Feb 27

From yesterday’s Journal Sentinel on a major heroin and cocaine arrest:

A separate complaint charges six Milwaukee residents with a variety of offenses related to the operation, which was based out of a rented house at 1800 S. Layton Blvd. A woman who lived there told investigators the main supplier paid the rent, car costs and other bills for her in exchange for using the location as a stash house for drugs and money.

http://tldrify.com/7ep 

”Fronting” is when, one person employees another person with a stellar rental history to apply for and rent a unit that the applicant has no intention of living at. Most often it is used by bad guys to acquire a place to do bad things, like sell dope.  We’ve also seen parents and friends front for people who otherwise could not get into our rentals due to eviction or criminal histories.

Screening becomes pretty much useless, unless fronting can be stopped. Law enforcement should look at these cases as felony fraud when used to put someone in a unit that the landlord would not otherwise rent to.  When used to facilitate a criminal act the fronter should be charged with either aiding and abetting the crime or the crime itself – If you drive the get away car while your buddy robs a liquor store and he kills someone, you will be charged with murder.  This should be the same.

In 1996 the Association had met with then D A McCann.  He promised to pursue fronting  cases if documented and presented to him.  Some cases were sent his way, but nothing ever happened.

When John Chisholm first became District Attorney he met a couple of times with the Southside Landlord Compact, a group comprised of small neighborhood landlords as well as many members of the AASEW.   We told him a large problem we were having was “fronting.”  

We had a major drug raid at one of our properties a few of years ago.  We went back over the app to see what we had missed. Everything looked correct. We rechecked the tenant for criminal charges – there were none.  We had done an in home pre rental visit. Notes had shown a woman, two kids in a well kept unit. 

I sent one of my manager to the four family she was living at when she applied to her to ask the neighbors if there was any indication of bad activity.  Low and behold the person we rented to was still living at the house where she lived when we accepted her application.  My manager asked her and she admitted that she was paid $500 a month to rent the house where the drug crime occurred and drop off the rent each month. We gave all of this information to the Police and DA.  She was never arrested. 

At least in the case reported yesterday the fronter was arrest.  Let’s hope this is part of a growing trend.

Feb 02

Over on the ApartmentAssoc Yahoo Group an owner asks the following about guests:

After 13 years of landlording, I have a new challenge: tenants who have “guests” stay 30-45 days at a time, and one guest who stays 5 days each month. I need to establish a Guest Policy.  I am surprised to learn that the California Realtors Rental Agreement does not have a guest policy.  So I am trying to determine what is reasonable.  An attorney told me that the courts typically recognize 14 days per year, per guest, as reasonable. The tenants don’t want any restrictions RE: guests, yet they asked me if I would replace the carpets. They don’t seem to understand that the additional wear and tear, water, trash, septic system use, and the liability of additional people is why Landlords put restrictions on guests.  I would appreciate any helpful feedback from other landlords.  

More important than the things listed by you, which of course are also important, is the fact that you screened your tenants to assure as much as possible a level of behavior and respect for both the property and other people.  

The guest could be just as well behaved as the people you rented to, or they could be ax murdering, drug dealing, sexual offenders who need a place to stay because they burned their last apartment down to spite their last landlord because he kicked them out for not paying six months rent.  You just do not know without having the ability to screen them. If they are a true guest staying for a week or less, then it probably will not be a problem.  But if they are there for months – then it is a problem.

Also some jurisdictions treat the guests as tenants, which means that if the tenant leaves because the guest is out of control the landlord must evict this person they never rented to and never had any information on. 

Additionally if it is a nicer building in a tourist area you have to decide what your policy is on things like AirBNB.  I think most municipalities are starting to have problems with these occupancies, viewing them as an unlicensed and therefor untaxed hotel. 

Here is an article that combines both fears – guest having tenant rights and AirBNB.

Jan 26

 

This past week, taking advantage of the moderate weather, we began our annual exterior survey of our properties a bit earlier than normal. We walk around the exteriors of all the properties to set a prioritized project list for spring/summer 2015.

The neighborhoods we operate in are the near Southside, from just north of National to Cleveland, 1st to 36th.

While the primary focus is reviewing our properties, we also get a good sense of what is happening generally in the neighborhoods.

If this was a rock band I would have called this the “Fresh Mud and New Green Board Tour” It was absolutely surprising how many properties have been bulldozed and how many more properties are boarded and abandoned since doing the fall review in Sept/Oct of last year.

Anyone who tells you the real estate market on the near Southside has or is rebounding from the 2008 housing bubble hasn’t been out much. ;-) I wrote about what I was seeing in the past  and again here.  It is much worse now.

Many of the new board ups are nice looking properties. However as they accumulate city “reinspection fees” and fines they get to the point they cannot be sold and languish until they are stripped of all value, foreclosed upon by the city for taxes and ultimately razed.

But at least the city was able to tack some fees on it. Fees that they never collected because when the City becomes the owner the only thing left to do was bulldoze  them. (The one pictured in the link is now a mud lot).  Many of these are Zombie Houses

We are seeing sale prices in Milwaukee that make Detroit almost look like a healthy market.

The sales below are listed in the Journal’s Recent Deals sales listing

$11,000: 2356 W Becher St – MILWAUKEE (01/06/15)
$4,000: 2328 S 4th St – MILWAUKEE (01/15/15)
$1,000: 1962 S 16th St – MILWAUKEE (01/02/15)
$3,375: 4624 N 29th St – MILWAUKEE (01/13/15)
$2,850: 323 E Chambers St – MILWAUKEE (12/05/14)
$2,625: 2904 N 16th St – MILWAUKEE (11/24/14)
$37,000: 3410 S 1st PL – MILWAUKEE (01/16/15) — a pretty nice neighborhood.

Jan 25

It appears the Metropolitan Omaha Property Owners Association’s lawsuit against their code enforcement will settle favorably for the owners.

1,000 Omaha rental property owners  filed a federal lawsuit in July 2013 alleging arbitrary and capricious enforcement of the city’s housing code.  Speaking to a couple of the owners their complaints are similar to ours, including the city ignoring owner occupied properties in disrepair while enforcing stringently on rental homes.

From the Federal complaint:

The City of Omaha has not adopted any specific rules, regulations, or interpretations of its very broad and general housing code. Instead, the City of Omaha has unlawfully designated the ability to make, interpret, and enforce Omaha housing law (including through unconstitutional means) on a case-by-case basis solely upon the unfettered discretion of each of its code inspectors. The system has no uniformity, consistency, or standard operating procedure and has fostered gross abuses, hardship, and violations of Federal and State Constitutional rights upon Omaha property owners. There are no adequate safeguards or protections in place and Omaha property owners are left without an adequate remedy or meaningful judicial review under State law.

Read the full complaint here.  Link to other case files

The Omaha World-Herald is reporting:

A proposed lawsuit settlement agreement between the City of Omaha and a landlord group faces questions and amendments when it goes before the Omaha City Council on Tuesday.

The agreement would settle a federal lawsuit filed against the city by the Metropolitan Omaha Property Owners Association.

The agreement includes an overhaul of the city’s ordinances and procedures on housing code enforcement.

It also includes a consent decree under which the landlords could haul the city back into U.S. District Court if the city changed those codes or procedures in the future.

 

Jan 18

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I maintain a couple of lists of tenant screening resources.

The purpose of this post is twofold.

  1. To share these resources so any owner can improve their screening
  2. To tap into the knowledge of the readers to improve the lists for the benefit of all who use the list.

One source is WI owners so you can look up the tenant’s current address and see who really owns the property:

http://www.landlordpedia.com/index.php?title=WI_Ownership_records

The other is a list of court record sites across the nation to help screen out of state applicants.

http://www.landlordpedia.com/index.php?title=Screening_resources

Info on the internet changes and moves.  

I would appreciate if anyone has additional resources or finds in active resources that they put it in the comments and I will update the lists for all to use. 

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