The LandLord Advocate June 2011
Since my children were born, I have looked forward to watching and enjoying many milestones they would reach in their lives. The first step. The first word. The first day of school. And, recently, they reached another that maybe not everyone looks forward to, but I sure did. Learning to play Monopoly. Playing endless hours of that classic board game was a large part of my youth and I was thrilled the day my daughter said, having no idea what she was getting into, that she would like to play.
So, we’ve been spending a bit of time around the cool board game playing area they built out of cardboard boxes, learning Monopoly. Now, like I said, I’ve played countless hours of Monopoly in my past. And, I would say it is probably one of my favorite games. At the same time, I have handled thousands of eviction cases for tenants who don’t pay their rent, and conducted hundreds of hours of seminars for landlords who want to learn more about collecting the rent. It was surprising to me how many Monopoly lessons I conducted with the kids before those two worlds of mine collided.
Just recently my son was showing me how he, while playing with his sister and their friend, had purchased a hotel and three houses for Connecticut Avenue and how much rent he was collecting. (For those Monopoly fans, you may recognize the slight laxity in the children’s application of the rules.) When he asked what happened if someone landed on his property and couldn’t pay the rent, I immediately found myself at a seminar full of landlords asking the same question. It took only a few minutes for me to realize that Monopoly had some really great lessons for anyone who buys property, rents it for income, and has trouble sometimes getting the rent paid.
So, here we go with how to be a landlord by Milton Bradley.
- If you miss an opportunity, someone else will take advantage of it and that may cost you money in the long run.
As you know, if you land on an un-owned property in Monopoly, you may purchase it, or it goes up for auction to the highest bidder. Waiting beyond that time ends up costing time and money. Whether in Monopoly or anywhere else in life, we don’t have a lot of time to make critical decisions that will impact us financially. Landlords who don’t act promptly to address tenants who are not paying their rent on time almost always spend more time and money later than they would have had they addressed the issue when it first appeared. For most tenants, rent is due on the first of the month. The landlord can, and should, take legal action on the 11th of that month if payment remains incomplete.
- Owning properties in close proximity to each another can help make more money.
In Monopoly, we buy a series of properties proximate to one another and we can double the rent. If we also buy the series of properties around the adjacent corner, not only do we double the rent, we are more likely someone will land there and pay the rent. Owning properties that are close to one another makes the “real-life” landlord more money as well. You can take advantage of economies of scale without extra delivery charges, your time to inspect is reduced and if you have work being done, you can probably secure better pricing because the contractor will be nearby. Also, you have more chance of collecting more rent while saving on expenses.
- Proper maintenance and improvements will make you more money.
When you build houses or hotels in Monopoly, you get more rent. Your investment into your property produces a greater return. This is also true in the real world. If you improve on and maintain your rental properties, offering amenities that are unique or superb, you can demand and will receive higher rents, thus improving the return on your investment. If your property remains unimproved or unmaintained, you can expect the cheaper rents and probably tenants who care as much about your property as you display.
- If someone can’t pay the rent, they don’t get to stay in the game.
In Monopoly, if you land on someone else’s property and cannot pay the rent, you must start selling assets to pay. If you cannot sell enough assets to pay the landlord, you are out of the game. When someone landed on your Pennsylvania Avenue with three houses, did you let them skate by or did you demand payment in cash or in kind before they moved on? You demanded payment. That’s how it should work in the real world, too. If your tenant cannot pay the rent from their income, they must liquidate assets and pay you. Or, they must leave. The law is designed with this purpose in mind if you want to apply this Monopoly lesson.
I have taken this opportunity to teach my children these and many other lessons that such a simple childhood game taught me. What’s more important, I am trying to relate these lessons to their broader lives and how their dad helps his clients. It is amazing how quickly they pick these things up and how innocently they ask probing questions. The most poignant question to date has been, “Do any of your clients let their tenants move on without paying their rent?” I’ll pose that question to you…
The legal benefits and pitfalls of texting.
Landlords are using cell phone texting as a valuable tool to communicate with tenants and prospective tenants. On the positive side, texts are short, easy to draft, and can be used – and received – by anyone with a cell phone, which these days seems to be everyone. Texts tend to be focused on one or maybe two subjects without the ease or opportunity for diversion to other subjects that phone calls and emails allow. Indeed, landlords seem to be driven to use texts primarily for their simplicity and easy access to sending or receiving. On the negative side, they are not easily stored, recorded, or printed to paper, and therefore are a bad medium when it comes to litigation or proving that the landlord said or did something that the tenant contests.
Texting seems tailor-made for property managers, marketing representatives, and maintenance staff with both prospective and existing tenants. With prospective tenants, property managers and marketers can use texts to quickly remind a prospective resident about the apartment community, its amenities, any special lease offers, and the landlord’s interest in having the person become a resident at the community. As advertisers know from decades of experience, people often make purchase decisions (here, the decision to sign a lease) based on the product or opportunity that is most recently present in their mind.
Regarding maintenance issues, property managers may allow tenants to text work order requests, and then forward those to maintenance staff to handle. In turn, maintenance staff can use texts with the tenant to establish the tenant’s consent to enter the unit and complete the work on a specific date and time, and report the work’s completion to the property manager. This is a very efficient process.
However, as mentioned above, texting does have its drawbacks when it comes to litigation. Texting seems very informal and landlords often treat it that way, meaning that they do not record either the text itself, or its substance, for effective retrieval in the future. Unlike cell phone pictures, there does not appear to be a quick and easy way to get texts onto paper for a mediator or judge to review. Texts get deleted or lost when the landlord changes or loses the cell phone. They are ephemeral. In contrast, housing courts are still creatures of paper, and the judge will always rule in favor of paper and against that which cannot be presented.
Contact your landlord attorney if you see texts becoming a material part of your property management, marketing, and maintenance procedures to ensure that the necessary policies are in place to protect the landlord’s interests when it comes to possible, threatened, or actual litigation. In particular, your landlord attorney can help you ensure that the texting use fits within and does not violate any “litigation wall” policy (see the article “Establish a Litigation Wall to Protect Your Rights” in this newsletter) you may implement.
The voice at the end of the phone.
We at the Landlord Law Firm have always prided ourselves on the relationships we have been able to forge with our clients. A large part of the credit for this bond can be directly attributed to the LLF staff.
Many of you have come to realize and appreciate the important roles that Lori, Melissa and Anne play in our organization. Recently, the firm has added two new players to our team – Shannon Buonocore and Karen East.
We thought we’d take a few minutes to introduce you to each. Our hope is to make each call to our office a bit more personal by knowing more about the “voice at the end of the phone”…
Shannon is typically the first voice you hear when you call or visit the Landlord Law Firm. While her title is listed as Office Receptionist, Shannon’s importance to the firm is boundless. Not only is she typically the client’s first point of contact within the firm (via phone or office visit), she is the team’s “point-person” – tasked with ensuring the right attention is given to each incoming matter.
Shannon also plays an important role in preparing cases that require time spent before the judge. Her emphasis to detail is a critical component in continually ensuring successful outcomes for our clients.
A self-proclaimed basketball/baseball/soccer/ football and soon-to-be hockey Mom, Shannon lives in North Haven with her husband Michael and two sons.
Karen is Robert and Adam’s new “right-hand gal” – tasked with keeping both Partners organized and on schedule. If either is in court or otherwise out of the office, Karen, like Shannon, is tasked with quickly assessing the situation at hand to ensure the matter is addressed in their absence.
Karen is also a critical link in the firm’s communications chain. Those clients with active summary process cases may expect to receive updates emails from Karen throughout the court process. She is an important part of a core, firm-wide component – open and up-to-date communication with our clients.
While not at the office, Karen enjoys music and boating (“I’m happiest when I can see palm trees, white sand and blue water” she recently stated), while also helping to manage her husband Kevin’s martial arts studio.
Please join us in welcoming Shannon and Karen to the Landlord Law Firm. We’re glad you’re now part of our team!
Establish a “litigation wall” to protect your rights.
Landlords should create a “litigation wall” to protect their rights when they are suing a tenant for noncompliance with the lease, rules and regulations, and/or governing statutes. With a litigation wall, the landlord restricts all communication with the tenant to a single individual who then coordinates the landlord’s response to the tenant. This is helpful because of the distributed environment in which landlords typically conduct business.
Normally, landlords have staff members that handle various responsibilities such as property management, maintenance, and accounting, or they contractually engage vendors or third parties to handle such tasks. In the normal course, the tenant seeks out the appropriate landlord representative to address the tenant’s request or concern. For example, the tenant would engage the property manager about lease renewal, the maintenance staff about work orders, and the accountant about charges to the tenant’s account other than rent. This task distribution leads to efficient property operations and customer service for the landlord.
However, once litigation begins, the rules change. Tenants are not usually passive participants in their own demise when facing a legal case by the landlord. Instead, they will focus on excuses, defenses, or claims against the landlord, and seek to establish – or create – one or more of those positions. On the landlord’s side, the landlords’ representatives may not even know that litigation exists, or – if they do – they may not fully understand its scope or implications – and yet the things said or done by each of them may be held against the landlord in that litigation. Many tenants realize these possibilities exist, and may try to use them to their advantage.
Here are three (3) examples of the common situations faced by landlords in litigation with a tenant:
- a landlord’s representative not knowing about the litigation;
- the representative knowing about the tenant noncompliance but misunderstanding its impact and significance; and
- the representative engaging with the tenant not being present in court to testify.
First, landlords may forget to tell the staff member responsible for sending lease renewals, or nonrenewal notices, to tenants that a particular tenant is subject to a summary process (eviction) case. The landlord usually does not consciously make this mistake – rather, the landlord established an excellent business practice that requires a staff member to send out such renewal or nonrenewal letters two (2) months before the tenant’s lease expiration, and no one thought to include an “exception” list to that process for litigated matters. The net result can be destructive to the landlord’s litigation goals. For example, if the tenant receives and signs a lease renewal offer, even though the tenant is subject to a nonpayment of rent summary process case, the case is over on the theory that the landlord decided – by sending the lease renewal offer – to continue with the tenancy despite rent not being paid in full.
Second, tenant noncompliance is often misunderstood by landlord’s representatives as well. A classic example is the maintenance worker who refuses to address a tenant’s valid work order request about a unit problem that the landlord is required to address, because the maintenance worker figures that a tenant in noncompliance is not entitled to landlord compliance, whether litigation has begun or not. Unfortunately, if the work order was about something that the landlord must address (litigation or not), then the maintenance worker will have created a potential excuse, defense, or claim for the tenant.
Third, if the tenant is permitted to communicate with multiple people in the landlord’s organization, the tenant can create a he said-she said situation in court. For example, if the tenant communicates with the assistant property manager and the property manager, but only the property manager comes to court for trial, the tenant can testify to an “agreement” with the assistant property manager, which may or may not exist. On the one hand, the assistant property manager may have actually come to the agreement, and the case will be lost. On the other hand, if there was no such agreement, the case may be lost (if the judge refuses to a second court date and believes the tenant) or will cost the landlord additional time and expense (if the judge schedules a second day for trial) by requiring both the property manager and assistant property manager to attend the second day of trial.
Landlords can establish a litigation wall and create communication clarity with a tenant in litigation by using any number of people, from the property manager to the regional manager to the landlord’s attorney. There is no one-size-fits-all answer here – the best person to select will often depend on the nature of the litigation and who or what was involved. Contact your landlord attorney if you want to establish a litigation wall policy and to develop the evaluation criteria to determine around who that wall will be established.
YOU are in control.
Many landlords don’t realize that when a tenant fails to meet their lease obligations, the tenant gives to the landlord a significant amount of control not previously enjoyed. Landlords who exercise that control gain an even greater advantage than they realize.
Since we regularly hear from landlords on the helplessness they feel, we often write or present about legal strategies landlords can employ, or operational adjustments they can implement, that may ultimately prove beneficial.
The overwhelming point of all of these articles and seminars is to emphasize how much control you, as the landlord, have in an environment where it often seems pointless to take action.
While exercising that control effectively may sometimes prove challenging, the point is simple: You are in control.
Your decisions and actions will have a large impact on how effectively you wield that control. Make sound, reasonable decisions and you should expect sound, reasonable results.
Exercise your control by attending court.
As noted in our first Quick Tip, landlords are in control when they bring a well-supported summary process (eviction) case against a noncompliant tenant – whether for nonpayment of rent or some other lease, rules, or statutory violation.
That control is at its highest point on the first court date assigned to the case.
When needed, we ask our clients either to attend court or be available by phone (and to be prepared to come to court), on each court date. This request reflects our understanding that most cases settle often without the need for the client to be present (after all, that is one key advantage to hiring an attorney), and other business matters may take priority over court on any given day.
Nonetheless, being at court, or appearing immediately if the case requires your attendance, is a powerful exercise of your control. You show a commitment to the case in terms of time and attention, as well as a willingness to see it through to a favorable conclusion.
In contrast, having a case continued because you do not attend court when needed, sends the opposite message to the tenant. Additionally, the delay in general, will very often favor the defense (here, the tenant).
Keep this tip in mind – and remember to exercise your control – the next time that you receive a court date notice from your landlord attorney.
The reading of this newsletter does not form an attorney-client relationship. The contents of this newsletter are for informational purposes only and do not constitute legal advice. Nothing in this newsletter is intended to imply or predict the outcome of any legal matter that you may be considering or be involved in. The Landlord Law Firm makes no warranties of any kind regarding the information contained in this newsletter.