When In Doubt,
Talk It Out!

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:

Welcome to this week’s adventure. I’m Krista and I’m here with Jonathan. Jonathan, how are you doing today?

Jonathan Forisha:

I’m doing great. I’m ready to jump in. Let’s go, both feet. Okay. What do you have for us?

Krista Reuther:

Okay. So, this fun little story comes from Washington. Our poster is on Reddit as 420 Throwaway Ack. The title of this story is Dropping Rent? Question mark?

Jonathan Forisha:

Oh, you don’t hear about that very often. No, you don’t.

Krista Reuther:

So inherently, a first time Washington landlord has come to Reddit for advice. 2023 was their first year being a landlord. Mozzles to you. And they love their tenant. So they want to know, should they drop rent, given how high it is in their area, they know that rent will not always be that high in their area.

But they’re like, do I get ahead of this by dropping it now? I really love my tenant. Like, what do I do? Which is a really refreshing question. It’s really nice to see somebody who’s asking if they should lower that price to make sure that they’re matching the market or not. But I do have some thoughts.

Jonathan Forisha:

Yeah, I do too.

Krista Reuther:

So my first thought here is just, no.

Jonathan Forisha:

What’s your first thought? My first thought is also no. So even just bringing this up with our audience of landlords, I’m sure you’re thinking, why, why drop rent? I’m not running a charity.

This is a thing that people say sometimes, which is true. You are running a rental business. So you don’t need to drop rent unless there’s some reason to do so. But it doesn’t seem like there is necessarily a reason here, aside from they like their tenant.

Krista Reuther:

Yep, that is the main reason that they have picked out. But I am curious, what are reasons to perhaps drop rent if somebody were to stumble across them?

Jonathan Forisha:

Yeah, if you use a tool like the one that we have on our site to try to determine the right market rent for your rental and you’re finding that you are way, way, way high and maybe you don’t have a luxury rental that could justify that kind of price, then you should probably drop it. The really telling thing would be if you are advertising your property trying to find a tenant and you just can’t get one. If people say, I’m totally interested and then they see the price and they say, never mind, I’m going to look elsewhere, then your rent is probably too high. But that’s not what’s happening here.

Krista Reuther:

No, great points. I think those are definite signs to look out for because again, you need your rental to be priced in a way that encourages people to rent it, right? That is the whole shtick that’s how you make money. But exactly as you said, that’s not what’s going on here.

In fact, this person is just saying, hey, I really like my tenant. I know that prices aren’t going to be this high forever. Do I get ahead of the curve and do I lower them now? To which again, I would say no. But to expand on it, if your tenant hasn’t come to you saying, hey, I need rental assistance, I can’t make this work, it doesn’t make good business sense to lower the price for fun. Right? This tenant has not come over and said, hey, landlord, I’m really struggling to pay rent.

Is there anything we could do? In that case, it’s up to the individual’s discretion. If you want to have a different kind of payment plan, maybe they pay twice per month, maybe you lower the cost altogether.

Completely separate conversation. If instead we want to celebrate and capitalize on the sentiment that this is a really great tenant, as the comments suggested, you could ask the tenant if there are any home investments that would make them want to stay longer or if there’s anything that you can do as a landlord to make their stay more comfortable. They mentioned things like maybe you ask them if they want a Nest camera. Maybe you ask them if they need some kind of renovation done to make it even more comfortable for them to stay longer.

Because long-term tenants are gold. Especially this, it sounds like they’ve had a really great relationship and you want to make sure that you’re keeping them on. Even a really small gesture such as giving them a handwritten card that says, hey, I’ve really appreciated you being my tenant and maybe 50 bucks to a local restaurant goes a long way in communicating the same message that you were trying to with a rent reduction without harming your business. Plus, if you buy a gift card for a tenant, you can write that off as a business expense.

Jonathan Forisha:

In general, if you are not getting pressure from the tenant to lower rent, if they are able to afford that rent and they’re happy paying that rent, and if you’re just wondering, should you drop rent just for peace of mind to know that what you’re selling is worth its price, then yeah, make some home upgrades.

Make it an even better deal at the price that you currently have set. Sounds like you really like your tenant and it sounds like your tenant’s pretty happy, too, based on what we’ve got here.

Krista Reuther:

Yeah, good on you. Yeah. Don’t shake up the ship. Say thank you and remind them that you’re happy that they’re there and you hopefully talk to you if anything pops up and you’re good to go. Do you know who’s really moving in? You can, using TurboTenant’s comprehensive tenant screening report. Your applicants will even cover the tab. Get started today at landlordpod.com.

Jonathan Forisha:

All right, Krista, I’ve got one for you. Shoot. This post is by OutThisWorldLikeTang on Reddit and the title is, Landlord Sold My House No Warning. So basically, this tenant is complaining that their landlord sold their rental property with them still in it without any prior notice. Ouch.

That’s a big no-no. They say the new landlord wants more money and they also threaten to evict. The old landlord apparently didn’t fix anything. There were lots of roaches.

It was in bad condition. And this poster says they intend to talk to their lawyer, but they wonder, would a lawyer even care? And they also bring up what happens to a security deposit when the property is sold.

So we can tackle that in a moment. And they also say that they’re being accused of unpaid rent. And they have no receipts to prove that they did or did not, in fact, pay that rent.

So I will just very quickly tackle that one. Use TurboTenant for rent payments. We give receipts to everyone. Tenant, landlord, all of its in your account, don’t end up in this kind of situation.

Now let’s tackle the other stuff. So the landlord sold the property with the tenant in it. There’s nothing inherently wrong with that. How should they go about that process though?

Krista Reuther:

As the landlord, you want to communicate with your tenants about what’s going on with the place where they live. All the time. I mean, really, just communicate, communicate, communicate. Typically, there’s some kind of language in the lease that dictates what will happen in this situation because generally speaking, So, I’m just going to say that a kind of rental property sale like this is something that landlords are planning out in advance. It’s not very typical for someone to just show up on your doorstep, offer you a big old bag of cash, and you just sell it right from under your tenants. That’s not, could it happen? Yes. Maybe. Bags of cash are in fashion, but is it going to happen? Likely not. It’s probably something that’s going to be planned out.

If it’s something that’s planned out, that clause in the lease should dictate everything that needs to happen from how much notice you have to give your tenants to if you’re going to be helping them in any regard in terms of waiving a month of rent or otherwise expediting the process for them to find their next place to live. That’s one part. That’s the first part. That’s the first part.

There are a lot of different parts here. But let’s say something amazing has happened. The bag of cash appears on your doorstep and Jonathan says, sell me a property today and you do it. You then need to talk to your tenant really fast because if you don’t, you’re going to create a really difficult situation that’s more contentious than it has to be because they’re going to feel like you’ve betrayed them. So have a conversation with them. Let them know that the situation has just popped up. You aren’t expecting it, but you are going to move forward.

This is not you asking for permission. This is just filling them in. You want to give them details about who the new owner is, what kind of records you’re giving to the new owner, their rent payments, their security deposit, et cetera, how to contact the new owner. Also when someone comes and purchases rental property that’s occupied, they are equally beholden to the original lease as the first landlord. So they can’t just come in and say, shoot, I’m jacking up rent $500 and you owe it to me tomorrow. That’s illegal because you signed a contract for the property and the lease stays with the property, not the owner. But by having this conversation, you smooth it out, right?

Jonathan Forisha:

Yeah. So the lease, looking at their original post, I think a lot of the questions do go back to the lease. As most things do, go back to the lease. Making sure everything is outlined in your lease. For instance, what happens when the property is sold, if the property is sold? Obviously, you would use that as a rubric for how to deal with this situation. But the transfer of the property, the old lease could have ended at that point and they could have started a new one with a new landlord.

It doesn’t seem like that’s what happened. So in that case, the security deposit counts for the new landlord, just like it did the old one because it’s the same lease, right? Having clear expectations on that and the fact that because it’s the same lease, you cannot just raise the rent for fun. All of that could be solved with communication. In fact, most problems that you’re going to face as a landlord can be solved with communication. Yes.

Krista Reuther:

When in doubt, talk it out. Leaving your tenants in the dark in this kind of situation is going to make them feel very defensive when it comes out because guess what?

They are going to find out that you sold the property at some point. This is not a secret you keep forever. And then they come to the internet and they’re really upset about it. So just save yourself the headache, save them the headache.

Jonathan Forisha:

And then there’s something else in this post that they say, they plan to talk to a lawyer, they ask, would a lawyer even care? Yes, because they’re in violation of their lease, it sounds like. But I think before that happens, making sure you’re communicating with the landlord, sounds like old landlord and new landlord on, hey, these parts of the lease agreement that we both signed are being violated and starting from that point. Yeah.

Krista Reuther:

Just see what kind of compromises you can come to and more specifically how you can do right by your tenant. Yeah. Yes. Again, you’re selling the property, you are getting a net benefit from selling your property and the tenants are just along for the ride. That’s right.

So trying to just let them know what to expect can go such a long way. There are also a couple other interesting tidbits in here that I’d love to tackle. So starting with the rent payments situation where the tenant is not sure if, well, it sounds like they’re being accused that they have not made rent payments when they have. Whenever possible, please don’t pay for rent and cash.

Don’t do it. It makes these kinds of situations really, really challenging because if you’ve at least paid via your bank account or on a credit card, you can go back to the source and track it and say, okay, this is where my monthly rent was deducted. So this means I made a payment.

But if you are making payments in cash, you don’t have that same thread. You could maybe try and argue, look at this that was withdrawn from my account on this day before the rent is due, but that doesn’t hold up in court. So please, please, please just pay your rent in a way that’s trackable.

Jonathan Forisha:

Cash is really easy to lose. It’s very easy for a landlord to say, well, you didn’t pay at all. I’m missing a few bills or for the tenant to say the same thing. I’d paid it all.

No, you were $200 short. It’s hard to prove that unless you have videos of the actual transfer of cash happening and everybody counting it every time. Who wants to do that every month? Don’t use cash. And on that note, checks are also not great. It’s really easy to lose a check. Yeah, please.

Krista Reuther:

We are in 2024. Welcome to the digital age. I say this with love and respect. Please pay your rent in a way that’s trackable. That means don’t use cash. Checks are also very iffy. Go online, pay through your bank directly, pay on a credit card, pay with something that you can go back and prove that a payment was made.

Jonathan Forisha:

Yeah, and make sure you get receipts. That could help in this situation.

Krista Reuther:

Yes. So similarly with rent payments, the other piece of this that comes up is the security deposit and what happens with that. It’s a question that we see all the time. And just as you alluded to, it follows the property. So your security deposit should have carried over. It should be in the same realm, carried the same way where you don’t have to worry about it until you move out. If the new landlord is giving you any grief or they are trying to get you to pay an additional security deposit, or if they’re just saying that they don’t have the security deposit, that’s bub kiss.

You need to tell them that it should have carried over with the lease and to get in contact with the original landlord, maybe have a nice conference call. And if it’s legal where you live, maybe record the conference call. I’m very passionate about recording laws. It’s a personal passion of mine.

Jonathan Forisha:

Yeah, Kristen records everything. I really do. It’s difficult to have any kind of conversation with her because you’re being recorded.

Krista Reuther:

Yeah, I’ve got an archive of you just saying silly stuff. I know. But really, you want to just make sure that if this does go to court, you have all of the tools at your disposal to prove that you’ve been a good tenant and you’ve been doing what you’re supposed to be doing. You’ve paid your rent, you paid the security deposit. How that’s being handled after the fact is none of your business. That’s on the landlords to figure out their business. But I’d hate to see you get penalized for something that somebody else is doing. Yeah.

Jonathan Forisha:

And on the landlord side, again, make sure you’re communicating. Make sure you’re falling back on that lease agreement if there is anything that’s not, for some reason, outlined in your lease agreement.

Like for instance, what happens if I choose to sell the property? Well, that’s a great time to talk with your tenant and to come up with possibly a lease addendum that tells you this is what’s going to happen. The lease is going to transfer to the new owner. That means security deposit has been covered. Because again, same lease. That means no increase in rent payments without a lease renewal. Just make sure you have it all in writing. Beautifully said.

Krista Reuther:

And as one final note, whenever we’re talking about legal situations, make sure that you know your local laws because some states actually require you as the landlord to disclose where the security deposit is being held down to the address. And so if the new landlord is going to be moving it to a new account, a new bank, you need to relay that information to the tenant, whether that’s you or whether that’s the new landlord. Either way, you have to let the tenant know. So stay up on your laws, communicate, communicate, communicate, and you’ll be golden.

Jonathan Forisha:

Whether you have one door or a hundred, TurboTenant’s all-in-one landlord platform helps you maximize your property management business. Sign up for a free account today at landlordpod.com.

Krista Reuther:

Landlords, we know them. We love them. But not all of them are great. That’s why we tackle the worst of the worst in the landlord special. Landlord special. Today’s landlord special comes served up to us from ICT 8715 on Reddit. They ask, how does Indian food differ from Bangladesh food? If you suspected we’re going to be talking about racism, you are absolutely correct.

Nailed it. This Californian landlord is asking their peers, had a previous experience with Indian tenants where they’re cooking using lots of spice. Oil and curry left a very strong odor all over the kitchen cabinets, walls, etc.

The cabinets and counters were all kind of sticky. It’s a question. He’s not sure. Is Bangladesh cooking slash food similar? Anyone with real life experience with this? Thanks in advance.

Jonathan Forisha:

If they were asking, how does Indian food differ from Bangladesh food? Because they were cooking it themselves or they were just checking out a new restaurant? That’d be great. But they’re not. They’re trying to decide who should live in their rental unit. And that’s not okay. Don’t do that.

Krista Reuther:

Don’t do that. Race is one of the seven protected classes under the Fair Housing Act. If you need more information about that, we talk about it all the time because it pops up in really innocuous situations and then there are really overt situations like this. As a landlord, you should not be considering someone’s race as a qualifying aspect to them getting into your rental. Point blank. Yeah.

Jonathan Forisha:

Questions you should ask. Can they afford the rent? Do they have stable income? What did previous landlords think about them? And when can they move in? Not their race.

Krista Reuther:

Unless tenants are cooking illegal substances in the kitchen, you shouldn’t give one flying hoot about what they’re doing in there. Don’t be racist. Don’t be racist.

Jonathan Forisha:

Well, that is it for this episode of Adventures in Landlording. Make sure to subscribe on your podcast Player of Choice and on YouTube. If you have any feedback or you want to share your own adventure in landlording, check us out at landlordpod.com.