Tuesday, February 5, 2019

Rising Seas Are Lowering Massachusetts Home Values

New reports show that rising sea levels are drastically lowering Massachusetts property values. Boston's Seaport hasn't been affected by flooding this year like it was at the start of 2018, however new reports have come out displaying how rising seas are hurting New England property values. The report, first published by New York-based First Street Foundation, a non-profit that studies rising sea levels, revealed that New England homes have dropped more than $400M in value due to tidal flooding and rising sea levels.

First Street Foundation studied 2.5 million properties throughout Massachusetts, Rhode Island, New Hampshire, and Maine coast lines, ultimately determining sea levels had accounted for $403.1M in home price depreciation between 2005 and 2017. Massachusetts faced the greatest amount of property loss, with an estimated $273.4 in lost value. Furthermore, property values are expected to continue decreasing from rising sea levels, unless adaptation and precautionary measures are being taken to stop it. The study stated that homes next to, but not yet in, flood prone areas are still highly susceptible to the damages and depreciating home values brought along from flooding and water damage.

Currently, Boston real estate leaders are going through several storm resiliency studies to determine the best way to prevent $80B of liable commercial real estate from getting damaged by regular flooding in the future. Boston Mayor Martin Walsh revealed a comprehensive plan in October that requested more private-public partnerships to build and protect the city around rising sea levels and flood damage.

Monday, February 4, 2019

How to Deal With Difficult Tenants

Every landlord's goal is to have ideal tenants who always pay rent on time, properly maintain their residence, follow the rules, and continuously renew their lease. Unfortunately, being a landlord involves dealing with all types of tenants, not just exceptionally great ones. Even by following a strict screening process and writing stringent lease agreements, you will inevitably come across difficult tenants at some point, such as those who: 

  • Fail to pay rent on time 
  • Damage property 
  • Sublet without your permission 
  • Cause general issues 

Difficult tenants can bring harm to your reputation and business. In Massachusetts, being a landlord is especially a challenge because the laws and rules are nearly all slanted in the tenant's favor. Fortunately, if you have a solid plan in advance to prepare yourself for troublesome tenants, you can handle tough situations smoothly and prevent problems from spiraling out of control. Taking the time to learn the following important legal knowledge will help you address any future negative situations with troublesome tenants:

1. Tenants not Paying Rent on Time 

When addressing tenants who are behind on their rent payments, you must always maintain composure and professionalism. Communicate with the tenant in person and in writing, reminding them of the consequences of paying rent late, including any late fees. Always save written documentation in case you need to bring the case to collections. 

In Massachusetts, the grace period for a renter must be clearly defined in the lease agreement, including when, where, and how the payment must be made. A landlord cannot begin the eviction process within the grace period defined in the lease. Late fees are also required to be defined in the lease agreement. According to Massachusetts laws, late fees and/or interest charges may not begin until 30 days after the rent payment is due. If the grace period expires and no payment is made, the landlord can begin the eviction process. Landlords are required to first provide you with 14 days "Notice to Quit". If the tenant makes a payment within these 14 days, the landlord can no longer continue the eviction process. 

2. Tenants Suddenly Abandoning their Lease

When you find out one of your tenants has suddenly abandoned their apartment and moved out, it's important to understand the law on property abandonment. You have the legal right to pursue unpaid rent and any additional fees the security deposit does not cover. Ensure that you document all efforts made to communicate with the tenant and keep receipts of any necessary repairs that were made. If your efforts to collect the rent back turn out unsuccessful, you may file your case with small claims court or hire a collection agency to track down your tenant. Consider reporting the tenant to all major credit bureaus, which will negatively impact their ability to secure another apartment rental. 

3. Property Damage 

If your property has been accidentally or purposely damaged, you must first asses the damages and figure out repair costs. Discuss restitution with the tenant and listen to their side of the story. If the property damage is minor, landlords have the power to retain the security deposit to cover any damages incurred by the tenant. Also consider asking your tenants to purchase renter's insurance, it's extremely affordable and prevents many major problems. 

4. Creates a General Nuisance 

Occasionally you will run across renters who break rules, accidentally or purposely. Examples of common troublesome behavior includes sneaking pets into apartments which are not pet friendly, or having large parties which cause noise complaints and legal worries. Whatever the case is, always begin by confronting the tenant in a respectable and kind manner. Ensure you go over the lease agreement terms and address any concerns or confusions they may have. A responsible property manager should always have an eviction clause in your lease agreement to protect yourself from troublesome situations that persist. 

Overall, having a clear-cut system to handle troublesome tenants will save yourself many headaches and legal troubles. Take the time to prepare yourself and educate yourself on property laws, which will allow you to conduct yourself in a confident and efficient manner. Remember that taking the time and investment to conduct background checks and credit checks before signing a lease often prevents many problems.