All Forum Posts by: Austin Thompson

@Casey S. With that parent's child, do you know if you have any emails/calls with them about the reno work being done? Maybe something from the occupying tenant saying they're aware of the reno work and understood that it'll be done in time?

If so, I'd let the parent know that 1) the tenant was aware and did not contest to the reno work being done. and 2) it is ultimately the tenants' decision on if they would like to terminate the lease (assuming they're 18 and signed themselves). They're 18 and it's their decision as a legal adult. Additionally, that clause protects Tenants from entering a home when the lease starts that's uninhabitable due to repairs/damages/etc. Since this occurred AFTER occupancy was granted, and they agreed/acknowledged repairs being done (if you have that record), a judge will most likely tell them that they were aware and agreed to it and they're still held to the lease terms. Can't terminate a lease due to buyers remorse. 

If they try to push further then it may be best to refund the pre-paid rent (which is what it sounds like your lease states) and refund the deposit they personally paid. Since everyone is on a separate lease just take that loss and find a new tenant for a fresh start. This precedent set by the parent and starting on bad terms is just going to get worse and worse as the lease goes on. Best to cut your losses now. It sucks to lose that money, but most likely worth it for the headaches, bad worth of mouth to other students, etc that you could be facing ahead. 

@Greg H., while the rent of the entire place is $2,400, they're only responsible for their $800 portion and only eligible for reimbursement on their $800. If the other tenants complained and asked for a concession or lease termination then it'd be based on $2,400. 

Judges interpret laws, a judge can always disagree with our interpretation. But playing strictly by the books the concession based on their 1/3rd of the rent times the square footage of unusable space lines up with what's is a legally required minimum. If a judge disagrees then they disagree and they'll tell you what they require you to pay.  

Ultimately this is a sucky situation and shouldn't have happened (reno being done before a lease is signed, a timeline on repairs, repairs being done sooner so there aren't concerns before move-in, etc). 

@Casey S., how you'd like to set up the coming year with your tenants is going to be the deciding factor in what you'd like to do. Without knowing your relationship with the tenants and how you'd like to be, the prorated "constructive eviction" method I stated above is a good starting point of knowing what they're legally entitled to. You can always offer more if you're looking to maintain a good relationship. 

@Casey S. Awesome! 

So looking at that information, with purely cosmetic repairs being done to the rest of the home, and the only "uninhabitable" space being on bathroom under reno, then I'd recommend counter-offering their termination with a partial rental refund comparative to the unusable space. 

Let's say the home is 1,500 square feet. With their 1/3rd of rent being $800. And the bathroom being 60 square feet. Meaning they pay $0.53 per square foot per month. Times that by 60 square feet for the bathroom, they pay $31.80 per month for that bathroom space. Divide by 4 weeks, $7.95/week, times 3 weeks for unusable time, $23.85. They legally have only lost out on $23.85 of space over the repair time. Offer them that $23.85 (or whatever your math is) as the partial rent refund for the "unlivable" space. Per law, that's the EXACT amount they paid for that space and they're able to get that amount back. Nothing more since the rest of the home is habitable and a second bathroom is available. The space was legally habitable, but we can sympathize with a second bathroom being unusable, so why pay for it? (Think of it that way).

Don't forget to mention that while you are more than happy to refund the rent for the space that is unusable, patching holes and painting is purely cosmetic and does not result in the space being uninhabitable. To make it easier to understand for them, anytime someone does painting or patching holes in their own home, they don't completely move out and set up shop in a hotel until it's done. Therefore, it's not uninhabitable. 

They should quickly realize that fighting over, $23.85 isn't worth it. Especially with school starting in a week, do they expect to find a new house, new roommates, sign a lease, pay a deposit, and move-in all within that short time frame? I think they're throwing their weight around to see what they can get out of you. And the mom is probably just stressed thinking the home won't be ready in time. 

Sympathize, offer what they're legally able to receive back, and wait for their response. All of that combined should help them realize they're making a mountain out of a molehill and things aren't as bad as they seem. 

I've dealt with a lot of college students and co-signed parents (I managed a lot of college rentals in Downtown Charleston, which has The Citadel and College of Charleston). It looks like you have multiple issues going on to work through so I'll try my best to help out. Sorry for the ranting!

For the repairs during an active lease. Are you charging them rent for the summer months? Even with an August 12th occupancy date? Since the lease started May 1st, even if they're not living in there right now, they can move in whenever they want. You may have put yourself in a bad spot by having a property under reno during an active lease. What would you do if one of the Tenants decided to move in tomorrow? There's a gutted bathroom and various reno work throughout the home. Legally you can't stop them from moving in regardless of the condition of the home.

For the mom trying to get out of the lease. Is your lease a Tenancy in Common or a Tenancy in Severance? Basically, did they all sign the same lease, or did they each sign their own individual lease? If they signed individually, then you may be legally required to refund their deposit and remaining pre-paid rent. If they signed on one lease together, then all tenants must agree to release them from the lease. An updated lease would need to be sent out removing their name from it and all remaining tenants must accept the responsibility of the full rental amount. Most likely, they don't want their rent to increase because one wants to back out. So they'll be stuck in the home until everyone agrees to release them from the lease. That takes the responsibility and liability off of you. 

Lastly, did the parents sign the lease agreement too? And is their child also signed on the lease agreement? If the parent isn't signed on the lease, then the parent is unable to make that decision. Their child is a legal adult signed into a contract. Per law, the child is the only one who can make that decision. If the parent did sign, then you need written documentation of their request to terminate from both of them. 

Don't let the parents push you around. I understand they're doing the best for their child, but their child is an adult and, legally, must be included in these communications and is ultimately the decision-maker as they are the person living there. 

Moving forward, I'd recommend not starting a lease until the home is renovated, cleaned, and move-in ready. To prevent these sort of situations. I'd also recommend that guarantors apply and are approved by you, but do not sign any paperwork. If a guarantor asks, just let them know you have their information on file to contact them in case the tenants don't pay, but legally, the tenant is fully responsible. This prevents you from being able to go after a guarantor in collections or filing an eviction against the guarantor, but it allows you to tell the guarantor that you can legally only talk to the tenant. Preventing the parents from butting in like this. They can talk to their kid all they want, and tell their kid what to do. They just can't tell you what to do. 

It's a sticky situation to be in, but depending on how the lease is set up you may be able to get through it pretty quickly. And hopefully this helps with planning for your future leases! College rentals can be stressful, but I've found that as long as you are open and upfront with college students, they're pretty understanding and flexible if a problem comes up!

Credit scores aren't really that great of an indicator of creditworthiness. Honestly, getting a history of their accounts/payments/etc gives you a much better view than just a score. We ask for 600, but a score below that isn't an automatic denial, we may just ask for some more documentation. 

We run applications on a 4-point system:

- Credit over 600
- Criminal/Eviction Background Clear
- Homeownership/Positive Landlord Reference
- 2+ Years of Employment History

If they meet all 4, then great! They're approved on a 1-month deposit. 

If they meet only 3 of them (let's say their score is below 600), then we'd ask for additional income documentation (like their previous year's tax paperwork to show their full yearly income). There's also a $200 Credit Approval Fee that covers the further research into their credit history and additional screening with added documentation. 

If they meet only 2 of them (credit below 600 and a negative criminal background item, like writing a bad check) then we'd charge a 2-month deposit. 

If they only meet 1, then they're denied. 

Being able to run the applications in this manner really helps ensure that each application review is as far detached from personal feelings as possible. Makes it a very straightforward and fair process for anyone and everyone. 

I used to be a PM that worked in the North Chas/Downtown Chas areas, and I lived in Park Circle for two years. In my opinion, the best area for investing is anything north of McMillan and east of Rivers. 

The Horizon Village community just north of McMillan has had some recent construction come up. I left before they finished so not too certain of pricing, but I've been seeing that area gentrify more and more in my two years there since Park Circle residents are bleeding to the south of PC for availability and affordable pricing. My place there went from around $70K in 2012-ish to $130K when I moved in 2018. (3bd/2.5ba/1,200sqft)

It's a more up-and-coming area, but the area around Sumner Ave may have some decently priced options with little pockets of newer homes to help with rising your rental rates and home values. I managed a few properties on Sumner Ave that had decent rental rates and attracted great tenants. Minimal issues with the neighborhood (one break-in, but that was during a hurricane after tenants evacuated). 

Hope that helps!