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Disinfecting Premises for New Tenants

I’m getting a number of questions about how much you should do to disinfect premises before a new tenant takes possession. Related questions ask about proof someone is COVID negative, etc.

First, unless your tenant or tenant prospect waives their HIPAA rights, you cannot inquire into health issues.

Second, don’t freak out about COVID. It’s not the Black Death. It’s not chicken pox ripping through the New World. Common sense and good cleaning habits are sufficient. Here is an article about the CDC that provides guidance: https://www.cdc.gov/coronavirus/2019-ncov/community/reopen-guidance.html

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Service Members, Stop Movement Orders, and Leases

The Service Members Civil Relief Act, among other things, lets service members cancel their leases without penalty under certain circumstances. Most often, it is a change in duty station that transfers them to another city, state, or country.

Recently, many service members had transfer orders and, based on those, leased rental properties in what was supposed to be their new city. Then COVID hit, and the military issued Stop Movement orders telling everybody to stay where they were. A recent amendment to the Act protects those service members affected by a Stop Movement order that prevents them from moving to their newly-leased premises. For more information, click HERE.

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Black Light for Urine Stains

You can find pet urine stains with a black light. The room must be absolutely dark, and the light around 4-5 inches from the surface. Even old urine stains will glow pale yellow.

I use a 24″ fluorescent light fixture available at WalMart for around $11. Since I don’t like crawling around on my hands and knees for the optimal 4-5 inches, I duct-taped the fixture to the leading edge of a rolling magnet commonly used to pick up stray nails in a shop. I’m sure there are other substitutes. Just make sure you angle the light forward a little bit. Also, try to do it in complete dark.

Why do you care about this? It can indicate the presence of an illegal pet, if you suspect that. More importantly, it will identify the exact location of urine stains so you can enzyme-treat just that space, and not the entire dwelling. Enzymes work wonderfully, but they are extremely expensive.

Does anyone else have some property maintenance “hacks” they’d like to share?

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Tenant Referral Fees

This article discusses a change from prior advice given to property managers with real estate licenses.

Alabama law says you must have a real estate license to manage rental properties, among other things. There is a specific exception for managers of apartments or complexes. THEY do not need a license.

Other Alabama law says that if you have a real estate license, you can pay commissions or referral fees only to other licensed real estate persons. That includes tenant referral fees. There is no minimum. In other words, even a $10 gift certificate to Burger King is illegal and the licensee can be disciplined for that.

Previous legal department personnel at the Alabama Real Estate Commission indicated they would not file a complaint against a real estate licensee who managed apartments and paid referral fees for those apartment units. That is because, they said, no license at all is required, so it was unfair to put such persons at a competitive disadvantage. They said the exemption indicated a Legislative intent that apartment managers be exempt from such rules, even if the statute did not come out and say exactly that. Their philosophy was called “liberal construction” in order to put into practice the general ideas and philosophy of the legislature.

Now we have a new AREC General Counsel, Starla Van Steenis. She is what we would call a “strict constructionist” in this regard. It is not wrong, it is just a different philosophy from liberal construction. She says that the statute does not exempt licensees from the rule against paying referral fees or commissions to unlicensed persons. Because it is silent in that particular, the regular rules apply. If you have a real estate license and manage apartments or complexes, you cannot pay tenant referral fees. To repeat:

  • You do not need a real estate license to manage apartments or complexes.
  • You must have a real estate license to manage anything smaller, such as SFR, duplex, triplex or fourplex
  • If you do not have a real estate license and manage apartments or complexes, you can pay tenant referral fees for those units
  • If you do have a real estate license and manage apartments or complexes, you CANNOT pay tenant referral fees for those units.

For more information about surprising ways you can get into trouble as property manager (even a self-managing investor) and how to avoid those problems, check out my class on Risk Management for Property Managers.

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CDC Issues Order Halting Evictions

With an effective date of September 4, 2020, and in effect through December 31, 2020, the Center for Disease Control ordered a halt to all residential evictions if tenants meet certain conditions. In my opinion (along with many experts!) the Order is a gross over-reaching disguised as something allowable under a federal regulation dealing with quarantine measures. Industry leaders are shocked at the complete lack of concern for struggling landlords, and by the apparent invitation for tenants to abuse the system. All is not doom and gloom, however. Sign up for one of our upcoming classes, or buy the streaming video, to learn how to protect yourself from people trying to game the system. People have been very complimentary of advice I give on how to successfully block the Fair Housing ESA frauds. So, trust me about the evictions moratorium–you DO have weapons in your arsenal! More information HERE.

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Question of the Week: Can I Use Online Services for a Lawsuit?

You can file and monitor lawsuits online, and you can see the details of other people’s lawsuits online, if you want. Click on a service title below to go to its website.

  • AlaFile lets you file lawsuit papers online, just like the lawyers. You will also receive email notice of any documents file by the other side, the process server, or the Court, and can view those online. It is designed to work on Internet Explorer 11.0 or Microsoft Edge, and does not work well with Chrome, FireFox, Safari, or other browsers.

  • Just One Look lets you see all of the documents and Court orders in any case at all, whether it is yours or not. If you have a lawyer and want to follow the case progress, Just One Look is for you. This is also good if you want to see someone else’s forms so you can use them as a guide, or if you are just nosy about your neighbor’s auto accident lawsuit. Nobody gets tipped off when you “look.”
    • Currently, it is $9.99 per case you want to look up, with a free copy of the docket sheet showing everything that has happened. If you want copies of documents, it is $5 for the first 20 pages, and 50 cents per page after that. You pay the $9.99 each time you look up a case, even if it is the same one as the day before. This is the service you use to get forms or satisfy your curiosity.
    • For lifetime monitoring of a particular case, you can see everything filed and receive notices whenever something new happens. This is the service you use if you have a lawyer, but want to keep track of lawsuit progress. The fee is $19.99 for District Court (where evictions are filed) and $29.99 for Circuit Court (regular lawsuits like ejectments, auto accidents, divorce, etc.)

  • AlaCourt is a monthly subscription service for higher volume research. It is currently $84.00 per month.

A warning, though: You can file your own eviction lawsuits if (1) you own the property in your own personal name, and not an LLC or corporation or trust OR (2) you are a lawyer. Unfortunately, even if you own 100% of the company that owns the real estate, that is still one person (you) representing another person (the company) in court, and for that you need a law license. The danger of doing this wrong is not some judge speaking sternly to you if you get caught. The danger is that any turnout order will be void and your tenant can sue you for illegally throwing them and their stuff out on the street.

I hope this helps you out. Many lawyers are reluctant to send copies of court documents to clients because it usually results in phone calls and requests for explanation about everything. That’s education, not practicing law. I LOVE education, but most lawyers prefer practicing law, and most clients resist pay $300 to $400 an hour for education. So, monitor your cases (or file your own) and turn to www.AlabamaLandlords.com and/or www.TaxSales-Alabama.com for your educational needs!

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Proposed Change Re: Evictions

Representative Pringle has introduced HB65 in the 2020 legislative session, to clarify the procedure necessary to serve lawsuit papers in a residential eviction.

Currently, the law says “A copy of the notice shall be personally served upon the defendant. If the sheriff or constable is unable to serve the defendant personally, service may be had by delivering the notice to any person who is sui juris residing on the premises, or if after reasonable effort no person is found residing on the premises, by posting a copy of the notice on the door of the premises….” The posting on the door is called “nail and mail service” or “post and mail service” and eliminates the need to actually find the tenant and hand them the lawsuit papers.

The new law adds the words “at the premises” so it would say “shall be personally served upon the defendant at the premises.” It also deletes the words “after reasonable effort” so the new version would say, “if no person is found residing…” That avoids all the issues of people being able to argue in court about whether the process server made reasonable effort or not. In other words, one stop does it all. If nobody is home, then straight to nail and mail service instead of multiple trips to make “reasonable effort” that “no person is found residing on the premises…”

I think this is a good change. If you agree, contact Representative Pringle at chris.pringle@alhouse.gov and tell him about your support. Be sure to mention where you live, so he can share your comments with your own elected official. (Sorry, I don’t seem to be able to create a clickable email link. Just copy and paste his address into your email message.)

Sarah Taggart

Sarah Taggart, an evictions lawyer (website HERE) disagrees, and thinks the bill is a bad idea. She says that lawyers and judges understand the rules without the change. In her opinion, the change is not necessary. As a result, it might only focus attention and cause tenant lawyers to argue there IS a problem with the current law. Then it’s bad news if the bill does not pass. She thinks the bill might also encourage amendments that make things worse, not better. Sarah reminded me about the mobile home industry introducing a bill several years ago to shorten the default notice time period from 7 calendar days to only 3 calendar days. Consumer protection groups latched on to that and got an amendment passed that increased the time to 7 business days. If I can paraphrase Sarah’s opinion, “If it ain’t broke, don’t fix it.”

What do you think?

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Question of Week: Dangerous Pet

A tenant has a pet or a disability animal that is allowed under the lease. But, the lease says that if the animal causes any injury or damage, the landlord can revoke the permission. According to the landlord who called me about this today, the tenant’s dog injured someone who tried to intervene when it attacked a much smaller neighborhood dog. The little dog was also severely injured, but survived.

Can the landlord give notice that the tenant’s dog will have to be removed?

Yes, the landlord can AND under its lease clause giving it that right, it almost MUST give notice. It makes no difference if it is a disability animal. The reasonable accommodation request for a disability animal is to allow the animal despite a rule against that. All other rules that protect property, people, and humane animal treatment, must be obeyed or the tenant will be in default.

If the landlord does not revoke permission, and the dog injures someone else, guess who will be sued? The landlord, of course! That is because the landlord could have prevented the second injury by invoking lease protections to remove the animal. When it had knowledge the dog was dangerous, but did nothing within its power to remove it, then the landlord could become liable, also. It would be different if the landlord had no power under its lease to do anything. In that case, it would be liable only if it renewed that tenant’s lease, with the dog.

Second issue, how should this be done? The landlord should give the tenant written notice to remove the dog. It should quote the relevant lease clause, and should include a narrative about the damage and injuries caused by the dog. Because it is a dangerous animal situation, the landlord should require the tenant to IMMEDIATELY remove the animal to a boarding facility or other location, and not allow it to return under any circumstances, even for short visits. The landlord should give a deadline of two business days from the date of the notice, giving the exact date. The landlord should notify the neighbors, so they will be extra cautious until the deadline.

If the tenant does not remove the dog by the deadline, then that is an event of default. The landlord should give a “7 Business Day Notice of Default and Opportunity to Cure.” It should describe failure to remove the animal as the default, and removal of the animal as the cure. Again, keep the neighbors informed, so they know to be careful. If the dog is not removed by the deadline, then the landlord must start eviction immediately. For its own protection, it cannot grant any extensions.

For more information, check our classes on Landlord/Tenant Law, and on Fair Housing.

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Tenant Repair Requests

You should have a good system for written requests for repairs or maintenance. You can create such a system easily, and FREE, using Google Docs. It solves the following problems:

  • Receiving info by text or phone call and then having to write it down.
  • Making mistakes when you write down the request.
  • A tenant CLAIMING you made a mistake and they asked for two things, but all you wrote down was one thing.
  • A tenant claiming you failed to respond to a repair request, but they never actually contacted you.
  • You having to call or write a repair person and relay the problem and instructions to them.
  • A tenant claiming you entered their dwelling illegally (where you discovered a pet that was not allowed) because “they certainly did NOT request any repairs.” The point is, if they requested repairs, you are automatically allowed to enter, even without giving notice or getting permission.

We have a free downloadable article with step-by-step instructions for creating an online repair request system using the free Google Forms section of Google Docs. You can even provide the ability for tenants to upload photos, as part of the same form.

Once the tenant completes the form, you receive an email notification with everything they entered. The info is also retained in your Google Forms account, online. You can print a copy to keep in the tenant paper file, save it as an image to save in their electronic file, and you can forward it to any required repair persons.

Your life is easier and your fanny is covered. That’s priceless, even though the instructions are free!!!!

Click HERE for the instructions. You will go through a checkout process, but will not be asked for any credit card information.

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Garnishment of Tenant’s Wages

The Alabama Court of Civil Appeals ruled today (January 10, 2020) that an employee’s wages CAN be claimed as exempt personal property if there is a garnishment.

In the case, Renter’s Realty sued Ieisha Smith for eviction and for damages. Renter’s obtained an order of possession and a judgment for $5,145. They garnished her wages. Ms. Smith filed a motion to stop the garnishment, under a claim of exemption. She said her bi-weekly wages were $900 or less and all of the money was used for current living expenses.

Renter’s argued she could not claim wages as exempt because Alabama Code Section 6-10-6.1 (which became law on June 11, 2015) specifically said that was not allowed.

The Court ruled the law was unconstitutional. It said Section 204 of the Alabama Constitution provided that personal property up to the value of $1,000 was exempt, and the courts had always interpreted “personal property” to include wages due from an employer. Because the Constitution gave debtors a specific protection, the Legislature was not allowed to take it way with just a statute. There would have to be a Constitutional Amendment, which had not happened.

More than likely, Renter’s will try to get a different opinion from the Alabama Supreme Court. Unless and until that happens, the Court of Civil Appeals decision is the law. Wages can be claimed as exempt from garnishment.

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Fair Housing Insurance

One of the most likely risks you will encounter as a landlord or property manager is not fire, tornado, hurricane, or personal injury. It is a Fair Housing complaint being made against you. It might be legitimate, because you were not aware of some of the rules. It might be bogus and merely used as leverage by an unhappy tenant or prospect. If fake, you are looking at a minimum of $15,000 in legal fees and lost rent just to get it thrown out. If real, legal fees and damages can be very large.

Sadly, most landlords are not aware that their insurance policy does not cover them for this. One person suggested their umbrella policy would, but that is not accurate. Umbrella policies don’t add extra risks. They just add more dollars to the limits of your other policies.

In the industry, what you want to obtain is called Tenant Discrimination Insurance. Property managers should check to make sure their Errors & Omissions (malpractice, basically) insurance includes this. If not, it is relatively easy to get it added as a rider. For landlords, though, the solution is not so easy.

Although you probably have landlord’s insurance for your rental properties, that is usually just for physical losses, plus liabilities related to things that happen on the premises. Most of those policies do not have any riders that can add Tenant Discrimination Insurance.

I have found five ways to obtain this. I know of four companies who write separate policies for Tenant Discrimination. They are

If you contact one of the named insurance companies above, they can either take your application online, or refer you to a local agent. You don’t have to move all of your insurance. You can buy just the tenant discrimination from them, and keep all other insurance with your favorite agent or company.

Fair Housing issues can be tricky. For classes and video on this topic, click HERE.

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Who is the Landlord?

The lease says “ABC Property Management Company, Inc. (“Landlord”) and Joe Smith (“Tenant”), agree as follows…” The property is owned by Sally Jones. Who is the real landlord?

It is not ABC. They are the AGENT for the landlord, but not the landlord. Calling them the landlord in the lease just muddies the waters and makes things confusing. It’s not necessary to reveal the true owner’s name. You can say, “ABC Property Management Company, Inc., as agent for Landlord, and Joe Smith, Tenant, agree as follows…”

Someone recently called me with a problem related to such confusion. He filed an eviction lawsuit against the tenant, with ABC Property Management Company, Inc. (a fictitious name made up for this article) named as Plaintiff. It wasn’t quite so obvious, because the real company name did not include the words “property management.” As far as the court clerks and the judge could tell from looking at the complaint, it named the true owner of the property as the plaintiff. The lease named that same company as the landlord. When the tenant failed to file an answer, the plaintiff obtained a default judgment

Afterwards, police officers were present for the turnout order. The tenant’s personal possessions were placed on the side of the road, where they were stolen. A week or so later the tenant hired an attorney. She asked the judge to void out the eviction judgment and turnout order because the plaintiff was not the true landlord. The judge agreed. This issue is similar to me filing a divorce lawsuit against Bill Gates and asking for $10,000,000 a month in alimony. I might get a default judgment, but it’s not enforceable. I was never married to Bill Gates. (Really!!!)(But, I have joke below with Bill Gates in it, as a reward for reading on to the very end.)

Because the turnout order was void, the landlord had no right to enter the apartment and put stuff out on the street. The landlord was liable for actual and punitive damages.

Don’t let this happen to you. Just like you are not supposed to commingle money, you also cannot commingle identities.

That was pretty grim, wasn’t it? Here’s a joke to lighten things up:

MY SON WAS FLUNKING OUT  OF COLLEGE SO I TOLD MY SON, “YOU WILL MARRY THE GIRL I CHOOSE.”
HE SAID, “NO.”

I TOLD HIM, “SHE IS BILL GATES’ DAUGHTER.”
HE SAID, “YES.”

I CALLED BILL GATES AND SAID, “I WANT YOUR DAUGHTER TO MARRY MY SON.”
BILL GATES SAID, “NO.”


I TOLD BILL GATES, “MY SON IS THE CEO OF THE WORLD BANK.”
BILL GATES SAID, “OK.”

I CALLED THE PRESIDENT OF WORLD BANK AND ASKED HIM TO MAKE MY SON THE CEO.
HE SAID, “NO.”

I TOLD HIM, “MY SON IS BILL GATES’ SON-IN-LAW.”
HE SAID, “OK.”

AND THAT’S EXACTLY HOW POLITICS WORKS HERE IN  AMERICA.

And thus, began the practice of hiring morons to work in influential positions of government.

The practice is unbroken to this date.

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Who Holds the Security Deposit?

This post is an excerpt from the Denise Evans book, Alabama Landlord’s Desk Reference and Forms Book.
If you’d like more information, including free table of contents and index, there is a link at the end of the article.

Sometimes a landlord hires a property management company, but wants to hold all security deposits itself. Often, the property manager balks, and says that is not allowed. The answer is more complicated.

A property manager is the agent for the landlord/property owner. Unless the management contract has some different provision, then the manager must surrender the security deposit to the owner if it is demanded. Agents must comply with their principal’s instructions, unless those instructions are illegal or a contract between the parties dictates a different result. There is nothing illegal about the owner holding the security deposit money.

This typically comes up in three situations:

  1. Owner wants the deposit forfeited and manager disagrees.  Unless the management contract says the manager is the one who is allowed to make that decision, then the manager must declare the deposit forfeited. If that happens, ask the owner to sign an indemnification agreement saying that if the manager is sued because the deposit was not refunded, then the owner will pay all of the manager’s legal fees and other costs and expenses.
  2. Owner wants to change management companies, or self-manage. It does not want to declare the deposit forfeited, but it does want sole control over the money.  This has the same answer as #1 above.
  3. Owner wants the security deposit so it can use the money. It is allowed to do that in Alabama, but the funds must be available and refunded at lease end if there have been no deductions.  Obtain the same indemnity agreement as described in #1 above.

Property managers who want to avoid such situations should have a contract clause that says security deposits will be held only by the manager, that forfeiture decisions are in the sole discretion and control of manager, and that if there is a change in management companies the manager will refund security deposit by checks made jointly payable to the tenant and the new management company. That last item avoids the problem of the new management company failing to refund the deposit (but with no forfeiture-related reason) and the tenant is allowed to get the refund from the former company, under Alabama law. With my method, the tenant has ALREADY received the refund, even though jointly payable to the new management company.

Interested in the Landlord’s Desk Reference and Forms Book? Click HERE

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Question of the Week: Security Deposit Deductions

This question comes from a landlord in Birmingham. He is just starting out, and can’t afford to hire cleaning crews and repair people every time a tenant moves out. So, he does the cleaning himself, and makes simple repairs such as drywall damage, broken window panes, and similar things. Normally, he would have to pay someone $300 for an “extra” cleaning job, and several hundred dollars for his repairs. He asks, “When I deduct these things from a security deposit, do I have to charge an hourly fee for my time? If so, how much per hour? Or, can I deduct the same amounts that independent contractors would charge me?”

The answer is, he can deduct the same amounts that independent contractors would charge him. In the case of cleaning and repair deductions from security deposits, they are the result of damages the landlord suffered as a result of the tenant’s default regarding property maintenance. The measure of the damage, meaning the dollar amount of tenant’s liability, is what it would cost to fix things. Not what it actually costs, but what it would cost. People who want to read an appeals court decision discussing this should read Tabor v. Thacker, 521 So.2d 66 (Ala. Civ. App. 1988)

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Question of the Week: Ad Valorem Tax Values

The question this week comes from somebody in Jefferson County who just received the new tax appraisals for his rental properties, and went into shock!!! He was hoping they were worth as much as the county thought, but that was highly unlikely. It just meant his taxes were going to increase astronomically and unfairly. What could he do?

If this happens to you, be sure to dispute the valuation to the local Board of Equalization. Counties are not able to afford the personnel necessary to appraise properties by the old fashioned methods. Instead, they rely on computer software and artificial intelligence that makes educated guesses about values. Those guesses can be wildly wrong. It is fairly easy to attack them, but you have to be prepared.

First, don’t miss your deadlines, or you’ll be out of luck until next year. You have thirty calendar days from the date of the final published notice to dispute it, in writing. The Code sections explaining this process start at Section 40-3-20, Code of Alabama 1975.

Second, call the tax appraiser’s office and find out HOW their appraisal was done. Was it recent comparable sales, or was it replacement cost minus depreciation?

Third, be prepared for the hearing with all of your evidence. You will need to persuade the Board of Equalization that your property is worth less than the tax appraisal. For a comparables methodology, you will need information about recent comparable sales, and current competing properties in the market place. If at all possible, try to find sales within the last year, within a one- to three-mile radius and in the same community. For example, a property one block away from a Mountain Brook address, but actually in the Irondale city limits, would not be a legitimate comparable sale. If past sales were at higher prices, but there are very similar properties that remain unsold even though listed for those higher prices, (or even your tax appraised value) then that is very good evidence the value is lower. For replacement-cost-minus-depreciation, you will need information about the quality of the construction, and the current condition of the components.

Fourth, be prepared to dispute the evidence offered by the County attorney. They might have recent sales they say are comparable, but which are really not. You should bring your laptop computer and be able to access property information quickly. You cannot rely on wireless Internet. Make sure your cell phone is set up for mobile hot spot use, and know how to use it. Practice doing this, and looking up information on MLS, Zillow, or other sources. Or, they might say your building is better-built and still in better shape than reality.

Get to the hearing early. Ask the county’s attorney for a list of the properties they plan to use as comparable sales to support the appraised value. In the alternative, ask the for details regarding the base value of construction, and how they calculated a percentage of depreciation. That way, you can research them while the Board is getting settled in for the hearings. Hopefully you will not be the first one!

In my experience, they rarely give taxpayers the value they want, but usually do lower the values somewhat. If you are unhappy with the result, you can always appeal to Circuit Court. The legal fees to do that might be far more than the higher taxes, though. Even if your property is owned by an LLC or corporation, you can still be the advocate in the Board of Equalization. If you appeal to Circuit Court, though, you will have to hire a lawyer unless the property is titled in your own personal name.

We do not currently have a specific class or video on disputing your property tax valuation. You can always reach out via email, though, if you need to hire a consultant to help you prepare for your dispute.

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What Were They Thinking – Tub Won’t Drain

A student shared this story with me. When she was in college, she rented a ground floor apartment. One day she came home from classes to find her bathroom flooded, with pieces of ceiling lying on the soaked floor. Of course, she called the property manager. The bathroom was cleaned up and repaired very quickly.

Nice story. What caused the flood, you might wonder? The student upstairs had a clogged bathtub drain. Perhaps he thought it was a garbage disposal and had been stuffing chicken bones down into it. Perhaps he had been bathing large hairy dogs to earn money. Perhaps he did not know how to operate the drain valve. Whatever the reason, the tub would not drain. His solution–drill holes into the bottom of the tub. Problem solved!!!

If you have a story you’d like to share for our “What Were They Thinking” column, please send an email to Denise@AlabamaLandlords.com.

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Question: Owner Wants Property Back

The Question of the Week is from someone who wrote, “I have an owner who wants possession of her home due to personal reasons. The tenant’s lease expires November 2020. The tenant  has informed me that he has no intention of moving.  What recourse do I need to take because the owner is insisting that she will demand possession because it is her home?”

I asked some more questions and found out there was no lease clause allowing early cancellation by the owner. The tenant was a model tenant and also paid her rent early every month. My answer was: Because there was no specific language in the lease authorizing it, the owner is not allowed to cancel the lease and cannot demand possession. She can wait until November of 2020. She can offer money to buy out the tenant’s remaining lease term. MAYBE she can fire the property manager, find some lawyer to file an eviction lawsuit, and end up being sued by the tenant and having to pay damages and the tenant’s legal fees.

It is not uncommon for owners of single family residence rentals to want the flexibility to cancel a lease. This is especially true for military owners who move back to the area, and also owners who rent a property until they can sell it. Other times, the child of an elderly person in an assisted living facility will rent out the parent’s home. After death, the child wants to sell the home.

The solution is to have a lease clause allowing cancellation under certain limited and specifically described circumstances. Typically such a clause will give the tenant 60 days notice of cancellation. Sometimes a tenant will negotiate the clause, and want the last month’s rent free. Most owners are willing to give that.

Do you want more information about landlord/tenant law, including lease clauses that can provide better protections and more flexibility than the standard leases everybody uses? Check out the full day class on Landlord Tenant Law, or the half-day FAQ Landlord Law, under the Resources tab on this website.

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City Inspections When Tenant Changes

Cities want to require new property inspections every time you change tenants in your rental property. To my knowledge, only Alexander City, Anniston and Gadsden have passed such laws, but others are trying, including Huntsville. The first inspection each time is either free or with a very low cost, but re-inspections after failure can get expensive. Usually the landlord can hire its own certified home inspector for the task. That might make sense if there are long delays before city personnel can make site visits.

What if you just ignore the law? How will the city find out? As always, someone could tattle. Then you’ll be in hot water, with huge fines and perhaps criminal prosecution. The other way is with the cooperation of utility companies, who will not turn on service in a new name unless they receive a copy of the Certificate of Occupancy issued after the landlord has passed inspection.

How do you fight this to keep your city from passing such laws?

  • They are directed at bad landlords with terrible premises and no responsiveness to tenant complaints. If you know of such conditions, report them to local inspections departments. That way, they don’t have to rely on inspecting EVERYBODY just to find the bad landlords. Self-policing is always the preferred method for avoiding government intrusion.
  • Be vigilant! When similar ordinances are before local government for public discussion, appear at the hearings with as many other landlords as possible. Explain that the increased cost of the inspections and the non-rentable downtime before issuance of a new CO will result in dramatically higher rental rates. Housing will be extremely difficult or impossible for the most vulnerable members of the community, increasing the burden on public assistance programs and increasing the risk of homelessness. Local government needs to hear that more than just the “rich landlords” will feel pain if the law is passed.
  • As an alternative, propose your own law that rewards good landlords and keeps the pressure on the bad actors. We currently have a task force working on model ordinances, if that seems the only choice remaining.

Interested in more information about landlord/tenant law? Check into one of the 6-hour “Landlord Tenant Law” classes and videos, or the 3-hour “Landlord Law FAQ” classes and video on the Resources page, HERE. Coming to a city near you!

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Flipping Strategy That Works

Television flipping shows intimidate me. Designer colors and finishes that all go together, walls removed, windows added, stairs moved and roof pitches changed entirely. One designer always paints the brick, another one always strips the paint off. Don’t even get me started about the insanity of California homes of 1,100 square feet with 4 bedrooms and 2 baths on 1/5 of an acre, miles from the beach, and $800,000 price tags.

Which kind of proves my point in this article. People in California, New York, Chicago, London and Tokyo might have $100,000 in cash and good credit for real estate investments, but they cannot afford anything in their own back yards. Investor money is pouring into Alabama for single family rental houses up to four-plexes. They don’t care about trendy tiles for the backsplash or mid-century modern light fixtures. The only question that matters is, “Do the numbers work?”

I can deal with that type of flipping! Experts say we are seeing an explosive demand for single family rental properties. Older people were traumatized by the Great Recession and an inability to sell their homes. Younger people want maximum flexibility and near-instant gratification. That means rental housing, but not apartments. Start investing now, so you don’t miss this opportunity.

Do you want to learn more about flipping rental houses? How to find properties, how to find investors, and what they need in order to making buying decisions sight-unseen? There’s an app for that! No, not really. But there is a class for that, coming to cities all over Alabama. Check out the schedule and see if there is a date and time convenient for you, or order the video if that will be more convenient. Click HERE for details.

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Security Deposit From Guarantor

If you think it is necessary, you can collect a SEPARATE security deposit from a lease guarantor. By law, you are limited to one month’s deposit from the tenant, but guarantors are not covered by the residential landlord/tenant act. They can agree to be liable for legal fees (which tenants cannot agree to) and they can be required to pay any amount of security deposit IN ADDITION TO the one month you get from your tenant.

Why would you require that? Suppose tenant is not financially strong. Maybe guarantor is, maybe they aren’t. But, you don’t want to chase down the guarantor and sue them and try to collect if the tenant defaults or damages the property. The additional security deposit gives you added protection.

Interested in more legal tools and ideas for Alabama residential tenants? Click “Resources” tab above to see when the 6-hour Landlord Tenant Law or the 3-hour FAQ Landlord Law classes will be in a city near you. Both earn CE credit and also open to public. If you cannot attend in person, both classes can be taken live but over the Internet and are also available by streaming video. There is no CE credit for classes you do not physically attend in person.

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Fair Housing Exemptions

Requests for emotional support animals cause the most Fair Housing anxiety among landlords. If the person has a letter saying they have a disability and need an ESA to assist with the disability, then Fair Housing says we must allow it. There are many legitimate claims and needs, but there are also a lot of con artists gaming the system. Some landlords will (incorrectly) say, “I am exempt from the Fair Housing laws. No animals allowed. Period. End Of Discussion.” Which would be good for them, if only they were really exempt!

Watch our YouTube video for an explanation for the exemptions. Yes, there is one for landlords of single family residences. BUT, it is extremely limited and can be lost. Learn the exemptions, and learn how to protect yourself so you don’t accidentally lose them. Click HERE for video.

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“Nail and Mail” Eviction Lawsuit Notices

Service of eviction lawsuit papers on tenants can be accomplished by attempting personal service at the residence and, if nobody is home, leaving a copy posted on the door and also mailing a copy within 24 hours. This is called “post and mail service” or, more colorfully, “nail and mail service.”

The mailed copy can be regular mail. A recent Alabama Court of Civil Appeals Decision threw the process into doubt, and seemed to require evidence regarding the exact efforts the process server took to serve the papers. The court included factors such as time of day, time waited after knocking, and others. That decision has now been overturned by the Alabama Supreme Court.

In a ruling on Friday, August 30, 2019, the Alabama Supreme Court said that such detailed testimony was not required. It reinstated the default judgment against the tenant in the eviction lawsuit, ruling that service was properly made on her. The court noted that the statute’s additional requirement of mailing the lawsuit papers within 24 hours satisfied United States Supreme Court concerns in similar cases that did not include a second method of service. If you want to read the entire decision, the case is Ex parte Trinity Property Consultants, LLC. You can read the decision HERE.

Bottom line: Back to the way you were doing things before the Alabama Civil Appeals decision of Mays v. Trinity Property Consultants, LLC. It’s not that there’s a new sheriff in town. It’s that the old sheriff is back!

Interested? Click for info on L/T Law Class
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Tenant Reporting Own Inspections

If your lease or your Rules, Regulations & Fee Schedules have this requirement, you can make your tenants self-report property conditions once a month. Why would you want to do that?

  • It gives you early warning of problems as tenants go down a checklist of items on your form, and report condition and any observed defects. Your form should also ask about additional occupants on the premises, and any new animals.
  • Having to self-report every month tends to make tenants more careful of your property.
  • Reports showing no defects or damages prevents the tenant from later claiming something was wrong, usually after they default and are looking for excuses to make it all the landlord’s fault.
  • There is a high probability that if the tenant lies on the reports, there is significant tenant-caused damage, and then the tenant later files for bankruptcy, the landlord’s claims for damages will not be discharged in bankruptcy. That is because the tenant engaged in fraud. The claim will still have to be paid.
  • Refusal to complete the form is an early warning sign of tenant damage, illegal occupants, or illegal animals. Better to know now, rather than at lease end, isn’t it?
  • If you are selling or refinancing your rental property, the monthly reports are a good due diligence item. If you include on the form the beginning and ending date of the lease, the monthly rent, the security deposit being held, and the lack of any claims against landlord, those letters also constitute “tenant estoppel letters.” Most buyers and lenders require such letters, but it is often awkward having to ask for them because landlords don’t want tenants knowing their plans. The information in this paragraph can be included at the end of the form, in an inconspicuous manner.

Self reporting does not take the place of your own inspections. They are merely a supplement–another tool in your arsenal of good property management. Keep your form short. If you want, you can vary the items each month for the less-important matters.

Interested? Click for info on L/T Law Class
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Fair Housing and “Limited English Proficiency”

The latest Fair Housing rumor sweeping the Internet relates to something called “Limited English Proficiency” or “LEP” for short. If you believe the emails and social media posts, a landlord who does not have all forms translated, at least into Spanish, can be hit with a Fair Housing complaint and an easy $16,000 PER VIOLATION penalty. Fearmongers offer to translate all of your documents, for a fee, of course!

Nonsense. Con artists are at work!!!!

Here is the truth.

  • You cannot blatantly discriminate, such as advertising “must speak English.”
  • Because the landlord/tenant relationship is relatively simple, and largely rests on written documents with very little on-going communication, landlords who routinely fail to return phone calls or even attempt communication with people who are not fluent will fall under HUD suspicion for unfair practices. In other words, you can’t use “I’m sorry I don’t understand you” as a blanket excuse to anyone who is not fluent in English. At a minimum, learn how to say the following:
    • English: “I am sorry. I do not understand. I need a translator.”
    • Spanish: “Lo siento. No entiendo. Necesito un traductor.”
    • http://www.translate.google.com will tell you how it is pronounced.
  • Requiring someone fluent in English to co-sign or guaranty the lease is a Fair Housing violation if the tenant otherwise meets credit and background requirements.
  • You do not have to translate documents, but if you have already done so, they must be made available to people who speak that language.
  • Allowing an interpreter of the tenant’s choice to be present or conferenced-in to phone calls is reasonable and should be allowed if requested.
  • Allowing a prospect the opportunity to take documents home for translation is a reasonable request and should be allowed.
  • If the market place for your properties has a high percentage of people who speak only one language that is not English, your failure to translate documents COULD be a violation if, statistically, it results in a higher number of rental denials than for people who do speak English. This is highly unlikely to be the case in Alabama.

Would you like more information about Fair Housing, the exemptions, the REAL traps, and debunking the fake problems such as Limited English Proficiency? Sign up for one of our upcoming Fair Housing classes at the link below. The live class earns 3 hours of Alabama Real Estate CE, but is also open to the public.

Fair Housing Classes or Videos
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Landlord Access Rights

When can a landlord enter a tenant’s rental property? There are times when notice alone is acceptable, or even no notice at all, but sometimes consent is required. Read the rules, below. They are an excerpt from the book available for sale on this website, Alabama Landlords Desk Reference and Forms Book. (more info HERE)

Tenant reasonable consent

The landlord may (of course!) request permission for access.  The tenant is not allowed to unreasonably withhold its consent for :

  • Inspections
  • Necessary or agreed repairs
  • Decorations, alterations, or improvements
  • The provision of necessary or agreed services
  • The purpose of showing the premises to prospective or actual purchasers, mortgagees, tenants, workmen or contractors.[1]
  • (With the right language in your lease, a tenant who unreasonably withholds its consent can be declared in default and/or fined.)

No consent required

Sometimes consent is not possible. There are emergencies, or tenants don’t return phone calls, or there is no time, such as a prospect who wants to look at a property during their lunch hour, right now. ARLTA provides some help for such situations.

No consent is required in the case of:

  • Emergency[2]
  • Court order[3]
  • Tenant failure to maintain property and landlord must enter and remedy[4]
  • Landlord has reasonable cause to believe the tenant has abandoned or surrendered the property[5]
  • Performance of tenant-requested repairs[6]
  • During any absence of a tenant in excess of 14 days, the landlord may enter the unit at times reasonably necessary[7]
  • Showing the property to tenant- or buyer-prospects in the last 4 months of the term, but only if this is authorized in a document separate from the lease. It can be signed at the time as the lease signing, but is effective only during the final four months of the term. Both landlord and prospective tenant or purchaser must be present during the showing. In other words, the property cannot be put on a lockbox for access by other persons.[8]
  • Scheduled pest control , repairs, maintenance or health/safety, but only if this is authorized in a document separate from the lease. It can be signed at the same time as the lease signing, but if that is fewer than two days before the first regularly scheduled entry, then regular notice and consent is required for that first visit The schedule can be for specific dates, or for a designated time period, such as the second Tuesday and following Wednesday of each month.  If it is impracticable to give prior notice, then the landlord may enter without notice. .[9]

Two days’ notice unless that is impractical

If the landlord wants to show the property to prospective tenants or purchasers or lenders, it must at least TRY to give two days’ notice. The notice can be satisfied by posting a note on the main door of the dwelling.  If notice is not practical under the circumstances, then no notice is required.[10] The landlord cannot use this limited exception as a tool to harass the tenant, and cannot abuse its rights under this limited exception. (Footnotes with citations appear at the end of this article)


More Info: Landlord Book

[1]Ala. Code §35-9A-303(a)

[2] Ala. Code §35-9A-303(b)(1)

[3] Ala. Code §35-9A-303(b)(2)

[4] Ala. Code §35-9A-303(b)(3), which makes reference to Ala. Code §35-9A-422 and the landlord’s right to enter and remedy problems causes by tenant’s failure to comply with Ala. Code §§35-9A-301 related to various tenant responsibilities to maintain the property and not cause damage to it.

[5] Ala. Code §35-9A-303(b)(5)

[6] Ala. Code §35-9A-303(e)

[7] Ala. Code §35-9A-423(b)

[8] Ala. Code §35-9A-303(b)(4)

[9] Ala. Code §35-9A-303(d)

[10]Ala. Code §35-(a-303(c)

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Tenant “Paid in Full” Check

What happens if a tenant writes a check for less than full amount due, such as not paying late fees, but writes “paid in full” on the check? Can the landlord deposit the check, or must it be returned?

Naturally, landlords want to get what money they can as soon as possible, and so do not want to return the check. But, does that mean they are giving up the right to collect the unpaid sums?

The short answer is, “No, the landlord is not giving up its rights to additional sums due if it deposits the check.”

In the Alabama Supreme Court decision in Madden v. Deere Credit Services, Inc., 598 So.2d 860 (Ala. 1992) Madden signed a promissory note for a cable skidder purchased from John Deere, and then made payments on an irregular basis. At some point, he wrote a check for approximately $2,400 and wrote “paid in full” on it. Deere Credit deposited the check. They then claimed additional money due, Madden refused to pay it, and Deere repossessed the equipment. The court held that the amount due on Madden’s note was “readily susceptible of precise, mathematical calculation. Madden, therefore, …had no grounds on which to base a good faith argument that he owed” a smaller amount than claimed by Deere Credit.  “We conclude that the debt was liquidated; therefore, Deere’s unqualified endorsement of Madden’s check, which was marked ‘paid in full’ … did not extinguish Madden’s liability.”

In other words, there was no real dispute about the calculations for the amount due, so accepting the check was not a settlement of a dispute. Because it was not a settlement of a dispute, it didn’t matter what Madden wrote on it, the check was not legally a payment in full.

I think that makes it fairly clear that accepting a “paid in full” rent check when there are still outstanding rent charges, late fees, or other fees, does not hurt you. Check with an attorney to be sure, but don’t have a heart attack if you accidentally deposit a check with such a notation. If, on the other hand, a tenant disputes some charges and then marks a check “paid in full,” you should not deposit it. If it is accidentally deposited, then refund the money as soon as you are sure their check will not be returned NSF or some other reason.

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HOA Rules and Tenants

Some homeowner and condo association rules prohibit rentals.  Be sure to review the rules and bylaws before putting a property up for rent, or before accepting a rental for property management. If in doubt about the exact language, consult with an attorney.  The luxury condos Turquoise Towers, in Orange Beach, had a rule prohibiting anything except residential use. The rule was intended to make it illegal to rent someone’s unit as a vacation rental. But, the exact language did not accomplish that. A residential rental is still a residential use.  A resort company was able to buy up 50+ units shortly after the crash, making many unhappy condo owners even more unhappy. An attorney can provide guidance if you are in doubt.

Landlords of properties subject to HOA rules or condo association rules should always provide a copy of those rules to the tenant, and include a lease provision that the tenant will obey the rules.  A tenant who violates the rules could subject the owner to fines, liens, loss of rights, attorneys fees and, possibly, loss of property through foreclosure of the lien.  It is not a defense that the owner did not know of the unauthorized activities. It is not a defense that the owner specifically prohibited those activities in the lease.  If the tenant causes problems, the owner will pay the consequences.

This means the property managers who handle SFR and condo rentals will have to be completely familiar with the rules for the various associations that might be relevant to a property. It might be wise to meet with the manager for the association, and request a warning letter or phone call before adverse action is taken. If they agree, be sure to get it in writing, or write a “This is to confirm our conversation that ….” letter to the HOA contact. Otherwise, if they fail to provide the warning and go straight to sanctions, you will be in a “he-said-she-said” situation.