Month: October 2021

By Robert L. Cain, Copyright 2021 Cain Publications, Inc.

PROPERTY NEWS SERVICE

American humorist Josh Billings observed, “Ignorance ain’t not knowin’ stuff; ignorance is knowin’ stuff that AIN’T TRUE.”   Landlords knowing too much that ain’t true easily fall victim to the bad tenant who knows less that ain’t true, and who is thinks in the words of the song by Blondie, “I’ll getcha getcha getcha getcha.”

That’s one reason we have rental agreements and leases.  Without everything in writing, both tenants and landlords come up with all kinds of things they know that ain’t true.  When it is spelled out in a lease, the lease language revokes the things someone thinks he or she knows.

Here are four things that landlords, tenants or both know that just ain’t true.

Ain’t True #1: A tenant can use the security deposit to pay the last month’s rent or for any unpaid rent.

The security deposit can be used for rent only if the landlord agrees to it. A security deposit is to pay for damages that the tenant may cause while moving in, living in or moving out of the property, not for rent.

Ain’t True #2: A tenant doesn’t have to pay rent if he or she gets a 30-day notice.

Tenants owe rent for the entire time they stay in or use a rental property. That may include rent for periods that only their belongings are in, or for when they have access to the unit. The fact that the landlord has asked a tenant to move in no way relieves the tenant of the obligation to pay rent.

Ain’t True # 3:The judge will give a tenant 30 to 90 days to move if he or she has children or a person with a disability in the household.

If a tenant loses an eviction case in court, the judge can order him or her to move out immediately. The law does not provide for extra time to people with disabilities or children.  The law does not single out families with children or the disabled for special treatment if they don’t pay rent, are a bad neighbor, or damage the property.

Ain’t True #4: A landlord can’t charge more rent or a higher security deposit to one tenant than another.

The only reason a landlord may not charge one tenant more than others is for an unlawful discriminatory reason such as race, disability, or children. A landlord can charge more if it is for another, businesslike reason, such as pets, smoking, or bad credit.

Bad tenants make a living off knowing the law far better than an unread landlord.  They wait for us to make a mistake so they can “getcha getcha getcha getcha” and live free for two or three months.

It’s all in the lease, assuming the lease comes from an apartment, landlord or rental owners’ association, and not from the local office supply store or free off the internet.  Drag the lease out of the file, dust it off and read it.  It’s not what you know, it’s what you know that ain’t true that can result in a huge hit to your bank account.

by Robert L. Cain, Copyright 2021 Cain Publications, Inc.

PROPERTY NEWS SERVICE

A property manager I knew told the story about the time she was talking to a landlord about her rental property and said “the law says. . .”

The landlord replied aghast, “There are laws!!!?”

Yes, ma’am, there are laws.  And in most states those laws were written to protect the “poor, abused, downtrodden” bad tenant.  Also in most states there are too many judges who take it a step farther and interpret the laws and rule in ways that provide bad tenants even more rights to not pay the rent and trash property.

Shame on the legislatures and shame on the judges, but that is the situation we face when we own and manage rental property.

Rental property is one of the most regulated industries in the country.  It is filled with traps, pitfalls and snares awaiting the unwary landlord.  The rental property business is also one of the easiest to get into.  All you have to do is buy house, tidy it up a little, find a tenant, and rent it out.

Blissfully unaware of the landlord-tenant law of the state, landlords enter without proper notice, harass tenants when the rent is late, apply the apartment complex’s rules unfairly, select tenants in violation of the Fair Housing Act, and handle security deposits improperly.

Bad tenants often know the law. They know the law because they have had experience using it and have probably sued a landlord or two over the course of their bad-tenanthood pillaging and devastation.  Again and again they catch landlords unaware that laws govern our business.  They lurk behind moldy tall grass and under rocks waiting for their landlords to violate the law even a smidgen, and then they slither out to try to get a judge to let them live rent free for months and months.

The landlord-tenant laws of most states can be found online from your state’s secretary of state, or from your local apartment, landlord or rental owners association.  Having them on your bookshelf is one thing, but actually taking the time to read them and understand them is another.

Whenever I traveled to another state to speak, I always printed out that state’s landlord-tenant act and read it.  The first thing I look at are notice requirements, that is, how much time a landlord has to give to terminate a tenancy, change the terms of the rental agreement, allow after the rent is due before filing an eviction, and before he or she can enter a tenant’s home for inspection or repair.

Next I want to know the security deposit requirement.  Is there a limit on how much a landlord can collect? Does the deposit have to be placed in a special bank account? What are the requirements for accounting for it when a tenant moves out?

In most states’ landlord-tenant laws, you can expect to see similar rights and responsibilities for both landlords and tenants. The real differences lie in entrance, notification and security deposit requirements.  Those are the ones that get landlords in trouble if they violate them, and the ones that bad tenants can probably recite like scripture.

If you don’t know the law, you leave yourself like a sitting duck to the scheming of bad tenants.  These people will take your property, your money and your sanity.  Know the law, know the law, know the law.

By Robert L. Cain

PROPERTY NEWS SERVICE

Millions of Americans face financial difficulties because they just “don’t get it,” their financial health on a knife’s edge. On a basic five-question financial literacy quiz, 80 percent couldn’t answer four of the five questions correctly. The world runs on money, but they don’t “get” how money works. Because of their ignorance, their illiteracy, they sheepishly admit to losing an average of $1634 a year reports the Financial Educators Council.

These are 18 to 34 year olds, Millennials, who on the literacy quiz got wrong such questions as “Suppose you have $100 in a savings account earning 2 percent interest a year. After five years, how much would you have?”  They didn’t even ask them to do the math, just if it would be more or less than $102.  Or even a “super tough” one “Imagine that the interest rate on your savings account is 1 percent a year and inflation is 2 percent a year. After one year, would the money in the account buy more than it does today, exactly the same or less than today?”

“Financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing. Financial literacy is the foundation of your relationship with money, and it is a lifelong journey of learning,” defines Investopedia.

Investopedia also warns, “The lack of financial literacy can lead to a number of pitfalls, such as accumulating unsustainable debt burdens, either through poor spending decisions or a lack of long-term preparation. This in turn can lead to poor credit, bankruptcy, housing foreclosure, or other negative consequences.”

Gflec.com reports the following facts. One in four Millennials, 24 percent, are financially fragile. Half could not come up with $2,000 if they encountered an unexpected financial issue. Thirty percent overdrew their checking accounts. They keep the payday loan companies and pawn shops in business since the half of them that have only a high school education use either or both sources of alternative financial services even including the 39 percent who have bank accounts and the 35 percent who have credit cards (presumably at their credit limits.)

Financial literacy helps answer such questions as how many credit cards someone should have, is borrowing for college worth it, should I buy or lease a car, should I rent or buy a place to live, and how much can I afford to pay for a mortgage or rent? Financial illiteracy can doom someone to poor or even disastrous economic decisions.  They simply don’t know how to figure out what makes most financial sense.

It continues its decline. All age groups find themselves worse off than 12 years ago, but Millennials saw the sharpest drop in financial knowledge. Just between 2009 and 2018, they saw an eight-percentage point drop in the literacy from 42 percent to 34 percent.  For the math averse and financially illiterate, that’s a 19 percent drop in literacy. But their parents’ generation, even though their literacy slipped, 51 percent could still answer four of the five questions correctly.

A National Financial Capability Study (NFCS), reports the TIAA Institute, shows that Millennials tend to rely heavily on debt, engage frequently in expensive short- and long-term money management, and display shockingly low levels of financial literacy while student loan burden and expensive financial decision making increased significantly from 2009 to 2018 among young adults.

These data bode poorly for the financial well-being of the country.  After all, in a few years, the Millennials will be in charge. Today, they are mostly our employees and renters.  They will be the bosses, the company owners, the teachers, the government workers, and filling every slot in the economy.  The older generations will be retired and depending on the Millennials to get it right. It doesn’t look promising.

This illiteracy pervades the entire country, border to border, coast to coast, north to Alaska, and across the ocean to Hawaii. WalletHub analyzed financial-education programs and consumer habits using 17 metrics that included high school financial literacy programs and the share of adults with rainy-day savings to learn the extent of illiteracy around the country. Even the most financially literate state, according to wallethub.com, Virginia, comes in at only 68.25 percent financially literate slightly over two-thirds. 

The most financially illiterate state, Alaska came in at 53.39 percent financially literate, followed closely by Mississippi (54.2), South Dakota (54.76), Oklahoma (55.57), Louisiana and Arkansas (54.15), New Mexico (54.57), West Virginia (56.4), and District of Columbia (56.54 percent).  The District of Columbia figure brings up several obvious questions. All the people in states bumping on the bottom of financial literacy are ripe for scammers. The financially illiterate simply can’t see through the scammers’ flimflam.

As we might expect, their amount of education correlated with the financial literacy. Those with only some high school show a financial literacy rate below 50 percent while those with graduate degrees come in at about 80 percent.

On a knife’s edge, one step ahead of financial disaster, their economic wellbeing can all blow up at any time with late or unpaid rent, auto repossession, collections, and bankruptcy. It affects not just them but all those around them and with whom they do business including employers and landlords.

Written for Zip Reports where they do employment and rental screening.

Contact Robert L. Cain at bob@cainpublications.com