When we expose a problem, be it financial or social, we need to make the tenant aware of the consequences. By doing so, we can hold tenants accountable for their actions. When tenants are aware of the consequences and they know they will be held accountable for their actions, we greatly increase the chances that a tenant will not become a problem tenant and repeat offender. If he does, we must insure our colleagues don’t ever get stuck with the tenant. I know then you will not get stuck because all “professional” landlords know the importance of, and take time to verify the tenant’s rental history with current and previous landlords. Professionals also request information from credit/tenant reporting services available. Let me ask you a few questions. Your answers will determine how cooperative your residents are in following your rental agreement, including how well they pay rent and take care of your property. Do you notify your current tenants when their conduct is unacceptable? Do you notify them that the record of their rental performance will follow them? Or do they know they can move anywhere unreported, despite their performance with you? Put tenants on notice that you will let the “world” know about their performance with you. What do you do to prevent your problem tenants from victimizing the next property? Do you throw your credibility away by failing to follow through on your notices? Do you always get a judgment against tenants who leave owing you money or cause unpaidfor damages? Do you try to collect what they owe after they leave? Do you report them to the maximum number of credit reporting bureaus? Do you turn them over to a collection agency? Do you report them to local and nationwide tenant reporting agencies? These are all steps you can take to show tenants they will be held accountable. This simple, powerful, seemingly obvious, but extremely neglected concept of HOLDING YOUR TENANTS ACCOUNTABLE FOR THEIR PERFORMANCE is strongly encouraged by the Apartment
AOA Form No. 180 (Rev. 04/06) Copyright 2006 Apartment Owners Association of California www.aoausa.com ▪ San Fernando Valley (818)9889200 ▪ Los Angeles (323)9378811 ▪ ong Beach (562)5972422 ▪ Garden Grove (714)5396000 ▪ San Diego (619)2807007 ▪ Northern California (510)7697521 L
Owners Association of California (AOA). First you should check an applicants credit and eviction history with AOA before you hand over the keys. If a tenant moves out owing you for rent and/or damages, fill out your free “AOA Tenant MoveOut Report” form that puts their “crime” on a local file. Also, use AOA’s “National Credit Alert Report TM ”. This report allows you to report the amount of money a tenant owes you to Experian and other national credit reporting bureaus (Refer to form on page 3). When the tenant moves out of state, his debt to you follows and other apartment owners across the nation will be alerted to the fact that this tenant is a bad risk. Even if the tenant pays you the debt owed, the blemish will still remain on his credit report (only now reflecting paid). AOA charges only $8 a report for making this valuable reporting tool available to it’s members. This report holds your former tenant accountable no matter where he moves. The end result of not holding your tenants accountable is that they perform without any thought of consequences. The percentage of poor performing tenants continues to climb and the national average for collecting losses from problem tenants is only 1.6%. Colleague, wake up! As landlords, more of us have got to start doing things differently to better our odds. If you told an amateur criminal that he could start robbing banks and get away with it over 98% of the time, he would make armed robbery his career. Likewise, problem tenants, who are not held accountable for their actions, get away with breaking agreements, cause damage, and live rent free, become repeat offenders. You have to admit, with those kind of odds, if you didn’t have high ethical and moral standards, you might even be tempted. I realize that most tenants do work out well. But the small percentage of tenants that cause headaches and financial stress moving from landlord to landlord is growing at an alarming rate. Unless we start holding tenants accountable, more will “discover” how easy it is to leave you high and dry and move right into another property. What then do you do to stop tenants from becoming repeat offenders? Start by putting tenants on notice at the very beginning of your relationship that they will be held accountable for their performance. Also remind them at the very beginning of each year. Don’t just lay down the ground rules in your lease. Also, make the consequences abundantly clear. Let each tenant know that it will not be a simple matter of denying that he ever lived at your property. Inform them you will notify local and national credit bureaus. You will have all performance information put on his credit reports and report him to local and nationwide tenant reporting agencies. By reporting their performance to all these sources, any negative reports will be made available to potential employers, banks, home mortgage companies, and other creditors who they may want to do business with in the future. You let the residents know upfront, that the reputation they establish with you will be with them for many years. It’s therefore important that you only rent to people who have a good credit history to protect! You will be far more effective getting cooperation from residents who are concerned about keeping a good credit record. They are more likely to do what’s needed to avoid negative credit remarks. Especially remind them how such remarks will make it very difficult for them in the future to get a job, rent or buy another home, get a car loan, student loan or emergency medical loan, buy life, home or medical insurance or obtain any charge cards. At the first indication of breaking any lease provisions, serve notice again to current residents, that they will be held accountable for their actions. Their performance will be reported to all the agencies previously outlined, which again will make renting, buying or borrowing very difficult for the next several years. I challenge you and all my colleagues to start putting your tenants on notice and holding them accountable for their performance. If you start doing this consistently with your tenants and truly hold them accountable by following through on what you say you will do, you will have far more cooperative residents and all the rest of us will be grateful. As professional landlords, we will thoroughly check out your past tenants when they come to our door, and we will know from the information you reported, not to let them in. Jeffrey Taylor is Editor of the popular monthly newsletter, Mr. Landlord, which is published for doityourself landlords and landladies. For a free copy, call 18009502250 and mention this AOA article.
AOA Form No. 180 (Rev. 04/06) Copyright 2006 Apartment Owners Association of California www.aoausa.com ▪ San Fernando Valley (818)9889200 ▪ Los Angeles (323)9378811 ▪ ong Beach (562)5972422 ▪ Garden Grove (714)5396000 ▪ San Diego (619)2807007 ▪ Northern California (510)7697521 L
TM
AOA National Credit Alert Report
This form is for the reporting of one person only. Additional occupants and/or other debtors must be completed on a separate form. AOA will cause the information below to be reported to the credit reporting agencies, but does not warrant the time of, form of, or fact of inclusion into the consumer’s credit profile. Any existing tenancies or any debts older than 6 ½ years should not be reported. Please enclose payment of $8.00 payable to AOA for each debtor to be reported. Mail to: AOA, 6445 Sepulveda Blvd. #300, Van Nuys, CA 91411 Your Name/Company Name: _________________________________________________________________________ Your Mailing Address:_______________________________________________________________________________ Telephone: __________________________________________ Fax:_________________________________________ Please Type or Print Clearly Debtor(s) Name(s) Last Debtor Address Member’s Rental Address Prior Address [ ] This is a new report of a derogatory. Date debt originated: _______________ [ ] This is an update of a previous reported derogatory. Amount owed: $_______________ Apt# City Zip First MI Social Security CA Drivers License Date of Birth
The law requires that the consumer be notified anytime before, or within 30 days after, you report a derogatory to a Credit Reporting Agency in substantially the following words: “You are hereby notified that a negative credit report reflecting on your credit record may be submitted to a credit reporting agency if you fail to fulfill the terms of your credit/rental obligations.” Only one notification to the consumer is necessary.
Have you given the debtor written notice that this debt can be reported? [ ] Yes [ ] No Have you tried to collect this debt? [ ] Yes [ ] No Have you turned this debt over to a collection agency? [ ] Yes [ ] No Have you obtained a judgment for this debt? (If yes, the case # is: _____________) [ ] Yes [ ] No Brief statement why the debt is owed: __________________________________________________________________ [ ] Debt Collection Alert Service: Please notify me by mail when an eviction inquiry is made on the above debtor. I will receive the name and telephone number of the inquiring landlord, the debtor’s employment data and a copy of the debtor’s credit reports(s). I will immediately pay the current charge for this service when billed. (Check box if desired) The undersigned declares that the above is true and correct and that the debt reported is a just and due debt of the consumer to the reporting party. The reporting party agrees to report the receipt of any payments and maintain accurate records regarding this debt for seven years and to immediately respond to written or oral inquiries about the status of this debt. I hereby indemnify AOA and the credit reporting agencies from any loss and/or liability incurred as a result of my submitting any false and/or incorrect information. That notice has been, or within 30 days will be given to the consumer that this debt can be reported to a consumer reporting agency in accordance with the credit laws. (See above) Date: _______________ By: _____________________________________________ Membership #: _______________
Your Signature
AOA Form No. 180 (Rev. 04/06) Copyright 2006 Apartment Owners Association of California www.aoausa.com ▪ San Fernando Valley (818)9889200 ▪ Los Angeles (323)9378811 ▪ ong Beach (562)5972422 ▪ Garden Grove (714)5396000 ▪ San Diego (619)2807007 ▪ Northern California (510)7697521 L
I. Reporting Debts to Credit Bureaus
The result: Whenever your debtors apply for credit, their unpaid debts that you report will appear on their consumer credit report and they may be denied credit and/or an apartment until you are paid. How it works: Just fill in the form on the reverse side and mail it to AOA. We will have the debt reported to the credit bureaus. We will have the debtors notified with the legally required notice of the fact that such a report has been made. Attach a check for $8.00 made payable to "AOA" for each individual you report.
II. Debt Collection Alert Service
The result: Whenever an Unlawful Detainer inquiry is processed on your debtors, their debts will appear on their Eviction Report and other apartment owners should deny them housing until you are paid. Also, you will be notified by mail of this event and you will be supplied with a "Debt Collection Alert Report" including the following: The name and telephone number of the inquiring landlord, the debtor's employment data and a copy of the debtor's credit report(s). How it works: Just check the appropriate square on the reverse side for this extra service. The unpaid debt will be recorded in the computer. It is your responsibility to have previously supplied the debtor with the legally required notice that such a report may be made in the future or, to supply such notice within 30 days that such a report has been made. There is no charge to have your information recorded. Your membership account will be billed $6.50 for this service only when you are sent a "Debt Collection Alert Report". You may cancel the service regarding a debtor at any time by written notice to AOA. You are required to maintain accurate records on these debts and to respond to us immediately when we request an updated status. Keep a complete file for future reference. Keep your AOA membership uptodate so that we have current information to contact you when the debtor decides to clear his credit by paying his debt and/or so that you will receive a timely report if you have also selected the "Debt Collection Alert Service". (See the form on the reverse side.) NOTICES TO FURNISHERS OF INFORMATION: OBLIGATIONS OF FURNISHERS UNDER THE FCRA The federal Fair Credit Reporting Act (FCRA), as amended, imposes responsibilities on all persons who furnish information to consumer reporting agencies (CRAs). These responsibilities are found in Section 623 of the FCRA. State law may impose additional requirements. All furnishers of information to CRAs should become familiar with the law and may want to consult with their counsel to ensure that they are in compliance. The FCRA, 15 U.S.C. 16811681u, is set forth in full at the Federal Trade Commission's Internet web site (http://www ftc.gov). Section 623 imposes the following duties: · General Prohibition on Reporting Inaccurate Information: The FCRA prohibits information furnishers from providing information to a CRA that they know (or consciously avoid knowing) is inaccurate. However, the furnisher is not subject to this general prohibition if it clearly and conspicuously specifies an address to which consumers may write to notify the furnisher that certain information is inaccurate. Sections 623(a)(1)(A) and (a)(1)(C) · Duty to Correct and Update Information: If at any time a person who regularly and in the ordinary course of business furnishes information to one or more CRAs determines that the information provided is not complete or accurate, the furnisher must provide complete and accurate information to the CRA. In addition, the furnisher must notify all CRAs that received the information of any corrections and must thereafter report only the complete and accurate information. Section 623(a)(2) · Duties After Notice of Dispute from Consumer: If a consumer notifies a furnisher, at an address specified by the furnisher for such notices, that specific information is inaccurate and the information is in fact inaccurate, the furnisher must thereafter report the correct information to CRAs. Section 623(a)(1)(B) If a consumer notifies a furnisher that the consumer disputes the completeness or accuracy of any information reported by the furnisher, the furnisher may not subsequently report that information to a CRA without providing notice of the dispute. Section 623(a)(3) · Duties After Notice of Dispute from Consumer Reporting Agency: If a CRA notifies a furnisher that a consumer disputes the completeness or accuracy of information provided by the furnisher, the furnisher has a duty to follow certain procedures. The furnisher must: Conduct an investigation and review all relevant information provided by the CRA, including information given to the CRA by the consumer. Sections 623(b)(1)(A) and (b)(1)(B) Report the results to the CRA and, if the investigation establishes that the information was, in fact, incomplete or inaccurate, report the results to all CRAs to which the furnisher provided the information that compile and maintain files on a nationwide basis. Sections 623(b)(1)(C) and (b)(1)(D) Complete the above within 30 days from the date the CRA received the dispute (or 45 days, if the consumer later provides relevant additional information to the CRA). Section 623(b)(2) · Duty to Report Voluntary Closing of Credit Accounts: If a consumer voluntarily closes a credit account, any person who regularly and in the ordinary course of business furnishes information to one or more CRAs must report this fact when it provides information to CRAs for the time period in which the account was closed. Section 623(a)(4) · Duty to Report Dates of Delinquencies: If a furnisher reports information concerning a delinquent account placed for collection, charged to profit or loss, or subject to any similar action, the furnisher must, within 90 days after reporting the information, provide the CRA with the month and the year of the commencement of the delinquency that immediately preceded the action, so that the agency will know how long to keep the information in the consumer's file. Section 623(a)(5) Other law requires that the consumer be notified anytime before, or within 30 days after, you report a derogatory to a CRA in substantially the following words: "You are hereby notified that a negative credit report reflecting on your credit record may be submitted to a credit reporting agency if you fail to fulfill the terms of your credit/rental obligations." Only one notification to the consumer is necessary.
AOA Form No. 180 (Rev. 04/06) Copyright 2006 Apartment Owners Association of California www.aoausa.com ▪ San Fernando Valley (818)9889200 ▪ Los Angeles (323)9378811 ▪ ong Beach (562)5972422 ▪ Garden Grove (714)5396000 ▪ San Diego (619)2807007 ▪ Northern California (510)7697521 L