Blog – Protecting the Renter Mon, 17 Jun 2013 16:15:05 +0000 en-US hourly 1 If I’m Renting a Place, How Can I Make My Application The Most Appealing to the Landlord? Wed, 25 Jul 2012 18:24:48 +0000 As you search for your next rental unit and schedule to see inside units and stop by open houses, you are going to find a few that you really like. For those that you decide you would like to rent, you are going to fill out rental application to give to the landlord. This is so they can review your financial position, possibly pull a credit report, and make a decision on whether or not they will rent the unit to you.

That application, and the information on it, is one of the most important items that will determine whether you will be selected to rent the property. The way to increase your chances of being selected is to be ready to fill out the rental application while you are right there with the landlord. This way, you’ve shown a very strong interest in the property, you’ve had a nice conversation with the decision maker, and can convince them that you’ll be a great tenant. So when the landlord leaves that day, they’ll be ready to move forward and rent to you, subject to confirming all the information on your application.

To fill out the application, you need to know what information will be requested. This is just a general list, and different landlords could request different information.

Here’s the information you might expect to have to provide:

  • Basic identification: This includes your name, Social Security Number, driver’s license number, spouse/roommate names, present address, landlord, landlord address and phone number, reason for moving, current rent, prior address, and your current landlord's contact information.
  • Employment information: This includes your salary, dates worked for at your current company, position, supervisor name and phone number, prior employment information, and your spouse/roommate's employment information.
  • Bank account and asset information: This includes your debt, credit card, car payment, and any other bill information, any bankruptcies, evictions, foreclosures, and criminal felonies you may have faced, and the same information for your spouse/roommates.
  • Emergency contact: This should be provided for all tenants.
  • All Information on children or others who will live in the unit.
  • Pet information, if any.
  • Vehicle information: This includes automobiles, trucks, and motorcycles.
  • Personal references: You will need a few of these.

    Those are the items that most applications will request. Now, many people will do a sloppy job of filling out the application, not write legibly, or not fill out the entire application. Those usually get thrown in the trash. So write everything crisp and clear so it is easy to follow and understand.

    You also want to be honest about any credit, rental, or job history issues and you may want to discuss those with the landlord right then. That way, they can understand your situation. You should know that most landlords put a lot of weight and faith in people who are honest about their situations. If you lie, they’re going to find out from your credit report and/or references, and then it becomes a trust issue – they’ll wonder what else you may have lied about on your application, leading to a greater chance that they won't pick you as a new tenant.

    It is also good to have a check or money for the credit application and credit report fee, probably $20 – $40 per person. If you really love the place, and you have trust that the person meeting you is the owner/landlord, you might also want to bring a check for the security deposit – agree with them in writing that they are not to cash it until a lease is signed with you. And make sure to make an agreement for them to return the check quickly if no agreement is finalized between you and the owner.

    And of course, always dress nice, act professionally, follow up quickly with the landlord on questions, phone calls, or emails. Being responsible also goes a long way!

    Due to your smart shopping, you’ll probably find yourself the one getting the keys! Good luck!

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Los Angeles Rental Market Fri, 20 Jul 2012 21:33:00 +0000 Ahhh Los Angeles, the City of Angels.

The County of Los Angeles is one of the largest population areas in the United States, with more than 10,000,000 people in the metropolitan area. Its residents are also incredibly diverse, and the income levels run from the richest of the rich in Beverly Hills, to the poorest of the poor in south central Los Angeles. Then, you have young people living over in the beach areas of Santa Monica, Venice Beach, Manhattan Beach, and Hermosa Beach, while families abound in Culver City, Pasadena, Torrence, Alahambra, and Century City.

But as the renter's market tends to be a young one, we’ll concentrate today on some of the beach areas where younger tenants are renting apartments, condos, and houses.

One of the most popular areas for young people, such as college students up to 30-year-old renters, is the Redondo/Hermosa/Manhattan beach areas. Students from USC, UCLA, Loyola Marymount, and other surrounding universities live in these areas, and the nightlife on Pier Ave. in Hermosa is world class. It’s a full party there on Wednesday, Thursday, and Friday nights at clubs, bars, and restaurants. During the day and on weekends, those same students rollerblade, run, bike, and do boot camp on the picture-perfect boardwalk and sands of the beach. If you want the ideal place to live in your younger years, it’s definitely the south beach areas of Los Angeles.

The tougher part of these areas for young professionals is that most of the employment opportunities are not in the beach areas, meaning morning commutes can take half an hour to 1.5 hours to work. But for many, the trip is worth the while for living in a young person's paradise.

Rental rates in Hermosa are reasonable for the income level of Los Angeles. Rent on a shared house or apartment could run from $900 to $1,500 per person per month, plus utilities. And that’s a very fair deal for walking distance to retail, restaurants, the beach, and all the other wonderful amenities that these beach areas can offer. A typical home would be a unit like this, that's one to two blocks from the beach . It’s a great place to visit too. Come in the summer when the fun is in full swing!

North of the Los Angeles Airport (LAX) are the other major beach areas of Los Angeles – Santa Monica and Venice Beach. Venice is well known as a “muscle beach” that you see on many TV shows . It’s a crazy place most days, and you can see people in costumes rollerblading, weight lifters on the beach, and you can also buy all the gift/junk/funky little knick=knacks you could ever want from the vendors. Finally, Santa Monica is just up the road, and the people there are little more reserved than in Venice Beach.

Santa Monica has lots of employment opportunities. Rents on higher-end units here, on average, tend to be a bit more expensive than Hermosa/Redondo. This is also because there are well-paying jobs nearby, and downtown is close, so one potentially has a much shorter commute.

But within Venice and Santa Monica, you can find all kinds of varied rental accommodations from the smallest and most reasonable studio units to the nicest, fanciest, upgraded condominiums and houses.

Any of these areas are wonderful places to live for the young (and young at heart!) and if you’re still thinking about what you should do with and in your life, you might want to move out to the west coast to check it out. Do this before you put down roots down in life because you really should test the waters before you settle into a "normal" and more "grown up" lifestyle.

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How Do Zillow & Trulia Get Listings, and Are They Accurate? Tue, 17 Jul 2012 16:18:58 +0000 There’s been a lot of noise in the news lately about real estate brokers and/or customers complaining that the listings on Zillow and Trulia are inaccurate, not updated, or just plain wrong compared to the local Realtors Multiple Listing Service database (MLS). As a weekly personal user of these sites, I can tell you that I’ve hardly found a single issue with the accuracy of the data on those sites. In fact, I’ve found gems of information that sometimes are not on the MLS! Let’s take a look at how the listings of properties for sale work and what you need to do to make sure the information you find is accurate.

First, let's discuss how the MLS works. The MLS has been around for decades, although it has only been online for the past decade or so. Realtors who are members of the local association of Realtors work with sellers to get signed listing agreements, which allows them to sell their properties and then post that information onto the MLS so that all MLS members can see the properties for sale. The MLS has the most accurate, up to date, and 100% valid data as long as the real estate agents update the information when the status of a property changes. And the MLS was the only source of listing data before Internet usage was common, so real estate buyers had to rely solely on their real estate sales agent for information about available properties. But those days of dependence are gone!

Now that Internet usage is widespread, websites are springing up to place the property listing data — once exclusive to the MLS — online for all to use. As you are probably aware, Internet listings have become an incredible place to find great data and information to help buyers and sellers review, scan, search, and analyze listings and sales data, helping to make them more educated consumers. And that makes a better real estate market for all parties interested in buying or selling real estate for themselves. Some real estate agents were hesitant at first, and some still are, as per this Financial Times story, but the truth is that more data is better for consumers, even if it isn’t always better for sales professionals.

Anyone, for free, can go to Zillow, Trulia, Ziprealty, Redfin, etc. and search property listings to see what is available for sale, along with prices, pictures, reviews of agents and reviews of the properties. And those sites have more information than is available even on the MLS! Now you might wonder where they get all the information. Well, they get it from companies called aggregators, which in turn get their information from agreements with the MLS providers, brokerage houses, services that provide property default and foreclosure notices, and lots of other places. With all these data streams coming into the aggregator from different software programs, there will inevitably be inaccurate data or missing information from time to time, although I’ve never seen incorrect data myself. And most online sites are updated at least once per day, so it’s likely you will see every listing when you are searching.

As an added bonus, these sites have foreclosure data, which the MLS will not, and they also have listings from for sale by owners (FSBO), and even could have properties listed by an MLS service provider that is from out of the general area. Any and all of that data can give a buyer or a seller additional insight into the market and pricing. And that’s better for consumers!

To make sure the information you see is accurate, though, you will need to confirm the data with your local real estate professional. But you have to work with a Realtor anyhow to offer upon any MLS listed properties, so start interviewing agents to select one that will do a great job for you. And once you get going, use all the tools available in your search, online and off-line! That’s going to get you your best outcome when you are ready to sell or take the property-buying plunge.

Full disclosure: I am one of the Zillow Featured Bloggers – but I believe once you search the online sites you will agree with my findings above.

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What You Can Do If Your Landlord Refuses to Return Your Deposit Wed, 11 Jul 2012 16:19:15 +0000 One of the most stressful parts of renting property is when you move out and have to worry about how much of your security deposit will be returned. Some property owners are very reasonable and will work with you to return most, if not all, of what you are owed. Some landlords, though, are not very reasonable and will try to keep as much of your deposit as possible, so let’s go through some general tips that will hopefully better ensure that you’ll get most of your money back at move out.

First of all, document, document, and document. The best way to increase your chances of getting your security deposit back is to take steps before and during your tenancy to document any property issues that arise, so that you'll have a record of them at move out. If the property was dirty, and there were items broken or stained carpets when you moved in, you need to keep a record of that. You should also email the landlord with the items and issues so he or she can repair them, or at least know that you are keeping records. And if issues arise during your tenancy, like malfunctioning appliances, document those too and alert the owner. This way, when you move out, if the landlord wants to charge you for a carpet stain, broken appliances, etc., you can show him or her the pictures and documentation, proving to them that the issue was the owner’s responsibility to correct, not yours!

Note: In most states, laws are very friendly to tenants, not landlords. This means if you get in a dispute with a landlord and have to take them to small claims court, you’ll probably win. This is especially true if you keep good records and have proof and evidence to support your side of the case. That being said, some owners might have all the time in the world to fight you, and they may even enjoy doing it, so make sure it’s worth the fight because going to court is time consuming.

You also should get a lot more out of your landlord/tenant relationship by being a good part of that relationship. Pay your rent on time, alert the landlord to issues so they can correct them, and do your best to take care of their property. Then, give them adequate notice when you are moving out and schedule a pre-move out inspection with them. This is the chance to do a walk-through and get a list, per your request, in writing, of what they believe you should put in order before you leave, such as cleaning up the yard or repairing and painting a wall that was clearly impacted by your use during your tenancy.

Then, you can get everything cleaned up to their satisfaction, and you'll have a record of what they wanted repaired. This again will help you if you ultimately have to fight them over your deposit.

Realize that landlords get stressed out too about finding a new tenant so they can continue collecting rent to pay their bills, so you want to make it easy, within reason, for them to showcase the unit to prospective tenants. You can help by keeping the unit tidy and agreeing to reasonable accommodations for them to show the apartment. Hopefully, they’ll remember this when they are calculating and deducting from your security deposit.

But let’s say they don’t remember your helpfulness and want to keep a big chunk of your deposit. In most states, they are going to have to give you an itemized list of what they are deducting from your deposit. Google state laws to find out what applies where you live! Then, you can reply, in a professional manner, with your thoughts and opinion as to what they should pay you. With all your documentation, hopefully they’ll give in and/or come to a fair amount as a resolution. This should handle most of the situations and hopefully, that will be the end for all parties. Remember that you might need them as a reference in the future, so keep that in mind when dealing with them.

If they just won’t act fairly, review your thoughts and claims with a friend or two and make sure you are being reasonable. If you are, you can always take them to small claims court. The threat of this will probably make them cave in and just give in to your demands. If it doesn’t, and you take them to court, you’ll probably win if you support your case, but at the end of the whole process, you’ll probably realize that going to court wasted a lot more of your time (and time is money) than if you just negotiated. In the future, you’ll have a little additional knowledge from this time around and each time you move out of a rented apartment.

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How Can I Tell If a Real Estate Deal Is Any Good? Tue, 03 Jul 2012 20:19:58 +0000 If you are thinking of leaving the renter's market and buying a home in the next 12 months, you might be a little hesitant because of all the bad economic information in the news. Well, there's no denying that it is a scary time in our economic history and the past few years have been really tough and painful for many of us, this author included. But thanks to our resiliency as Americans and our desire to make a better life for ourselves, this pain will pass. But in the meantime, what is a potential homebuyer to do to get a good deal?

The first item on the list is to figure out if you even have the ability to purchase a home. For this, you must to go a bank or mortgage lender to get qualified and see how much the lender will let you borrow based on your income, credit score, and assets. Then, you would add that amount to how much of a downpayment you plan to use, and that will give you your purchase price range. So if you can borrow $200,000 and you have $40,000 in savings that you plan to use as the downpayment, you can buy up to a $240,000 property. Now, you can figure out what areas and neighborhoods are within your price range.

If you can’t finance enough to purchase a property that is a good fit for what you want and need, then you should hold off on purchasing and save some additional monies, pay off some debt, or make yourself more creditworthy so that you can take another look in 6-12 months at your ability to buy what you want. Renting in the meantime won't be so bad!

Let’s say you can purchase a home in an area where you would like to live. Now we can figure out what a good real estate deal would be. Quite frankly, it’s a fire sale in the U.S. Prices are way down, interest rates are at historic lows, affordability is the best it’s been in decades in some parts of the country, like in California. But despite all that, it still doesn’t mean it’s a good time for you to buy.

To earn wealth on real estate ownership, you really need to own property for a long time. Five years is about the breakeven point to increase your wealth, so owning longer than that should be your top priority. If you aren’t very sure about whether you'll own the property for a long time, it’s probably not a good deal regardless of the fact that interest rates are low, so you should think hard before you decide to go from a renter to an owner.

You should also avoid properties that are in bad shape, like fixer-uppers. The costs of doing construction these days are outrageous, and properties in bad shape rarely sell at a big enough discount to compensate for all the work that needs to be done. So skip them and buy something in good shape instead.

Additionally, shop around. You are shopping for the most expensive and most complicated thing you will ever buy, so make sure to shop around, know the market, take your time, and find a house you love. That’s the best way to get a good deal – putting your hard-earned money down on a house you love.

The last consideration should be the price. Don’t worry too much about the price, though within reason. Since you’ll be owning the house for a long, long, long time, 20 years from now, what you paid today will be of little consequence. All that equity will have piled up, and you’ll have a smile on your face showing the world that you got a good deal!

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I’ve Had an Insurance Loss, Should I File a Claim? Fri, 29 Jun 2012 20:05:28 +0000 When you have a loss on a peril that is covered by your insurance, like fire or theft, you will need to decide whether or not to make a claim on your policy. Now, if your loss isn’t higher than your deductible amount, you would have to pay for it yourself regardless, but what if the loss is only slightly above that deductible, or what if the loss is your fault? In those cases, should you make a claim and get reimbursed by the insurance company? Let’s run through some issues herein.

The first item to understand is that making claims on insurance policies should really be saved for when you have a major loss. If there is a fire, theft, or other covered peril and the loss is $4,000, or $8,000 or $15,000, those are large amounts and paying them yourself will significantly impact your financial situation. So in those cases, it probably makes sense to make the claim with the insurance company and have them reimburse you for your damages.

But if the loss is small, like $300, you might consider just absorbing that cost yourself and not making a claim. You can and should discuss this openly with your insurance agent. The reason you might want to hold off on filing a claim is because your insurance rates may go up the following year as a result of making that small claim. And if you make many minor claims, your insurance premium will likely be heading north the following year. This is because it costs the insurance companies a lot of money to process claims and they don’t want customers to continuously make little claims, so they might raise your rates in hopes that you will find a new carrier or drop their coverage, if possible.

Now you might think, "Well, I will just switch carriers if they raise my rates." But unfortunately, that won’t solve the problem. Most major insurance companies are part of a network that tracks claims that a person makes on policies. It’s called the C.L.U.E. – Comprehensive Loss Underwriting Exchange and keeps track of claims made by people, like yourself, and on properties upon which the claims were made.

This means that if you try to switch insurance carriers, the new carrier may pull a C.L.U.E. report and see your claims history and decline to offer you coverage, or they might offer you a higher rate on your insurance coverage. You need to beware that the insurance companies are watching you, as they should be. The problem is that those who file frequent claims, and many of those may be questionable claims, run up the cost of insurance for the rest of us. To keep rates lower and competitive against other carriers, the insurance companies avoid offering policy coverage for these repeat offenders, and you could be viewed as a "repeat offender" if you file too many small claims.

These principles really apply to all types of insurance coverage that you might have. Making a claim on an insurance policy should be reserved for when the big one hits and would cause you a significant financial hardship. By taking that approach with insurance, you should be able to enjoy lower insurance premiums going forward in your life. This is because the insurance companies will be glad to have you as a customer and will work hard, via offering you lower policy premiums, to get your business.

So think this through when you have a loss, and remember that you can openly discuss this with your insurance agent, and then you can make the best decision for your circumstances.

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Understanding the Renter’s “Right of Quiet Enjoyment” of Their Property Wed, 27 Jun 2012 00:06:03 +0000 As a renter, you want to have the “right of quiet enjoyment” of your residence since you're paying rent for it each month. What this means, according to, is that you have the right to be left alone, not disturbed, and generally not bothered in your residential unit as long as you are following the agreed-upon rules of the city, community, and your legal lease contract with the owner. But there are several issues that can impact and may be violating your right to quiet enjoyment, so let's discuss a few and explore what you can do about it.

One of the things you may be concerned about is the rules regarding your landlord's access to your property. A landlord can generally enter your property, subject to the lease, to do repairs with notice to you, in an emergency, or when showing the property for sale or rental. It’s very rare that any of these situations would impact your right to quiet enjoyment. However, in some cases, they might, such as if your landlord is not respectful to you, pops by all the time, or enters your unit without sufficient notice.

If you're suffering from this, you might have to pursue a judicial remedy, but you really should try to handle and solve the situation in a diplomatic way with your landlord first before taking any legal action. After all, your landlord may not even know that it is a bother because they may be inexperienced, or have had tenants before that never minded (or complained) about their behavior. So play it cool and try to work it out.

However, even if you plan to discuss this in person with your landlord, keep track of what you consider to be an issue. Then, talk to them about your specific issues in a sensitive and tactful way, and request that they keep some boundaries to make your living situation better. This is probably going to solve the issue most of the time, but if it doesn’t, you might need some assistance from a lawyer or a local housing authority. In this case, keep track of everything, including what you did to try to solve the problem, dates, times, costs, etc.

Quiet enjoyment also means the freedom from repeated disturbing noise. If there is construction going on or other noise issues, the courts would look at the level of noise, the frequency and duration, and possibly what the landlord knew and disclosed to you, the tenant, about the noise.

For example, if the owner was doing construction on another unit he owned in the building and it made a lot of noise that would go on for months, that’s a different story than if a building next door started construction – unbeknownst to your landlord – during your tenancy. Other items would be like if the residential unit was under the airport flight path; it’s really up to you as the renter to notice obvious glaring issues like planes flying overhead or train tracks next door. You can’t blame the landlord for something like that. Barking dogs are another issue that might arise. In those cases, you should consider if it's a new neighbor with dogs, or one who has been there forever, meaning that the landlord should have already known that it could be an issue.

Depending on the specific situation,, you might be able to get the city to solve it via the city’s code compliance policing unit. They might also handle construction noise issues that occur, for example, before 7am or after 6pm. Try to determine the best way to handle the situation and work with your landlord towards a resolution that works for all parties. Take my word for it: 99% of landlords just want the issue solved so they don’t have to waste time dealing with it.

There could also be loud partying or annoying neighbors that could be preventing you the quiet enjoyment of the premises. Repeated noise and disturbances can probably be handled with a simple request to the owner or code compliance. If the situation gets bad or dangerous, though, always call the police first and let them handle the situation in a cool and calm manner. There's no need for you to get involved in an argument.

Luckily, it’s pretty rare for renters to suffer from an issue related to quiet enjoyment. But they do occasionally occur, so as with all issues, be reasonable and work with your landlord to come up with something that will be to the satisfaction of all parties.

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Drought Resistant Landscaping Can Help You Reduce Your Water Bills Fri, 22 Jun 2012 19:42:05 +0000 As water becomes more of a scarcity in parts of the U.S., people are learning to better conserve their use of this priceless resource. One thing that can greatly help with conservation is changing a property’s landscaping from that beautiful lush green grass to a yard that uses more drought resistant plants, or even no plants at all. Lately, more people are going drought resistant with their lawns, and with some beautiful results. Part of the inspiration for this, of course, is that as water bills go up, we look for ways to save. So here are some notes on the issue and some ways you can make a difference for the environment and your wallet.

Now, I’m going to quote statistics and numbers from Southern California areas, but your area may be different. However, these numbers will at least give you some items to consider.

First, the average single family home uses about 130,000 gallons of water per year, with half of that going to exterior landscaping if you have a grass lawn. Grass uses about 30-45 gallons of water per year, per square foot of grass , so if you have a 1,000 square feet of grassy area, it uses more than 30,000 gallons of water each year to stay green and nice.

While water costs vary, in Southern California, they may be around $.01 to $.02 per gallon, which means that 1,000-square-foot grassy area costs $300 to $600 per year in water usage. And it’s not just that, it’s mowing it too! That might add another $50-$100 per month to your bill, causing the costs of maintaining that lawn to add up over time. More importantly, as water becomes scarcer and the population grows, water rates are eventually going to go through the roof. So let’s think through how we can use less water with respect to our outdoor areas.

One negative issue to note is that it costs money to make your lawn drought resistant, and this can cost you thousands of dollars, depending on what you do. And if you run the numbers, you’ll probably realize it’s actually less expensive to just leave the grass in place and pay the monthly costs associated with not making any changes. However, as the cost of water increases, and simply on a “let's work to save the environment” basis, you'll hopefully make the decision to move towards a lower water usage environment.

One option is to replace your grass with fake green grass . The newer types of faux grass really do look awesome, and it uses no water and never needs to be mowed. It does, however, cost quite a bit to install. With professional installation, it can run up to $15.00 per square foot, so that 1,000 lawn area might cost up to $15,000 to redo.But to reduce that cost, you might just replace some of the grass and leave the outside areas as bare dirt or put in some drought resistant plants to fill in the gaps.

Wood chips are also another good option. You could scrape the grass, put down weed blocker paper mesh, and cover the entire area with wood chips. You can do this yourself if you want to save some money, but just be ready to spend a few weekends on the job. As a plus, the metal mesh clamps that hold it in place and the wood chips are going to cost a lot less then the fake grass. You’ll need to drop a few new bags of wood chips on the area each year as the existing ones fade, but they are only about $5 per bag at home improvement retailers.

Another option is to do the same preparation as the wood chips above, but have some nice stone dropped on the area instead of wood chips. They are usually purchased by the cubic yard and dropped by a dump truck at your house. Check the Internet for a local stone retailer. They are a little expensive, but still much less so than the fake grass, and in general, need no maintenance.

Lastly, you could employ any or all of the above and leave some areas as dirt with some natural plants that don’t use much water and grow slowly. Jade plants, ice plants, birds of paradise, lantana ground cover plants, etc. are all lower-water-use plants that can look incredible in the right configuration. You might even want to have a landscape architect design it for you.

But even if you don't want to go and replace your entire lawn, you can still help conserve water and lower your bills by doing a sprinkler check up. You want your sprinklers to hit the grass, work at night when the sun won’t burn off the water, and water the grass just enough to keep it looking nice instead of excessively. Sprinklers are a pain and sometimes the controller units are pretty confusing, but give it a good shot to work towards getting them to use only the amount of water needed for the task. That alone will save lots of water and some money.

Either way, stopping excessive water use is the goal to help the environment and your pocket book too!

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What to Do When Your Landlord Faces Foreclosure Wed, 20 Jun 2012 15:32:09 +0000 With all the foreclosures, short sales, and financially troubled people today, some of you may be renting a property that itself is in foreclosure. So now you may be wondering what your rights and options are, and what you'll need to do in case your property is in default on your loan.

First of all, you don't need to worry about getting kicked out in a short span of time. Most states or cities laws require plenty of notice to the tenants in case of a foreclosure, so check your local laws if needed. And if it is sold via foreclosure, many new owners might happily allow you to stay as a tenant after your previous landlord is out of the picture. So here is some guidance for you – but note, however, that all situations, state laws, owners, and banks may have different rules, regulations, timeframes, and procedures that may differ from what is noted below.

If the property is in default, the owner may not care or do anything to stop the process. But despite this, you are still required to pay him rent because you have a lease agreement with him, even though he’s probably not paying the mortgage. You could plan to move at the end of your lease to a place that isn’t in flux, or you could just stay, though the latter is subject to your negotiations with the landlord on a lease. Staying may not be too bad of an idea either, as it could take a couple of years before the property loan default issue is resolved. In other words, there is no need to stress because you aren’t in trouble either way. However, be sure to work with the existing owner so that if your rental property does eventually go through foreclosure, you can work with the new owner too and resolve the situation.

If the owner is trying to sell the rental property via a short sale, you should keep on good relations with him as well as keep the place in good shape and tidy. Make sure he notes in his real estate listing the term of your lease for any potential buyers because any new owner would have to honor the existing lease until it expires. An investor may buy it and leave you right there as his tenant, so don’t impede the sale. However, also take care to work on a new lease or even property vacancy if that is the new owner’s desire.

Another situation you may find yourself in if your landlord is facing foreclosure is that the property could end up being owned by a bank. In this situation, don't fret, though your lease is technically void. The city or state will still have some protections for you, but the more likely course is that you can stay there rent-free for several months until the bank starts the process of getting you to vacate the unit. They may offer you cash for keys to get out – take it! If you want to fight, they will have to evict you, and I don’t recommend forcing someone to evict you. It goes on your credit reports and will follow you for a long time, so instead, work with the bank towards a resolution that's satisfactory for all parties.

The last situation you may face is if your rental property goes through foreclosure and ends up being owned by an individual investor. This could be a little trickier if they want you out ASAP and take an adversarial approach to you. Your best bet there is to try to negotiate a new lease if you want to stay, and remind them about how you’re already in the property, so they won’t have to make any repairs and won’t have any vacancy regarding rent. If they try to raise the rent after this talk, let them know that you’ll leave as a result, so try to negotiate. If you have to lease, in some states the new owner is required to honor your security deposit, but many may try to get out of it, so negotiate with them or just dictate (talk to a lawyer) that the security deposit serves as your last month’s rent. They won’t like this, but that may be a good option for you. And there really may not be much the new owner can do about that because they have no valid lease agreement in place with you, and your old lease with the prior owner is void at foreclosure. Again, either way, try to work with the new owner to resolve any issues.

Remember, there is no need to stress. Since you have possession of the property, you have a lot of negotiating power to say to the owner how and when you will leave (subject to your being reasonable). If they harass you or threaten you, make sure to contact the police and/or local housing authority or a lawyer for guidance on how to proceed. But overall, working with the new owner will give you the best outcome and the lowest amount of stress in what could be a stressful situation. Good luck!

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What Amount of Renters Insurance Coverage Do I Need? Fri, 15 Jun 2012 20:41:47 +0000 When you shop around and get some bids for renters insurance, they might come in with different coverage amounts and different premiums. It can seem challenging to read and understand the basics of the policy to ensure you have the proper coverage, but it’s actually easier than you may think. Learn how to dissect your policy so that you can make the best decision for your circumstances.

How much coverage you need is actually a multi-pronged question because in your policy, you get several different types of coverage. Those types cover different situations and perils (or losses) that could occur and cost you money. Here are the general categories of coverage that are included in a standard renter’s policy.

  • Personal Property. This covers the cost to replace your clothes, furniture, electronics, and all your other personal property items.
  • Loss of Use. This covers your living expenses if your rental unit is uninhabitable. This includes items like hotel costs, food, and other costs incurred as a result of your being displaced from your rental unit.
  • Liability. This covers if you are sued by another party that is financially injured as a result of the peril that occurred related to your home.
  • Medical of Others. This covers the medical costs of others who were on your property with your permission.

Each one of the above categories will have a maximum amount of coverage that the policy will pay in case there is a loss, so let’s discuss how much coverage you may need for all of them.

Personal Property – A typical renter may have $15,000 to $25,000 in personal property, but of course, that depends on the renter. For example, if you are a management consultant renting a second residence in New York City, and you have expensive clothing, extensive electronics, high end furniture, and so on, you could easily have $50,000 to $100,000 worth of personal property in your rental unit. This means you need to think through how much coverage you really need in case a fire destroys all your belongings. And if you have expensive artwork or antiques with high values and want them to be covered, you need to discuss that with your agent to make sure you are paying for the appropriate amount of insurance. If you don’t have the right insurance, you’ll be out of luck if there is a loss.

Loss of Use – This is pretty straightforward to determine because if there is a loss, your insurance agent and/or an adjuster will review your current rental amount and lifestyle and that will form the basis for what coverage you need. The insurance agent can go over this with you as well as any other options you may have for extra coverage.

Liability – This is a more important one to think through and consider because there are some important options here. A normal renters insurance policy might have $25,000 of liability coverage, according to the Texas Department of Insurance , but that might not be near enough. As you get wealthier and/or if you have a higher paying job, that increases the risk that you might be sued if, for example, someone slips and falls while visiting your home.

If you do get sued, $25,000 is not enough coverage. That won’t even cover your own lawyer's bills at $350 an hour! A typical homeowners policy has $100,000 to $300,000 in liability coverage. Many people get an excess liability policy, called an Umbrella Policy, that bumps that coverage to over $1,000,000. And this is only about $250 per year, so if you have some assets and/or a good job, it'd be in your best interest to get an Umbrella Policy.

Medical of Others – This is usually governed by a standard amount of coverage that the insurance carrier offers. And that standard amount is probably fine because they’ve looked at their past claims and determined the most sufficient amount to cover most situations. Talk to your agent about this issue and make the best choice for yourself.

In thinking through how much coverage you need, the most important items are to make sure you have enough coverage in place for your personal property and for liability protection in case you get sued. It’s really not very expensive on an annual basis to have a little extra protection to ensure you are properly covered. So review your existing policy, your situation and belongings, and get the right coverage that fits for your life's circumstances.

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