God's Money

Transcript

Jonathan Forisha:

Welcome to Adventures in Landlording. Each episode we pack our bags and hit the trail to answer some of the many questions plaguing landlords across America.

Krista Reuther:

I’m Krista and I am joined by Jonathan. Jonathan, could you give us three words to describe how you’re feeling about today’s episode?

Jonathan Forisha:

Oh boy. Uh, three words. Is any words? Any words. Excited. Ambitious. And dragons.

Krista Reuther:

That will tie in, but not to this first story. That’s what we call a teaser. Ooh, a little foreshadowing if you’re in the realm. But this has no shadowing because it’s all about sun damage. So this first story comes to us from Reddit. User is named International Bear. And the title of this post is, Landlord deducted $1,000 from the security deposit for sun damage to the siding of the house.

Let’s jump into this. International Bear says, I just finished a lease with a landlord from hell. They are deducting $1,080 for professional residing of the house due to sun damage. I can’t imagine in what world this would be considered the tenant’s responsibility. Initial thoughts, Jonathan.

Jonathan Forisha:

Well, it’s absolutely the tenant’s responsibility. Why didn’t they turn off the sun?

Krista Reuther:

We’re always saying it, people turn off the sun when you’re not using it.

Jonathan Forisha:

You don’t want the sun to damage stuff, right? So turn off the sun. Yeah. No, this is ridiculous. This makes no sense whatsoever. But why don’t you dig into why this doesn’t make any sense whatsoever?

Krista Reuther:

Okay, sure. So when we have a security deposit, right? There are only certain things that you can actually deduct from it. It’s always the tenant’s money. It’s just being held pretty much to make sure that things don’t go completely awry. However, when there is normal wear and tear, such as damage caused by the sun on the exterior of the house, that cannot be deducted from the security deposit. That is just silliness.

Unless your tenant is literally the sun god Ra and he is directing beams of sun to the side of the house that you don’t have a lake to stand on. Would be cool though. Would be pretty sick. How do you screen a god? We’ll have to cover that next time. But for now.

Jonathan Forisha:

Yes, normal wear and tear, you said it. That is absolutely what applies here. Same thing would apply to carpet that’s been 20 years old that all of a sudden is getting kind of ready. Well, that’s normal wear and tear. People walk on carpet just like the sun shines on the exterior of everything. Of everything.

Krista Reuther:

Yeah. And granted, this is New Jersey, which isn’t known for its sunny disposition. But still, there’s going to be sunshine. It’s not as if the tenant has put something in the window that is concentrating a sun beam and maybe doing some damage internally.

No, it’s external. The siding of the house damaged by the sun could not fall onto the tenant. And in fact, as the comments brought up, the international bear poster here, they actually are well within their rights to go to small claims court and they can ask for double what was withheld from them, which means that not only would the landlord owe them $1080, but they would owe another $1080 plus court fees and attorney fees if this goes all the way through. Wow.

Jonathan Forisha:

And it should be noted we are not attorneys, but I will say this seems like a pretty open and shut case in small claims court. So in the end, not only would this landlord be very silly for trying to deduct money for sun damage. Yes. They could actually lose a lot more money by going through this. Yeah.

Krista Reuther:

That’s why it really pays to know your local laws. Be up to date. Make sure that you understand how you can use a security deposit because, again, normal wear and tear, it’s bound to happen. But when that happens, you could actually take this cost and probably deduct it, whether it’s considered an improvement or a repair. You’d have to make sure that you touch base with your accountant.

I’m also not an accountant. But that is an avenue to get some of that money back where you’re not taking it out on the tenant who has no fault in this situation.

Jonathan Forisha:

Yeah, I’m going to go ahead and say exterior damage will very rarely factor into security deposit being withheld. They’d have to do something crazy to cause exterior damage, like drive a car into the garage or into the front door or something. Deciding on the house. Yeah, there’s not a whole lot that a tenant would likely do. Let’s do something crazy, just hanging up pictures on the outside of the house, just nailing straight into it.

Krista Reuther:

Yeah, or those giant magnifying glasses that have become so popular over the years. Of course, we all have them. We all have them. We all have them. So again, make sure that you understand what your local laws are regarding security deposits so that you don’t end up in hot water and paying more than you actually got for the initial deposit. An unscreened tenant is a potential liability. Don’t let your rental property management business get caught in the crosshairs. Sign up for a free tenant screening report today at landlordpod.com and tell them the podcast sent you.

Jonathan Forisha:

All right, I’m very excited about this next one. This is a story from Reddit. The user is ill-handle-1863. And the title is, tenant wants to pay in gold bars. So already I’m sure you have some thoughts, but let me set the scene here a little more. So ill-handle inherited this rental property from his grandpa. The tenant pays about 2000 a month in rent. He’s an older man who’s been there for over 10 years. He’s had some health issues recently and asked if he could pay rent in a one ounce gold bar, which he referred to as God’s money. The landlord said, sure, if a local coin shop would verify the value. He took it there and the coin shop dealer said it is authentic and he offered to buy it for $2025. He said it was a PAMP Lady Fortuna one ounce bar. Fancy. I guess. It sounds cool. What are your thoughts?

Krista Reuther:

Man, gold bar rent payments. That’s a new one. Yeah. That’s fun and fresh. I would worry. I am concerned.

Jonathan Forisha:

Okay. But not a fan of gold, apparently.

Krista Reuther:

Not a fan of gold in this context necessarily. But I think it’s creative. Sure. I think that’s fun. Yeah. I don’t know if we want rent payments to be creative and fun. If it’s better if they’re very straightforward. What do you think?

Jonathan Forisha:

Well, it’s well known. I aspire to be a pirate one day. Also would be fine being a mining magnate in the late 1800s slash early 1900s. That’s why I moved to Colorado. Apparently I came too late for that particular dream.

Mr. Just by an inch. Just 100 years or so. Gold is awesome. I think we can all agree on that. Right. I’ve never had gold bars sitting in front of me. Do I want them? Yeah. That would be great.

Should they be rent payments? I’m skeptical. So when we dig into the comments, there’s not much skepticism, which is what is very funny to me about this thread. A lot of people are super into the idea of being paid in gold.

Why? Well, when you look at landlords, they’re investors, right? They’re real estate investors. They’re probably also investing in some other stuff.

Maybe they’re investing in gold. Gold does have value worldwide. You could argue it has a lot more intrinsic value to it than our paper money. We’re not here to make an economics argument, but a lot of people were pointing out that gold is never going to be value less. But the thing gold does do is fluctuate quite a bit. So it’s possible that this older man tenant has had the gold a long time. If he bought it during certain periods, like between 1980 and 2011, the gold could be up in value as much as 350% what he bought it at. So in that case, if the landlord is comfortable accepting the gold and if the tenant has, if the gold has increased in value that much, it’s a win-win. It’s a win-win. Except it does introduce another step in the rent collection process. So a lot of this depends on the appraised value for that gold.

And this is where it gets potentially hairy. Is that the landlord had to take it to a local coin shop to get the appraised value. Different coin shops may give different numbers. And somebody username Gringo Grande in the comments has a very lengthy response. This guy really knows gold about PAMP bars carrying a premium and advising that the landlord might get more on the private market. Private gold market? Private gold market. Apparently it does exist.

Krista Reuther:

Okay, run by dragons.

Jonathan Forisha:

Is it just dragons with piles and piles of gold? Yeah, probably. But the point is he could maybe get more money on the private market. But then that means he’s got to go on the private market every month, or maybe he takes a few months of gold payments and then just does it in bulk and goes up to the hilltop where the dragon lives.

I have an offering, you know? That sounds like a lot of work. Other commenters suggest getting a gold test kit to make sure it’s the real deal because apparently there are gold scams. Maybe like gold-plated zinc or something. Shoot. My favorite comment is from reasonable-broccoli0 who said, LOL, all the gold bugs coming out of the woodwork.

Krista Reuther:

That’s pretty reasonable from that broccoli.

Jonathan Forisha:

Yeah, pretty reasonable broccoli. So like most human beings, I find gold fascinating. We live here in Colorado, which was built partially by gold, but actually there was more silver here than gold. Anyway, it’s interesting. It’s shiny.

There’s something lovely about it. But it’s heavy. And it’s not something you can mobile deposit into a bank account. And unfortunately, TurboTenant can’t accept gold and rent payments.

Dang it. You could potentially put it in as an offline payment in your account, but the point is it adds another step to accept rent. The landlord is then getting a gold bar. They’re getting it appraised. They’re finding a buyer for it, whether it’s a coin shop or a dragon.

And then they are taking that money and putting it into their bank. It sounds like a lot of work, especially to do this every month. So I think if the landlord was just looking for a new hobby and really wanted to get into metallurgy and the alchemy of gold bars, particularly Lady Fortuna gold bars, then sure, this would be a fun thing to spend their time on. But if they just want to accept rent, I think I’d tell the tenant to go sell the gold bar and then give me the money.

Krista Reuther:

Yeah, preferably through a reliable system that allows you to track your payments automatically, perhaps like TurboTenant. I’m just going to throw that out there. I would also wonder, how does that shake out if the gold bar is either worth more than the rent payment? It’s not like you could just cut it like a loaf of bread and be like, here’s your portion.

Jonathan Forisha:

It introduces a lot of different factors. It does. And if he does choose to accept the gold bars, there are a few things that he should do to safeguard himself. He still needs to give a receipt for the rent payments. It’s going to be a funny receipt. He needs to take pictures of the gold bars, have all of this documented.

The weight probably would be a good idea to put it on a scale or something. He could even pay the tenant back for excess value to your point, or at least work out what happens in that case. And that’s where a lease addendum would come in. I’m not sure that we’ve had many gold bar related lease addendums made in TurboTenant, but it could be done.

You could do it. So just figuring out with the tenant, you’re going to pay in gold. Apparently you have a lot of gold that you want to give me for rent. Cool. I’m fine with accepting it. Here’s how it’s going to work. And making sure everyone agrees, making sure everything is in ship shape gold wise. Yeah.

Krista Reuther:

Might also have to address how late payment, like late fees are paid. Is that like a smaller gold bar, a small lady fortune? Points. Of course. The doubloons. The doubloons.

Jonathan Forisha:

Yeah, write that in your lease. That’s when your pieces of aid come in. I guess that’s silver. Oh, man. I look forward to gold related comments on this segment. So other forms of payment. It wasn’t that long ago that Bitcoin was unavoidable in the news. I’m sure we had landlords accepting rent and Bitcoin or other types of cryptocurrency. What are your thoughts on that?

Krista Reuther:

I think they’re like shiny IOUs that might never come to fruition and I wouldn’t stake my fortune on them. But I don’t have a fortune to stake. So, you know, not really in my, not really punching into my weight class there.

Jonathan Forisha:

Yeah. We typically advise sticking to the old US dollars. Yeah.

Krista Reuther:

For now it’s reliable. It’s backed by the government. And most people understand what to expect with, you know, a rent payment coming out from a cash or otherwise cash based source. Versus the run around that gold bars create no matter how fun they are. I know I’m visualizing you as a dragon and I know you’d have a good time. But it still would be. It’d be tricky. Okay. It’d be tricky. It’d be worth it.

Jonathan Forisha:

From finding your new favorite tenant automating rent collection, TurboTenant has the tools you need to thrive as a landlord. Get started for free at landlordpod.com today and tell them the podcast sent you.

Krista Reuther:

Landlords are humans and there are great humans and there are bad humans. So in this segment we like to go over some of the mistakes or malintention behaviors of bad landlords. This is the landlord special. Landlord special. This piping hot dish comes to us from Tik Tok. It is served up by my safe lock and the title is Stay Safe Ladies. Let’s roll the clip.

Speaker 3: Our landlord likes to check on us late at night so we’re not partying. As to 22 year olds living alone my roommate and I find it super creepy. So we install this portable lock to keep him from just walking in.

Krista Reuther:

Horrifying. That’s spooky. Yeah. Very spooky. So again, it’s this, wow.

Jonathan Forisha:

Thoughts? This is bad. Don’t be a landlord who does this.

Krista Reuther:

Why Jonathan? Why can’t I do this to my tenant? It just jiggle the knobs at night.

Jonathan Forisha:

Well, you know, there are a few reasons. There’s the covenant of quiet enjoyment which is basically the right to inhabit or use a certain property without disturbance. And this comes along with any sign lease agreement with anyone who’s paying rent to live in a place. Clearly what’s happening here is a violation of that right to quiet enjoyment. Hard to enjoy something when your landlord is trying to break in all the time.

Krista Reuther:

Yeah, yeah. Well said. I think that that’s so important to highlight because even if a landlord doesn’t think about that inherently, it really is baked into every single rental agreement. So please just do not be that person. Do not be jiggling all the knobs. You don’t have to do it. In fact, you’re infringing on your tenants rights when you do and it can be considered harassment. Yes. Also, if you want to go pop by a rental unit, make sure that you are giving proper notice.

It’s going to vary depending on where you live, but it is never appropriate, especially not on a regular basis to be sneaking around and trying to get inside the unit at night. Cut it out. Stop that immediately.

Jonathan Forisha:

And the TikTok said to make sure they weren’t partying. Yeah. Wouldn’t you know before you try the door, unless you’re having a very quiet party, is it like a seance party?

Krista Reuther:

In which case, again, one, do not interrupt a seance party. Are you crazy? That’s how you get haunted for life. Although I do have an article about how to exercise your rental property if there are ghosts in the mix.

So please check that out. But really, I mean, if they are being quiet, you have no excuse to try and regularly jiggle in there to try and get in. Please refrain from jiggling. Do not jiggle.

Jonathan Forisha:

Don’t jiggle. Do not jiggle. What should the tenant do if they are having this very insane situation?

Krista Reuther:

Document, document, document. Specifically, I would reach out to the landlord and say, hey, please stop. I’ve noticed this happening on XYZ dates. The reason you should be documenting is because this is technically harassment, especially if it continues on for a significant period of time.

Jonathan Forisha:

Documentation is your friend. It can prove that there was more going on here than just what you say was going on, or it can back up what you were saying was going on. If it goes to court, if it goes to evictions, having documentation on the landlord’s side or on the tenant’s side, always good.

You nailed it. And if you’re a landlord and you’re not doing anything wrong, then your tenant having documentation shouldn’t upset you because you know you’re in the clear. But if you’re jiggling handles, I’m going to go ahead and say you’re not in the clear.

Krista Reuther:

Not in the clear. So don’t be that guy. Make sure that you are respecting your tenant’s rights, allowing them to enjoy the rental. Is there home for as long as they’re there paying

Jonathan Forisha:

rent?