Excerpts for American Landlord Law : Everything U Need to Know--About Landlord-Tenant Laws


AMERICAN LANDLORD LAW

Everything U Need to Know ... about LANDLORD-TENANT LAWS
By Trevor Rhodes Nicole Feévrier

The McGraw-Hill Companies, Inc.

Copyright © 2008 EUNTK Corporation
All right reserved.

ISBN: 978-0-07-159062-4

Contents



Chapter One

Your Rent: Laying Down the Law

This Chapter Discusses:

* When It's Due

* Where It's Due

* How It's Due

* Partial Payments

* Increasing Rent

* Charging Late Fees

* Charging NSF Fees

Who doesn't want to get paid, right? After all, this is why you're a landlord. Those of you that have a great deal of experience in property management have probably already learned that if you are not careful from the get-go in defining when, where and how your rent should be received, then you may be in for a rude awakening when you come across a tenant who decides to set his or her own terms because you failed to lay down the law. If you are a relatively new landlord or are just getting your feet wet for the very first time, you should pay extra careful attention to the advice in this chapter (and all others, for that matter) to ensure you have an ironclad arrangement with your tenant for your own protection.

When It's Due

In every state of the Union, you have the right to specify exactly when the rent is due. Whether it's on the first day of the month, last day of the month or any day (or days) in between, this is your call. Talk with your new tenant and see what will work out for both of you. It's not uncommon to have rent due around an odd pay schedule or a public assistance payment (this is actually required in some places such as Hawaii). The important thing is just to make sure it's clearly spelled out in your lease agreement. You will hear repeatedly in this American Landlord Law volume that handshakes and casual agreements must be avoided.

Failing to give an actual day could lead to serious problems and, believe it or not, there are plenty of landlords that take a lackadaisical approach and find themselves short a month or two (there have even been stories of more than six months – amazing, but disappointingly true). In addition, there are a number of states that will dictate for you when rental payments are due if it is not specified in your lease. You certainly don't want to find yourself stuck in that position.

Where It's Due

Specifying when the rent is due isn't enough; you also need to instruct the tenant (in writing) where the rent must be paid. Again, if you do not specify where the tenant must pay the rent, then many states will dictate that for you – often at the property itself, and it may not be convenient for you to drive all the way over there just to pick up a rent check every month.

If you have a management office onsite, great! If not, then do not specify your home address. This was a topic touched on in the American Landlord volume. It stated that you should never lead a tenant to your home for reasons that are too many to mention.

If you do not have a commercial location for doing business, then set up a private mailbox (known as a PMB) at any shipping center such as a UPS store – or get an official mailbox at your local post office. This is an absolute necessity for any individual landlord for accepting rental payments, as well as any official correspondence that should take place between you and your tenant (e.g., repair requests, notices and complaints).

How It's Due

Believe it or not, you can actually dictate the manner of payment you are willing to accept. This could be Visa, MasterCard, personal check, money order, cashier's check or even cold hard cash (however, under no circumstance should you accept cash!). Obviously, the more difficult you make the manner of payment, the smaller the tenant litter becomes. While this book does not necessarily advocate opening your door to credit cards (which can easily be disputed and reversed by the tenant – known as a chargeback), it is suggested that you accept personal checks, but stipulate that if the personal check should be returned by the tenant's bank on more than two separate occasions, money orders and cashier's checks will only be accepted from that point on. If you do not add in this stipulation from the beginning, in the original lease, you may find it difficult to change this later if you do have a problem with repeated bounced checks.

Partial Payments

Undoubtedly, there will come a time when a tenant cannot pay the full rent amount and offers to pay part of the rent in hopes of catching up on the rest at a later date. Only you can decide if you are comfortable with this idea – keeping in mind how long you have known the tenant, if the tenant has been communicating with you openly about why he or she can't make the full payment, or if the tenant recently changed his or her jobs which adjusted his or her pay dates. If you decide to accept a partial rent payment, make sure you set a firm payment schedule and put it in writing to protect your rights to evict should the tenant never catch up. Do NOT allow the tenant to leave it at "I'll pay you when I can."

A simply worded statement indicating how much he or she has paid toward that month's rent, when the remaining rent must be paid by and what late fee (if you decide to charge one or not) will be needed to be paid by what date(s), signed by all parties will maintain your business relationship with your tenant.

Increasing Rent

Can you charge more for your rental? Sure, it's just a matter of when. If you had your tenant sign a lease (and you better have in order to protect yourself!), then that lease will dictate when you can adjust the rent. The lease can actually give you the authority to increase the rent after giving the tenant adequate notice, but if the lease does not give you this specific right, then you must wait until the lease has expired.

Of course, when it's time to renew the lease, you should give the tenant adequate notice that the new lease will include an increase of rent. If the tenancy is less than a year, such as month-to-month, then state laws generally dictate that you can increase the rent at any time as long as you give notice equal to the term of the tenancy. So, for example, with a month-to-month arrangement, you would need to give 30 days' notice. Of course, there are exceptions to this – some states require less time for notice while others require more. A chart outlining each state's requirement has been provided on the following pages ...

Rent Increase Notice Requirements

Alabama No statute

Alaska 30 days

Arizona 30 days

Arkansas No statute

California 30 days unless all increases in last 12 months total greater than 10% of the lowest amount of rent during those 12 months, then 60 days

Colorado 10 days

Connecticut No statute

Delaware 60 days

District of Columbia No statute

Florida No statute

Georgia No statute

Hawaii 45 days

Idaho 15 days

Illinois 30 days

Indiana 30 days unless lease gives different time frame

Iowa 30 days

Kansas No statute

Kentucky 30 days

Louisiana No statute

Maine 45 days

Maryland 1 month

Massachusetts 30 days or time frame between rental payments, whichever longer

Michigan No statute

Minnesota No statute

Mississippi No statute

Missouri No statute

Montana 15 days

Nebraska No statute

Nevada 45 days

New Hampshire 30 days

New Jersey 1 month

New Mexico 30 days before rent due date

New York No statute

North Carolina No statute

North Dakota 30 days

Ohio No statute

Oklahoma No statute

Oregon No statute

Pennsylvania No statute

Rhode Island 30 days

South Carolina No statute

South Dakota 1 month

Tennessee No statute

Texas No statute

Utah No statute

Vermont 30 days

Virginia No statute

Washington 30 days

West Virginia No statute

Wisconsin No statute

Wyoming No statute

The amount of any rent increase, as well as the number of times you can increase rent, is generally not regulated by the states (with the exception of property governed by rent control laws). Your common sense should guide you here. Obviously, you don't want to anger your tenants and have them move out – or go beyond what the local market is dictating and risk not having any good applicants.

Charging Late Fees

The purpose of a late fee is to give your tenants more of an incentive to pay you on time without having to always serve notice to pay or quit (more on the steps of eviction in Chapters 12 and 13) when someone simply forgets to send the rent on time, while still compensating you for the additional effort needed to collect the rent.

There are only 15 states that regulate late fees in some way, so chances are good that you are free to charge a late fee of what and when you like. However, excessively high late fees can be considered usurious, and thus illegal, in some states that don't have late fee statutes – so don't try to make a killing off of late fees. In general, to protect yourself, a late fee should be charged when the rent is at least 3 days late and should be no more than 5% of the rent payment that is late. A chart covering the requirements of those 15 states that do regulate late fees specifically in statutes is listed on the next three pages.

Late Fees

Alabama No statute

Alaska No statute

Arizona Late fees must be reasonable and indicated in the lease agreement

Arkansas No statute

California Late fees must be close to the landlord's actual losses and indicated in the lease agreement as follows: "Because landlord and tenant agree that actual damages for late rent payments are very difficult or impossible to determine, landlord and tenant agree to the following stated late charge as liquidated damages"

Colorado No statute

Connecticut Late fees can be charged when rent is 9 days late

Delaware Late fees cannot be more than 5% of the rent amount due and can be charged when the rent is more than 5 days late. If the landlord does not have an office within the rental property's county, the tenant has an additional 3 days before late fees can be charged

District of Columbia No statute

Florida No statute

Georgia No statute

Hawaii No statute

Idaho No statute

Illinois No statute

Indiana No statute

Iowa Late fees cannot be more than $10 a day with a maximum of $40 a month allowed

Kansas No statute

Kentucky No statute

Louisiana No statute

Maine Late fees cannot be more than 4% of the rent amount due for a 30-day period and must be indicated in writing to the tenant at the start of the tenancy. Late fees can be charged when rent is 15 days late

Maryland Late fees cannot be more than 5% of the rent amount due

Massachusetts Late fees can be charged when rent is 30 days late

Michigan No statute

Minnesota No statute

Mississippi No statute

Missouri No staute

Montana No statute

Nebraska No statute

Nevada Late fees must be indicated in the lease agreement

New Hampshire No statute

New Jersey Late fees can be charged when rent is 5 days late

New Mexico Late fees cannot be more than 10% of the rent amount due per rental period. Tenant must be notified of the late fee charged by the end of the next rental period

New York No statute

North Carolina Late fees cannot be more than 5% of the rent amount due or $15, whichever is greater, and can be charged when rent is 5 days late

North Dakota No statute

Ohio No statute

Oklahoma No statute

Oregon Late fees cannot be more than a reasonable amount charged by others in the same market if a flat fee is utilized; if a daily charge is utilized, it cannot be more than 6% of the reasonable flat fee with a maximum of 5% of the rent amount due per rental period allowed; late fees can be charged when rent is 4 days late and must be indicated in the lease agreement

Pennsylvania No statute

Rhode Island No statute

South Carolina No statute

South Dakota No statute

Tennessee Late fees can be charged when rent is 5 days late and cannot be more than 10% of the late amount; however, if the fifth day is a weekend or holiday and the tenant pays the rent amount due on the following business day, a late fee cannot be charged

Texas Late fees must be reasonable and close to the landlord's actual losses. Late fees must be indicated in the lease agreement and can be charged when the rent is 2 days late. Late fees can include an initial fee as well as a daily fee for each day the rent is late thereafter

Utah No statute

Vermont No statute

Virginia No statute

Washington No statute

West Virginia No statute

Wisconsin No statute

Wyoming No statute

Charging NSF Fees

Like late fees, the purpose behind charging an NSF – "non-sufficient funds" or bounced check fee – is to compensate you for the fees charged by your bank for the returned check, as well as the additional time and resources needed to collect the rent. The amount you can charge for a bounced check is regulated in every state, and the following chart lists each state's limit ...

Returned Check Fees

Alabama $30 - Check writer is also responsible for all other costs of collection

Alaska $30

Arizona $25

Arkansas $25

California $25

Colorado $20 - Check writer is also responsible for all other costs of collection

Connecticut $20 - Check writer is also responsible for all other costs of collection

Delaware $40

District of Columbia $25

Florida Checks from (1) $0.01-$50.00 = $25.00 fee, (2) $50.01-$300.00 = $30.00 fee, (3) $300.01 and over = the greater of $40.00 fee or 5% of the face amount of the check. Check writer is also responsible for all other costs of collection

Georgia $30 or 5% of the face amount of the check, whichever is greater

Hawaii $30 - Check writer is also responsible for all other costs of collection

Idaho $20 - Check writer is also responsible for all other costs of collection

Illinois $25 - Check writer is also responsible for all other costs of collection

Indiana $20 - Check writer is also responsible for all other costs of collection

Iowa $30

Kansas $30

Kentucky $25

Louisiana $25 or 5% of the face amount of the check, whichever is greater

Maine $25

Maryland $35

(Continues...)



Excerpted from AMERICAN LANDLORD LAW by Trevor Rhodes Nicole Feévrier Copyright © 2008 by EUNTK Corporation. Excerpted by permission of The McGraw-Hill Companies, Inc.. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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