Rental application and lease??? Advice needed

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Submitted by treehugger on March 15, 2010 - 9:08pm

In anticipation of getting the house in Vista we are renting out the boyfriend's condo. I posted it on Craigslist yesterday and already have someone that wants it so bad they gave us a check for April rent and deposit..I was not properly prepared and told them they have to fill out an application and I will run a credit check and then if all goes well they will sign a 1 year lease.

Does anybody have a rental application they like? Know how I can do a credit check? A lease form they like?

I looked up the California Association of Realtors and they look like they have a good lease, but not sure about their application.

I am usually on top of it but thought I would have a bit more time, who knew the place would be this popular.

These people seem great, in theory, just arrived from Boston and the place they were supposed to rent fell through so they are in a pinch. He is a cop and going to be working for the Oceanside PD. Wife and 2 daughters, dog and a cat. Since I trust but verify, I want more info on these "nice" folks.

Anything else I should be aware of?

Submitted by AK on March 16, 2010 - 5:20am.

Try Nolo Press (nolo.com) -- famous self-help legal publisher that sells books and forms written by lawyers for laymen.

As a general reference I'd recommend the book "Landlording" by Leigh Robinson.

(Yeah, I'm a lifelong renter who still hasn't closed on his first home. But my parents were reluctant landlords for years, and as the kid with the best grades in English I helped type up all the legal paperwork.)

Submitted by DataAgent on March 16, 2010 - 7:10am.

I use LegalZoom for my legal docs: http://www.legalzoom.com/

As for dogs and cats, pets can be very destructive. Carpets, wood floors, doors, drapes, landscaping etc. I've been a landlord many times. All other criteria being equal, I'd take a tenant with no pets anyday.

Submitted by 4plexowner on March 16, 2010 - 7:31am.

when I had numerous rentals I belonged to San Diego Apartment Assoc (http://www.sdcaa.com/) - they have all the forms you need and can do the background / credit checks needed - not sure it makes sense to join them if you have a single rental

landlord-tenant law in CA favors the tenant - as a landlord you need to be careful

for example, I believe that technically you have already committed to rent to this person by accepting their check - you might be on shaky ground if you turned them down at this point and they decided to force the issue

one of the things I learned about tenants and potential tenants: they will lie through their teeth to the landlord - it seemed to me that most people thought this was an OK thing to do, almost like it was an unwritten rule that the landlord should be lied to at every opportunity - I think part of this is driven by the idea that the landlord is 'getting rich' at the tenant's expense - it didn't matter much whether it was a $600 apartment or a $2100 house

be careful and best of luck

Submitted by DataAgent on March 16, 2010 - 7:52am.

4plexowner is not quite right. Accepting a check without a signed lease agreement is not a legal contract. If your prospective tenants don't 'check out' for any reason just give them their check back and keep looking for a better tenant.

Submitted by 4plexowner on March 16, 2010 - 8:09am.

"If your prospective tenants don't 'check out' for any reason"

I'm not being confrontational here but this is another area where a landlord can get in trouble

CA law says that a landlord is supposed to rent to the first qualified tenant who applies - rejecting a tenant because they don't 'check out' could put the landlord on shaky ground if the rejected applicant decides to push the issue - the rejected applicant might even claim discrimination if they are just looking for a lawsuit (not that we live in a litigious society or anything!)

to protect yourself from this you need to have a written list of what constitutes a qualified tenant - I never provided this list to an applicant but I had it available if the issue ever came up

another way to protect yourself is to NEVER tell an applicant that they are the first person to apply

Submitted by socrattt on March 16, 2010 - 8:15am.

If you found a prospective tenant that quick I would suggest putting another ad on Craigslist for a higher price. The rental market over the past few months has changed dramatically. The rental market is surging as inventory is fairly depleted with so many homes off the market. I have seen homes in my community up almost 15% in just a few months. It may be area specific but I have had a few people tell me that prices are extremely outrageous all around the county. This looks to be affecting most of the rentals below $3K. Everything above that number still seems to be unchanged or is continuing to fall.

Put another ad up on Craigslist, have an open house at a specific time and meet all the tenants that are interested. This will give you a better idea of who is interested in your home and will allow you to make a choice. I always used this technique and prefer it rather than scheduling specific times for each renter.

Submitted by treehugger on March 16, 2010 - 9:02am.

Actually they drove by the property and ran into my boyfriend (complex gated but he was actually out riding his bike) they all started talking he gave them a tour of the condo they loved it. They were told I was doing all the stuff and that I may have already rented it and he knew I had several people lined up. They wrote out a check "to show how serious they were". Joe really liked them (but he likes everyone and is way too nice), I am going to meet them and their dog tonight (I like very few people and am not that nice), have them fill out an application, do a credit check, and then make a decision.

As a long time renter and dog lover, I will always be open to renting to someone with a "well-behaved" pet. We have told them it will be an extra $500 pet deposit and I will meet the dog (retired police dog).

I chose the monthly rental amount at what i thought was fair, my boyfriend is now hopping up and down that we could get more! I think we are better off getting a good tenant that will stick with us for the long term. i guess I think like a tenant rather than a landlord? As a tenant if my landlord is fair and doesn't mess with me or raise rent and I like the place I will stay for years and not do anything to make them think about me or consider raising the rent. I know I am probably a little different than most tenants. Hopefully, I am not too naive about this whole thing. That is where I am hoping the application/credit check will confirm.

I like the open house idea, I should have consulted you folks before I posted on craigslist. This group is really a wealth of info!

Submitted by EconProf on March 16, 2010 - 9:22am.

The prospective tenants sound like such nice people. Then again, they could be the Tenants From Hell. You really just don't know.
There are so many many pitfalls for beginning landlords I don't know where to start. By posting here you have a good beginning. You might have an experienced landlord-friend you could consult, or even have them screen this family.
One basic piece of advice I'd give is to not make friends with these people. Keep it on a strictly business basis, proper paperwork, no favors exchanged, no tenant painting allowed, etc. It simply rarely works to be friends with your tenants.
And the fact that you like pets and therefore are open to their's suggests you are thinking with your heart, not your head. Talk to experienced landlords about the pet thing--there are many pros and cons and you need all sides to decide.

Submitted by DataAgent on March 16, 2010 - 9:30am.

"As a long time renter and dog lover, I will always be open to renting to someone with a "well-behaved" pet."

If you rent your place to someone with a dog, make sure your lease agreement specifically states:
1. the number of dogs allowed with this lease
2. the name of the dog(s)
3. full descriptions of the dog(s)
4. what the tenant must do if their dog situation changes.

A tenant who feels you are 'dog friendly' may decide to add a few stray Pitbulls during the lease without notifying you. You need to reserve the right to restrict a tenant from adding or replacing dogs.

Submitted by Blogstar on March 16, 2010 - 9:46am.

What is the likely hood that someone will get traction in court against a one resident landlord, who takes and leaves whoever they want without being obscenely rude about why someone can't have a place? I tend to think a lawyer or fair housing rep... or whoever,is going to tell the tenant-would be litigator to forget it? After someone is in I am sure they could cause some trouble.

In this case,
I would wonder why someone with a police dog would want to rent a condo. These tend to be large, no? They could be prone to leaving as soon as they find a better place for it.

Submitted by Hatfield on March 16, 2010 - 9:59am.

Definitely get the Nolo Press California Landlord's guide. It is specific to California and is kept current with California law. It comes with a CD containing all the forms (month-to-month rental agreements, leases, application forms, etc). It also has very well-written explanations for how to do all the procedural stuff: placing the ad, screening tenants, accepting deposits, etc.

The most important piece of advice I could offer is to screen your tenants very well. Call all of the previous landlords, ask if the dogs were well-behaved, ask if the place was left in reasonable condition, ask the landlord if they would rent to this tenant again. Call the Boston PD's personnel department and make sure the employment story checks out. Run a credit check. (People who can't pay their bills on time generally can't pay their rent on time either.)

This is the time to do your due diligence.

Submitted by disimilar1 on March 16, 2010 - 11:07am.

If you lease to folks with a dog be prepared to replaced any carpeting or redo the hardwood floors after they vacate.
Definately call the previous LL.

Submitted by Ricechex on March 16, 2010 - 8:04pm.

Wow. I am all for pets, but I prefer pets with a single or couple. I have had families with NO pets, and their small children destroyed the place. Broken blinds, broken built in drawers, and more... they were just really hard on the place.

On the other hand, pet owners are a bit more desperate because as noted in this thread, landlords don't want to rent to tenants with pets.

Of the 4 different tenants that have had pets, every time the house was returned in good condition. I think it is more important to see the pet, and understand the person/s relationship with the animal. For instance, I would rather take a female with an inside dachsund, rather than a family with 2 outside Pitbulls.(nothing against Pits, they are actually wonderful, loving dogs, but many of the people that choose Pits are not so wonderful) Or a couple with a lab, rather than a couple with 2 small chihuahua dogs (they urinate constantly and are hard to housebreak). It really all depends.

I always specify..."pets on approval."

Submitted by treehugger on March 17, 2010 - 10:32am.

Seems like if it is too good to be true.....

I told these people that I wanted to meet their dog and that I would do a credit check. They offered me a credit check they had "just had done". I said no, I would run my own. They changed their mind!

We figure we dodged a bullet on that one and are moving forward more prepared and forewarned!

I have the application in hand, will definitely run credit check, and the lease ready to be filled out.

We had appointments lined up that, thankfully, I did not cancel and will probably do an open house next weekend if needed. So it should still work out and, lesson learned!

Thanks for all of your good input.

Submitted by DataAgent on March 17, 2010 - 10:43am.

"I told these people that I wanted to meet their dog and that I would do a credit check. They offered me a credit check they had "just had done". I said no, I would run my own. They changed their mind!"

Congrats. You learned the cheap way. I wish I were so lucky the first time I played landlord.

Submitted by 4plexowner on March 17, 2010 - 10:47am.

I always did the background check as well - it will turn up legal issues like evictions

I had a 'nice' couple apply for one of my units - they were very upfront about their finances and the fact that their credit wasn't pristine - I told them my main criteria in that regards was no evictions

I asked them point-blank, "Have you ever been evicted?"

"Oh, no, we've never been evicted"

Background check showed they had been evicted three times - when I called them to turn them down they wanted to waste my time explaining the evictions

I assume they thought I wouldn't check

Submitted by 4plexowner on March 17, 2010 - 10:56am.

another 'fun' interaction with potential tenants

two law students checked out OK on the credit and background checks - I was ready to rent to them and we met at the unit to sign the rental agreement and exchange keys / checks / etc

when they saw the rental agreement they made up some BS story and left

the only thing I can figure out is that they saw they would be renting from my LLC and not me as an individual - they were probably planning a trip-and-fall accident / lawsuit and knew they couldn't easily play that game with an LLC

~

this snippet is from another website - it pretty well sums up my feelings after 8 years of being a landlord:

"Problem is, most people get where the whole business of dealing with Tenants (largely deadbeats and scumbags) and local/state laws that favor the tenant and screw the landlord just, generally, makes them puke. "

Submitted by poorgradstudent on March 17, 2010 - 5:03pm.

I don't actually have a lot to add except the rental market moves *really* fast. It amazes me that in a world where you normally have to give 30 days notice I regularly see apartments put up for rent signs and people moving in less than 2 weeks later. Most property management companies are looking for someone to move in *right now*, not in 2 weeks or 30 days. It's tough to avoid at least some double-rent overlap when moving.

Submitted by Hatfield on March 17, 2010 - 5:42pm.

Here's one: applicant was moving from Arizona. She listed prior apartment management company's manager, but the company was now defunct. Googled and found out, yep, management company in fact was defunct. But the manager had an unusual (Polish, I think) name, so I Googled her and found her phone number. Rang her up, explained who I was and why I was calling. Again, the Nolo press book explains what questions you can and cannot ask. You can ask whether they remember the tenant, the length of the tenancy and how much the rent was, whether the rent was paid on time, whether they gave proper notice, whether they left the place in reasonable condition, whether they'd rent to that tenant again, etc.

So here we go. "Do you remember X?" I ask. "Oh yes, I remember her!"

"Can you tell me what the rent was?" "Intermittent," she said. (I actually meant the *amount* of the rent. This was a much better answer, though!) "Excuse me?" I said. "The rent, it was kind of intermittent."

"I see. Well, let me ask you this then. Would you rent to this tenant again?" She said: "I'm sorry, I'm not going to answer that, I think I've said too much already."

I said, no, thank you very much, you've told me exactly what I needed to know and I really appreciate your doing that for me.

I've also had tenants list their mom as a landlord reference. Give me a break, whose mom is going to say anything bad about them.

So far (knock on wood), I've been very lucky with tenants, but part of that I think is a result of screening very carefully.

Submitted by Hobie on March 17, 2010 - 6:59pm.

The cop angle certainly makes you want to let your guard down. Especially with permitting a 'police dog'.

Good job for smoking out the true person.

Submitted by 4plexowner on March 18, 2010 - 7:01am.

more fun with tenants

tenants seem to think their security deposit should cover the last month's rent - it doesn't seem to matter that they signed a legal contract specifically stating that this is NOT the case

one of the games the tenant will play is to make sure there isn't enough money in the checking account to cover the last month's rent check - long before you can collect on the bad check they will have moved out

some of the ways to prevent this situation:
- collect first and last month's rent up front along with a security deposit (most people don't have this much money available so you will severely limit your pool of potential tenants doing this)
- make the security deposit significantly more than one month's rent - by at least $500 - this gives the tenant an incentive to pay the last month's rent since they will lose the $500 otherwise

if you end up with a bad check from a tenant here's a potential workaround: take the bad check to their bank and deposit enough cash into their account so the check will clear - if you can deposit $300 and cash a $1200 check you will be far better off than trying to get a judgment against the tenant - a collection agency will only give you half of what they collect IF they are successful at collecting

the bank won't tell you specifically how much you have to deposit - you have to say something like, "if I deposit $300 will I be able to cash this check?"

most likely, by cashing the check you will cause the tenant to bounce a whole string of checks before they realize what has happened - at $15 to $45 per pop for bounced checks, their attempt to get over on the landlord becomes expensive quickly - I only had to do this a few times and each time it was young tenants (twenty-somethings)

~

on a related note, NEVER accept partial payment for rent or a security deposit - if the tenant doesn't have full rent on the due date serve them with the three day pay or quit notice - if you accept partial rent you are stuck with them for at least another month and they may or may not ever pay the remaining balance - likewise with paying the security deposit in chunks - once you let a tenant move in they are in control of that property - what is your recourse if they choose to never pay the remaining balance?

Submitted by Hobie on March 18, 2010 - 7:16am.

4plex - thanks for sharing your knowledge. Great advice.

Submitted by rhea_s on January 23, 2013 - 3:15pm.

I am hoping to be first time landlord soon. As per recommendations here I did get the Nolo book.
Please recommend which service to use for credit check. Also there are so many different kinds of tenant screening packages. What kind of service should I use?

Submitted by Hatfield on January 23, 2013 - 11:12pm.

For the credit check I used simplescreening.com last time. Seemed to work OK. IIRC you need to download a a consent form for the tenant to fill out, and you fax it back. Or maybe I just used the NOLO consent form, I don't recall at the moment. But you have to send them some form of authorization and they email back a link to the credit check. Pretty painless.

Submitted by rhea_s on January 24, 2013 - 10:11am.

Thanks Hatfield.

Submitted by flu on January 24, 2013 - 10:37am.

rhea_s wrote:
Thanks Hatfield.

I just use experian connect for credit screening

http://www.experian.com/connect/index.html

They enter information there, pay for the credit report. You get notified to view the credit report.

As far as background check. If your prospective tenant works at a large company, chances are as condition of employment, the company already did the background check for you.

So you would just need to have tenant give you proof of employment at that company.

If your tenant happens to volunteer the information they are on H1-B (because you definitely can't ask for that info)...then you should know government has already done a background check for you and same for the employer that employs them.

Submitted by SD Realtor on January 24, 2013 - 10:47am.

There are plenty of quality tenant screening services online. I would also stress to ask for a few months worth of bank statements and reconcile those statements with what the tenant claims as liabilities and income on their application. I find that to be a much better measure of their ability to pay rent then any credit report.

Submitted by thejq on January 24, 2013 - 12:51pm.

I use http://www.youcheckcredit.com/ to check for credit. You need to register as a landlord first. They have many packages for background check. There're standard rental application and lease agreement forms from the internet. I use the ones provided by California Assoc. of Realtors (CAR). Depending on where the applicants from, there're free court searches for both civil and criminal records. In SD county, http://courtindex.sdcourt.ca.gov/CISPubl... . I check this first, before wasting money on credit reports. There's also a useful website for these type of questions. http://www.biggerpockets.com/forums/52-r...

Good luck.

Submitted by rhea_s on February 2, 2013 - 11:35pm.

Thank you all. Currently working on getting property ready! I am not a member of CAR so don't think I can use their forms.

Submitted by Hatfield on February 3, 2013 - 11:36pm.

4plexowner wrote:
collect first and last month's rent up front along with a security deposit (most people don't have this much money available so you will severely limit your pool of potential tenants doing this)

The Nolo press book strongly advises against calling any part of the security deposit "last month's rent" because the tenant will likely take that literally. It also creates an ambiguity should you later raise the rent during the tenancy.

In California the security deposit cannot exceed two month's rent (CC § 1960.5(c))

Get the Nolo press book. It's 30 bucks well spent and has all the forms you'll need.

http://www.amazon.com/The-California-Lan...

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