VOLUME 11 - ISSUE 3 LEGAL UPDATE
- Satellite Dishes and the Property Manager
- Making Sense of Bankruptcy
- Water Damage Prevention
- Penalizing a Resident for Lack of Notice
- When You Don’t Accept Section 8
Satellite Dishes and the Property Manager
by Brian Wolk, Attorney at Law
Most property managers are often astounded to learn that there are limitations on restricting the installation of satellite dishes by residents. Many managers lack sufficient knowledge of the various rules that are applicable, and some managers just decide to not comply with those rules. That is a big mistake and can lead to significant liability. Some reckless property managers even remove satellite dishes from locations within the apartment community because they determined that the satellite dishes were not authorized to be installed in those areas, in turn exposing their companies to substantial liability. It is crucial that the property manager realize that there are limitations as to how they may prohibit satellite dish installation on apartment community grounds. It is also very important that the lease along with the rules and regulations contain the correct wording, so that the apartment community is able to legally place restrictions on satellite dish installation by residents.
Federal Communications Commission
At the direction of Congress, Section 207 of the Telecommunications Act of 1996, the Federal Communications Commission adopted the Over the Air Reception Devices rule which concerns the restrictions on a viewer’s ability to receive programming from direct broadcast satellites. Effective in 1999, the Federal Communications Commission amended the rule and expanded its application to apartment communities. Effective in 2001, the FCC again amended the rule to also include antennas that receive and transmit wireless signals.
Prohibition of Outright Bans
The Over the Air Reception Devices rule applies to apartment communities. Satellite dishes cannot be prohibited in an exclusive use area of the apartment community or an area under the exclusive control of the resident. Exclusive use of the apartment community is defined as an area that is only used by the resident on the lease, and from which other residents can be excluded from entering. Patios and balconies not shared with other residents are considered exclusive use areas. However, the rule does not apply to the apartment community common areas. The roof, hallway and exterior walls of an apartment building are considered common areas. Thus, an apartment community should be able to prohibit the resident from installing a satellite dish to the exterior of the apartment building. The rule will not protect the resident if the satellite dish is installed in the exclusive use area but protrudes into the common area. For example, if the resident installs the satellite dish on the balcony, but it extends over the balcony, the property manager is allowed to restrict the resident in that case.
Management’s Right of Inspection
It is undisputed that an apartment community has the right to inspect a resident’s apartment home, and if necessary, make repairs. The apartment home, for purposes of the rule, is still considered to be within the exclusive control of the resident. Therefore, the Over the Air Reception Devices rule will apply, and the apartment community cannot prevent a resident from enjoying a satellite dish, even though management has inspection rights concerning the same area.
Exclusive Use Area Regulations
It is very common for a property manager to regulate exclusive use areas. For example, propane grills may be prohibited by the terms of the lease to be placed on the patio of the apartment home. The patio is not considered a common area. However, while the grill can be banned, the resident cannot be prohibited from placing a satellite dish on the patio. If it is an exclusive use area, the FCC Rule will be applicable, which will protect the resident.
Restrictions and Deposit Requirements
The installation of the satellite dish by a resident can be regulated by the apartment community, if the purpose of the prohibitions is to prevent damage to the apartment community. However, those restrictions must be reasonable. It would clearly be reasonable to prohibit the resident from drilling holes into the exterior of the apartment building. On the other hand, it would most likely not be considered reasonable to prohibit a resident from causing minor damage to walls or carpeting within an exclusive use area. The apartment community is allowed to place restrictions according to the FCC rule in order to impose safety regulations. For example, if the resident has placed a satellite dish on the patio, and it is not installed in compliance with the local building code, the apartment community can require removal of the satellite dish. Restrictions by the property manager for historic preservation are also allowed, in addition to restrictions on the size and weight of the satellite dish. The FCC rule would arguably not prevent an apartment community from requiring a deposit to cover possible damage from the installation of the dish. The deposit would most likely withstand judicial scrutiny, if the deposit amount is reasonable, and the deposit is fully refundable, excepting damage beyond ordinary wear and tear caused by the installation and use of the satellite dish.
Correct Lease Wording
The apartment community is allowed to impose reasonable restrictions on satellite dish installation. In order to impose those restrictions, they must be included in the lease and applicable rules and regulations. The lease should limit the resident’s ability to install satellite dishes in common areas and other areas of the apartment community not with the resident’s exclusive use or control, and should also limit size in accordance with FCC regulations.
Dealing with Satellite Dish Lease Noncompliances
What if the resident has disregarded the lease provisions and placed a satellite dish within a common area of the apartment community? The initial impulse of the property manager is to simply remove the satellite dish. That action should never take place, but if so, will expose the property manager and property manager’s company to liability to the resident for property loss or damage, in addition to possible criminal charges for theft. The proper action for the apartment manager to take would be to serve the resident with a Seven-Day Notice to Cure. The notice should explain with proper details why the resident is not in compliance with the lease. Once the Seven-Day Notice to Cure has expired, if the resident is still not in compliance with the lease, and the property manager can prove it, then the next step would be to file an eviction, or in an abundance of caution, to serve the resident with a Seven-Day Termination Notice, giving the resident seven more days to vacate the apartment home or face eviction. In both cases, the property manager should have video and/or pictures to support the position that the satellite dish is in an unauthorized location or otherwise in violation of the rules, in the event the matter ends up in court.
Accepting Rent with Knowledge of the Lease Noncompliance
Many apartment communities with residents who place satellite dishes in unauthorized areas do not deal with that issue immediately. By failing to take quick action, but rather continuing to accept rent, it is possible that a judge may find that the apartment community has waived its eviction rights. In those cases, non-renewal in accordance with the terms of the lease may be the property manager’s most effective way to deal with the satellite dish problem.
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Penalizing a Resident for Lack of Notice
by Harry Heist, Attorney at Law
Your resident left at the end of the lease and did not give any notice. What can you charge? Your lease requires 60 days’ notice, and the resident gave notice that was 20 days too short. What do you charge? These two questions have caused more confusion than almost anything else in dealing with the departing resident. The vast majority of property managers will answer these questions incorrectly, charge the resident the wrong amount and will expose the owner and/or management company to litigation. We have written 2 articles on this already over the years, but it is time to revisit the subject, as it is getting bad out there, real bad.
If you think you know what you are doing when it comes to charging the resident, there is a really high chance you are wrong. The reason you are probably wrong is that the law goes against logic and intuition. It would seem perfectly logical and fair to charge a penalty for failure to give notice or to charge the resident the full 60 days’ notice worth of rent if they only gave 45 days’ notice, but it just is not the case as far as the law goes.
Before we move on with this article, try to cleanse your mind of how you may have been charging the resident in the past. Let us start from scratch here, and look at this with an open mind, realizing that just because you got away with doing something for so many years, or it is your “company policy” or procedure, it probably is wrong.
The whole business about charging a resident for improper notice coinciding with the lease expiration date is governed by law. It is all addressed in Florida Statute 83.575. Rather than look at the law now, we will break it down first in a practical way, and see how we can successfully charge for improper notice or no notice at all. Try to think about the fact that a typical lease has a beginning date and an ending date. It is very simple. The resident moves in on the beginning date and is supposed to move out at as of the ending date. However, the issue is that the property manager wants to know if the resident indeed plans on moving out, or conversely, if the resident plans on staying. This makes sense of course. If you know the resident is moving out, you will begin to market the unit and hopefully get someone to take the resident’s place as soon as possible. If you are kept in the dark about the resident’s future plans, this inconveniences you and may result in you losing money. You are not able to properly plan and market the unit when you have no idea what the resident will do, and you assume, sometimes incorrectly, that the resident will simply stay or renew. What do you do to that resident who does not give you any notice or gives you short notice? Well, you want to punish that resident, and you hope that the threat of this monetary punishment will result in proper notice being provided. So far so good, and we all agree.
Now comes the law. The law changed a number of years ago after a major lawsuit put a big damper on charging any sort of penalty to a resident. The “new” law allowed a penalty, BUT special procedures had to be adhered to carefully. You MUST know them, and they are tricky.
Prior to the law changes, it was a free-for-all regarding charges to a resident in the event of improper notice. Property managers would simply charge the resident whatever the lease agreement allowed, or the property manager would see how many days were required, and if the resident gave a short notice, the resident would be charged until the end of the notice period. Some judges and legislators just did not like this. Residents would often forget to give the notice required by the lease, and then they would be hit with a big penalty or be required to pay rent for days past the day they vacated. The result was a change to the law. NOW, the property manager MUST do something special in order to enforce the notice requirement of the lease. It is not hard.
REMINDING AND INFORMING THE RESIDENT
The laws now states that the property manager must “REMIND” the resident of when the lease expires, inform the resident exactly what the notice requirement of the lease is, AND DETAIL the penalty that the resident will be hit with if the resident does not give the proper notice. Keep this in mind for the rest of this article: “REMINDING” AND “DETAILING”. The purpose of the law and the procedure set out is to make sure that a resident is not charged a burdensome penalty for something that the resident “FORGOT” to do. It is more about being fair to the resident who may forget to follow the lease and forget to give you notice.
WHEN MUST YOU “REMIND” THE RESIDENT?
You cannot remind the resident too far out in advance, because the resident may forget. You have to remind the resident in the “reminder window”. The “reminder window” is the period of 15 days BEFORE the notice period begins. Read this a couple more times!
Let’s look at some examples:
Scenario #1: The lease requires the resident give 60 days’ notice prior to the end of the lease. The property manager does nothing, the resident does not give any notice, and she leaves at the end of the lease.
Result: The property manager CANNOT charge the resident for failure to give notice. Why? Because the property manager did not REMIND the resident in the proper “reminder window”. In fact, the property manager did not tell the resident anything at all. It does not make a bit of difference what your lease provides.
Scenario #2: The lease requires the resident give 30 days’ notice prior to the end of the lease. The property manager sends out a Renewal Offer Letter two full months before the end of the lease. The renewal offer tells the resident when the lease expires, how much notice must be provided if the resident is not planning to renew, and the penalty for failure to give notice. The resident does not respond with any notice and leaves at the end of the lease.
RESULT: The property manager CANNOT charge the resident for failure to give notice BECAUSE the property manager reminded the resident TOO FAR IN ADVANCE.
Scenario # 3: The lease requires the resident gives 60 days’ notice prior to the end of the lease. The property manager sends a Renewal Offer Letter detailing the terms of renewal, the notice requirement and detailing the penalty for failure to give notice. The property manager sends this out 50 days before the end of the lease. The resident leaves at the end of the lease, giving only 10 days’ notice.
RESULT: The property manager CANNOT charge the resident the insufficient notice penalty of the lease, because the property manager did not send the Renewal Offer Letter out in the proper “REMINDER WINDOW” period.
Scenario #4: The lease requires the resident gives 60 days’ notice prior to the end of the lease. The property manager sends a Renewal Offer letter 70 days before the end of the lease offering a renewal, confirming when the lease is set to expire, detailing what notice is required under the lease and reminding the resident what penalty exists under the lease for not providing proper notice. The resident leaves at the end of the lease, only giving 30 days’ notice.
RESULT: The property manager CAN charge the resident the insufficient notice fee of the lease, because the property manager gave the resident “PROPER NOTICE WITHIN THE “REMINDER WINDOW”” period.
What is the “REMINDER WINDOW” PERIOD?
It is the period “WITHIN 15 DAYS BEFORE THE BEGINNING OF THE NOTICE PERIOD REQUIRED OF THE RESIDENT”.
This means that besides containing terms of the renewal offer, confirming when the lease expires, detailing the lease provision of what notice is required of the resident, AND the lease penalties for failure to give notice, this correspondence is delivered within a special 15 day window. Focus on that “window”.
A PROPER “RENEWAL OFFER LETTER”
The “RENEWAL OFFER LETTER” should contain the following to cover all bases:
1. The terms of renewal you are offering the resident. For example, the rent amount. 2. A deadline for the resident to accept the offer of a renewal and sign a renewal lease. 3. When the lease expires. 4. The AMOUNT OF DAYS’ NOTICE REQUIRED BY THE RESIDENT UNDER THE EXISTING LEASE IF THE RESIDENT DOES NOT WANT TO RENEW. This can be up to 60 days. 5. The PENALTY AMOUNT UNDER THE EXISTING LEASE if the resident fails to give you proper notice of an intention to vacate.
Note that we recommend that the penalty for improper notice not exceed one month’s rent. The MAXIMUM amount of notice you can require of the resident is 60 DAYS.
CHARGING THE RESIDENT FOR SHORT NOTICE
Suppose the resident is supposed to give you 60 days’ notice according to the terms of the lease, BUT the resident only gives you 15 days’ notice and leaves on the last day of the lease. You never bothered to send them any kind of reminder notice, or maybe your Offer to Renew Letter that you sent out did not properly list the penalties for not giving enough notice. Can you charge the resident for 45 more days rent? NO!!! But why not? The resident’s notice was short! Well, you just cannot do it. The ONLY time you can charge the resident a “penalty” is if you follow the statute.
Confused yet? Many people are. You need to understand this law and the procedures extremely well, or your company can get in a lot of trouble. When you charge a resident improperly, this amount often ends up on a credit report, and if a lawsuit is filed against you years from now, the mistake will come back to haunt you. The key is to understand fully that if a resident does NOT give you notice or gives you short notice, you cannot automatically charge the penalty contained within the lease. You must go back and see if you followed the law. The key is to have a system in place to make 100% sure that your Offer to Renew Letter is delivered in the 15 day “reminder window”, and the offer to renew has the proper wording in the body of the document.
Remember that the Offer to Renew Letter is often created by your marketing department and is the same notice used on all your properties in many states. Take a moment to look at your Offer to Renew Letter today to see if it has the proper wording, and if not, notify your regional manager immediately. If you are unsure, our office will review your Offer to Renew Letter at no charge. Just send it to firstname.lastname@example.org, email@example.com or firstname.lastname@example.org with a request to review.
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Making Sense of Bankruptcy
by Brian Wolk, Attorney at Law
For most property managers, the filing of an eviction action can cause much stress. Managers should understand that delays may happen during the course of an eviction, as staffing reductions have negatively impacted court systems and the sheriffs' civil process divisions. In other cases, the property manager may be battling a resident in court who has contested the eviction, sometimes leading to future hearings. At the same time the resident’s ledger continues to show the accruing unpaid balances. On top of that, an eviction action can become significantly delayed and more complex if a resident under eviction files a bankruptcy petition. Therefore, it is vital in those cases to consult immediately with an eviction attorney. Many property managers have never been through this process before, but the good news is that if you follow the advice of your eviction attorney, in most cases the resident will still be successfully evicted. It is crucial that the property manager understand that as soon as the resident files for bankruptcy, the property manager is prohibited under federal law from undertaking or continuing any collection or possession activity without first obtaining permission from the bankruptcy court, or the property manager will risk large penalties and significant liability.
Resident Continues to Pay the Rent on Time
This scenario is the best case scenario for the property manager. Sometimes during the course of the lease, the property manager will receive notice that the resident has filed for bankruptcy. That information can throw the property manager into a panic, who may have no clue as to how to proceed. Frequently however, the resident will voluntarily keep making rent payments. If that happens, the property manager can accept the payments and need not take further action. It does bear repeating that if the rent is not paid, the manager would indeed be prohibited from serving a 3-day notice for unpaid rent, or engaging in any other possession or collection activity.
Manager Receives Notice of the Bankruptcy
The property manager can find out that the resident has filed for bankruptcy protection in a number of different ways: the property manager’s attorney may have received a suggestion of bankruptcy after an eviction is filed, the resident claims to have filed bankruptcy when conversing with the manager, or the property manager receives official notification from the bankruptcy court. In all cases, the property manager should confer with the eviction attorney, to avoid potential liability for taking subsequent improper action. When a resident files for bankruptcy under Chapter 7 or 13, all listed creditors, including the landlord or property management company, should receive a formal notice of the bankruptcy petition shortly after the case is filed. Keep in mind that all bankruptcy filings are public record, so if the property manager has not received a notice of commencement from the bankruptcy court, your attorney should be able to confirm whether that resident has filed for bankruptcy. If the landlord is not a listed creditor in the bankruptcy case, but the landlord becomes aware of the bankruptcy petition, the automatic stay should be honored.
What is the Automatic Stay?
As soon as the resident files a bankruptcy petition, all rent collection and possession efforts must cease; in most cases there will be an automatic stay of the eviction under federal law. That simply means that bankruptcy law has put a stop to all collection activities, and in most cases eviction actions for possession of the premises. The automatic stay remains in effect until the dismissal of the bankruptcy case, the entry of a discharge, or an order for relief from the bankruptcy court. If the resident has filed bankruptcy and is not paying the rent, then it would often be a poor decision to wait until the case is dismissed or discharged. In this situation, the landlord's best option will usually be to have an attorney obtain an order of relief from the bankruptcy court, so that action can be taken to initiate or continue an eviction action, since the resident will be living in the unit without paying rent. The property manager in those cases would wish to minimize the rent delinquency balance that is continuing to expand. There will be major problems for the landlord or property manager who fails to comply with the automatic stay on all rent collection actions, or if applicable, the stay on the eviction action. To begin with, the eviction action would be void, and if the eviction were completed, the judge would determine that the eviction was illegal, and the resident could be entitled to regain possession of the premises. The property manager and landlord could be sued for actual damages, punitive damages, attorney's fees and court costs. Finally, a property manager could be held in contempt of court, since the automatic stay is a court order which authorizes the court to impose substantial fines.
Chapter 13 Bankruptcy Petition
The law allows a property manager to evict the resident with bankruptcy court approval who has filed a Chapter 13 petition without having to wait for the bankruptcy action to be completed in full. The Chapter 13 petition differs from the Chapter 7 petition, because it is not a liquidation. Rather, a payment plan is created so the resident can attempt to catch up on past payment obligations over time. The resident must be a wage earner, and the payment plan typically lasts for three to five years, and is administered and monitored by a Chapter 13 Trustee who is employed by the bankruptcy court. .
Chapter 7 Bankruptcy Petition
In the majority of cases, the resident who files for personal bankruptcy chooses what is referred to as a Chapter 7 petition. It is also referred to as a liquidation. The resident's assets are liquidated to partially satisfy the debts of creditors, or the petition is considered a “no asset” case, under which creditors receive nothing. The resident in this type of case has typically incurred large debts and is seeking a discharge of those debts. The debts are usually discharged in approximately four full months from the time the Chapter 7 bankruptcy petition is filed. Most creditors, including the landlord, will not be able to collect any monies owed, except for the amount of the security deposit retained, money already in the landlord's possession. Unless the debt has arisen from a bad act, a family court ordered obligation, student loans, governmental tax, governmental fine, or court fine, the resident will likely have all debts discharged in full. However the law authorizes the property manager to evict a nonpaying resident who files a Chapter 7 petition, if approval is obtained from the bankruptcy court, without having to wait for the bankruptcy case to be completed in full.
Motion for Relief
A motion to obtain relief from the automatic stay must be filed with the bankruptcy court in order to proceed with the eviction process. The timing for obtaining relief from the bankruptcy court generally takes 25-40 days in a Chapter 7 petition, provided that the resident does not contest the relief request. The time period is often longer with regard to a Chapter 13 petition, since the landlord must first wait to review the Chapter 13 plan, and often a hearing will be required in a Chapter 13 case. It will take longer to obtain relief under either Chapter if a preliminary hearing is required, especially if a final hearing is subsequently scheduled, or if the resident pays rent under an adequate protection order reached at the preliminary hearing. The attorney that files the motion to obtain relief from the automatic stay must be admitted to practice in the bankruptcy court in the federal district where the bankruptcy petition was filed.
Dealing with Applicants who have prior Bankruptcy filings
If an applicant has filed one or more bankruptcy petitions in the past, a property manager must take a hard look at the application prior to approval, especially if there is any pattern of bankruptcy petition dismissals. With a history of prior bankruptcy petition dismissals, it will not be surprising if the resident moves in, files a new bankruptcy petition, not pay rent for months, and then allow the bankruptcy petition to be dismissed. At that point the resident will move into another apartment community and repeat this despicable conduct again. Once in a while, a resident will file multiple bankruptcy petitions within one eviction case! It is also risky to approve an applicant in an active bankruptcy case, because the bankruptcy petition can later be converted to a different chapter, allowing the resident to live rent free due to the automatic stay going into effect at the point of conversion, or the active bankruptcy case can be dismissed, only to have a subsequent petition subject lease enforcement to an automatic stay. You should immediately contact your eviction attorney should you become faced with these issues.
Bankruptcy Petition is filed after an Eviction Judgment is Entered
Occasionally, a resident under eviction desperate to buy time will file bankruptcy late in the eviction process, one or more days after an eviction judgment is signed by the county judge. Because of a 2006 amendment to federal bankruptcy law, the automatic stay technically does not apply in this situation, but the property manager should obtain an order from the bankruptcy judge confirming the absence of the automatic stay, or a notice from the bankruptcy clerk confirming that no stay is in effect, prior to finalizing the eviction with the sheriff. Unfortunately, obtaining an order confirming there is no stay can sometimes take weeks, particularly if the bankruptcy judge requires a hearing; this seems to defeat the purpose of the law change, but such is the reality of bankruptcy law.
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When You Don’t Accept Section 8
by Harry Heist, Attorney at Law
“WE DON’T TAKE SECTION 8.” Have you ever said this to a prospective renter in your office? A simple factual statement like this could lead to a discrimination complaint being filed against your company and maybe even you personally.
Picture this scenario. It is rainy season, you have been stuck in traffic all morning, and in the 20-foot walk from your car to the office, you get completely drenched by rain, not to mention having to walk through a 4 inch stream of water running through the parking lot in your new sneakers. The day is to getting off to a bad start. You are not even settled in your office when the receptionist tells you that some people are in the lobby wanting to speak with you about a rental they saw. You come to the lobby, where a small child has just tipped over a chair and is proceeding to empty the water cooler on the floor. The mother is screaming at the child, the father is grabbing the child, and they appear to be from another country based on their ethnic dress. Between the screams from the child, the father asks you about a house they drove by that had a “for rent” sign on it from your office. You begin to answer some of their questions about the home, trying hard to hide your annoyance with the situation, and Section 8 comes up. This is when you blurt out the statement, “We don’t take Section 8”. When asked why, you simply say, “We don’t take it. It’s company policy; sorry”. Puzzled and angry, the prospective renters leave your office. No Section 8? Why not? These people have been renting for the last 5 years with their Section 8 vouchers. This is the very first time they have ever even heard someone say that Section 8 was not accepted. They leave the office bewildered and shocked. Since they have experienced discrimination before, they assume that you simply do not want to rent to them based on where you think they are from. Plausible? Sure. Many people of protected classes experience blatant discrimination each day, and this just appears to them to be one of those instances. A discrimination complaint with HUD is filed online using the HUD provided handy app on their smartphone, and next thing you know, you are hiring an attorney at $450 an hour to fight a baseless accusation of discrimination. Did you illegally discriminate? We know you did not, but that is not the point.
Are you required to take Section 8?
For the most part, unless there is a special source of income ordinance in your city or county, you are not required to take Section 8 or be any part of the Section 8 program. Your company may have decided that it simply does not want to be involved with a federal program such as Section 8 because of the rules, regulations, inspections and other requirements of the program. This is perfectly okay and legal. Unlike some states, as of this writing, only one municipality in Florida has a source of income ordinance, which means that you must accept Section 8 in that municipality if the applicant otherwise meets your approval process criteria. When source of income “discrimination” is made illegal, the Section 8 funds must be counted as part of income. The problem in the above example is that it just does not look good how you handled the inquiry.
How to handle the inquiry
The delivery of the statement is the key here: how you say it. Instead of blurting out the fact that you do not take Section 8, you should take the time to explain nicely that your company is not connected or set up with the Section 8 program. Tell the person inquiring that your company has decided it does not want to get involved with the program due to the requirements. Maybe your company does not want to deal with the red tape and bureaucracy. Explain to anyone inquiring that not all property management companies or apartment communities take Section 8, and that is it not required by law. Be nice. Be clear. Be patient. Take your time.
Referring the Prospect
After you are finished explaining that you are not part of the Section 8 program and why, the best part comes. You simply hand the prospect a list of a names and numbers of local management companies and/or apartment communities that you know for a fact accept Section 8. Take your time to shop around your competition, and call your fellow housing providers. Many will gladly take referrals, and possibly you can legally be paid a referral fee as well. Create a diverse list. Do not rush into this. Simply recommending a low income housing apartment community down the street is certainly to be avoided. Many companies accept Section 8, but you would not even know it. A good updated list you can hand out to a prospect is priceless. Now… Do you take Section 8?
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Water Damage Prevention
by Harry Heist, Attorney at Law
All of us are aging. We see and feel it every day; at least I do. What we do not seem to recognize is that the units we manage are aging as well. It is hard to comprehend that 1970 was 45 years ago. When homes and apartment communities were and are built in Florida, many contractors used and still use the cheapest of materials. Cheap piping and wiring are extremely common. Some of these shortcuts have resulted in massive lawsuits as we have seen in the plastic piping and aluminum wiring class action cases. Other shortcuts are not as blatant, but are still now causing serious damages to the rental units. While you cannot ever prevent a storm from blowing a roof off or preventing a resident from causing a kitchen fire, there are a number of things you can do right now to prevent thousands of dollars in damages and the resulting legal headaches that go along with this damage. Water in the wrong place equals property damage, inconvenience and then the dreaded mold.
It takes a little time and little money to inspect your rental units and take action, action which not only can save money but can avoid legal problems. One small flood can cause a big problem. If a problem can be avoided, it should be. Many managers of single family homes do not look at themselves as asset managers. As an asset manager, one has a duty to preserve the asset for the client. An apartment manager often looks at himself or herself as “just an employee”, but we believe an employee has an important duty to help preserve the property of the owner. By doing so, everyone benefits, as everyone has a stake in the business that they are in.
This article will begin to examine just some things that should be looked at, evaluated, fixed or replaced on a rental property to prevent water damage, and detail the reasons why. The choice is yours. Sit back and wait for a disaster, or prevent one right now. Everything that follows is incredibly easy and inexpensive to do.
WATER SUPPLY LINES
A typical rental home, or any home for that matter, has many interior water supply lines. These include the toilet bowl line, sink lines, washing machine hoses, dishwasher hoses, refrigerator water dispenser and ice cube maker hoses. Many of these supply lines or hoses when originally installed were of the cheapest quality possible, and even to this day, the cheapest quality materials are used. We have seen many cases when these lines burst or slowly leaked, causing massive water damage, and often resulted in mold damage as well. It is time to examine them NOW. Recently, we dealt with a case when a simple bump by a mop to the toilet water supply caused the wafer thin 30-year old line to break. Upon attempting to turn off the water valve, the valve crumbled in the hand of the resident. We have seen pin holes in supply lines to fully bursting washing machine hoses. Refrigerator water supply lines are usually made of a thin, clear, plastic ¼ inch line holding the full water pressure of the plumbing. They fail constantly. The dishwasher has rubber hosing behind the appliance, and under the counter and completely out of sight. You never see them or even think of them until one bursts. The washing machine which may be brought in by the resident or has been there for years, has 2 water supply lines comprised of black rubber hoses that bulge, crack, break and fail all day long.
The solution? Braided steel hoses. Speak to your regional manager or your owner now, and get these cheap or old hoses replaced with better quality braided steel hoses. Are the replacements cheap? They range from $5 - $15 and will potentially save many thousands of dollars. Own your own home or rent somewhere? I bet you have not even checked your own residence to see what type of supply lines are present. When replacing, always take the time to see if there are any leaks and to be aware that disturbing old valves can result in a big problem. Beware and be prepared.
AIR CONDITIONER DRAIN LINES
Most air handlers are located in the ceiling of a rental unit, often above the air filter grate. Some are in closets. As the air conditioner is operating, water naturally condenses and drips into the drip pan located below the coils. In theory, this water is supposed to flow into a PVC pipe and usually ends up running outside where it belongs. Some air handlers have a safety feature which will shut off the air conditioner if the pan begins to fill up with water and fails to drain. The drain pipe for the air conditioner often gets plugged up by moss, mold, and algae growth. Sometimes a critter will nest in the line in colder weather, clogging it up. The result is an accumulation of water in the drip pan which then overflows and begins to soak the ceiling, causing damage and potentially mold. If the air handler has the proper safety float shut-off switch, and it works, the air conditioner will shut off. You will have a service call, and although you have to pay for this, the problem will be fixed with no damage. All too often though, there is no float switch, or it is nonfunctional; the drain line is plugged, and the water slowly or sometimes quickly enters the rental unit.
The solution is simple. Any air conditioning technician, maintenance tech or handyman is fully capable of checking the drain pipe or pipes on a routine basis, cleaning or blowing them out, flushing them with bleach and making sure they work. Failure to take this simple preventative maintenance step is a recipe for water damage, mold and the resulting legal problems. This is an extremely common problem. If you do not bother to deal with it now, you will have to deal with it later when it is too late, and after you have damage.
WATER HEATER PANS
If a water heater is properly installed, there is a plastic, metal or rubber pan that the water heats sits in which is designed to catch water in the event of a water heater failure. It is not a matter of if a water heater will fail, it is a matter of when. They do not last forever. If you are able to catch a leak fast, you are in business, but many times, the leak is discovered too late or occurs while the unit is vacant or the resident is on vacation. The water heater pans are very similar to the pan dealt with above that is under the air handler. The water is meant to drain into this shallow pan and then flow out the PVC drain pipe to the outside of the unit. The problem we see is twofold. Sometimes the pan is not installed properly, or the drain pipe is not properly affixed to the pan. This results in the water slowly filling the pan and running out around the bottom of the drain pipe to pan connection and not into the drain pipe as designed. You also can have the same problems when the drain pipe is clogged just as discussed above. This clogged pipe results in flooding, defeating the entire purpose of the water heater pan.
The solution is to inspect the water heater pan and drain pipe. Some are made of tin and over the years have corroded away. Check the fitting from the drain pipe to the pan, and make sure the drain pipe is clear. This is something that can be done at the same time the air conditioner drain pipe is being checked and or cleaned out. There is no safety device on a water heater pan. If it fails, you will have a flood where the water will continue to run until the problem is discovered. No alarm is going to sound! The sound will be of running water and a screaming resident, if that person is lucky enough to be home at the time.
GUTTERS AND ROOFS
Out of sight and out of mind. Often a gutter is not cleaned until it begins to overflow, or you see something growing out of it. Clogged gutters and accumulating debris can result in water intrusion to the roof and eaves. The water flows out and over the gutter and seeps into the roofing material under the shingles, eventually rotting the wood and/or causing leaks in the home. The smallest of roof leaks can go unnoticed for quite some time until water intrusion occurs in the walls, ceilings or behind the siding, and mold begin to grow. Once mold begins, the residents cry foul and legal problems start. Leaves, twigs and other debris left to accumulate on the roof can cause leaks. Water is meant to run off of a roof, not sit on it and soak into the porous areas. A typical roof will have sewer vents, air vents, electrical pipes and flues going through the roof. Around each of these will be some sort of tar or other product used to keep a seal. With time, these products dry, shrink, crack and fail, causing slow leaks into the attic spaces and eventually the ceiling in the living area.
The solution is proper roof and gutter inspection, cleaning and maintenance. This needs to be done on a periodic basis along with checking to see whether the downspouts are sending the water away from the outside of the unit. Any item such as a pipe or vent protruding out of the roof needs to be checked for potential leakage, and this is often discovering by going into the attic or crawlspace. A leak can go on for a long time and the water evaporate prior to getting into the living areas, but can be readily discovered by a visual inspection in the attic. Why wait until it is too late? You cannot depend upon residents to tell you when something needs to be done. You need to inspect, and you need to ask residents if they have noticed anything unusual when you do your periodic inspection and maintenance.
SHOWERS, SINKS AND TUBS
Each year we deal with legal problems that arise when water slowly seeps into the walls or the countertops due to cracked or missing grout and caulking. Eventually, this water causes damage and often mold. Have you ever received a call from the resident regarding the smell of mold in their closet? Yes, the closet that is behind the shower? Often these leaks could have been prevented by proper maintenance.
The solution is a thorough inspection of the grout in the bathtub and shower areas, closets behind the bathroom, sinks and countertops. The damage is often found under the countertop, so a visual inspection above may show nothing. Taking the time and spending the money for caulking, grouting or regrouting now can save thousands later. Most insurance policies do not cover leaks due to grouting issues, as insurance companies expect you to maintain this, but insurance will typically cover leaks from structural problems or defective drain pans. Keep this in mind, as it could mean the difference in having the insurance company pay for a large job or deny the claim.
Most property managers have dealt with one or more of the water damage related issues above. Most know that water damage is the single most costly cause of damage to homes and apartments. Will the property manager take proactive steps to keep this damage from occurring? Sadly, most will read this short article and do absolutely nothing. Not even an inspection will occur. All we can say is to keep the phone number of your water remediation/extractor on speed dial, and hope that you as a property manager are not held liable for damages that you as a property manager could have easily prevented.
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