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The LandLord Advocate August 2013

Lead Article:

How to avoid experiencing the recurring problem tenant.

Landlords expect to have problem tenants – it’s just an unavoidable situation that will always occur. The goal, however, is to eliminate the problem and keep the tenant, because long-term, lease-compliant tenants are not only typically good neighbors and members of the community, but also finding a way to keep them in place, is generally more profitable for the landlord. The challenge lies in how to avoid the situation of the recurring problem tenant.

The first thing to keep in mind is that not all problem tenants need to go. Tenants sometimes have an issue arise that causes them to fall into the problem tenant category on a temporary basis. For example:

  • They had a medical issue arise that produced unexpected bills, so they did not pay the rent in full for the first time in years.
  • A close friend moved and asked the tenant to keep their dog until they got re-settled in a few weeks, putting the trying-to-be-helpful tenant squarely in violation of the no pets clause.

In either situation, usually a letter or call from the property manager resolves the situation quickly and definitively.

However, some tenants fall repeatedly in the problem category, and no effort by the property manager will eliminate the issue. Such tenants historically pay the rent late, not because of a one-time event, but because they place all of their other wants and bills before ensuring that their rent is paid and their home secured for another month. This then drains time and energy from the property manager, who monthly must dedicate substantial time to dealing with all of the administrative and management issues that arise from such a non-paying tenant.

So, what’s the best way to deal with the situation of a chronic problem tenant?

Just the tenant’s repetition of the problem behavior should be signal enough to turn to your landlord attorney, who, in turn, should resolve the matter definitively and for an extended period of time, eliminating the need for you to continuously face the problem. For example, with the tenant who is not paying the rent, the landlord attorney can bring a nonpayment of rent summary process case and get the tenant on a stipulated judgment, enforceable through the court, under which the tenant either agrees to stay and pay on-time and in-full each month, or leave the property if the tenant cannot fix the problem satisfactorily. If the tenant refuses to enter a reasonable stipulated judgment, then the landlord attorney can take the case to trial and evict the tenant.

Sounds simple enough – however, we often watch attorneys in court who fail to deliver this critical level of advice and service to their clients. They typically either:

  • Do not assist the landlord or property manager in entering the right kind of stipulated judgment,
  • Fail to make the judgment long enough, or
  • Fail to recognize and advise the client on the option of taking the case to trial should the settlement negotiations turn unfavorable for the landlord.

Having this level of representation in court can translate into a hard lesson for the landlord or property manager.

A recent experience I had paralleled this situation and may help you better understand…

Traditionally, I have turned to the dealership whenever my car needed service. However, I have had a repeated nagging suspicion that work was being done unnecessarily and repetitively. The last straw was a recurring rattling problem I had with the exhaust. Every time I complained about the problem, the service advisor explained that to correct the problem, they would need to replace the entire exhaust assembly. Life was busy, so I took him at this word (luckily not opting to have the work done), paid the bill, and moved on.

As the car aged and the issue arose for the fourth time in eight years, I really pressed the service advisor about the need to replace the entire section of the exhaust now at issue. We had gotten to know each other over the years, and — after looking around to see if his boss or co-workers were in earshot — acknowledged that it appeared the car’s design was missing a key support for the exhaust pieces. The connection, not the functionality of the exhaust pipe was the problem. He suggested I take the car down the street to a local mechanic who could fix it definitively, and for a reasonable price. I took his advice and the exhaust literally did not rattle for the remainder of the car’s life.

We have seen this same phenomenon with landlord attorneys. They do not explain the various options available to their clients; rather, they deliver simplified, predefined solutions that often cause the landlord to deal with the same problem tenant over and over. While this approach benefits the attorney with revenue from each case, it burdens the landlord who is constantly finding himself in court, dealing with the same problematic tenant.

Landlords should view this situation as unacceptable. If they have a problem tenant, they should turn to a landlord attorney who looks to resolve the problem the first time it is brought to them by the property manager. Getting to the right version of a stipulated judgment, including its length and specific terms necessary to deal with the specific problems created by the tenant — or turning to a trial, when necessary — are the key moments of landlord attorney service to the client.

Contact us if you find you have the same, recurring problem with a tenant — be it nonpayment of rent, lease violation, or nuisance behavior — and we will help you get to a definitive resolution.

Quick Tip:

Make sure you know who’s in charge of construction projects.

Commercial and residential complexes often have extraneous things going on outside the normal, daily operations of the property. A classic example is construction repair or renovation on some or all of the building or units – a situation, which by definition, brings all sorts of new people and equipment onto your property. In this often hectic, exciting, and stressful time, issues will arise, and how you handle those issues will define in large part whether the project succeeds.
In this quick tip, we focus on the seemingly obvious, but absolutely critical, first step to success — the landlord needs to determine who is in charge. One person should be assigned responsibility for the entire project, be given the proper training (or have the experience) to handle it, and be delegated with the authority to make decisions when necessary.

This is often easier said then done. A leased property has many people in charge — the landlord as owner, the property manager, the maintenance supervisor, and the tenant (at least when it comes to having quiet enjoyment of the unit). A construction project brings even more people to the table — a general contractor and/or construction company vendor, and possibly an architect or engineer who has provided the project’s scope of work. Each has their own perspective to lend to the project, as well as impact on its progression. Nonetheless, only one can be in charge because, when separate individuals are in charge of their own pieces, there is no ultimate control and things may fall through the cracks.

Picking one person to be in charge does not mean that everyone else can abdicate responsibility for their normal roles and responsibilities. Rather, they must engage with the person in charge to ensure that everything is addressed, and — when something gets missed or comes-up unexpectedly, as it always will — to assist with the resolution.

Contact your landlord attorney if you are planning a large maintenance or renovation project to obtain both big-picture and detailed operational and legal consulting and feedback on the project. Doing so will help ensure that you’re not only involved in the process of picking the person in charge, but also that you are positioned correctly to assist that person throughout the entire project.

Quick Tip:

Not so fast – headlines can be misleading.

Many of you may have recently seen the headline: “CT approves submetering, fines N.H. landlord,” or one similar, in your local newspaper. But, as often seems to be the case, there is more to the story than meets the eye. While truth in such a headline would be a good first step toward having CT tenants become responsible for their energy and utility consumption, when you read the fine print, you’ll learn that such a step has not truly been taken here in our state.

On a positive note, CT did in fact pass SOME legislation pertaining to this topic, but it falls far short of allowing submetering on a grand scale. Here is a link to the law that was passed: http://www.cga.ct.gov/2013/ACT/PA/2013PA-00298-R00HB-06360-PA.htm. The language of interest is contained in Sec. 36. Section 16-99ff. You have to dig deep – its tucked way down in there. Once you find it, you will note that the verbiage is quite vague and there are quite a number of hurdles that remain in place. And, since there are no regulations yet promulgated on the issue, exactly what those hurdles are, and how to scale them, remains unknown.

To find more accurate and complete reporting of this new legislation, you must do your research. Don’t trust the headlines as they are not telling the whole story.

Additionally, this legislation in no fashion addresses the issue of ratio utility billing. As of press time for this newsletter, RUBS remains the topic of ongoing controversy in many venues and within many agencies around the state. While we can certainly hope that submetering approval and the Governor’s desire to make the tenant responsible for their own energy usage will lead us to the logical result of RUBS, only time will tell how far these energy conservation efforts will go.

One thing is for sure, the issue is currently one of great interest. Perhaps I misspoke before. Maybe we HAVE taken the first step, albeit a small one, toward all tenants assuming responsibility for their energy consumption…

Quick Tip:

How to effectively set a goal or objective for your landlord attorney.

In our December 2009 “Not-so QUICK TIP: Effectively communicating with your attorney”, we addressed the attorney-client privilege and how landlords can take advantage of that privilege to seek advice and counsel in dealing with problem tenants and other issues at their commercial and residential leased properties. That Quick Tip included a 7-step guide to effective communication with your landlord attorney. This month, we’ll focus on step #2 which is very important when dealing with problem situations: “Tell your attorney what you want to accomplish.”

As landlord attorneys, we realize that some of our clients either simply do not know what they want to accomplish, or have been burdened by the problem for so long that they have lost sight of what they CAN accomplish. While alarming, it’s perfectly acceptable to find yourself in that situation – at least in the short term.

When you face this situation, give your landlord attorney a call and BE SPECIFIC. After describing the issue (step #1):

  • Let the lawyer know that you are unsure what you want to accomplish,
  • Ask for help, and
  • Remind the attorney that you will make the decision on your goal or objective after the consultation.

Following these guidelines will help your attorney understand what kind of conversation you want to have, and you will likely find yourself well on the way to checking-off Step #2 as you move toward resolution of the problem.

Quick Tip:

What message are you sending your tenants? Are you sure?

With the CTAA’s 11th Annual Tradeshow rapidly approaching, I am excited about the education opportunities coming your way. Even more, I am thrilled about our keynote speaker, Janine Driver, who last wowed a national multi-family industry audience at NAA’s Education Conference in San Diego. Janine is a body language expert and you will learn all about her and your body language at the tradeshow. If you haven’t signed up, get it done now. You won’t want to miss her.

As a prelude (and I am certainly no expert), I thought I’d prime you from the legal perspective, about the message you are sending your residents every month. Now, I won’t pretend to know what your message is – since I don’t live in your community. But, I will challenge you as to whether you are delivering it effectively. The reason I feel qualified to do that is because, as a landlord attorney, I often see management’s conduct with their residents falling out of step with their intended message. They simply do not DO what they SAY. While this is often just a mere hiccup in their operations, sometimes, it can really have a serious impact on the achievement of overall goals.

Hopefully a quick, practical example will illustrate my point…

You, like all other landlords or property managers, want your residents to pay their rent in full and on time, without any effort on your part. You have the requirements for such outlined in your lease, you may cover it in your lease signing ceremonies, and you have possibly even sent letters to the entire community reinforcing the rules – perhaps along with the consequences associated with noncompliance. All this done, you may believe that this message has been presented perfectly clearly. But, has it?

Do your actions around timely rent payment support that message or dilute it? Do your collections efforts each month reinforce your expectations for prompt payments or do they contradict your goals? It is important that you find out.

The purpose of this tip is to encourage you to investigate the situation from a bird’s eye viewpoint. Evaluate your actions as much as your words. If you cannot determine whether your are sending a clear, singular message to your community, perhaps you need to reassess. Janine can help us all get started.

See you at the show!

DISCLAIMER:

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.