Being a landlord gives an initial aura of being different than other businesses.  I believe this is because your product is an intangible.  You’re not selling an item like a store.  You’re selling a service, but even that is different than most services.  It’s not like you are an electrician or plumber where you come in, perform a service and get paid.  As landlords the service we provide is a properly maintained housing unit. 

The service we provide forces us to have a different relationship with our customers than a plumber would have with their customers.  Our business relationship with our customers can last for multiple years.  We can see marriages happen, children being born, growing up, etc.  We have a view into intimate happenings.

On a personal note, I will say that I believe that if you are a good person, and treat people well, you will be treated well and have a good life.  You can call it living by the golden rule, karma, whatever you want.  My point is that it is how I live my life and it flows through to my business practices.

As a landlord, especially a new landlord, it can be hard to realize that there needs to be a line drawn between the tenant and you.  This is a business and it nes to be treated as such.  This isn’t charity, it isn’t a helping hand, it is a business.

When it comes to landlording it may seem that those two points conflict but I don’t believe so.  I give everyone a fair shake when i deal with them.  I don’t take advantage of anyone and I don’t expect to be taken advantage of.  If a tenant doesn’t pay me I see it as being taken advantage of.  I live up to my end of the deal by taking care of any issues that arise and providing good, sound housing.  They need to live up to their end by paying on time and taking care of the property.

What goes around comes around.

This article is a very good reason why you should not mix relationships.

Business is business.  Personal is personal.  Listen to the godfather on this one, “It’s nothing personal Sonny, it’s all business.”

Obviously this situation ended as poorly as it could have but there were so many chances taken here.  First, legally, if she was his tenant and he was giving her a rent reduction for a relationship I can smell harassment, prostitution, etc all over the place.  The landlord would have been in a pickle if she decided to take some type of legal action. 

Landlording is a business people.  We need to treat it as such.  Landlord, tenant and girlfriend/boyfriend should not be in the same sentence.

Woman held in stabbing death of boyfriend

Chicago police this morning were investigating a stabbing death on the Far Northwest Side that resulted from a dispute between a 54-year-old landlord and a tenant of his building who also was his girlfriend.

Officers were called to the apartment building in the 6400 block of West Touhy Avenue at about 12:30 a.m., police said.

Police arrived to find Fred Khoshaba, the owner of the building, dead on the floor of his girlfriend’s apartment there, bleeding from a stab wound to the neck. A 49-year-old woman was arrested and charges are pending, said Police Officer Laura Kubiak.

According to Kubiak, the woman pulled a knife during a possibly domestic-related argument in which she ordered her boyfriend to leave her residence. When he refused, a struggle ensued, with the victim reportedly grabbing the woman’s arms and shaking them, apparently causing the knife to plunge into Koshaba neck, according to Kubiak.
A cousin of the dead man said the woman called police and told them Khoshaba had stabbed himself in the neck as they argued.

"I will never believe that," Wissan Zala told WGN-TV Ch. 9. "He would never hurt himself."

Zala said his cousin had four children, was in the process of a divorce and was having financial problems due to the difficult real estate market.

     One key way to ensure you keep good tenants for a long time is to not forget they are your customers.  Taking care of issues quickly and to their satisfaction is important.  Give them good customer service and they will stay longer and refer you to friends who may be looking for a place to live.

Article and video below.

Rental rip-offs suspect faces judge, new victim talks
Reported by: Jesse Chavez

WEST PALM BEACH, FL — He’s the suspected ring leader in what authorities call one of the biggest mortgage fraud cases in Palm Beach County history.

Carl Heflin faced a judge on a day when another one of his alleged victims came forward.

"Court is now in session. The honorable judge Ted Boors presiding," said a bailiff.

Heflin, a former West Palm Beach cop, is now on the wrong side of the law.

In court this morning, he faced 30 counts of fraud, burglary and grand theft.

Sheriff’s detectives arrested Heflin yesterday, saying he submitted fake warranty deed forms.

Heflin reportedly claimed he owned 20 homes in the Westgate and Belvedere areas of West Palm Beach.

Julio Elvir learned from us that Heflin claimed to own and live in a house on 2328 Beech Road.

Elvir and the bank are the actual owners.

"Oh! I’m surprised because I never expected something like this," said Elvir. "I thought the bank had already taken possession of the property. But, last July, I went there and noticed two men living there."

Two weeks ago, we caught the suspected scammers, Heflin’s associates, on camera, trying to rent a home they did not own.

It’s located on Wabasso and Oswego.

"I’m the landlord," said one of the men who did not give his name.

"We’re the property managers," said a female associate. "

"Why are you asking me questions?" ask the man.

"Because I’m a reporter," said NewsChannel 5′s Jesse Chavez. "That’s what I do for a living."

One of the associates is George Chambers.

He claimed to be renting Elvir’s house from Heflin since last July.

You can hear dogs barking inside, even though it’s supposed to be empty.

"It’s the first time this has happened to me," said Elvir. "I’m happy to hear that he has been captured. What he was doing was wrong."

A neighbor says a woman, possibly Heflin’s wife, still lives in the home… at least for the time being.

     I once got into a heated discussion with someone on the site who gave bad information.  This woman was touting herself as a real estate expert and was giving landlord/tenant advice in absolutes with no knowledge of the area of the questioner.  Personally I think everyone who gets into landlording or real estate investment learns early on that all real estate is locally driven.  This is true in prices and this is true in landlord/tenant law.  The only absolutes you can quote about landlord tenant law are federally mandated items such as the equal housing laws, lead paint disclosures, etc.  Items such as what rights a tenant has if the landlord goes into foreclosure are all locally driven at the state and municipal level.  You cannot speak in absolutes on this unless you know the location.

     OK, off my rant about the ignorant posting as experts.  There have been a lot of questions lately about what rights a tenant has when a landlord goes into foreclosure.  A lot of the questions have to do with can the tenant stop paying rent.  My general answer is that the tenant can do whatever they want.  It’s a free country.  What can they do legally is a whole different ball game.  In most jurisdictions the legal answer is that you must continue to pay rent.  You have a legal binding contract.  You never know what the outcome of a foreclosure filing is going to be.  There are three possible situations in this:

1. Property has a short sale completed.   
   • In this scenario a lack pf payment by the tenant could cause an eviction.  If the new owner is an investor they may not want a tenant who stops paying, for any reason.
2. Landlord makes arrangement with the bank to keep the property.     
   • Again, an eviction is likely here.  The landlord isn’t going to want you in the property when you stopped paying rent.
3. Bank takes the property back.     
   • Your lease used to be voided but the Protecting Tenants at Foreclosure Act of 2009 changed all that.  Some states have stricter laws than what the federally mandated minimums require.  There is a PDF at the end of this post listing each states laws.  If the state has stricter laws than the Protecting Tenants at Foreclosure Act of 2009 then they stay in effect.   

     One sure fire thing is that if a tenant does get an eviction on their record other landlords will treat then as a pariah.  No one will want to rent to them anymore.  Play it safe and know your rights. 

     I found a listing of tenant rights by state.  Check it out, it has a lot of good information on your rights if you are a tenant facing foreclosure.   Tenant Rights in Foreclosure

     I’ll be posting on the Protecting Tenants at Foreclosure Act of 2009 and my views on it shortly.

     I’m not sure of the details of each scam but I am sure there were red flags that would have tipped off the potential tenants of what was happening. 

     Strange part is, he is being charged with submitting fake warranty claims on the properties.  I’ll bet if he just stuck to ripping off people he would have been in "business" much longer.

Article and video below.

Fake landlord suspected of scamming 30 renters
Reported by: Jesse Chavez

WEST PALM BEACH, FL — NewsChannel 5 cameras rolled when a would-be tenant confronted her alleged scammers.

Now, the suspected mastermind of a huge rental rip-off is behind bars.

The former officer is now facing 30 criminal charges.

NewsChannel 5′s Jesse Chavez was the first reporter to investigate what authorities now call one of the largest mortgage fraud schemes in Palm Beach County history.

"Who owns this property right here?" asked multi-media journalist Jesse Chavez.

"Who are you?" asked a man who claimed to be a homeowner.

"It don’t make no difference," said an associate.

"How about we just call the sheriff’s department and I’m telling you, get that camera out of my face," said another man who was confronted by us.

Our cameras were rolling two weeks ago, when a group agreed to meet a woman at a home on Wabasso and Oswego.

She had offered to give them $800 to rent it.

"Are you really the landlord then?" asked multi-media journalist Jesse Chavez.

"I own this property," said one man.

"No, we’re property managers," said the woman.

"No, I own it," replied the man. "I could do what I choose to do with it."

It turns out, the group works for former West Palm Beach police officer, Carl Heflin.

None of them own the house in question or any others involved in the alleged scheme.

Heflin was arrested this morning and charged with submitting 20 fake warranty deed forms claiming he owned homes in the Westgate and Belvedere areas of West Palm Beach.

"All the properties are in some sort of foreclosure," said Detective Michael Antinoro of the Palm Beach County Sheriff’s Office. "Some of the people are still trying to work it out to pay the payments and some of people just walked away from the property. They’re still technically owned by the person."

Leslie Walker is one of the renters looking for justice.

After paying rent, she even moved into this home before the real owner called the sheriff’s office and had her removed.

"It’s not right, what he’s done," said alleged victim Leslie Walker. "He’s hurt a lot of people and he doesn’t care. He didn’t care what he did."

Walker says she’s now homeless, broke and embarrassed about what happened.

"I’m snake bitten by it, the whole thing. Shocked, angry, victimized is what I am," said Walker.

Heflin is charged with 30 counts of fraud, burglary and grand theft.

Detectives have not charge his associates, but that may change in light of what we caught on camera.

"Listen carefully, back the hell up with your cameras and move on," said the man who claimed to own the house.

"Well if you’ve got nothing to hide, then what’s the problem?" replied multi-media journalist Jesse Chavez.

"This is mine and if you don’t like it, that’s too bad," said the man.

Detectives say the investigation is not complete and others may be charged in the future.

I read the article then saw Shaun over at Shaun’s Real Estate Adventures  wrote about it.  I added my comment to it and am waiting for it to get moderated.  I am definitely in the minority in my thinking over there that you home is a bad investment.  Actually, I feel your home isn’t an investment at all.  Real Estate is a good investment.  Home, that’s where the heart it.  It has nothing to do with investments.  Anyway, the article quote is below.

There’s the usual talk about what the latest Case-Shiller house price data mean for the next short term move in the real estate market. Has housing bottomed? If not, has the rate of decline slowed? And when will we see an upturn?

Human nature likes the short term. Which is why so little attention is paid to something that is probably more important, if less urgent: What the latest data show about the long-term of the real estate market.

And it’s startling.

We have just been through the biggest boom in real estate in American history. The subsequent bust surely hasn’t finished.

Dropping home prices are only one of the factors that keep the annual returns on homes low.

Yet look at the numbers. Since 1987, when the Case-Shiller index of 10 major cities begins, it’s risen from an index value of 63 to 151. Annual return: Just 4.1% a year. During that period, according to the Bureau of Labor Statistics, consumer prices rose by 3% a year. Net result: Home prices produced a real return of just 1.15% a year over inflation over that time.

Critics may point out that the analysis is unfair — after all, it starts counting near the peak of the 1980s housing boom. Fair enough. Look at the performance since, say, early 1994, when home prices were near a historic trough. Surely someone who bought then has made a bundle.

Not necessarily. Since then the ten-city index has risen from a value of 76 to 151. Annual return: 4.7%. Inflation over that period: 2.5%. That’s still only a real return of 2.2% a year above inflation.

You can often do better on long-term inflation protected government bonds.

And real estate often costs 2% or more a year in property taxes, condo fees, maintenance, insurance and the like.

Conventional wisdom long held that home ownership was a route to wealth, and the imputed rent — in other words, the right to live in your home — was just part of the value you got from it. Under that widespread view, the recent housing bust was simply a temporary, though deep, pothole.

Yet for very many people, even over the past 15 or 20 years, the imputed rent may have been all, or nearly all, the real value they actually got from their home.

Yes, it’s only recent data. And it’s only ten cities. But there’s some reason to suspect these numbers may, if anything, flatter real estate performance. After all, it’s hard to look at the data and figure the bust is now over. And if they fall further, those long-term return figures will fall too.

Prices weren’t just down 19% over the past year. They fell 2% just between February and March. And it’s not the worst-hit markets that worry me the most — Phoenix is down 53% from its peak, Miami 47%. That smells of capitulation. It’s the other markets. New York and Boston are only down 20%. Denver’s only down 14%.

Overall the ten- and 20-city Case-Shiller indices are merely back to mid-2003 levels. After the biggest boom and bust on record, history suggests things don’t stop getting worse until they’ve gotten a lot worse than that.

While I am a landlord, I am a citizen and see both sides of the equation here.  With the economy in a tailspin we have set the stage for scams to be rampant.  The increase in foreclosures has forced both homeowners and tenants out into the street.  Most appear with a sense of urgency and will need a place fast.  This urgency can cause people to cut corners or to rush through things and not pay attention to the details.  This is a scam artist’s dream.  They can prey on the urgency and need to bilk people out of their hard earned, and much needed, money.

I’ve compiled a list of some scams, both landlord and tenant scams, for us all to keep an eye on.

Non-Owner Scam:
Non-owner showing a property.  These guys got the keys to a place one way or anotehr and are looking to rent it out.  They will rent the same place out to multiple people and collect security deposits, first and last months rents from all the "tenants".  this usually ends with no one’s lease being valid and everyone out their money.

This can be accomplished a couple ways.

• Renting with the intent of renting to others. This scam works just how it sounds. A scam artist rents a property so they can show it to other prospective renters. They will collect first and last month’s rent, security deposits and any fees or charges they can squeeze out of their victims before skipping town with the loot. There have been reports of a single property being leased or rented to dozens of people before the crook vanished with their money.
• Renting on behalf of the owner. This scam is similar to the previous one but there’s one major difference: the scam artist claims to be helping someone else rent the property. They might be sick, or overseas, or just too busy to do it themselves for whatever reason. Once the scammer collects first, last, deposits and fees they skip town. The renter then discovers the home wasn’t for rent. The owners or renters may have been away for business or pleasure, or it’s a vacation home, or it could be a foreclosed property. Either way you’re out the money if you fall for it.
• Let and run scam.  In this scam the perpetrator poses as someone interested in renting a property. they will come and view the property once with the owner or manager.  they will then stop by and ask to see the place again, usually trying to get the manager or owner to agree to allow them to view the place alone or very quickly.  Once hey get the key from the owner they will have a copy made and return it.  If the landlord checks out the property everything seems fine.  The "prospective tenant" will then perform one of the above scams.

In these scams, there are really two victims.  First, the landlord now has squatters in their property and, second, the tenants have an illegal tenancy and will face eviction.

Ad Copying:
Here a scammer will copy a Craigslist ad or other rental ad exactly.  They will then post this ad, many times pictures and all, and just change the rent amount and contact information.  Here everything looks good.  If you drive by the property you may even see a "For Rent" sign in front.  Neighbors will know it is for rent, etc.  This scam plays on the "too good to be true" emotion.  If all properties are renting for around $900 and the one you are looking at is great and also $700, something is wrong.  This is most likely the start to one of the above mentioned scams.

Identity Theft:
In today’s online world it may seem Ok to handle things electronically.  Maybe even an application to rent a property.  Remember folks, you are giving out your personal information here.  Think identity theft.  Some scammers aren’t necessarily looking to rip you off now.  Some may just want your personal information.  These people will most likely try to keep everything over the phone or the Internet.  They will try to get you to fill out an application and give them personal information.  Here they are mainly looking to steal your identity.  You may not even realize you were scammed until it is too late.  Follow some good advice.  Never give out your personal information over the phone…or the Internet.

Nigerian type Scams:
This tried and true scam has now made it’s way into the hearts of all areas of business.  This scam preys to both tenants and landlords.  There are two main variants for each.

• With landlords it is generally a tenant coming into the country.  The prospective tenant will send a cashier’s check to you.  "Accidentally" they will have sent too much and they want you to wire them the difference back, keeping a little bit for your won trouble of course.  Once you wire the money to them they will have it and you will find out the check has bounced.  Remember, it can take a couple weeks before the bank knows that the check has bounced.  Once it does they will come after you for the money.  Either way, you will be out the money you wired to them.
• For tenants, it is different.  It is a play on the Ad Copying Scam above.  Generally you will never meet this person but they have a great place for rent.  They will try to conduct all business over the phone and via the Internet.  Once they have your money they will disappear. 

Things to watch out for:

• If it is too good to be true run, don’t walk.
• Cash only up front
• Overpayment then asking for a refund
• Offering you something that doesn’t pass the smell test, like the “homeboy hookup” in the video below.

Safe practices:

• Deal locally with people you can meet in person.
• Avoid deals involving shipping or escrow services, and be wary of a transaction “guarantee.”
• Never give out your financial information and definitely do not wire funds.
• Ask plenty of "qualifying" questions.
• Verify owners of property at the tax board.
• Ask the landlord if you can see their ID.
• If a property management company is managing the condo, home or community, call them and ask whether the person you’re dealing with actually owns the property.
• Considering how many homes are being foreclosed, don’t be afraid to ask if the landlord is current on their mortgage payments.
• Ask potential tenants for references and follow up by checking them.
• Change the locks frequently if you rent the property often. If your previous tenants kept a copy of the keys, they have access to the home!
• Verify your tenant’s employment by contacting their employer.
• Run a credit check on potential tenants before renting to them.
• Don’t let a tenant pay more than you asked for then demand a refund. If you give it to them, you’re out the money.

Sorry for the long post.  It ended up being a lot of information to put here. 

Check out the video below.  The original story is here: 

[See post to watch Flash video]

Below you will see an interesting news article, along with a video about a tenant who died during his lease and the landlord’s response.

Fort Lauderdale Landlord Emulates Scrooge In Demanding Rent From Dead Man

Fort Lauderdale, FL (AHN) – Florida’s overbuilt and slow real estate market has left the state over loaded with a huge inventory of homes, condos and apartments that don’t sell or rent. That might explain why one South Florida landlord is seeking rent from a dead man, claiming that he is owed three months rent because the tenant failed to give 60 days notice before dropping dead of an unexpected heart attack.

Fort Lauderdale landlord Alan Statsky claims he is owed the money for the apartment at Sun Harbour Yearly Residences that Art Zissen left vacant after dying there of a heart attack on Sept. 22.

"Part of the contract says if you abandon your lease and you don’t pay on your lease that we have a right to collect your security deposit," property manager Alan Statsky was quoted as saying by Local 10 news.

But it’s not just the dead man’s security deposit. In a move that could have been a scene in novelist Charles Dickens’ "A Christmas Carol" by character Ebenezer Scrooge, Statsky wants rent for October, November and December for the vacant apartment too. And since Art Zissen is dead, Statsky sent his relatives a bill for three months of rent.

Although it’s up to a Broward County judge to interpret the lease in January, a lawyer says the lease died when Zissen did leaving Statsky without any contract to enforce.

"This landlord’s ability to collect rent came to an end when Mr. Zissen died," Russell White, an attorney for Zissen’s family, was quoted as saying by Local 10 news. He added, "That landlord, in my view, is trying to take advantage of the situation to extract money. It looks to me that it’s motivated on pure greed."

Zissen’s brother notified the apartment management company on Sept. 24 that his brother had died, then cleaned out the apartment and did a walk through with apartment managers on Oct. 5.

While I can understand the man’s estate being responsible for the remainder of the lease I would expect the death to remove the need for notice.  Is it really abandonment?  It seems like the bother was trying to do the right thing.  This just reminds me of something Bill Maher said when interviewing Elizabeth Warren.  They were discussing the recently passed Credit Card legislation and Bill said that it was needed because we just don’t treat each other very well.  This is another example of that.  I can see legislation being formed because one guy wants to rip off another one here.

     The last few weeks have been pretty bust for me.  In my personal life I have been swamped.  I was literally going from 8am through until just past midnight Saturday and then back out at 8am on Sunday and got home around 6pm.  A very long weekend and when you add in that I was tossing and turning all night Saturday into Sunday I am exhausted.  Anyway, on to some updates.  The house has been rented.  The tenants are a couple moving to a larger place from a studio apartment they have in the city.

     They seem like nice people, so they passed the "gut" test.  For the rental criteria, they passed everything.  Financials were OK, current landlord for one gave a great reference. 

     The guy currently splits time between his parent’s house and his girlfriend.  She has a loft apartment which makes it a tight fit for them both to live there.  His financials were good, everything on credit looked good.  I wasn’t able to get a hold of his previous landlord from another state.  That was something that gave me cause to give a second thought.

     For the lady, she was OK with her financials.  No recent delinquencies.  Not a great credit score but an OK score.  Current landlord gave a good recommendation.  Pays on time, no issues at all.  The current landlord and I got into a conversation about how there aren’t many landlords now that call and check references.  It’s refreshing to talk to someone else who does.  The previous landlord gave a mediocre recommendation.  She said that the place was kept nice, rent was paid on time and they even gave a full refund of the security deposit.  The issue that she had was the tenant was in a tumultuous relationship and this caused social issues (arguments, etc).  I’m not sure if this is the current relationship she is in now.  I didn’t really get the opportunity to bring it up in conversation and I really wasn’t that concerned with relationship arguments.  Both candidates qualified for the place independent of each other so if there is a split, it should be OK.

     Either way, the place is rented and I am back to full capacity.  It’s nice to see the bank account for the rental business growing instead of shrinking.