Every once in a while we get questions from our readers about the finer details of renting. Some are from tenants, others from landlords, and still others from parents, attorneys and agents. Today we’re back with more questions from the mailbag!
Dear RentConfident: My mom is a landlord with a few buildings on the West Side. She still goes door to door every month to collect rent payments. She tracks repairs with post-its and does her accounting in Excel. Her “office” is a crammed with old leases and papers, a firetrap waiting for a match. I worry about her safety every month. How can I convince her to join us in the 21st century? – Paperless in Portage Park
Dear PPP: You may not be able to convince her. It all depends on her business model and portfolio.
Most areas of the real estate industry have embraced the internet with open arms. Brokerages and mortgage offices have largely gone paperless. Lagging far behind them is the rental market. There was a running joke in my old office that you could spot the rental agents because they were the only ones who used the fax machine instead of something more modern like emails or text messages.
Larger property management companies have mostly gone digital with online rent payments, online maintenance requests and e-signed leases, but these services mostly target owners with big portfolios, offering volume discounts for those with 1000 apartments or more. Small private landlords can certainly opt in to some of these services, but when you’re only handling 1-10 units the organizational advantages gained by using an online service may not outweigh its cost.
Further widening the gap between analog and digital in the rental industry is the existence of two “camps” of renters: the permanent renters who have no other choice, and the temporary renters who are in the market temporarily until they can buy out of it. A landlord who serves a clientele that may or may not be able to afford a burner phone will not see much use in accepting online rent payments, but if they accept Section 8 they’ll have to have some means to do so, as Section 8 payments are only made by direct deposit. A landlord serving the Trader Joe’s/Amazon Prime demographic will have tenants that demand online rent payments and complain about their absence, but still must have a Plan B to counteract the tenants who will claim that their rent is unpaid this month because their router is broken.
Somewhere in the middle is your large scale Class C/D landlord who must try – and frequently fail – to please members of both groups while still making a buck. Their rents are the lowest in the city. Their buildings are old and take a lot of upkeep. Their apartments have a blend of students, young professionals and families who will never see the upper side of the poverty line. They must somehow embrace the digital age while still keeping things accessible for those who don’t have access to the web. In their offices you’ll find a hodge podge of answering machines, fax machines, post it notes, check scanners, real scanners, papers and probably a handful of computers. You won’t find a dedicated IT support employee. You will find maintenance workers who speak a Babel of languages who must all be dispatched from a central source, but probably not in the language that tenants use to report their broken items.
It’s also worth considering what’s involved in upgrading computerized systems for property management. Early adopters of property management software were probably in their 30s or 40s when these innovations first came out. It was the mid 1990s. We had not yet gained the future-proofing experience that came with the Y2K bug. If they are still in the business now, they’re in their 60s. Their software probably doesn’t have any means of extracting the data. It may be running on that one lonely Windows XP terminal in their office that can still load up their now 20 year old DOS-based management software. If they want to maintain a paper trail, as they probably should, they would have to manually transfer 20 years of data into whatever new system they choose to purchase, with no guarantee that they won’t have to do it again in a year. Landlords are risk averse by default. Given all the options available for investing their money they chose the least popular, most demanding route because it is one of the few that guarantees growth of your money.
If you really want to get your mom to go digital, we recommend that you start small, and with something that appeals to her way of thinking. For many landlords their first venture into online business is running credit checks on applicants. Start there and then slowly introduce other concepts.
Dear RentConfident: A friend recently moved out if the apartment complex where I live. They had a medium to large sized dog, and paid $100/month in “pet rent.” After move out was completed, property management determined that there was hidden damage under the carpet, which had been the newly installed just prior to their move in fifteen months ago. The manger cut and lifted the entire living room carpet, exposing evidence of dog urine in numerous spots, even though the carpet was clean to the naked eye. Now our friends are being charged almost $700 in damages for that carpet, and they would like to contest it. They believe their pet rent should have covered any damages, and they feel the outwardly clean carpet gave no indication that there had ever been damage. So, why should they be responsible for paying damages on a carpet management lifted anyway? I am afraid contesting this bill could lead to serious trouble, but they think they have a case. What is the real deal with pet rent, pet fees, and pet damages? Inquiring minds want to know. – Puzzled by Pet Fees, Boston, MA
Dear Puzzled: In most states “pet rent” reflects the increased market value of a pet friendly apartment. Damages are covered by pet deposits or pet fees. However, Massachusetts is an outlier. This is because Massachusetts has a unique law that limits the amount a landlord can ask for in deposits to one month’s rent. (Massachusetts General Laws Part II, Chapter 186, Section 15B (1)(b)) This means that if the rent is $1200, they can charge a $1200 security deposit and no pet deposit, or a $600 security deposit and a $600 pet deposit, but not a $1200 security deposit and a $600 pet deposit. The same math applies to up front pet fees applied at move in. However, there are no laws on the books restricting pet rent, which is probably why your landlord has opted instead to charge pet rent. Rather than reflecting a higher market value, that pet rent is really a pet fee distributed across 15 months to skirt the laws.
(As a sidenote, specific local laws like this are one of the reasons why we normally focus on Chicago renting only. We happened to know about this particular quirk because it was quite notorious nationwide when it was enacted.)
Since we’re in Chicago, we had to check Boston area carpet replacement costs on HomeAdvisor. We found that the average cost to install carpet in a 16′ x 16′ area is $1348, with a range of $250 – $3500. It is our guess that your friend’s apartment was substantially larger than 16′ x 16′, and we also would note that the high durability carpet used by commercial property managers is more expensive than the average issue Home Depot stuff. The $1500 in pet rent may already have been applied to the cost of carpet replacement, leaving a balance of $700. This would have been the case if your friend had paid a pet deposit, a pet fee, or pet rent.
While we consider it a debatable choice to replace an entire apartment’s worth of carpet to repair some spot staining, it can be tough to match weaves and dye lots. They may be looking to remove all trace of dog hair, dander, etc to prepare for a tenant with allergies.
If we were in your friend’s position we would ask for itemized receipts for the carpet replacement along with a complete account ledger before proceeding with legal activity.
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