Rental Housing Journal Metro April 2016

Rental Housing Journal Metro

April 2016

2. Window Film – How Its Proper Use Can Help You Save Money

6. Service In A Growing Industry

3. Multifamily Landlords Win Some/Lose Some in the Short 2016 Legislative Session 5. Fair Housing Month

7. HUD Seeks to End Discrimination Against Tenants With Criminal Records 8. Increasing Your Property’s Bottom Line 9. Top Questions Regarding Music Licensing for Rental Properties

10. Dear Maintenance Men – Maintenance Tools & City Inspections 12. How Wireless Security Transformed the Real Estate Industry 17. Ask the Secret Shopper – Pets & Children

Portland/Vancouver

www.rentalhousingjournal.com • Professional Publishing, Inc

Published in association with: Multifamily NW; Rental Housing Association of Oregon; IREM & Clark County Association

Attract Tenants with Simple Eco-Friendly Upgrades

Common Tenant Complaints and How to Handle Them

By Scott Matthews, Director, Strategic Accounts, The Home Depot

T B

eing a landlord inevitably includes dealing with tenant complaints. Managing those complaints promptly and effectively is essential for your relationships with the tenants, the security of your property and last but not least – for your landlord’s reputation. If you approach the problems in a professional manner, you are definitely going to lessen the chance of some legal issues as well.

Here are the 4 most common tenant complaints and a few useful tips on how to deal with them. Some of them can occur during the tenancy period, but others you can easily foresee and handle in advance.

he multifamily housing industry is expected by many to continue growing throughout the year, which means strategic upgrades to your property can help prepare you for increased demand and set you apart from competitors.

Approximately 65 percent of renters consider energy-efficient features when

Save Energy Seal and insulate: Sealing gaps and cracks will help keep money in renters’ pockets. Maintenance can start by properly insulating needed areas around windows and doors. Seal cracks and gaps with caulk, spray foam and weather stripcontinued on page 11

Are You Investing in Real Estate to Go Green or to Make Green?

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here are countless ways to make your rental properties more energy efficient. High efficiency appliances, high efficiency heating and cooling systems, solar, the list goes on and on. Most of you probably did not purchase investment real estate with the intent of saving the planet. One big question that you need to ask yourself when making your property greener is “How is this going to make me more green ($)?” Any money that is spent improving your property should increase the overall value or lower your monthly expenses or both.

Are you looking to increase the value of your property? According to a repu-

The property is not clean enough Absolutely no tenant will be pleased by the thought that they will have to start cleaning the property from the very second they move in. In fact, few people will be willing to rent a place where domestic cleaning hasn’t been done since forever.

So it is a great idea for you to give your rental property a good cleaning before the new tenants come and avoid starting your continued on page 11 Professional Publishing Inc., PO Box 6244 Beaverton, OR 97007

deciding what apartments to rent, according to The Center for Climate and Energy Solutions. These upgrades will also cut operational costs associated with water usage, heating, cooling and other energy, helping both you and your residents save money.

Consider these simple, eco-friendly upgrades before the summer season begins.

continued on page 13 PRSRT STD US Postage PAID Portland, OR Permit #5460

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51 Ways to Increase Your Rental Property Cash Flow (And 10 Ways to Ruin It)

Rental Housing Journal Metro

Window Film

How its proper use can help you make money

By Cliff Hockley, President, Bluestone & Hockley Real Estate Services

I

t’s somewhat of a secret that window film has more than one application. If used correctly and installed by a professional, window film can deliver huge savings to building owners, especially in warmer climates.

Over ten years ago we purchased a small office building to move our business into.

We moved in March, and as spring transitioned into summer and the sun came out more often, our space started heating up. The air conditioning system (about 6 rooftop and ground based split units), could not handle the load and labored to cool down the building. The employees complained about the heat, and the high electric bill added insult to injury.

Installing new HVAC units would have been very expensive and the roof was not designed to support the additional weight.

We looked for another answer and found one at the booth of a window film vendor during a vendor open house hosted by the Institute for Real Estate Management.

Their display was very simple. It consisted of a piece of glass with window film on one half of the glass. A heat lamp was positioned on one side of the glass and two thermometers were positioned on the other side, one parallel to the clear glass and the other one next to the glass covered in the film. It became clear in a moment that the window film reduced the heat load significantly.

According to tests conducted by window film manufacturers, the film reduces heat loads from 25 to 85 percent. (Results vary depending on manufacturer and type of film; research products carefully

Text 51WAYS to 44222 to receive the FREE e-book 51 Ways to Increase Your Rental Property Cash Flow

to identify the best film for your need.)

The location of the window film is also a factor. Installing film on windows that face east, south and west are typically more effective than on the shady north

side of a building, and if your building is already well shaded, window film may not help at all. continued on page 19

GOT LEAKS? Is there a leak lurking around your property?

High water bill? Hear water running?

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(And 10 Ways To Ruin It)

“51 Ways to Increase Your Rental Property Cash Flow is full of great advice on how to get the most out of your rental properties.”

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Rental Housing Journal Metro

Multifamily Landlords Win Some/Lose Some In The Short 2016 Legislative Session

By Clifford A. Hockley, President, Bluestone & Hockley Real Estate Services

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n the short spring Oregon legislative session of 2016, landlords were surprised by HB 4001, a bill introduced by tenant advocates.

HB 4001: • Matched Portland’s 90 day rent increase notice requirement (and the reasons for the increase) and added the requirement that a 90 day notice be given for termination of tenancy after the first year of occupancy.

• Required that landlords pay the tenant relocation assistance of one month’s rent at the delivery of the termination notice.

• Created the presumption of retaliatory actions between landlord and tenant within 6 months after a tenant’s report regarding maintenance.

• Added new language regarding unreasonable harassment of a tenant by a landlord.

Landlord advocates were able to stop the bill in the Oregon State Senate, but they had to agree to the following concessions in a similar bill, HB 4143. HB 4143 was passed and will become effective April 14, 2016.

HB 4143: • Rent increase notices for week to week tenancies must be received at least seven days prior to the effective date of the lease.

• Landlords may not increase the rent in the first year of month to month tenancies, or at any time after the first year of the tenancy without giving at least 90 days written notice to a tenant. (Remember to add mailing time). · This applies to any rent increase and effectively overrules the city of Portland ordinance that called for 90 day notices only for rent increases over 5%. · Notices must specify the amount of the rent increase; the amount of the new rent; and the date the increase becomes effective.

• The statute does not address rent increases for the renewal of fixed term tenancies, such as a one year lease.

In light of these new requirements, attorneys for Multifamily NW believe: • If the increase is built into the existing lease no specific additional notice of rent increase is required.

• If you would like to raise the rent on a tenant who did not sign a renewal and you expect the lease to turn into a month to month agreement then you will want to give the tenants a 90 day notice (plus mailing time) to have the rent increase occur at the same time

that the lease rolls into a month to month agreement.

• If you fail to plan ahead and the lease turns into a month to month agreement then you are stuck with the existing rent for one year after the convercontinued on page 14

In honor of National Fair Housing Month | April 2016

We Are Fair Housing

WE

, as housing providers to the people of Oregon, pledge the following:

1. To provide equal opportunities for rental housing to Oregon residents without regard to race, color, religion, national origin, sex, familial status, disability, source of income, marital status, sexual orientation, gender identity, or victims of domestic violence.

2. To be open and transparent in all our practices, investigations, and other activities related to fair housing laws.

3. To provide ongoing training and education in fair housing best practices to all our employees.

4. To address all fair housing complaints and, if fair housing laws are broken, to hold violators accountable.

5. To uphold all fair housing laws as our legal and moral obligation to all Oregonians.

Signed, The Board of Directors of Multifamily NW representing Cascade Management, Tokola Properties, Greystar, Mainlander Property Management, Quantum Residential, American Property Management, Background Investigations, Bittner & Hahs, Capital Property Management, Guardian Real Estate Services, Home Forward, Income Property Management, Interstate Roofing, Kennedy Restoration, Princeton Property Management, Sterling Management Group, WPL Associates.

This fair housing pledge represents a public commitment from management companies and housing providers that manage or own approximately 160,000 multifamily units or homes in Oregon. To learn more about our pledge and fair housing laws, please visit out website at multifamilynw.org.

16083 SW Upper Boones Ferry Road, Suite 105, Tigard, OR 97224 | ph: 503-213-1281 email: info@multifamilynw.org

Rental Housing Journal Metro · April 2016

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Rental Housing Journal Metro

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Rental Housing Journal Metro · April 2016

President: John Sage Vice President: Phil Owen President Elect: Ron Garcia Secretary: Lynne Whitney Treasurer: Elaine Elsea

John Sage, RHA Oregon President

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pril is Fair Housing Month and only a few short weeks until the Primary elections on Tuesday, May 17th. Why do I mention the elections coming up? Because I want to remind everyone of the right and privilege that we have to participate in the governing of our cities, our state, and our country. I could go over the fact that many people gave their lives for this right/privilege. I could remind you of the ease with which we are afforded the ability to exercise this right and privilege. I could do all of those things and have done so in past articles.

Yet, I wonder at times, does it make a difference? Are people truly listening? Then I have something happen which shows me that people are listening and that maybe I have been looking in the wrong place for my answer. I was talking with my 17-year old daughter and some of her friends the other night and I asked them about the coming elections. Who would they vote for, if able to vote? What did they think about the issues? Their answers encouraged me and gave me hope for our future.

The next generation is not as uninformed as we might think, and not informed only via what they read on social media. They have ideas on how to face the future and are already thinking about how to tackle problems with creative solutions that

Past President: Elizabeth Carpenter Office Manager: Cari Pierce

President’s Message

Fair Housing Month will take some sacrifice and fortitude before progress is made. However, they are willing to try, and their enthusiasm was contagious. So I encourage you since you have the right/privilege to vote that you go out and exercise that right for those that are coming behind you and have not yet the ability to vote but have the courage to dream it. And now this…..

Again, April is Fair Housing month!!

Why is April the designated month that we observe this recognition of Fair Housing? On April 11th, 1968 President Lyndon Johnson signed the Civil Rights Act of 1968, an expansion of the Civil Rights Act of 1964. The 1968 act expanded on previous acts and prohibited discrimination concerning the sale, rental, and financing of housing based on race, religion, national origin, sex (and as amended), handicap, and family status. Title VIII of the Act is also known as the Fair Housing Act (of 1968).

We at RHA Oregon are committed to helping you to understand Fair Housing and how it applies to your business. On April 7th, we have Diane Hess with the Fair Housing Council of Oregon presenting a class on Fair Housing at the RHA Oregon Conference Annex starting at 6:30 pm. She will be presenting an introduction to and overview of Federal, State,

Rental Housing Journal Metro · April 2016

and Local fair housing laws. If you would like to attend, go to our website and/ or call our office to register. I have been to several classes over the years on Fair Housing and I learn something new each time. Also, if you haven’t done so yet, you should check out the Fair Housing Council of Oregon website and especially their link to resources for landlords. http:// www.f hco.org/hs_provider_info.htm.

There is a lot of information here that you should find very helpful for your business.

RHA Oregon also has classes this month on Landlording101, presented by Mark Passannante, Attorney at Law and Past President of RHA Oregon, at the Monarch Hotel. You can check both of

10520 NE Weidler, Portland, OR 97220 (503) 254-4723 • Fax (503) 254-4821 info@rhaoregon.com • www.rhaoregon.org

these classes out on the RHA website, http://rhaoregon.org/.

Please remember to go out and get some exercise of your voting rights in May. You wouldn’t want those rights to atrophy!!!

As for Fair Housing month, know that we really observe it every day of every month of every year since April 11th, 1968. Remember that RHA Oregon is a resource for training and answering questions about fair housing. And please be sure to let us know if there is anything that we can do to help you.

Sincerely, John Sage President RHA Oregon Stegmann Insurance Agency Inc.

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Rental Housing Journal Metro

Service in a Growing Industry

Dave Bachman President of Cascade Management

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’m often involved in the daily conversation regarding the state of the multifamily marketplace. The conversation is naturally focused around supply and demand. We often speak to the “hot” rental market or “landlord’s” market. In nearly every market there certainly is high demand. Currently, raising rents and absorbing vacant units is often easier, however we should never disregard the fact that the marketplace is still very competitive. To remain competitive, drive performance and move our industry forward, we need to focus our work to provide quality service to our applicants and residents.

Service is typically more inclusive than how we view customer service. Customer service is typically an action, whereas service relates to everything we do. It’s a way of existing, more than just a task and for that we need a very high level of

self-awareness around hard work, dedication, creative thinking and self-motivation. This higher level of awareness creates a recognition of service to each other and service to your team. This translates to service to our applicants and our residents.

Self-awareness and careful consideration of our impact often determines how we supply service to our industry but we also need to acknowledge our ever changing marketplace. Newer and more innovative product is coming online quickly.

There is also a high level of project acquisitions that is driving renovations and improving the existing housing stock.

Acquisition, new competition and higher rents result in a competitive marketplace where resident retention and applicant acquisition will be a direct result of the customer’s experience.

Our customer has also changed. We frequently serve a more diverse customer with higher expectations and lower tolerance for mistakes or poor service. Multifamily housing is no longer just a necessity for those who cannot afford a home or are in need of a temporary place to live.

The marketplace has changed to where customers are choosing multifamily as a preference and a lifestyle. More than ever, someone’s apartment is truly their home.

It is important to think of an apartment

16083 SW Upper Boones Ferry Rd, Suite 105, Tigard, OR 97224 503-213-1281 | Fax 503-213-1288 | www.multifamilynw.org

as the base or foundation block of somebody’s life.

To reference this point it is helpful to think of an example that we can all relate to. Think of visiting your favorite restaurant. Imagine you show up to have dinner with friends and the location is much busier than normal. You typically frequent the location since you know the food and service are both of high quality. If you were told that you had to wait 45 minutes for a table when you only had 20 to spare would you wait? If there were 15 other quality restaurants close by you would likely consider your other options in hopes that someone could better accommodate you and potentially find a location that would be more enjoyable for your group.

When thinking of our customers in Multifamily, their experience is more personal because their experience is specific to their home or the foundation of their life. In consideration of just how important service among competition is in our industry, it is helpful to review four guiding principles to consider when delivering service in this new marketplace:

3) Hiring and training have never been more important, 4) How we work with each other will certainly translate specifically to how we work with our applicants and residents.

Finding the best renters and retaining them will ultimately be determined by service, more than by product. With the amount of activity in our marketplace there will always be a newer, bigger and better apartment down the street. How residents feel about their home, their community and the service they receive from management staff will ultimately lead to higher rents, higher resident retention and better financial performance.

1) An applicant or resident’s perception IS their reality, 2) More communication is (generally) better than less,

Form of the Month Oregon Notice of Rent/Monthly Charges Increase – M011 OR This form has been updated to be compliant with language passed during the 2016 short session of the Oregon Legislature. Rent increase notices must include a notice period of 90 days, state the new rent amount and specify the amount of the increase over the previous rent amount.

Upcoming Events with Multifamily NW 4/6/2016 CAM: Marketing Class 4/6/2016 April Landlord Study Hall 4/7/2016 Mold Awareness Class 4/7/2016 New Supplier Orientation Program 4/8/2016 It’s the Law - Crazy But True: Stories from a Full Moon 4/13/2016 Low Income Housing Tax Credit Class 4/18/2016 CAM: Property Maintenance for Managers 4/18/2016 EPA Lead-Based Paint: Renovation, Repair - REFRESHER 4/25/2016 OSHA/Safety Prep Class 4/26/2016 Spring Apartment Report Breakfast 4/28/2016 Reasonable Accommodations Class 4/29/2016 A Tour of Portland’s Hidden Discriminatory History 5/2/2016 Oregon Landlord Tenant Law Part I 5/2/2016 Maintenance Boot Camp for Spanish Speakers 5/4/2016 New Hire Class 5/6/2016 Forms and Notices Class 5/10/2016 CAMT: Plumbing Part I & II 5/10/2016 Fair Housing Basics with a Historical Perspective 6

Rental Housing Journal Metro · April 2016

Rental Housing Journal Metro

HUD Seeks to End Discrimination Against Tenants with Criminal Records

By Evan L. Loeffler

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he U.S. Department of Housing and Urban Development (HUD) published guidelines in April, 2016, for the proper consideration of applicants’ criminal records when considering them for housing. HUD notes that because a disproportionate amount of people with criminal records are minorities, a blanket policy of refusing to rent to anyone with a criminal history may violate the Fair Housing Act. Much like the 1991 HUD memorandum regarding occupancy standards (the “Keating Memo”) this new document provides general guidance for how to consider whether a housing policy violates federal law. The memo is not law in itself, but it interprets how the law may apply to certain situations. As with any new guideline, the legal ramifications will develop on a case-by-case basis as matters are heard in court and the guidance is considered.

According to the new guidelines, turning down tenants solely based on their criminal history may violate the Fair Housing Act. While the Act does not list people with criminal records as a protected class, HUD notes that minorities have disproportionately high rate of arrests and convictions. For this reason, while in some cases a landlord may refuse to rent to a party with a criminal record, the pol-

icy should not be applied automatically without further consideration.

The guidelines note that there is a difference between an arrest and a conviction. An arrest may occur if a police officer forms the belief that someone needs to be detained for their own safety, for the safety of others, or for the investigation of a crime. A conviction may occur only after a party has been formally charged with a crime and had an opportunity to defend himself or herself in a court of law.

A judge or a jury must determine that it is beyond a reasonable doubt that the indi-

vidual committed the crime. Both arrests and convictions may appear on a criminal history.

HUD takes the position that a policy of excluding individuals because of a prior arrest without a conviction is discriminatory. Quoting the U.S. Supreme Court, HUD states, “[t]he mere fact that a man has been arrested has very little, if any, probative value in showing that he has engaged in any misconduct.” In other words, an arrest is not, by itself, proof of a crime. A housing provider who categorically denies housing to a person because

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Rental Housing Journal Metro · April 2016

continued on page 15

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of an arrest on their record violates the Fair Housing Act. Convictions, on the other hand, are different. HUD states in the memo, “In most instances, a record of conviction (as opposed to an arrest) will serve as sufficient evidence to prove that an individual engaged in criminal conduct.” Even so, a blanket policy of excluding all people with a criminal conviction probably violates the Fair Housing Act. The landlord with a policy of excluding applicants with

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Rental Housing Journal Metro

Increasing Your Property’s Bottom Line

by Tami Cox

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wning and managing multi-family properties has its challenges.

Two of the most important - keeping residents happy so they keep paying rent (aka - your direct revenue stream and job security) and simultaneously pleasing the property owner (which almost always results in what shows up on the bottom line each month and at the end of the year). In this article, we won’t be covering resident relations, but will be focusing on shining in the owner’s eyes and increasing your property’s bottom line. Whether you work for the owner or are the owner, consider these tips to decreasing expenses and increasing revenue - resulting in a healthier NOI come year end.

Outside Services In the day in the life of property management, any number of things can go wrong! They can also go right. Smooth operations don’t necessarily equate to a profitable property. One of the key areas to look at is how much you are spending in outside services. This means your maintenance team, plumbers, electricians, groundskeepers, painters, carpet cleaners, and so forth. Having good quality people you can rely on and trust is important. But also, having those same people reliably deliver services at a price your current revenue stream can afford and support on an ongoing basis. I like to get at least three quotes for every project or service job I’m planning to give to someone. That way, you have a better chance of knowing what rates and pricing is com-

petitive in the market for whatever service you need. Now, if you lock in great pricing for your “go-to” people, and you work well together - perfect! Keep it moving that way. But if performance is down and the cost is too steep, it may be time to start

looking for someone new. By the time you add up all the labor, material costs, taxes to services rendered it’s possible to have bitten off more than you can chew! If so, dial it back and implement some immediate changes. I like to keep my options open, and not get stuck in long term contracts in the event something goes wrong and I’m not happy with either the service or the end price showing up on the bill.

The larger the property (in units), the easier it is to slip on these expenses because gross revenue coming in looks good as a big round number. But when you start deducting everything coming in, it may not look so good any more.

Maximize Rents Collecting rent on time from every resident at your complex affects cash flow and is vital to the financial health of your property. But it’s not just collecting that

rent and depositing it in the bank that counts. It’s how much you collect (along with your vacancy rate) that is significant.

This is where we look at factors that can draw greater rents to a property that may be underperforming financially. So how can that be accomplished?

Part of it has to do with local market conditions and the time of year, we’d be foolish to say otherwise. But the other parts are having a unit that is desirable to

and new, in addition to everyday function, location, amenities. Amenities actually have far less impact that they used to. Residents care about them, but not as much as they do about the unit they live in and call “home”. Let me ask you, what are you doing to make it feel like home to a prospect? Their home, not yours. Go shopping. Buy some simple staging items to spruce up the kitchen counter. Get a plant, a place at, some candies, make it

live in in the first place, along with good old fashioned salesmanship - a warm personality and an on your game professional approach that nails it when it comes to leasing.

First, the unit itself. It’s not just about doing a turn, where a little paint and cleaning are enough anymore. If you have an established property, chances are pretty great you’re competing in your local market with brand new developments that have a “newness” you don’t. Residents like shiny and clean and smelling good

look like an inviting presence which you then leave behind as a house warming gift. Put your sign in sheet next to it with your business cards. But the core of the unit has to “sing” rent me! Is it spotlessly clean? Did you replace anything old and worn out? Spend the money and upgrade all the appliances to stainless steel. Mist resident prefer the stainless. White can be okay, but still look dated. Black, makes the room look small and closed off. Go the extra mile and get an interior designcontinued on page 16

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Rental Housing Journal Metro · April 2016 7/23/15 1:28 PM

Rental Housing Journal Metro

Top Questions Regarding Music Licensing for Rental Properties

By Amanda Hyland

I

f you manage a property where music is played in a common area like a clubhouse, pool or fitness center, you need to be aware of copyright implications. As a copyright attorney, I have helped my property management clients comply with public broadcasting licensing requirements, which can be surprisingly complicated. Here are some of the most common questions and answers.

Q: What is copyright?

A: The Copyright Act gives artists, authors, composers and publishers the exclusive right to reproduce and publicly perform their work. A small business, including an apartment management company, that plays music using any type of device engages in a “public performance” under the terms of the Copyright Act. Therefore, unless the apartment complex is exempt, it needs permission to play the music. If work is reproduced or publicly performed without proper permission, the conduct may constitute copyright infringement and subject the infringer to damages.

Q: I got a letter from ASCAP. What is ASCAP? A: ASCAP, BMI and SESAC all are “Performing Rights Organizations,” or “PROs,” that collect copyright royalty income on behalf of songwriters and music publishers when a song is publicly broadcast.

Q: I already subscribe to ASCAP, but now I got a letter from BMI? Aren’t we covered already?

A: Most songwriters are members of one of the three PROs. Accordingly, a subscription to one PRO provides a license to some, but not all, of the music that would be played on a radio. If you need one subscription, it’s likely you need all three.

Q: Is our clubhouse really “public?” Aren’t these private areas not subject to public performance requirements?

A: The copyright laws give copyright owners the right to control public (but not private) performances of copyrighted material. According to the statutory definition, a sound recording is performed publicly when played “at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered.” There are certainly arguments that common areas within an apartment community are not “public” for purposes of creating public performance liability. No court has ever published an opinion ruling on the question of whether community rooms, swimming pools or exercise areas are “public.” Pending resolution of these questions, most property managers choose to pay the PRO fees in order to avoid the risk of being sued and held liable for copyright infringement. continued on page 18

FIND EVICTIONS STESSFUL?

503-242-2312

Full FED Service First Appearances evict@landlord-solutions.com Small Claims Rental Housing Journal Metro · April 2016

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Rental Housing Journal Metro

DEAR MAINTENANCE MEN: Maintenance Tools & City Inspections

By Jerry L’Ecuyer & Frank Alvarez

Dear Maintenance Men: I am going to university and want to use my DYI skills to supplement my income.

Being that I live in a college town, there are a lot of rentals aimed at students. Since students are sometimes hard on their living quarters and move a lot, I figured there might be a maintenance market for repairs and making rooms and rental units rent ready. I don’t have a lot of money to invest in tools and want your recommendation for the minimum I might need tool wise to get started?

Bryan Dear Bryan: Good thinking Bryan, you might just be on to something; students can be a bit hard on rental units! Keeping in mind that as a college student yourself, you have limited funds, so other than a cordless drill, we will leave power tools out of the picture. The majority of the repairs will involve drywall, plumbing and cleaning.

Other than light bulbs, leave the electrical to the pros.

Basic Tools • Retractable utility knife • 5 in 1 paint scraper • Drywall saw • Drywall mud and tape

Dear Maintenance Men, I am planning major remodel work to my 4plex and need some advice. My contractor has told me not to worry and he will have everything under control but I know that city inspections can cause serious delays if we are not ready for them or do something wrong. I am not an expert or experienced in construction, what should I watch for as far as the actual inspections are concerned?

Bob-

• Bucket • Hacksaw • Claw hammer • Tape measure 25’ • Caulking gun • 6 way screwdriver • Adjustable wrench • Channelock tongue & groove pliers • Small hand snake for bathroom sinks.

• Toilet plunger • Broom and dust pan • Gloves

Bob, It is not often we are able to share our experience on the actual General Contracting and building side of our business so, thank you for your question.

We have listed the top reasons why professionals do not pass inspections taken from a 2015 JLC (Journal of Light Construction) survey.

• Flashlight • Safety glasses • Step stool • Cordless drill/screwdriver This is a limited tool set used for light duty work. Try to buy quality tool. Many can be found at garage sales for a fraction of the retail price. With these tools, you will be able to change a faucet, repair drywall holes, unclog bath sink drains, caulk bathtubs, haul trash etc.

Foundation: Improper reinforcement or support of rebar Wall Framing: missing fire-blocks, hold down straps etc.

Floor framing: missing anchor bolts, sheeting nails missing joist.

Trusses: bracing not installed, improperly connected to wall plate continued on page 13

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Rental Housing Journal Metro

Common Tenant Complaints ...continued from page 1

Eco-Friendly Upgrades ...continued from page 1

relationship making the wrong impression. In case you are not capable of taking proper care of the hygiene, maybe you should hire a professional cleaning company at least a week before the scheduled moving day. Make sure no stains and dust will greet your tenants as they go through the door.

ping. This simple project can reduce energy bills by up to 30 percent and ensure that air remains inside the units.

Upgrade thermostats: Allow residents to moderate electricity and gas usage by upgrading to programmable and / or WiFi-enabled thermostats. The thermostat can adjust to their schedule manually or automatically through a convenient app on their smartphone. Tenants will save an average of 10 to 12 percent on heating and 15 percent on cooling bills, and you may be able to offset part of your investment by taking advantage of rebates.

Switch to LEDs: Increase savings easily by converting to LED lighting, which uses approximately 84 percent less energy than incandescent bulbs and lasts 25 times longer. Install LED lighting in interior fixtures, pathways, hallways and parking garages. Also consider decorative LED options for communal areas. LED technology is integrated in a variety of lightbulbs and fixtures, allowing for an easy transition and customization for the property.

Invest in HVAC: Switch to high-efficiency, ENERGY STAR®-certified units and reduce air-conditioning energy usage by up to 50 percent. Maintain the longevity by cleaning the evaporator coils and drain channels to prevent potential clogging. These practices will reduce unnecessary wear and tear on the AC unit.

Take extra steps to improve the air quality for residents by having maintenance change air filters regularly, at least every 1-3 months.

Something does not work properly Appliances and facilities just stop working sometimes; it happens no matter that no one wants it. Test all domestic appliances in advance to prevent complaints from your new tenants. In case the same person has been renting your property for a certain period of time, make sure you respond immediately to their signal.

A clogged sink or an oven which cannot heat may be or not be your tenant’s fault, but you have to handle the matter in both cases. Check the issue as quickly as you can and make an appointment with an expert if you are not capable of dealing with the problem by yourself. Warn the renter when to expect a plumber for example and pay for the service. You can figure out who is financially responsible after the specialist has done their job and things are under control again.

Pest complaints Regardless of how clean the tenant keeps your property, unfortunately pests can always invade it due to many reasons other than irregular cleaning. If the adjacent apartments, for example, have been infested with mice or bugs, this can turn out to be a great problem. As a decent landlord, you should react immediately to such complaints. The best thing you can do when it comes to pest control is to hire an exterminator to handle the pests

in your property. It will be wise of you to schedule a second appointment after 7 – 10 days and thus ensure the safety of both your property and tenants.

Inoperative keys If you are not a first-time landlord, you should not at all be surprised by such a complaint from your tenants. Keep an extra set of keys at your disposal for emergency situations. Should you find that the lock is hard to open, it would be wise to change it as soon as possible or you may have to change the whole door if somebody gets locked inside eventually. Buying an installing a new lock promptly will make things much easier for you and your tenants. Do not forget to change the locks every time when a tenant ends your contract is an additional security measure.

Doing your best to help your tenants will always be appreciated, so do not hide when they complain about something.

After all, renting a property is a kind of a job and you will have to do it well if you want to get your rent on time.

Rental Housing Journal Metro · April 2016

sign of leaky plumbing, so inspect plumbing fixtures for leaks annually to avoid water damage and potentially high outof-pocket costs.

Update water heaters: Upgrade water heaters to newer units that are compliant with more energy efficient standards that went into effect in 2015 – some of which can have the output of a 50-gallon unit with the footprint of a 30-gallon unit.

This is an excellent option when hot water is needed and space is limited. Insulate the water heater with a blanket for extra savings.

Maintain the landscaping: Maintain a green space and reduce water usage with a low-water-use landscaping or xeriscaping plan. Mulch and drought-tolerant plants, such as coneflowers, daylilies or butterfly weeds, can help reduce and / or minimize excessive watering. Adding decorative gravel and well-aerated soil will enhance a walkway or landscape bed, while also conserving water and adding nutrients to the green space. Improve water efficiency even further with smart irrigation technology. Smart controllers can reduce annual bills as much as 15 percent by watering plants only when necessary.

By Scott Matthews, Director, Strategic Accounts, The Home Depot

Scott is responsible for managing national accounts and e-commerce while overseeing business-to-business relationships. During his 25 years at The Home Depot, he has served in a variety of roles and capacities, including Regional Pro Sales Manager, District Manager and Store Manager.

Conserve Water Tend to the bathroom: Reduce water usage by updating toilets, showerheads, faucets and additional bathroom accessories with WaterSense-labeled products, which are approximately 20 percent more efficient. Excessive water usage can be a

11

Rental Housing Journal Metro

How Wireless Security is Transforming the Real Estate Industry

T

he real estate industry has long been faced with a problem: “You can’t be everywhere at once.” It feels impossible to monitor your property and staff, without forgoing your other tasks.

But now, with new wireless technology there is finally a solution. A professionally monitored wireless security system gives real estate professionals essential insights into their units. More and more real estate professionals are using wireless alarm systems, to protect vacant homes, keep an eye on their staff, prevent water damage and provide extra value to their tenants.

Keep an Eye on Vacant Properties: When you’re not around, what’s happening to your properties? You hope that the answer is “Nothing”, but you worry. What if someone has broken into your home? Between squatters and copper thieves, there are many reasons to be concerned. Copper theft can cause tens of thousands of dollars in damage. In the old days, a wired security system was the only option, but the contract and need for a landline phone usually made this a non-starter for a vacant property. With a professionally monitored wireless security system at the property, you can keep this worry at bay. When your property is monitored, if you ever have a break-in, the police will be on their way immediately.

The siren will sound, and the would-beburglars won’t have time to steal from you.

to access the temperature at the property remotely, you never need to stress, or get in your car and drive down to check the property out. Assurance at your fingertips.

And it’s not just the freezing pipes that a security system helps you combat. Never worry about whether or not the pipes burst, or if a washing machine is leaking. To the average apartment, water can cause $11,000 or more worth of damage.

Water damage is expensive and time consuming to repair, but water sensors let you know as soon as they detect even a small amount of water. This way you can prevent any damage from happening and move on with your day.

And when you’re selling the property, a security system is an easy way of letting realtors in and out. You can set up a specific PIN for them, and you’ll be able to see when they come, and how long they stay! With a home security system, you’ll know that the property is protected by more than just a lock box and a lock.

Know when your maintenance staff comes and goes: With an alarm system, you can create custom PINs that will let you know when contractors enter and exit. Many of the property managers we spoke with told us that they use this feature to make sure work that needs to get done gets done.

Know who has come and gone from what apartment or home easily. You can make

sure that your maintenance needs are addressed, that your staff is doing its diligence, and just in case, you have a record of it all!

If you and your renters agree, you can also set up a specific maintenance PIN. The maintenance PIN can be added for all units and will not be able to be seen by the tenants. Consequently, you can use the same number for each property, without security risk, by adding a maintenance PIN.

Stay on top of your pipes and plumbing: New wireless security systems, let you monitor the environment in your properties. Worried about freezing pipes? No need with a freeze sensor. You’ll be able

Provide Extra Value to Tenants: With wireless security systems, once you buy your system, they belong to you.

Therefore, you can do anything you’d like with them. This includes providing systems to your tenants. It’s easy to transfer ownership. Alternatively, many property owners and landlords rent the security system as part of the apartment. You can either have the tenant subscribe to the monitoring service, or you can take care of this for them! Your tenants will love the extra security that comes with your homes!

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Rental Housing Journal Metro · April 2016

Rental Housing Journal Metro

Investing to Go Green or Make Green ...continued from page 1 table local appraiser there are very few green upgrades that will increase the value of the property itself. “Vinyl windows may be one of the best upgrades you can make,” said the appraiser “tenants like them because it saves money on heating.

Plus it will add to the appraised value.” I asked her to what level solar panels, tankless water heaters, and high efficiency furnaces add to the value of real estate. Her answer was “none”. Every buyer expects appliances, furnaces, and water heaters to be in working order. It does not matter if they are high efficiency as long as they work.

Appliances and heating/cooling systems may not add value to your property at sale but may add value to your bottom line. The potential savings on owner paid utilities such as gas, electric, and water/ sewer might make some “green” upgrades worth the investment. As a landlord you should consider investing in upgrades that either make or save you money. If you are paying the utility bill for units being heated during Oregon winters, putting in a high efficiency furnace might be a good long term investment for you. If you do not pay for the utilities, you will be spending money on upgrades that will only save tenants’ money unless you plan on passing that expense on to the tenant in the form of a rent increase or utility bill back.

Most small plexes are not separately metered for water and sewer and the owner is likely responsible for the water/ sewer bill. If that is the case making small changes like low flow toilets, low flow

shower heads, and low flow faucet aerators could save you a substantial amount of expense on your water bill over time.

Another consideration is low maintenance landscaping. Grass may look good but does come with added upkeep. Look at your annual landscape expense for the last few years. You may find that lower maintenance landscaping which consists of native plants, shrubs, and trees will save you money over time.

Think about your short and long term financial goals and ask yourself if making “green” improvements to your properties is putting more “green” into your pocket.

Chris is Small Plex Broker at SMI Commercial Real Estate, LLC .

Please contact Chris if you would be interested in receiving SMI’s free bi-annual newsletter which includes the most comprehensive rent and vacancy survey in the mid-valley, the SMI Apartment Update. 503.390.6060.

Chris@smicre.com

Rental Housing Journal Metro · April 2016

Dear Maintenance Men ...continued from page 10 Roofing: over driving of nails in shingles, missing nails, incorrect felt Window and Door: improper flashing, inadequate fire rating, improper weather stripping Handrail: Improper height or spacing Plumbing: missing nail plates, improper pipe support Electrical: missing grounds, GFCI protection, labeling of circuits Decks: deck not built according to the plans, improper handrail installation

Dear Maintenance Men: I have been contemplating the purchase of a high pressure sprayer for my employees to use in maintaining and cleaning around my apartment buildings. Because these pressure washers produce a powerful stream of water, I am worried about my employees hurting themselves or damaging the building. What size machine do you recommend and how safe are they to use? Should I rent one first?

Julia Dear Julia: As with any large ticket items it is always prudent to “try before you buy”.

Fortunately there are a variety of rental places to choose from which carry all sizes, makes and models.

A rental yard will often use the best and longest lasting machines. Most times these companies can provide you with the best information on the products in regards to maintenance, wear & tear, life expectancy and performance.

In regards to workers safety, look at the operators manual for the best advice on personnel safety wear and use. These ma-

chines can produce a very powerful jet of water capable of ripping through clothing, skin and even break small bones.

You should always wear goggles, leather gloves, and steel toe leather work boots with nonskid soles.

Stucco & wood siding is especially susceptible to damage when using a power washer. Use the lowest setting and wide spray nozzle to avoid damage. Lightly mist stucco surfaces if cleaning is your objective. Keep nozzle adjusted to spray not stream and approx. 2’ to 3’ away from the surface.

As with most things, proper training will help insure safe usage of power tools.

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 Jerry L’Ecuyer at 714 778-0480 CA contractor lic: #797645, EPA Real Estate lic. #: 01460075 Certified Renovation Company www.BuffaloMaintenance.com www.ContactJLE.com www.Facebook.com/BuffaloMaintenance

13

Rental Housing Journal Metro

Multifamily Landlords Win Some ...continued from page 3 sion to a month to month agreement.

• The terms of a fixed term tenancy, including the amount of rent, may not be unilaterally amended by the landlord or tenant.

Other items amended with HB 4143 include: • Notices and penalties for smoking: Fees may be assessed for smoking in a clearly designated nonsmoking unit or area of the premises. The fee for a second or any subsequent noncompliance may not exceed $250. A landlord may not assess this fee before 24 hours after the required warning notice to the tenant.

• The legislature also fixed a small problem that occurred with new rules regarding changes for emergency exits in apartments established in the 2015 session. · In ORS 90.460(2), it removed the language requiring a landlord to provide at all times during the tenancy “a route of exit from a bedroom, other than the main entrance to the bedroom, for use during an emergency.” · The language now requires the landlord to provide “a route or routes of exit from each bedroom and, if required, a secondary route of exit from each bedroom, for use during an emergency. The routes of exit must conform to applicable law in effect at the time of occupancy of the building or in effect after a renovation or change of use of the building, whichever is later.”

This change helped landlords who had permits for legal bedrooms that may not have had an immediate outside exit, and whose design had been approved by

building officials.

The session also included a new bill regarding inclusionary zoning, SB 1533, which originally was also included in HB 4001. Inclusionary zoning is defined as zoning that requires permanently affordable residential units (inclusionary units) be set aside in either a new development or a substantial rehabilitation in exchange for a bonus density.

SB 1533 was a part of a ‘package deal’ of housing related bills instigated by House Speaker Kotek. The version that passed included many key incentives which earned the support of many building and development advocates.

SB1533: • Removes the preemption regarding local control against inclusionary zoning.

• Requires 20% of the units to be affordable to gain the benefits of inclusionary zoning.

• Applies to units that are 80% MFI or above.

• Has a number of incentives that can be offered (including tax abatement).

These were the key landlord tenant bills that passed in the 32 days of the short legislative session. Tenant advocates were very disappointed as their fight for affordable housing and more substantial rent control appeared somewhat stymied in the Senate. Landlords beware; the tenants will be back in 2017 to fight for more help in controlling the fast increasing rents, especially in the major metropolitan areas.

The battle for regulated affordable housing is far from over.

Unfortunately, in the fight to provide affordable housing for low income Or-

egonians, laws will be passed that affect all tenants and this could hurt landlords in the future. Residential landlords must stay engaged and be involved in the upcoming local elections for Oregon Sena-

Natural gas is comfortable, clean burning and affordable. It’s also in high demand, which makes incorporating natural gas service into your next project the right move. After all, buildings are easier to sell and lease when they come with the amenities tenants want. And NW Natural is

tors and Representatives if they want to protect their investments.

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14

10695_NWN_MultiFamily-Rental_Housing_Journal-Builder_SNAP.indd 1

Rental Housing Journal Metro · April 2016 3/9/15 12:57 PM

Rental Housing Journal Metro

HUD Seeks to End Discrimination ...continued from page 7 a criminal history must be able to point to a “substantial, legitimate, nondiscriminatory interest” served by the policy. The landlord must also be able to prove that the policy achieves those goals. A housing policy must take into consideration the nature and severity of the crime, and the amount of time that has passed since the criminal conduct occurred Whether the discrimination is accidental or intentional, during screening or just at the inquiry stage, the landlord or property manager is still at risk of a discrimination lawsuit. The best practices are: • Do not impose blanket bans on renting to those with criminal history or arrest records.

• If there is evidence of a conviction, consider the nature and severity of the crime and how long ago the criminal conduct took place.

• Ensure everyone who interacts with applicants is trained well on current Fair Housing policies.

• Keep screening policies pertaining to arrest records and criminal history specifically related to safety of persons and property. The policy must distinguish between criminal conduct that indicates a demonstrable risk to resident safety and property and criminal conduct that does not.

ed that criminals are a protected class.

HUD recognizes that housing providers have an interest in providing safe housing to all their tenants. These new guidelines do not require landlords to rent to convicted felons, but do require landlords to examine the criminal history (if any) of its applicants with more care than before.

Naturally, there will be applicants who refuse to provide details about their criminal history or provide inaccurate information revealed by a screening company.

An incomplete or inaccurate application may be denied.

Following best practices will save you thousands of dollars in litigation and court costs, so it is well worth the effort.

If in doubt about a policy, contact your legal resource for help dealing with tricky questions related to this new HUD guidance and the Fair Housing Act. Evan L. Loeffler is the principal attorney at the Loeffler Law Group PLLC in Seattle, Washington. His firm’s practice emphasizes landlord-tenant relations. www.loefflerlawgroup.com

• Obtain and use a standard screening policy in compliance with Fair Housing and HUD regulations, and apply it equally to anyone who applies. You may want to consult an attorney or housing specialist to develop a rental criteria relating to criminal conduct.

Keep in mind that HUD has not stat-

Publisher Will Johnson – will@propubinc.com Designer/Editor Kristin Flores – kristin@propubinc.com

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Rental Housing Journal Metro is a monthly publication published by Professional Publishing Inc., publishers of Real Estate Opportunities in Investing & Real Estate Investor Quarterly

www.rentalhousingjournal.com The statements and representations made in advertising and news articles contained in this publication are those of the advertiser and authors and as such do not necessarily reflect the views or opinions of Professional Publishing, Inc. The inclusion of advertising in this publications does not, in any way, comport an endorsement of or support for the products or services offered. To request a reprint or reprint rights contact Professional Publishing Inc. PO Box 6244 Beaverton, OR 97007. (503) 221-1260 - (800) 398-6751 © 2015 All rights reserved.

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Rental Housing Journal Metro

Increasing Your Property’s Bottom Line ...continued from page 8 er in to help you spec out the unit turn with the goal of maximizing rents with a new lease. Don’t lock in a one year lease that’s going to end at a time of year undesirable for leasing. Be open to adjusting the lease term to say 7 months, or 10 months. Whatever works so you expire at peak leasing times. The exterior has to be impeccable as well. Always have your cleaning crew on top of every detail when you’re about to lease a vacant unit. It matters. These are just a few of the things you can do aesthetically to improve your units in such a way as to draw bigger rents.

Then there is salesmanship. Who you put to the task of making that first impression and communicating with prospective new residents will either advance you or kill you! The longer a unit sits vacant because it doesn’t get leased is money out the door and off your bottom line.

Find great people (or a great person) to do your leasing and reward them generously for doing so. This keeps motivation high and keeps your property showing green!

Don’t assume the best person for the job is the property manager. Not always true.

It could be one individual you know who has a talent for such work and all they do for you is lease. It doesn’t have to be that way. I’m just saying that who you choose for this particular role in the operations and management of your property is absolutely key!!! A good “sales person” can convert features to benefits in ways that are received well during a showing. I like to say, if the deposit is getting collected and the lease inked on the first visit you’ve got a strong closer. Getting them approved and issuing keys as well for immediate move in is icing on an already sweet cake. A rock star leaser can do that.

Find that person! They are one of your

property’s most valuable assets. A person with good salesmanship abilities can also drive rent rates up a notch, and every dollar counts on you year-end statement.

Completely affects your overall property value. My suggestion - when you find that person, bonus them well. Give them that “carrot’!

A well prepared unit along with an exceptional leasing professional will directly impact your bottom line.

Organization and Due Diligence This last point I’m going to mention has everything to do with organizational skills, keeping the property books in order, knowing where to find things, staying on top of the numbers and how your property is actually performing month to month. Don’t wait until the end of the year or tax time to get your ducks in a row and see how it all turns out. Can you spell disaster? No, someone should be assigned the task as scrutinizing the income and the expenses each month, and looking at what can be changed or adjusted for maximum productivity and profit. If you don’t

know your numbers, or if they aren’t accurate - how can you manage your property effectively and make money? Are you using the right soft ware program to help you with this? How long has it been since you even looked at new soft ware options out there (with so many talented computer geeks coming up with amazing programs!) that could be better for your property manage to and portfolio tracking tasks. Or are you still on a dinosaur system, because it’s just what you’ve used for years? That dinosaur could be costing you money!

Then there is the person who is actually putting the numbers in. Is it getting done regularly, on schedule, and is it accurate?

Or are things falling through the cracks?

Again, good people are an asset to you.

Value and appreciate them. Train them.

Create a positive work environment that makes them want to dig into those numbers and crunch them for you! Lunch now and then, Starbucks, cookies, a gift card of appreciation. I see this people side of your business (because your property is your business) as due diligence. Things you

need to do to arrive at a specific outcome.

That outcome is profitability. We’re all about the bottom line, but what are you doing to improve it?

Taking these things into consideration for each of your properties will become like second nature once you get the system in place. Whether you win one property it multiples, it’s your system that you must improve to create assets that perform well. There are many other factors I could elaborate on, but these are some of the basics that I hope will give you a fresh perspective and jump start to putting a finer pencil to that operating statement.

The one that can get you more money to buy the next property, when you need it.

Because you will have proven you know how to not just repay debt service, but take a multi-family property and improve its performance over time with your top rated management skills. Investors and partners will love you, and so will your bank account!

Tami Cox is a Business Consultant and Commercial Real Estate Lender that has been working with investors and business owners for over 16 years - helping them become more profitable, grow, reach their business goals, and improve their bottom line. You can learn more about her services at www.sizzlinghotbusiness.com or reach her by phone at 952-491-0030.

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Rental Housing Journal Metro · April 2016

Rental Housing Journal Metro

sk The Secret Shopper Pets & Children

M

any apartment communities strive to create a welcoming office environment in order to put prospective residents at ease. From aromatic scents and freshly baked cookies to a warm fire, these comforts communicate a feeling of “home.” However, when managers have an office connected to their apartment or even inside their apartment home, sometimes the lines between the professional office and an employee’s personal space can blur.

Q

I supervise several apartment buildings in which many of my managers work out of an office attached to or inside their apartment. Some of these employees have young children and pets. Often when I call these properties, I hear a dog barking or a child crying, and not always in the background. Sometimes I am even put on hold while the manager deals with an urgent child-related matter. I am concerned about these situations and how they are affecting residents and prospective renters. However, I’m not quite sure how to deal with this issue since these managers have a personal residence attached to or combined with their office.

A

You have a valid concern and it needs to be addressed. Yet, much respect and con-

sideration are required when dealing with people regarding their pets and children.

- ESPECIALLY their children! However, your employees must be made to understand you have certain expectations regarding office protocol during business hours. If your employees are regularly allowing their children or pets to be in the leasing office during these hours, then this is a disruption to the leasing process and an inconvenience to your residents or prospective renters.

Regarding pets, this could end up becoming a liability for your company, community and/or owner. Many people have pet allergies and/or phobias. When someone is looking for an apartment, they do not expect to enter a leasing office; which is a “place of business,” and

Rental Housing Journal Metro · April 2016

find themselves confronted by a dog.

They also aren’t thinking they have to be prepared with a medication to counteract their body’s response to an extreme cat allergy. They are expecting a professional business setting where they plan to get information about renting an apartment.

As with any other office policy or procedure, something in writing regarding these issues will help your employees know what the expectations are. It might seem like “common sense” to you for your managers to keep their personal lives separate from their professional lives. On the other hand, when people “live where they work,” it’s not always easy to keep the lines clearly defined; these managers have an obligation to their families as well as to their residents and employer.

No matter what type of situation you are dealing with on site, it’s important to keep the lines of communication open.

This will ensure the onsite managers understand your expectations and help reassure them you are committed to providing the support they need. That way, they can handle their responsibilities at work, as well as at home, and put appropriate distance between the two. After all, employee turnover can have an even greater impact on the dynamics of your community and bottom line, than apartment turnover.

If you are interested in leasing training or have a question or concern you would like to see addressed, please reach out to me via e-mail. Otherwise, please contact Jancyn for your employee evaluation needs: www.jancyn.com ASK THE SECRET SHOPPER Provided by: Joyce (Kirby) Bica Former owner of Shoptalk Service Evaluations Consultant to Jancyn Evaluation Shops E-mail: shptalk2@gmail.com Copyright © Joyce (Kirby) Bica

17

Rental Housing Journal Metro

Music Licensing for Rental Properties ...continued from page 9 Q: Do I need to worry about these issues if we exclusively use Pandora at our pool and in our gym? We never use the radio.

A: Pandora has partnered with Mood Media to provide rights to Pandora music such that the business owner does not need to separately obtain PRO rights. If you obtain a license from Mood Media, you should not need a separate license from a PRO for Pandora music.

Q: What about Spotify? Or Apple music?

A: If you have not negotiated a license specifically for business use of the music, such as through Mood Media, you probably need a license. In fact, some exemptions that pertain to radio transmissions do not apply to streaming music. Any public performance of music by using streaming services requires a license.

Q: I heard that there are certain exemptions for businesses that only play the radio. If I only play the radio, do I need to pay any PROs? A: If you are playing music from the radio, including satellite radio like SiriusXM, your property might fall into an exemption. As noted earlier, streaming music does not provide any exceptions.

Q: How do I know if I fall into the radio performance exemption?

A: Congress exempted certain types of businesses from compliance with the copyright laws, so long as certain conditions are met. Areas less than 2,000 square feet are exempt. Areas larger than that are exempt if ALL of these requirements are met: (1) No TV is larger than 55 inches, (2) there is no more than one

TV in any room, (3) no more than four televisions are in the establishment, (4) no more than six speakers are in the establishment and (5) no more than four speakers are in any room.

Q: I’ve decided to pay ASCAP the licensing fee. How do I know if I’m getting a fair deal? Can I negotiate with the representative for a lower rate?

A: Apartment complexes are charges fees based on the number of units in the community. These rates are set by the courts and are the same for everyone. For example, for 2016 ASCAP charges $351 annually to provide a license for a community with less than 150 units, and $421 to provide a license for a community with 151 to 500 units. Discounts are typically offered to property managers who enter into licenses for multiple communities.

Q: I received a letter from BMI demanding that I pay fees. Can I ignore it?

A: Yes, but you are putting your company at risk of getting sued for copyright infringement. Although it is not necessarily likely that a lawsuit would occur, it would expose the infringer to significant risk. The law allows the copyright owners to sue for statutory damages in a range between $750 and $30,000 per individual copyrighted work infringed, i.e., for each song played. The liability to the property management company will be much greater in court than the licensing fees the PRO requested.

I have helped clients with other challenging questions as well. For example, some property owners are concerned about fee calculation on properties with high vacancy rates. Other owners are

concerned about public areas that are not used. Another interesting question is what to do when the cardio equipment in the gym features individual televisions.

Do these count towards the four televisions? These are all tricky questions without black and white answers. Consult an attorney before entering into a licensing agreement or deciding that no agreement is necessary.

Amanda Hyland is an attorney with Taylor English Duma LLP in Atlanta. She counsels clients on a variety of intellectual property matters, including trademark registrations. She may be reached at ahyland@taylorenglish.com.

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Window Film ...continued from page 2 ering this window film. That was eight years ago. The surface is scratch resistant and has held up well. Though there is evidence of attempts of attacks to the surface since the installation, the perpetrators eventually became frustrated by the lack of results that they stopped attacking the building altogether. If, perchance, they have some success, we can always strip off the film and replace it rather than installing a new window.

The film offers the added benefits of heat load protection (these windows are on the south side), and privacy. The window film is dark and reflective which makes it difficult to look into the space, (preventing a thief from “casing the joint” by looking through the windows.)

Of course window film can be used in residential (single family and multifamily) applications as well. Say you wanted to renovate an apartment complex in Phoenix and the windows are 25 years old.

Rather than buy new windows, you can use window film and market the advantage of lower electrical bills to potential tenants. Owners of residential buildings in hot climates are responsible for maintaining the air conditioning units, so reducing the solar heat load with window film makes a lot of sense since it relieves stress on air conditioners.

Secondary benefits of window film Although reducing a building’s solar heat intake is the primary purpose of

window film, it has other advantages as well. It relieves the stress and resulting wear and tear on the cooling unit, and reduces the need for individual fans, saving energy and money. Most of these films also almost completely (up to 99 percent) reject UV rays, extending the lifetime of carpeting and furniture in addition to mitigating the harmful effects UV rays on people. As the technology as developed, many film manufacturers have marketed other dual benefits their product.

Security and windstorms: The 3M company has developed a film series that will work effectively in wind storms of up to 185 miles per hour and will resist breaking and entering, if installed by an experienced and certified installer. This

micro layered technology is typically blast and tear resistant (see their website for examples).

Anti Graffiti / Surface Protection Series: 3M also offers products that are graffiti and scratch resistant. They can be either 4 or 6 millimeters thick and offer protection from taggers in high risk areas by using an invisible sacrificial layer to protect glass from acid etchings, scratches and tagging. This layer can also protect window surfaces from regular wear and tear.

This product solved a recurring tagging problem we had at a commercial building we manage in a high risk area. Vagrants had repeatedly defaced the windows using keys and other materials. We replaced the windows twice before discov-

Saving you money In select situations, window film can be used to reduce heat load, the stress on HVAC systems, electrical bills, glare and crime. It also distributes light better in some applications. As you troubleshoot operational problems and/or attempt to reduce energy needs, consider the use of window films as an economical alternative to window or cooling unit replacements.

Note: There are any more uses of window films. In a future article we will address how window films can be used decoratively or to increase privacy in the interior of buildings with glass walls.

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