Many, many years ago, I had a tenant who violated a zoning ordinance.
The ordinance prohibited placing barbecue grills on apartment patios or porches. Mind you, this was not about use; it was about storage.
Guess who received a violation notice from the local zoning office? If you answered “the tenant,” you were wrong. We, the property management and the owner, received the notification with a short window of time to remove the grill in question.
It took me years to realize that not only am I at the mercy of my renters, but I am also at the mercy of the local and state zoning, housing, police – well you get the idea. As if being at the mercy of my renters was not enough (you can’t see it but I’m rolling my eyes over here)!
We’ve talked in the past about how more states and cities have been introducing criminal penalties on landlords. Now we’re looking even closer, at how cities are outsourcing their code enforcement by holding landlords liable for tenant infractions.
Landlords, Tenants, Chickens
Earlier this month, NPR released an story about a landlord, a tenant and some very bothersome chickens. The story, entitled “Some California Cities Criminalize Nuisance Code” Violations, explores how landlords are increasingly being criminalized by laws and authorities.
The short version of the story? Renters get chickens. Chickens stink and cause noise violations and disruption for the neighborhood. The landlord, a woman is in her eighties, consistently ordered her tenants to remove said chickens. They didn’t.
The City of Indio took this elderly landlord to court over her tenants’ ordinance violation, where the landlord pleaded guilty and was fined $225. Sad but done, right? Nope! She then received a bill for “legal expenses” from the City of Indio (the self-proclaimed “City of Festivals”), for a whopping $5,659.02. The City of Festivals charged her for her own prosecution, and cited the fees were “reasonably incurred” in order to “abate the nuisance conditions.”
First of all, this makes me so mad! On so many levels!
Granted, there are bad landlords out there. Landlords who violate their lease contracts, state landlord-tenant laws, or local ordinances.
But of the hundreds of thousands of lease disputes in the U.S. each year between landlords and tenants, what portion are caused by landlords violating the lease contract, versus tenants violating it?
Quite simply, most lease disputes occur because tenants violate the lease, whether by failing to pay rent, failing to keep the property clean, failing to observe local ordinances, bringing in unauthorized roommates or pets, etc.
Yet the common refrain among citizens and lawmakers is to vilify landlords. And not just vilify, but criminalize, by holding landlords legally responsible even when the tenants violate local laws.
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Outsourcing Enforcement: Cities Follow the Easiest Way to Collect
Why are landlords held accountable for tenants’ legal violations?
- It’s much easier to collect fines from landlords – all the city government has to do is put a lien against the property. Collecting from tenants, who can move at the drop of a dime and generally have no large assets to secure liens against, is much harder.
- By sending violation notices to landlords, city governments can effectively outsource code enforcement to the landlord. Why would city officials want to chase down tenants and enforce the laws, when they can just have the landlord do it for them?
- Landlords are politically easy targets, with no strong union or trade organization defending their interests in city hall. There are no political consequences to holding them accountable for tenants’ violations.
We live in a society where those presumed to have deep pockets are often targeted by the bureaucrats anxious to shore up their city’s revenues. Unfortunately, being referred to as a landlord or real estate investor seems to fall under that presumption. According to Landlord Station, only 34% of real estate investors make over $75K per year. That means, folks, that two-thirds of landlords – 66% – make under $75K.
Many so-called “real estate investors” are actually accidental landlords, who end up with a home they have to rent out, whether they were forced to move from a home they lived in or inherited one. Or uninformed investors who hop in, purchase a home without making sure they know the ropes! (Now is probably a good time to mention our free mini-course on becoming a landlord with 2-4 unit properties!)
5 Ways to Avoid Taking the Fall for Your Renters’ Violations
How does a landlord avoid this liability, that cities are increasingly putting on landlords? How does a real estate investor prevent being held accountable for their renters’ violations?
- Spell out all tenant requirements and regulations in detail in the lease contract and go one step further, have your renters initial that they understand!
- Make sure that there is language in the lease contract that makes your renters responsible for any violations that they cause that are against any state or local ordinances.
- Move quickly when a violation occurs! Do not prevaricate or procrastinate when it comes to responding. Include any warning notices from any authority. And inspect each rental unit quarterly. If lease agreement violations aren’t cured quickly, start eviction procedures. Save all paperwork, logs of phone calls, emails and texts.
- Hire an attorney! If you find yourself in uncharted territory, do not go in by yourself. Oh, but you do not want to spend the money on an attorney, you say? I believe our landlord from Indio, California would have preferred spending even $1,000 on attorney representation than deal with the aggravation and the ridiculous fines she ended up paying by securing a loan from her U.S.M.C.-serving son.
- Join local real estate investment clubs and network. Go online and use social media with its vast number of groups devoted to assisting the newbie real estate investor.
There will always be political establishments trying put the blame on the landlord such as last year’s passed law in Portland, Oregon that prevents landlords from hiking up the rent. It is laws such as these that can make it a bit challenging to master the maze of landlording.
However, it is worth it. With preparedness, diligence, and rent automation, being a real estate investor can still pay off, regardless of how “politically expedient” it is to put all the liability on the landlord!