Professional Publishing, Inc
Vol. 5 Issue 8
www.TheLandlordTimes.com
August 2013
COLORADO
DENVER METRO • COLORADO SPRINGS • BOULDER Monthly Circulation To More Than 7,000 Apartment Owners, Property Managers, On-Site & Maintenance Personnel
HUD AWARDS COLORADO HOUSING AUTHORITIES $9,948,853 TO IMPROVE, PRESERVE NATION’S PUBLIC HOUSING STOCK Housing authorities across the U.S., territories use funding to maintain housing for families, seniors
WASHINGTON – U.S. Department of Housing and Urban Development Secretary Shaun Donovan today awarded public housing authorities in Colorado $9,948,853 that will be used to make major large-scale improvements to their public housing units.
The following housing authorities in Colorado will receive this funding. Adams County H.A. $76,110 Aurora H.A. $119,780 Boulder Housing Partners $405,504 Burlington H.A. $37,513 Center H.A. $35,854 Conejos County H.A. 53,077 Costilla County H.A. $70,693 Delta H.A. $102,673 Englewood H.A. $119,762 Fort Collins H.A. $182,170 Fort Morgan H.A. $95,405 Holyoke H.A. $33,797 H.A. for the Town of Cheyenne Wells $32,349 H.A. of Antonito $36,108 H.A. of the City & County of Denver $4,650,878
H.A. of the City of Alamosa $253,737 H.A. of the City of Brighton $48,091 H.A. of the City of Brush $33,930 H.A. of the City of Colorado Springs $768,421 H.A. of the City of Fort Lupton $87,003 H.A. of the City of Fountain $39,305 H.A. of the City of Greeley $107,889 H.A. of the City of Lamar $33,544 H.A. of the City of Pueblo $1,023,468 H.A. of the City of Salida $54,451 H.A. of the City of Sterling $124,613 H.A. of the City of Walsenburg $168,558 H.A. of the City of Wray $46,975 H.A. of the County of Montezuma $38,029 H.A. of the Town of Aguilar $21,853
H.A. of the Town of Haxtun $24,013 H.A. of the Town of Holly $18,694 H.A. of the Town of Keenesburg $20,011 H.A. of the Town of Kersey $19,993 H.A. of the Town of Limon $45,323 H.A. of the Town of Yuma $54,168 Julesburg H.A. $65,016 La Junta H.A. $108,305 Lakewood H.A. $207,246 Littleton H.A. $166,624 Louisville H.A. $16,324 Trinidad H.A. $253,426 Wellington H.A. $48,170 Colorado Total $9,948,853 *H.A. = Housing Authority Continued on page 3
Dear Maintenance Men: By Jerry L’Ecuyer & Frank Alvarez
Dear Maintenance Men: I manage a number of properties that use a master key system. Do you have a plan or solution to prevent vendors from losing master keys? This is becoming a problem and an expensive risk. Janet Dear Janet: Never, ever, ever give a master key to a vendor or anyone else not employed by your company. If the building is on a budget and cannot afford state of the art systems for key control or access, try this simple and cost effective approach: Install a temporary lockbox with the unit key inside and hang the lockbox on the door knob or a water pipe near the unit. Any locksmith and even some hardware stores sell these boxes. If a vendor needs access to a unit, give him access to the lockbox only. Should they lose the key, you are only out the cost of a key. Save yourself a trip and install the lockbox when you visit the property for the move out inspection. Note: The locks should be changed or re keyed after completion of work.
If your vendors need access to a unit where on site personnel is available, the unit must be opened by your employee or provide the vendor with the unit key only, not the master. If your main office is centralized and your portfolio is dispersed throughout a particular region with buildings under 16 units (which do not require onsite managers) appointments should be made in advance and coordinated between the vendor and the resident (keeping you in the loop). This will put the burden of entry, missed appointments, etc. on the resident and the vendor, freeing up your valuable time. If entry is needed due to an emergency, you should respond to the building to assess damages or necessary mitigation at the same time allow entry. Take a lock box with you and a unit key incase the repairs will be prolonged and access will be needed by others. Never give a master key to a vendor!
my new residents. (Of course, after executing a fully signed disclosure with the new resident at the time of contract signing.) The issue has arisen because when a resident moves, they expect their cleaning deposit to be returned if they clean the unit. However, I find I must clean again at my expense as the unit is really never clean enough. Is the automatic cleaning deposit a good idea or will the residents just leave the unit in far worst conditions, since they feel they have already paid for the cleaning? Kelly Dear Kelly: Due to the fact that individual units may differ in the size, construction, appliances, finishes amenities etc., establishing a one size fits all cost or fee may hurt you in the long run. People have different ideas of what “clean” is and this is why property owners and managers must set the standard of how clean the unit must be. Give the resident a description of what management considers a clean unit to be Dear Maintenance Men: and have the new resident fill out and I have a conundrum! I am thinking of sign a move-in inspection form as to the charging an automatic cleaning fee to Continued on page 2
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Top reasons to use rental payment history data Experian® RentBureau®, the leading provider of rental payment history data to the multifamily industry, recently released the findings of an analysis examining the financial risk posed by residents and the most effective screening metrics to employ to avoid lost revenue from risky residents. The analysis, Risk versus reward: identifying the highest-quality resident using rental payment history, provides unique, industry-specific insights regarding the use of rental payment data in conjunction with credit scores in screening to produce a superior prediction of a resident’s propensity to default. The analysis also includes firstof-its-kind data regarding late payments, nonsufficient funds (NSF), write-offs and rental collections. Here’s a look at the top seven takeaways from the analysis that offer multifamily owners and property managers a look into the best applications of resident payment history data:
Continued on page 2
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COLORADO ...continued from front page Top 7... 1. Complement traditional credit scoring: The use of rental payment data in conjunction with credit scores in the screening process produces a superior prediction of a resident’s propensity to default. To improve rent default rates and better assess an applicant’s risk, owners and property managers are best served by utilizing rental payment data along with credit scores. Renters with the highest credit scores show much lower rates of default. However, within that population, those with negative rental history are more than four times as likely to default as those with positive rental history.
3. Gain insight into propensity to default: How an individual paid rent in the past is a good indicator of how he or she will pay rent in the future. Renters with one prior rental debt have a default rate nearly four times higher than applicants with positive rental history.
with three or more late or NSF payments have a default rate more than twice as high as renters with only two or fewer late or NSF payments. 7. Achieve higher occupancies: Augmenting the lack of a credit score with rental history data can help owners and property managers improve occupancy while also managing risk. Unscoreable individuals with positive rental history have lower overall default rates and could make strong renters for managers looking to increase occupancy.
4. Avoid balances owed: Rental payment history data allows for the identification of residents who repeatedly move out of communities owing money. These individuals are nearly six times as likely to repeat this behavior compared with a resident who has consistently paid rent on time.
To learn more about how rental payment history can help your portfolio protect NOI, reduce skips and evictions, and identify the highest-quality residents, download a complimentary copy of Risk versus reward: identifying the highest-quality resident using rental payment history, an analysis of the most effective screening metrics to employ to avoid lost revenues from risky residents.
5. Spot serial skippers: By identifying prospects with multiple negative prior rental payments, owners and property managers can avoid renting to individuals who likely are serial skippers and have a 35 percent chance of defaulting again.
2. Realize better risk management: Renters, as measured by credit scores, are a higher-risk group than the U.S. population overall. Eighty-five percent of the renters in the sample set are in one of the three lowest VantageScore® credit ranges (501 to 799), compared with a national average of only 64 percent.
6. Minimize late and NSF payments: Default among residents who have a history of late or NSF payments escalates steadily as the number of late or NSF payments increases. Renters
VantageScore® is a registered trademark of VantageScore Solutions, LLC
Dear Maintenance Men...
...continued from front page
move-in condition of the unit. When you are given a notice to vacate, inspect the unit and document the conditions. Do not discuss the cost or what you will be charging or deducting from the security deposit with the resident at the time of the inspection. However do let the resident know what is expected when the unit is returned and supply the name of your preferred cleaning service. The rational in supplying the name of your cleaning service for your tenant’s use is that the cleaning service knows what is expected and how management wants the units cleaned. Upon move out; if the vacant unit does not meet that
standard; charge the resident a cleaning fee, backed up with vendor receipts and take pictures of the substandard unit should the matter go to court. Keep in mind that there are always costs in turning a unit such as normal wear and tear, smoke/Co2 alarm batteries and other cost of doing business associated with being an owner or manager of an apartment building. Dear Maintenance Men: I have rented a unit to a retired building contractor and he has offered to do work around the building in exchange for a rent reduction. He says he knows what he is doing and the arrangement will benefit both of us in the form of lower rent for him and lower apartment maintenance costs for me. He views it as a win win for both of us. Is this a good idea? Gloria
Dear Gloria: This is a management and maintenance question all in one! Both will have the same answer and it is a firm NO! You will lose all leverage over the work since you are not directly paying for the work and you are blurring the lines between resident and landlord. Do you evict the tenant because he did a bad job installing a garbage disposal unit or because he is short on his rent? It would be better that your resident work for someone else and keep your maintenance and rent separate. Also, please keep in mind the liability and workman’s compensation issues that may be involved by hiring a resident to do work at your building.
QUESTIONS? QUESTIONS? QUESTIONS? We need more Maintenance Questions!!! To see your maintenance question in the “Dear Maintenance Men:” column, please send submission to: Questions@BuffaloMaintenance.com Please “Like” us on STAFF Facebook.com/BuffaloMaintenance Bio: Please call: Buffalo Maintenance, Inc for maintenance work or consultation. JLE Property Management, Inc for management service or consultation: Frankie Alvarez at 714 956-8371 or Jerry L’Ecuyer at 714 778-0480 Publisher COLORADO CA contractor lic: #797645, EPA • Real Estate lic. #: 01216720 Certified Renovation Company Will Johnson • will@propubinc.com Websites: www.BuffaloMaintenance.com & www.ContactJLE.com • www.Facebook.com/BuffaloMaintenance Editor
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The Landlord Times - Colorado • August 2013
COLORADO Hud Awards...
...continued from front page of units in a community. Eligible uses for this funding that complements the Capital Fund Program and
The grants announced today are provided through HUD’s Capital Fund Program, which provides funding annually to all public housing authorities to build, repair, renovate and/or modernize the public housing in their communities. The authorities use the funding to do large-scale improvements to the housing such as new roofs or to make energy-efficient upgrades to replace old plumbing and electrical systems. “This funding is critical for housing authorities to maintain and improve public housing conditions for their residents,� said Donovan. “However, with a significant repair backlog, I am encouraged by new, innovative long-term solutions HUD is exploring that can be combined with this funding to not only protect and preserve this housing for the next generation, but to also build the quality infrastructure necessary for families to thrive.�
include development, financing and modernization offers a long-term solution to preserve and enhance the of the public housing units as well as management country’s affordable housing stock, including leveraging improvements at the public H.A.. public and private funding to make critically needed Over the past 75 years, the federal government has been improvements. working and investing billions of dollars in developing and maintaining public and multifamily housing – including providing critical support through the Capital Fund grants announced today. Still, the nation continues to lose approximately 10,000 public housing units annually, primarily due to disrepair. In 2011, HUD released Capital Needs in the Public Housing Program, a study that estimated the capital needs in the public housing stock in the U.S. The study found the nation’s 1.2 million public housing units are facing an estimated $25.6 billion in large-scale repairs. Unlike routine maintenance, capital needs are extensive improvements required to make the housing decent and economically sustainable, such as replacing roofs or updating plumbing and electrical systems to increase energy efficiency.
Since Congress approved the demonstration, early results show it is already generating additional capital for public and assisted housing. After opening RAD application periods last summer, HUD has approved or given initial approval to nearly 20,000 public and assisted housing units in 180 different projects across the country. Through these awards, housing authorities have proposed to generate close to $816 million in private debt and equity investments to reduce the capital backlog in public housing properties, which will preserve or replace distressed units and support local jobs in their communities – all without additional federal resources.
HUD also recently issued new RAD guidance that expands the program’s flexibility that will benefit To help protect the considerable federal investment and current and future applicants and participants. respond to the growing demand for affordable rental housing, the Obama Administration proposed ‡ 3RVW \RXU UHQWDO )5(( ZLWK Capital Fund grants are awarded each year to the the Rental Assistance XQOLPLWHG WH[W RQH SKRWR nation’s approximately 3,100 public housing agencies Demonstration (RAD), a comprehensive strategy through a formula that considers number, type and age “Housing authorities in Colorado count on this funding to maintain and improve their public housing for many families, especially the most vulnerable – our seniors,� said Rocky Mountain Regional Administrator Rick M. Garcia. “HUD is currently taking bold steps to preserve this affordable housing.�
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