How To Find Out What Liens Are On a Property

Property liens can be problematic for a wide variety of reasons.

They tend to be discovered during the sales process and must be cleared before the sale will be allowed to proceed.

Some jurisdictions will automatically notify property owners when a lien is filed, but this isn’t always the case.

If you think your property might have a lien on it, then here’s how you can find out.

1. Check Your County Recorder or County Clerk’s Records.

Many of these records are online so they can be instantly searched.

You’ll need to find the specific county website that applies to you.

If you cannot locate the website, then you’ll need to stop by the office in person and ask for the records that pertain to your property.

Online options are usually free, but in-person options tend to have an associated fee.

2. Look At Your Parcel.

Whether you’re looking at the paper file or an online listing, you’ll need to go through the Parcel ID to look at the history of the property.

There will likely be a heading called “Liens” to locate.

It may be under the “Book” heading or could be listed under property taxes.

Select the tabs or open the file up to see if there are any liens that are listed.

3. No Liens Listed Doesn’t Mean They Don’t Exist.

Liens can sometimes exist on a property even if they aren’t in their proper place because of a misfiled document.

Go through the entire “Book” section of the file and look for specific language about a lien that may be present to see what turns up.

Look for anything that may be associated with a creditor, even if it doesn’t actually include the term “Lien.”

4. Use A Search Service.

Many online real estate agencies today offer a free property report for prospective buyers to determine if there is a lien present.

Just pull up the property in question and you’ll get the information that you need.

Knowing how to find out what liens are on a property will help to save you a headache later on during the sales or ownership process if one exists.

Use these tips to avoid surprises and you’ll be able to find and/or clear a lien effectively.

How to Make Sure Your Favorite Tenants Stay

Having to replace a good tenant can be very expensive.

The final costs of replacing a tenant can easily exceed $4,000.

Accordingly, it’s very important that you try to hold onto your favorite tenants for as long as possible.

Offering competitive rental rates and keeping your property in good condition are obvious requirements in this effort, but consider these five suggestions for extra steps you can take to keep good tenants signed on.

Offer a Longer Lease Renewal

If you normally offer one year leases, try offering a two year lease (or even longer) the next time your favorite tenant is up for renewal.

While this is technically a market gamble for both of you, from your tenant’s perspective it will seem as if you’re offering them the opportunity to avoid rent increases for the next couple of years.

This will encourage their loyalty to you and the property.

The income stability of a tenant with a good payment history can often outweigh the potential downsides of missing the opportunity to increase the rent for a few years.

Give a Lease Renewal Gift

The small things matter, and that can be especially true when you’re trying to keep a good tenant.

The next time a tenant renews their lease, offer them a renewal gift. It doesn’t need to be much, and even a $50 gift card to a fantastic local restaurant can be enough to make a tenant appreciate you.

Pair this with a small gift for the holidays and you’ll generate even more goodwill.

Give Them Opportunities for Feedback

It’s important to make sure your favorite tenants feel that their concerns are being noted, and this requires more than simply waiting for them to call with a problem.

Be proactive about communicating, and actively reach out to them from time to time.

If you’re renting a multi-unit property, make sure to have a comment box in a common area, along with a placard that reminds tenants of your contact information.

It’s also a good idea to send them a letter two or three times a year letting them know that you’re available to discuss any concerns that they may have.

Offer an Apartment Update

Part of the appeal in finding a new apartment can be that vacant apartments have often been newly renovated, or at the very least given a new paint job and touch up.

To recapture this feeling for your favorite tenants, particularly if they’ve been renting for several years, offer them an apartment update for their next lease renewal.

This can be a simple repainting, but it’s also a good opportunity to accomplish two objectives from things you were planning to do anyway.

For example, instead of simply stating that you’re going to replace their stove (if you were already planning on doing so), tell them you’re doing it because they’re a good tenant and you appreciate them.

Offer a Cleaning Service

In the same vein, offer them a visit from a cleaning service when they renew their lease.

A good, deep cleaning can make a difference that is just as dramatic as an actual renovation.

Tenants will feel like they’ve genuinely stepped into a brand new apartment, but one with all the comforts of their familiar home.

Cancellation of Debt on Rental Property

There are a lot of unique tax circumstances that can hit an investor at any given time. One of the most common issues that landlords face is a cancellation of debt on a rental property. The removal of a debt is a good thing and it brings a sense of relief, but that’s not the end of the story. A debt cancellation is viewed by taxing authorities as earned income. In many circumstances, this must be reported at the end of the year and it can increase tax liabilities.

Mortgage Forgiveness Does Not Apply To a Rental

Many homeowners have been able to get out of large amounts of debt through the foreclosure process, deed-in-lieu, or through short sales thanks to the Mortgage Debt Relief Act. The only problem is that many landlords believe they can take advantage of this law, but they cannot. This income forgiveness does not apply to a rental property.

Here’s an example of the income liability that you’d be facing at tax season. Your rental property has a mortgage for $200,000 and a value of $250,000. You can’t get a tenant and so you can’t make the mortgage payments. The home goes into foreclosure and you lose the rights to the property because the bank takes it back. They sell the property for $165,000 on the open market and then forgive the rest of your mortgage.

Your total income that must be reported: $35,000. This is because having a lien holder taking possession of a property does not automatically remove a loan. Some landlords have also found this out the hard way as well. Instead of having the debt forgiven, they’re finding collection notices in the mail.

There Is One Exception To This Rule

The only time a rental property does not need to report a canceled debt as income is when that debt is $600 or less. In this circumstance, not enough income has been generated to warrant the filing. The same is true for income that is earned through traditional means as well. As long as the initial amount threshold is never met, then the money does not need to be reported.

When would a landlord have $600 or less in a canceled debt on a rental property? A forgiven utility bill is the most common place this is seen. Discounts or debt forgiveness from repair personnel would also potentially qualify for this action.

The only time a landlord would be able to have their mortgage debt canceled and the income forgiven is if they are living in the home as their primary residence. In this specific circumstance, a portion of the income or even all of it may qualify for debt forgiveness without the phantom income charge on taxes.

The cancellation of debt on a rental property can relieve a landlord of their primary responsibility, but that only lasts until tax season rolls around. Know how much income you’ll need to report and plan your tax payments accordingly so that you aren’t surprised by the final bill that becomes due.

Safety Options for Single-Family Units

Your rental property is an investment.

And there are a few subtle ways to protect this investment, such as getting homeowner’s insurance.

However, it’s also important to think about more direct ways in which you can physically protect your rental properties from burglars and vandals.

Here are three options for protecting your properties and your tenants:

Alarm Systems
Alarm systems use sensors and codes to protect your buildings.

The sensors will alert the authorities when a door is opened or a window is broken.

Codes entered onto keypads can change alarm settings and turn the alarm on and off as your tenants come and go.

Sensors
The sensors included in alarm systems must be installed.

This cost of installation can vary significantly depending on the type and number of sensors used.

Some sensors can only measure when a window or door has been opened, whether by a tenant or an intruder.

These less expensive sensors throughout the home won’t alert tenants to dangers such as carbon monoxide, fire, flood, or broken windows.

The more expensive sensors can detect significant risks to your tenants and property.

They can also alert your tenants when there is motion detected in the home.

For example, someone may sneak into a home while the alarm isn’t armed.

They then may hide until the tenants are asleep.

The intruder may even watch from their hiding place as someone enters the code to disarm the alarm so that they’ll be able to disarm it before they start stealing valuables.

They can them disarm the system, take valuables out of the home, and rearm the system.

This scenario is possible for a system without motion detectors.

However, with motion detectors, as soon as they intruder began to move from their hiding place, the sensors would trip, the alarms would sound, and the tenants would be alerted.

Gated Entry
Another option for tenant and property safety is gated entry.

This entails having a strong gate constructed all around the property line with just a few entry points (for instance, one in the front, one in the back, and one on the side), for tenants to use.

The tenants would need a key card or gate code to gain entry onto the property.

The Gate
The gate you choose would need to be high enough so that no one could jump or climb over it.

Yet, you’ll want to monitor the height, because costs of installing the gate increase as the height goes up.

Also, for aesthetic purposes, gates that are very high tend to make residential properties look like prisons, and this may turn off potential (or even current) tenants.

Video Surveillance
Criminals may be less likely to steal from or damage your property if there are cameras visible on the land.

If they understand there is a greater risk that they will be captured because they are being videotaped, they are less likely to take the risk of getting caught.

Playback and Monitoring
You may not need to have a specific security professional viewing the security cameras of a single-family home throughout every hour of the day.

There are ways to digitally record and store various amounts of video so that you have it on file and can play it back to see who spray-painted a garage door or stole a laptop from a home.

Since most people notice an act of vandalism or theft has taken place soon after it happens, you may opt to store video that covers a limited date range.

Based on the property you’re protecting, its neighborhood, and your budget, use this information to make a decision about the best single-family unit security options for your rental situation.

Keeping your property safe protects the longevity and the value of the land and structure that you have invested in.

3 Dangers of Unscreened Tenants

Your tenant might be a great person at heart, letting down-on-their-luck friends and family couch-surf while they get back on their feet.

They may be caught up in a whirlwind romance that has their significant other staying at the property more often than not.

Whatever the situation is, you end up with a complicated situation to handle.

A guest staying behind the reasonable time span you define in the lease agreement is essentially an unscreened tenant on your property.

You might not think it’s the biggest deal in the world, but there are some very real dangers unscreened tenants bring to your property.

1. Unknown background
You don’t know anything about the person who is living in your property.

When you bring a tenant onto the lease agreement, you probably check their credit and criminal background to ensure they can afford the property and they won’t use it for illegal activities.

You don’t have that reassurance with a friend or family member that the tenant brings into your property.

The tenant may assume that their friend or family member is trustworthy, but some people are very good at hiding bad behavior to get what they want.

You don’t want to kick out a good tenant because they won’t get rid of an unscreened visitor who stays past the lease agreement terms.

You also don’t want to risk your property becoming involved in illegal activity.

If the original tenant is interested in the guest staying on a long term basis, talk to them about screening the new addition to the apartment.

They need to go through the same screening process the original tenant does to ensure everything is on the up and up.

You don’t necessarily need to add them to the lease, depending on the situation, but you do want to do your due diligence to protect your property.

2. No security investment in the property
The unscreened tenant doesn’t have anything tying them to the property except the tenant that is on the lease.

They don’t have a monetary investment, so they don’t have a direct incentive to keep up on maintenance and cleanliness.

If they are staying for a significant amount of time, they add to the wear and tear of the property.

They also run the risk of damaging the property, whether through negligence or malice.

3. No consequence for disruptive behavior
Your unscreened tenant also doesn’t deal with any consequences for acting disruptively.

They aren’t the ones who stand to lose their apartment when they get into arguments on the front porch, hold loud parties, or ignore noise complaints coming from the next door neighbors.

That’s all on the on lease tenant, who may not realize just how badly the unscreened tenant is behaving.

Avoiding Unscreened Tenants
You have no way to stop unscreened tenants from getting onto your property.

After all, you can’t prevent your tenant from having guests.

What you can do, however, is restrict exactly how long the tenant’s guests can stay before they need to leave the property.

If you aren’t often at the apartment, you won’t necessarily know there’s an unscreened tenant on the property unless neighbors complain.

However, it’s important to get this policy in writing so that you can enforce it.

If the original tenant refuses to adhere to the lease terms, you have grounds to remove them from your property before a serious situation occurs.

How to Legally Tackle Skipping Tenants

Dealing with tenants who skip out on their lease can be a very frustrating endeavor; however, there are some steps that a landlord can take to recover the money that is owed to them. As a landlord, you have a right to collect money that is owed to you when a tenant leaves the rented property prematurely. A lease agreement with fixed terms protects you from tenants who skip out on their remaining rent. They owe you the rent on that lease for the duration of the lease period or until you are able to rent out the property–whichever comes first. It does not matter whether the tenant gave you notice or they vacated the property in secret; the process of collection is the same.

Create a Documentation File
It is paramount that you keep written documentation of communication between you and the tenant. If the tenant provided you with written notice that they were breaking their lease agreement, include that letter in their file. If the tenant did not provide notice but left in secret, simply type up a short note that explains when you discovered that the property had been vacated.
To achieve the best results, stay organized and detailed in the records that you keep throughout the process. Be sure to record dates, times, and phone numbers associated with any conversations that you have with the tenants. You will need all of this information when you attend the court hearing.

Send a Written Notice to the Tenant
Send a written notice to the tenant to remind them that they are responsible for paying the rent until the end of the lease or until you find another tenant. Be sure that the notice you send expresses the fact they are not only still responsible for the rent, but they must pay the rent on time in accordance with the lease agreement. The notice should also include clarification that you will pursue legal action if the rent is not paid as required under the lease.

Inspect the Property
When a tenant provides notice that they are leaving before the end of the lease, inspect the condition of the property as soon as possible. Complete an inspection checklist and note any damage that has been caused by the tenant. You will also need to take pictures of damaged items, but normal wear and tear should be excluded from your list.

Prepare the Property
Make the necessary preparations to lease the property again. Once it’s ready for rental, begin advertising and interviewing potential tenants. You will also need to keep copies of any ads you post and the receipts and costs associated with those ads. You should place this information in the file with your other documentation.

Notify the Original Tenant of the Total Amount Owed
Once you have rented the place or the lease has expired, you will need to send the tenant a notice of the total amount owed. Make sure that you have identified a deadline by which the money must be paid. Let them know if the money is not paid by that time, you will be forced to file a civil suit for the purpose of collecting the money that is owed to you.

If you don’t receive the money by the deadline, you will need to visit the county clerk’s office to file the suit and have a hearing date set. On the date of the hearing, take all of your documentation with you. Once you present it to a judge or justice of the peace, it should be a quick judgment. Not only will you recoup the money for the lost rent, but the judge will most likely make the tenant cover your court costs as well.

Minimizing the Damage Done to Your Property

Normal wear and tear on a unit is… well, normal.

Depending on how long the tenant lives within your house or apartment unit, you’ll see wear on carpets, on walls, and on appliances.

This is all just a part of life in a person’s home, but there are certain things you can do to minimize the damage even before you choose your tenant.

This will help when it’s time to turn the property over.

The shorter the turn around period, the better your income.

There are many ways to protect your property, but protecting for beyond-normal wear and tear (even if it’s not done maliciously) begins during the advertising/screening process.

While certain groups are protected by law that does not mean that you cannot be picky over your next renters.

You can’t market your rental to ‘singles’ or ‘families without children’, of course, but you can make other choices that will help keep your property in better shape.

Smokers

Smokers are not currently a protected class. Indoor smoking can cause damage the the paint on the walls and to the carpets and make it difficult to eradicate the smell even after the tenant has moved out.

You may be required to paint over nicotine stained walls and do a deeper clean on the unit than you would have with a non smoker.

Many landlords are marketing their properties as ‘smoke free’ now.

Smoking will be prohibited inside these units, and you may choose to only accept applicants who do not smoke at all.

This will also help with renting the property again when it becomes time, as the new applicants see that your property is smoke free and they don’t have to worry about lingering smells.

Pets

Unless the applicant is requesting to keep a service animal, a pet is not a protected class.

You’ll want to put some thought into how you want to approach pets, though, because while they’re not protected many renters do own them and you may risk cutting off a significant number of potentially excellent applicants from your pool to choose from.

Though some landlords prefer to keep pets out of their property entirely, some choose instead to limit the breed, size, and number of the pets they allow in.

Meeting the pet is also an option you may choose to entertain as well. You can tell a great deal about the animal from the meeting, such as how well they behave and listen to the owner. You may also choose to charge a pet deposit and/or pet rent to cover any potential costs associated to the clean up.

Irresponsible Tenants

This one is going to be a bit harder to detect, and you won’t always be able to pinpoint it.

There’s a difference in people who live with a bit of disorganization and those that simply do not take care of the property.

When a tenant signs a lease with you they are agreeing to take care of the property as their own.

They are meant to keep it clean and maintained.

There are a couple things you can do to try to catch tenants that might cause real damage to the property before you ever sign the lease with them.

The first is to meet them in person.

Sit down with them, talk, and discuss what they’re looking for.

This won’t always give you a clear view of their habits, but it might.

You may also wish to follow up with their prior landlords.

Check and see how they left the last two or three properties that they lived at.

Were they left in the same condition as received, save the wear and tear? If so, then there’s a better chance they’ll take care of your property as well.

Regular Property Inspections

Granted, this won’t help you catch the problem before you sign the lease, but may help save you money before a small problem grows into a big one.

Make sure to abide by your local laws and give your tenant the appropriate amount of warning before dropping by so that you don’t encroach on their personal space.

You should be able to see any signs if they’re not living up to their end of the lease or if there’s a small maintenance issue that could do real damage if left unattended.

In the end these inspections help both you and your tenant so that the home is safe and secure.

How To Get Rid of Squatters

Your tenant has abandoned the rental property and you haven’t realized this as the property owner.

You’ve been sending out the notices to pay or quit because you haven’t been getting the rent, but the tenant has literally moved out and left the property vacant.

During your inspection of the property to see what is going on, you notice that there are people living in the home that shouldn’t be there.

Those folks are squatters.

Squatting is a fairly common practice. If they haven’t established a tenancy, then knowing how to get rid of squatters is as simple as calling local law enforcement officials to take care of the situation.

If the squatters have established tenancy, however, then you’ll need to officially evict them from your property.

What Happens If a Previous Tenant Left the Power On?

A home is considered to be occupied if it is supplied with power and water.

Squatters don’t have to be actively paying the utility bills of a rental home in order for them to be legally defined as a tenant.

As long as there is no hiding the fact that they are living in the home and the utilities are available to be consumed, most law enforcement officials will look at you if you’ve called them and apologize because they can’t do anything about it.

This means your first step with squatters who are considered tenants is to evict them.

You’ll need to follow the same process that you would with any other tenant, but with one exception: instead of sending a notice to pay or quit, you can send them a notice to terminate tenancy instead.

Landlord/tenant law will dictate how much time you must give the squatters to leave.

Some jurisdictions allow as little as 72 hours. A few go up to 60 days.

If you cut off the utilities to the home of a squatter who has established tenancy, you could be fined, the squatters could sue you, and you might wind up starting the eviction process all over.

Just legally evict them, even if the utilities are in your name, because it’s the cheapest overall cost you’ll face.

Most Squatters Aren’t Going to Go to Court

As long as you have followed the proper procedures according to your landlord/tenant law for eviction, you’ll be able to file for a court motion to proceed with the eviction if the squatters don’t leave the property.

Many will just move out when they receive the first notice, but a few will stick around to be legally evicted.

Once your notice to terminate the tenancy has expired, file a court motion and receive a court order for the eviction.

The squatter will have a chance to respond or defend themselves, but most don’t appear in court and you’ll receive a default judgment.

This judgment will allow the local sheriff’s office to conduct the eviction.

They will remove the people from the premises with a 72 hour notice.

You will then be able to take physical possession of the rental property once again and begin to make repairs as necessary.

You must act immediately whenever squatters are discovered because many jurisdictions will view a 30 day delay as acceptance of the living arrangements.

This would qualify the squatters to be on a month-to-month lease instead, which makes the eviction process even more difficult.

Follow these tips and your local landlord/tenant laws and you know how to get rid of squatters.

How to Set a Late Fee for Rent

If you’ve just picked up a rental property and are creating a lease, then after you decide how much rent you want to charge, you’ll want to decide on late fees. Some landlords don’t charge a late fee for their rent. Others have a flat charge that is assessed if a rental payment is overdue. Sometimes a percentage of the rent is charged as an additional fee. Which is right for you? Many of these choices are already set for you. Landlord/Tenant laws typically dictate a maximum amount that can be charged in late fees. It is generally up to 10% of the rent that is paid each month or a flat fee maximum.

Should You Even Be Charging a Late Fee?

The issue with a late fee being included on a rental agreement is that it allows someone extra time to stay in a rental without actually paying for that privilege. An eviction procedure cannot even begin until the grace period for the late fee has expired. Let’s take two examples for consideration. 1. Landlord A has a flat that he rents for $700 per month. The lease clearly states that rent is due by 5pm on the 1st of the month. He does not have a grace period or a late fee. This means he can file a Notice to Quit or Pay on the 2nd of the month right away in the morning. If the tenant doesn’t pay, with a 3 week average time for eviction, he can have a paying tenant ready to go for his flat by the next month. 2. Landlord B has an apartment that he also rents for $700 per month. The lease states that rent is due on the 1st of the month, but that there is also a grace period until the 5th of the month where no late fees will be charged. After the 5th, the lease states that $70 late fees will be assessed and rent will be due by the 8th. This means that Landlord B cannot start the actual eviction procedures until the 9th of the month. 3. The benefit of setting late fees is that you’ll be able to offset some of your costs that come with the collection of overdue rent. The detriment is that if you have a tenant who is in a rental and isn’t paying what is due, it can be 10-14 extra days of not receiving any income from the rental property.

Late Fees Can Sometimes Be Charged as a First Expense

Depending on your landlord/tenant laws, it may be possible to charge a late fee as a first expense. This means that you could take any rental payments that are received from a tenant and apply them to the late fees first. In the example above, let’s say Landlord B gets paid rent on the 7th of the month for $700. This landlord could then apply the $70 late fee first, meaning that the tenant is still out of compliance on the lease because the full amount has not been paid. An eviction proceeding can still begin. Late fees can be a delicate balancing act. Some landlords may choose to ignore late fees and just start the eviction process immediately. Others may choose to include late fees as a possible way to earn extra profit. Know what your legal limits are before you begin, be consistent with your policies, and you’ll have an overall positive experience.