Zona Properties, Inc. | P.O. Box 17937, Rochester, NY, 14617
Email: dick.zona@zonaproperties.com | Phone: (585) 506-9430

A Reader question – disputing tenants

Posted on: December 13th, 2017 by zonaprop

A reader sent in a question regarding feuding neighbors.
The email read: I FOUND YOUR BLOG POSTS TO BE INTERESTING. I WOULD GREATLY APPRECIATE AN ANSWER ABOUT THE NEIGHBORS NOT GETTING ALONG IN MULTI FAMILY UNITS THAT SHARE A DRIVEWAY AND IS CONSISTENTLY CAUSING PROBLEMS FOR THE OTHER TENANTS IN THE BUIDLING. IT’S BEGINNING TO BE HARASSMENT IN THE FIRST DEGREE BUT THE TENANTS HAVE BEEN DISCOURAGED FOR CALLING THE POLICE TO AVOID POINTS ON THE PROPERTY.

The first approach is to establish the rules for use of the driveway. Hopefully these rules are written in the lease for every tenant (one of the reasons I recommend a written lease instead of a month to month verbal). If there isn’t a written lease then you could write up an individual notice of the rules regarding parking/use of the driveway etc. and deliver it to each tenant (not just the offending tenant). If a violation of the rules occurs the landlord then should notify the offending tenant that he/she is in violation of the parking rules with a request to move their vehicle immediately. This should be done by phone or in person followed by a dated letter. The landlord should keep all written correspondence for possible future use in court. The landlord could also at the time of sending out the original notice of the rules contract with a towing company to remove cars from the property if notified by the landlord. When this is established the landlord must post a sign on the building stating the name and location of the company that can tow vehicles as warning notice. If the particular tenant keeps on violating the rules you can then issue another written notice and have the vehicle towed. If this procedure does not deter the offending tenant then the final action is to evict the tenant. I would recommend an attorney be used for this type of action.

Does the security deposit belong to the owner, management company or tenant???

Posted on: October 26th, 2017 by zonaprop

This blog subject was prompted by an article written by Roy Hanlin and published in the Journal of Property Management. It is really a simple answer. When a security deposit is submitted for the rental of a house or apartment the deposit belongs to the tenant until either the tenant’s lease is terminated or he moves from the unit. The security deposit is held by the management company or building owner to be used when this event occurs (tenant moving) so that any costs related to damages, non-payment of rent or charges owed under the terms of the lease can be recovered by the owner. At the termination of the lease (voluntarily or not) any amount remaining held for the tenant, must be returned to the tenant.

I have found that this subject is the most common cause of lawsuits by tenants against management companies and building owners. That is why documentation, pictures and eye-witness accounts of items charged against terminated tenants is most important. Also it is important to have a written lease in effect that specifically spells out charges that can be levied against the deposit. Without a written lease that lists items like late fees, attorney fees etc. a judge may disallow those charges against a tenant.

Finally, it is important that security deposits be held in a separate account from any operating funds. This is to ensure that security deposits paid (the tenants money) is not used for any of the owners day to day expenses.

Single family investing vs. doubles & larger buildings

Posted on: March 23rd, 2016 by zonaprop

Single family investing vs. doubles & larger buildings

This is a question that comes up many times in conversations with investors. Which vehicle you choose depends a lot on what your goals are in investing in real estate. Are you looking for cash flow? Appreciation? A combination of both? Tax write offs? My observations come mainly from common sense than management experience. Just to outline some factors:

Single Family:

Pro:
– Single family is more desirable to renters in most cases
– Price of homes in the city of Rochester can be as low as $10,000
– Tenants usually pick up the total costs related to utilities, lawn care and snow removal
– On resale you not only have other investors to sell to but also owner-occupants
– Management could possibly be handled by the owner without a professional
Con:
– When you have a vacancy you have 0 income to make repairs etc.
– Resale in lower income or less desirable areas is much slower as owner-occupant buyers who want to live in those areas are usually less qualified for financing

Multi-family (2-8 unit)

Pro:
– When you have one vacancy there is still income to cover monthly costs
– Cost/unit is lower than single family on purchase
– Gross Potential Income (GPI) is higher than single family properties bringing in more money to cover costs and for cash flow profit

Con:
– Larger buildings are usually less desirables to some tenants (especially families with children)
– The cost of exterior upkeep is usually borne by the owner and not the tenants
– The cost of water is usually borne by the owner
– Parking is sometimes limited causing a problem for tenants with cars
– Resale will be likely limited to an investor instead of owner-occupant

Larger buildings (10-50 units)

Pro:
– Many units, thus increasing monthly income
– Cost/unit is lower on purchase
– Smaller units cater to mainly single people or couples (see below)
– Resale will be only to investors

Cons:
– Smaller units cater to mainly single people or couples (see above)
– Resale will be only to investors
– Management will usually require a professional
– All costs are the responsibility of the owner usually including the costs of heat and electric
– There is usually at least always at least one vacancy
– In most cases the cost of an on-site superintendent is recommended

Allowing Service dogs in your property

Posted on: June 4th, 2015 by zonaprop

I believe everyone knows the importance of adhering to all laws relating to discrimination of any kind in housing. Very often the question of allowing service animals in your rental when your policy is ‘no pets’ is one that I have found some landlords don’t fully understand. First, below is the definition of a service animal as stated by the federal government:

    “Service animals are defined as dogs that are individually trained to do work or perform tasks for people with disabilities. Examples of such work or tasks include guiding people who are blind, alerting people who are deaf, pulling a wheelchair, alerting and protecting a person who is having a seizure, reminding a person with mental illness to take prescribed medications, calming a person with Post Traumatic Stress Disorder (PTSD) during an anxiety attack, or performing other duties. Service animals are working animals, not pets. The work or task a dog has been trained to provide must be directly related to the person’s disability. Dogs whose sole function is to provide comfort or emotional support do not qualify as service animals under the ADA

I ran across a case several years ago that enlightened my knowledge on this law. We had a prospective tenant apply for one of our apartments where we had a ‘no pets’ policy in place and that had a ‘companion’ dog. We asked if the dog had training in being a service dog (the answer was no), we asked how long the applicant had the dog (1 month). We asked the type and size of the dog (50 lb. pitbull). Based on our knowledge of the ADA law (Americans with Disabilities Act) we denied her application. This was based on our policy of no pets along with the knowledge that insurance companies very often cancel the landlord’s policy based on the presence of certain breeds of dogs (pitbulls, German Shepherds etc.). I very promptly received a letter from an attorney (not always a pleasant experience) stating that while we may not have been discriminating against the applicant based on the ADA, we were discriminating against her based on the Fair Housing Act. See the following explanation from Wikipedia:

    While the ADA has narrowed the definition of service animals that are required to be permitted in places of public accommodation, other laws still provide broader definitions in other areas. For instance, the Department of Transportation’s regulations enacting the Air Carrier Access Act permit “dogs and other service animals” to accompany passengers on commercial airlines.[4] The Fair Housing Act also requires housing providers to permit service animals (including comfort and emotional support animals) without species restrictions in housing.

Based on our ‘new found’ understanding of the law (and prodding from the attorney) we reversed our decision. It is always wise to consult with your legal counsel before making a decision such as the above.

Purchasing Investment Properties in the Rochester NY area

Posted on: June 4th, 2015 by zonaprop

The greater Monroe County area of New York of which the City of Rochester is the centerpiece, is a great place to live and bring up a family. It is located on Lake Ontario, has a very stable economy (home to Eastman Kodak, Bausch & Lomb and Xerox among others) and has been found of late, because of its affordable housing stock, a great place to invest your money. Enough of my public service announcement, for further information you can contact the visitors’ bureau website at www.visitrochester.com

The city of Rochester is a city where you can buy a single family home for as little as $20,000 and expect a monthly income of at least $550/month or a 2 family property for $30,000 which brings in a monthly income of at least $800-900/month. I receive calls from investors all over the country (and outside of it) asking how this is possible. As someone that was born and raised in the area all of my life I (and other Rochester residents) ask how is possible that you pay $300,000 and above for a 1200 sq.’ 2 bedroom house in your area? To us this is insane. I guess the only thing to say is Se La’vi. I can’t speak for your area but my thoughts on Rochester are related to a steady (but small) appreciation of homes in the city. The suburbs, both east and west of the city, have had a higher appreciation but not in any way like some areas of the country such as California etc. The area is still what most people consider a ‘white collar’ type of town with three of the major corporations in the world (see above) founded here and with two of the three still maintaining their world headquarters in the city. Even though all of them have gone through a major downsizing in the past several years, the people that have been laid off have been absorbed into the local economy in the many startup companies in the area.

A major part of the housing stock in the city was built from 1900 – 1925. Dealing with older homes has the typical problems relating to maintenance & obsolescence. Properties in the lower price range ($10,000 – $60,000) usually are in areas of the city that have a higher concentration of low income tenants and sometimes a greater percentage of crime and problems related to crime. When looking at this price range of property an investor has to take into consideration extra costs related to repairs, turnover, improvements etc. It is not that these items don’t exist in higher priced homes but through experience, properties in these areas tend to have an increased amount of these types of expenses. There is always exceptions to these rules but as a realtor friend expresses to many of his clients, it is the old adage “pay me now or pay me later” concept. You might be able to purchase low but down the road you could have more expenses and losses that affect the bottom line. Hiring a good property manager will help, but even a good property manager can’t change the circumstances of the neighborhood or all outside forces that affect rentability

Offering Rental Incentives

Posted on: April 3rd, 2015 by zonaprop

Rental incentives are used by many landlords to help keep their properties full. Some landlords are against using incentives at any time, some use them only when rentals are slow and some use them all of the time, no matter what the vacancy rate is on their properties. Below are some options you may want to consider.

– Free months rent on approved applications (never allow the first month’s rent to be free)
– Last month of lease free if all conditions are met
– 50% rent reduction of month #6 and 50% reduction of month #12 if all conditions are met

Usual conditions: All rent payments made between 1st and 3rd of the month
No bounced checks or problems with payments
No problems with tenant conduct or residency

– Reduced security deposit for approved applications

– Additional perks
– upgrade of apartment amenities (carpet, cabinets, ceiling fans)
– free or reduced cable TV
– free or reduced internet access

Remember the purpose for offering incentives is to attract good prospective tenants from your competition and keep your property filled.

Can a Tenant Sue the City (government) for being evicted???

Posted on: March 23rd, 2015 by zonaprop

There was an interesting case in the city of Rochester. A tenant was recently evicted from her apartment because the police were called to the building for domestic disturbance too many times. The crux of the matter is that the City of Rochester has a law on the books (that may be also on other municipalities records) that states that if the a property owner has a building that is deemed a public nuisance the city can place ‘points’ on the property. If a property is assessed too many points in a short period of time the property can be confiscated by the city (in the extreme) or possibly shut down from doing business. The original purpose of the law was so places that harbor drug houses, prostitution and other crimes could be shut down. The most common measure the city uses to establish placing points on a property is by the number of times the police are involved in the property and the seriousness of the calls.
In this case we are led to believe (by newspaper accounts) that the tenant was a long term tenant, a good tenant that always paid her rent on time. She had a boyfriend that abused her. The police were called numerous times and finally informed the landlord that the issue had become a nuisance and they were placing points on the building. The landlord cancelled her lease with a 30 day notice. She moved from the property and subsequently began a lawsuit against the city because (I believe) she was evicted for no reason other than she was a battered woman. Is this fair? Is this legal? Is this the right thing to do morally?

Working Out Payment Plans with tenants

Posted on: March 23rd, 2015 by zonaprop

Different landlords have different views on this subject. Some feel that if a tenant doesn’t pay the rent in full on the first of the month he/she should be evicted by the 2nd. This is a good concept but doesn’t always find itself in reality. First, in most states it is required that a landlord goes through a full court procedure before a tenant can be put out (a 3 day written notice does not suffice by itself). Also if you are dealing with middle-low income tenants (or any tenants) sometimes financial problems arise that make it not possible to have the rent right on the first. It might be wise to take into consideration several factors when making your decision/policy on late payments. First, is this a good tenant that has just had a one-time problem or is this a tenant that has caused problems repeatedly and is likely taking advantage (again)? Is it worth working out these problems with a payment plan or financially would it be better to get the tenant out and start over?

Take into consideration these factors:
Evcition costs: (in my part of the country)
– Eviction filing fee: $45.00
– Service of papers: $30.00 – $60.00
– Attorneys fee: $225 – $350
– Marshal to serve warrant: $50.00 – $100.00

Make-ready costs:
– Clean & paint & repair apartment: $200.00 – $800.00

Loss of original rent: $???????

Advertising for new tenant: $00.00 – $200.00

Loss of rent while apartment is vacant: $???????

If the tenant is generally a good tenant and agrees to a reasonable (in your eyes) payment plan beginning within a week it might be better to work this out as long as the payment plan is kept.

Single Family investing vs. doubles & larger buildings

Posted on: February 19th, 2015 by zonaprop

Single family investing vs. doubles & larger buildings

This is a question that comes up many times in conversations with investors. Which vehicle you choose depends a lot on what your goals are in investing in real estate. Are you looking for cash flow? Appreciation? A combination of both? Tax write offs? My observations come mainly from common sense than management experience. Just to outline some factors:

Single Family:

Pro:
– Single family is more desirable to renters in most cases
– Price of homes in the city of Rochester can be as low as $10,000
– Tenants usually pick up the total costs related to utilities, lawn care and snow removal
– On resale you not only have other investors to sell to but also owner-occupants
– Management could possibly be handled by the owner without a professional
Con:
– When you have a vacancy you have 0 income to make repairs etc.
– Resale in lower income or less desirable areas is much slower as owner-occupant buyers who want to live in those areas are usually less qualified for financing

Multi-family (2-8 unit)

Pro:
– When you have one vacancy there is still income to cover monthly costs
– Cost/unit is lower than single family on purchase
– Gross Potential Income (GPI) is higher than single family properties bringing in more money to cover costs and for cash flow profit

Con:
– Larger buildings are usually less desirables to some tenants (especially families with children)
– The cost of exterior upkeep is usually borne by the owner and not the tenants
– The cost of water is usually borne by the owner
– Parking is sometimes limited causing a problem for tenants with cars
– Resale will be likely limited to an investor instead of owner-occupant

Larger buildings (10-50 units)

Pro:
– Many units, thus increasing monthly income
– Cost/unit is lower on purchase
– Smaller units cater to mainly single people or couples (see below)
– Resale will be only to investors

Cons:
– Smaller units cater to mainly single people or couples (see above)
– Resale will be only to investors
– Management will usually require a professional
– All costs are the responsibility of the owner usually including the costs of heat and electric
– There is usually at least always at least one vacancy
– In most cases the cost of an on-site superintendent is recommended

Who’s responsible to remove snow from the sidewalk?

Posted on: February 16th, 2015 by zonaprop

This question came up in a column sent to Anne Peterson, a local Real Estate writer for the Rochester Democrat & Chronicle. It seems appropriate to address this now that we have 15-20″ of snow here in Rochester and the temperature with wind chill is -25 degrees. The simple basic answer is ‘the landlord’. The question posed, and my insight, applies to small properties. Single family, 2-4 family etc. not large complexes where the landlord uses plows and staff to keep the sidewalks and parking lots clear. In all of our single family properties we require the tenant to treat the exterior maintenance as if they owned the property. That means not only snow removal but grass cutting and gardening is their responsibility and this written in their lease. For 2-4 family properties we also have this written in their lease(snow removal) but we do provide salt for the porch steps. But, if push comes to shove our local government states, requires, insists (whatever term you wish to use) that the landlord is ultimately responsible. Since the landlord owns the property he is the only one that the government can fine and try to force to comply.