CT Real Estate Today - June 2022 Edition

In This Month’s Edition Rental Application Fraud In The Digital Age

Mortgage Activity Hits 22-Year Low As Rising Rates Bite Housing Market

8 Important Legal Tips For Landlords and Property Owners

Inflation, Cost of Living Top Issues For Connecticut Voters

June 2022

Published by:

Table of Contents Publisher’s Message A Message From Bob DeCosmo, President Of CTPOA

News And Views From The Capitol Inflation, Cost of Living Top Issues For Connecticut Voters

Realtor Report Mortgage Activity Hits 22-Year Low As Rising Rates Bite Housing Market

Insurance Insights Does Homeowner Insurance Cover Rental Property?

Property Management Tips & Tricks Summer Maintenance For Your Rental Property

Helping Property Owners Since 1994

Published by: CTPOA

CTPOA’s Mission:

Financially Speaking Inflation Rates Are Breaking Records. Here’s What Your Need To Know

Get Energy Efficient Spring & Summer Energy Saving Tips

The Legal Corner 8 Important Legal Tips for Landlords and Property Owners

Vendor Spotlight ServiceMaster Restore, Specializes In Restoration Services For Your Property!

Tenant Screening Tips & Tricks Rental Application Fraud In The Digital Age

Educate our members on the Best Practices.

Increase profitability.

Provide access to Core Services.

Advocate for Property Owner Rights.

Meet Our Team: Bob DeCosmo Carmine DeCosmo Melissa DeCosmo Paul Jenney

Chelsea Sayegh

PO Box 4795 Waterbury, CT 06704 800-369-6153 info@ctpoa.com

By Bob DeCosmo, Advocate for Property Owners Concealing Eviction Records - Action & Reaction “Real-Time” Tenant Payment Data Now Being Captured Senate Bill #200 was introduced in this year’s legislative session and it limited a rental agent and landlords’ ability to view eviction records to just one year. If signed into law, it would have a significant impact on rental property and make the ability to provide stable, safe and decent housing more difficult. It would have also caused a hike in rental prices as owners would try to mitigate future collection losses.

Last week, our programmers completed the process to allow all our clients to upload documents proving they own rental property and provide us with a photoID so we know its them. Once we get the documents, our TenantTracks clients can then upload rental payment info on their tenants including; • • • • • • •

notice to quit served summons and complaint served late payment partial payment notice of lease violation cash-for-keys no-payment and no action taken.

TenantTracks, a rental screening company I manage opposed Senate Bill 200 and we also decided to get prepared for such a proposal to become law in the future, like in New York. The best way to help make our tenant screening reports better is to capture “real -time” tenant rental payment information and provide In addition to rental payment performance, we now this data in our background checks. allow all users to enroll their tenants into monthly rental payment reporting to TransUnion at no cost.

Landlord groups have often talked about creating Timely rental payments will help increase a tenant’s lists of non-compliant renters (blacklists) and want to credit score and late payments will potentially hurt exchange this information amongst themselves. This the renter’s score. is illegal as it offers no ability for a tenant to dispute the information and their data could be subjective as Necessity being the mother of invention and well. Example, the tenant was a messy housekeeper. eliminating eviction records from a landlord’s view The problem with subjective data is who is setting the was a wake-up call and made us take a proactive standard, you, me or a health department official? approach to more accurate tenant screening, which is essential to operating rental property . We will be Any tenant payment information used as part of a consumer report for tenant screening must be factual making presentations to landlord groups and and objective. We now have a created way of making individual owners in CT, encouraging them to report this valuable information to all landlords and housing this rental payment information to TenantTracks so they and other housing providers can make better providers via TenantTracks. informed leasing decisions in the future.

04 / Publisher’s Message

Register at CTPOA.com/events

Inflation, Cost of Living Top Issues For Connecticut Voters From: cbia.com Inflation and the state's high cost of living

state taxes are too high and 89% believe

are the top concerns for Connecticut's voters Connecticut's cost of living is too high. according to a new statewide poll.

State taxes were seen as too high by 79% of

Conducted by Public Opinion Strategies for

Democratic voters, 88% of independents,

CBIA, the poll shows personal finance

and 91% of Republicans.

issues dominate voter priorities ahead of this year's elections for governor and statewide offices and the General Assembly.

When asked to identify the two top issues for election candidates, 65% of respondents said inflation and the state's high cost of

Affordability Issues Eighty-two percent of Democrats said the state's cost of living was too high, as did 92% of independents, and 94% of Republicans.

living and 48% cited state taxes and

Just 16% believed state taxes were "about

government spending.

right," with 16% also feeling the same about

Inflation and affordability are the top issues

Connecticut's cost of living.

regardless of political affiliation, identified by

Connecticut's lack of affordability was also

63% of those who said they were registered

seen by 75% of those surveyed as the most

Democrats, 66% of independents, and 67%

significant challenge for recent college

of Republicans.

graduates and young people, followed by

Eighty-five percent of surveyed voters said

student loan debt (48%).

06 / News & Views From The Capitol

Forty-five percent of those polled feel less

"While any tax relief is welcome, less than

secure financially than they did a few years

half of what was in the budget package is

ago, with 40% feeling the same, and 11%

recurring, so there are questions about the

feeling more secure.

long-term impact beyond this year,"

More than half of GOP voters (51%) said

DiPentima said.

they felt less secure about their finances, as

"It's clear from this poll that voters want

did 50% of independents and 37% of

structural changes to both the state's tax

Democrats.

system and to the way state government

Those without a college degree were more

operates.

likely to feel uncertain about their finances

"They want government to be more efficient

(49%) than those with a college education

and effective and they want a better return

(41%).

on their taxpayer dollars."

Tax Relief

Economic View

Seventy-nine percent of all surveyed voters

Voters were mixed about the state's

support comprehensive tax relief for all

direction, with 46% believing Connecticut

individuals to lower taxes and raise take

was on the "wrong track" and 42% saying it

home pay.

was headed in the right direction.

While the state budget revisions adopted

Seventy-one percent of Democrats

this year included $600 million in individual

approved of the state's direction, while 54%

tax relief, $330 million is temporary,

of independent voters and 80% said

including suspension of the state's 25 cents

Connecticut was on the wrong track.

per gallon gas tax through Dec. 1.

When asked to rate Connecticut's economy,

The budget also expands the 50% tax credit 57% of voters described it as “only fair” or for employers that contribute to an

“poor,” with 40% calling it "good" or

employee's Connecticut Higher Education

"excellent."

Supplemental Loan Authority student loan, although that program only impacts a minority of graduates.

07 / News & Views From The Capitol

Party affiliation played a major role in those

Eighty percent of voters support expanding

responses, with 69% of independents and

the research and development tax credit to

74% of Republicans having an unfavorable

small businesses, while 72% believe

view while 65% of Democrats were

lawmakers should restore the pass-through

favorable.

entity tax credit to its original level.

Voters were evenly divided about the state's Over two-thirds (67%) said policymakers economic outlook, with 31% expecting the

should use federal COVID relief funds and/or

economy to improve, 30% predicting a

budget surplus dollars to pay off the state's

downturn, and 27% seeing no change.

pandemic-related unemployment loan debt

Business Climate A majority of voters (59%) believe state government makes it difficult for businesses to succeed in Connecticut.

The high cost of living (79%) and high state

taxes (65%) were viewed as the top challenges to the future growth and survival of businesses in Connecticut.

Fifty-seven percent believe business taxes are too high, 14% said they were "about right," 4% said they were too low, and 24% were unsure.

and ease the burden on employers.

Seventy-five percent support modernizing and streamlining government operations and the use of technology solutions to reduce the state's physical footprint and cut high overtime and other costs.

Public Opinion Strategies surveyed a representative sample of 500 Connecticut voters between March 29 and April 4, 2022.

Forty-three percent of those surveyed identified as independents, 37% were registered Democrats, and 20% were registered Republicans.

08 / News & Views From The Capitol

Register at CTPOA.com/events

Mortgage Activity Hits 22-Year Low As Rising Rates Bite Housing Market By: Emily McCormick, with finance.com A closely watched gauge of mortgage application activity slid to a more than two-decade low last week, as elevated home prices and rising interest rates dragged further on purchase and refinancing activity.

The Mortgage Bankers Association's (MBA) weekly market composite index tracking mortgage loan application volume sank 6.5% during the period ending June 3. This represented a fourth consecutive weekly decline and extended a 2.3% drop from the prior week.

10 / Realtor Report

Refinance applications fell 6% weekon-week and were down 75% compared to the same time last year.

Meanwhile, purchases fell 7% from the prior week, and on a seasonally unadjusted basis, were lower by 21% compared to last year.

“Weakness in both purchase and refinance applications pushed the market index down to its lowest level in 22 years," Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a press statement. "While

rates were still lower than they were than-expected 16.6% in April to four weeks ago, they remained high reach a two-year low, while existing enough to still suppress refinance

-home sales sank to the lowest

activity. Only government

since June 2020 as the median

refinances saw a slight increase

home listing price soared to a fresh

last week."

record high of $391,200.

“The purchase market has suffered The average rate on a 30-year fixed from persistently low housing

mortgage hovered at 5.09% as of

inventory and the jump in mortgage the beginning of the rates over the past two months,"

month, according to Freddie Mac

Kan added. "These worsening

data released June 2. While that

affordability challenges have been

was a tick down from the 5.10%

particularly hard on prospective first from the prior week, it was still a -time buyers.”

The MBA's latest report adds to other housing market data underscoring cooling demand as interest rates creep higher. New home sales slid by a much worse-

jump from the comparable week last year, when the rate averaged 2.99%. The average rate on a 30year fixed mortgage reached the highest level since 2009 in mid-May at 5.30%.

11 / Realtor Report

Does Homeowner Insurance Cover Rental Property?

From: nationwide.com If you own a home, you already know used as a rental. you need homeowners insurance to

2. Ensure your space qualifies as

protect your investment. But what

a rental.

insurance policy do you need to

adequately protect your rental property?

If you’re unsure about whether your situation is fully considered “renting,” contact your insurance provider.

Having the right insurance package

Different insurance companies have

can save you a headache in the long

different rules for what qualifies as a

run. Here are a few things to know

rental, such as whether the person

about insuring your rental property the living there is a family member, right way: whether the space has a separate

1. Consider obtaining additional

entrance and how the space is

coverage.

attached to the main structure.

A standard homeowners insurance policy typically doesn’t cover damage that occurs when the space is being 12 / Insurance Insights

Making sure you’re aligned to your insurance provider’s definition is key to choosing the right coverages.

3. Stay protected with Dwelling

disasters – which helps you protect

Fire insurance.

your investment.

If you are renting out your property for any length of time, you will need landlord insurance. Most landlord polices come standard with liability insurance, property damage and loss of income coverage, which reimburses you for rent lost as a result of the unit becoming uninhabitable. You can

5. Cover your personal belongings.

also take out additional coverages,

If you rent out a property that you

such as flood insurance, to further

own full time, you may not need a

protect your property.

standard homeowners insurance

4. Encourage tenants to get renters insurance.

policy. However, if you’ve furnished the house or store any of your personal belongings there, you will

Although not required by state law,

still want home insurance to protect

renters insurance is the only way

these contents.

your tenants can protect their belongings, because your landlord’s insurance won’t cover their personal property. It can also protect tenants from having to pay out of pocket for

Now that you have the full scoop on homeowners insurance for rental properties, it may be time to get a homeowners insurance policy.

other common incidents like water backup damage and certain natural 13 / Insurance Insights

Summer Maintenance For Your Rental Property By: Kaycee Miller, with rentecdirect.com Seasonal maintenance is vital to ensure your

aren’t faded by winter weather or the

tenants’ safety and to protect your property

sun. Check that locks and gates are in good

from damage; summer maintenance is no

condition to further protect young residents in

exception.

your community.

A quick preventative maintenance task could

Outdoor Amenities: Nothing can kill a summer

easily save you thousands of dollars down the

BBQ faster than a grill that runs out of fuel in-

road, so you certainly do not want to skip this

between burger flips. If you want your residents

responsibility. Now is the time to start on your

to use the community space you provide, make

maintenance tasks and summer event planning sure the propane tank is full and keep an extra so your property is ready for the season. These on hand, in case your residents need to make a are the keys to remember in order to tackle those vital summer maintenance tasks.

quick switch.

Pull out the summer maintenance checklist:

This comprehensive list will ensure that your

Each season calls for different routine

property is in tip-top shape. These tasks also

maintenance. Your team should be prepared to

address your tenants’ expectations for summer

add summer chores to their to-do list like:

enjoyment, as you address outdoor activities,

servicing the pool, cleaning grills, organizing

shared spaces, and amenities.

outdoor community areas, adjusting the

Pool Safety: Get the pool cleaned and in prime condition for summertime splashes. If you do

irrigation system, and getting ready for A/C maintenance calls.

not have a lifeguard on duty, check to make

Water: When the temperatures start to rise,

sure your posted safety signs are visible and

servicing the irrigation system can result in big

14 / Property Management Tools & Tips

savings on water usage, prevent landscape

grills, and community amenities. Make sure to

damage, and reduce standing water. You

include information about your guest policies

should also program your sprinkles to optimal

and parking. Be sure to remind your residents

summer use settings, to keep your landscape

about any state and local distancing

looking fresh and reduce overwatering.

requirements.

Fire Wise: Make sure your property is prepped Check for summer-related State and Local for high heat and that any fire dangers are

Requirements: Did you know that

removed. Outside bushes and trees should be

in Washington, D.C. the housing code requires

trimmed backed and dead plants removed.

landlords to put screens on windows and doors

Additionally, make sure any grills owned by the from March 15 through November 15 to protect property or your tenants are properly ventilated tenants from insects and pests? Ensure you and positioned away from buildings. Make sure follow state and local laws for seasonal to double-check your local laws about fire extinguisher requirements for landlords.

requirements like this for landlord compliance.

Don’t Forget About Renewals: Capitalizing

Service the Air Conditioners: Enlist the help

on summer fun by using this time to ask for

of a professional to service the A/C unit at

renewals while spirits are high. If you host

least once a year. They will be able to check

community events, like a BBQ or pool party,

the unit, clean coils, adjust dampers, and look

and offer renewal incentives. The more you

for any other potential problems. It is also

remind your tenants about how much fun it is

important to remove trees, debris, or trash that to live in your property, the more likely they will can obstruct proper operation.

stay.

Check chairs, umbrellas and tables:

As the nation begins to open up, you may be

Multifamily renters are about to spend more

inclined to resume your property’s normal

time outdoors, which means any chairs, tables, summer events. Keep in mind any local area and umbrellas are going to get a lot of use.

restrictions before you invest in a plan.

Your property will be more inviting and safer if

Consider your event activities and layout and

those community fixtures work properly.

attempt to build more natural social distancing for those that need it. A little extra planning can

Send a Friendly Rule Reminder to Residents: The warm weather and late sunset can bring people outside late into the night.

keep everyone safe while finally enjoying the usual summer fun.

Remind your residents of the complex’s quiet hours and any rules about using the pool,

15 / Property Management Tools & Tips

Inflation Rates Are Breaking Records. Here’s What You Need To Know By: Emma Kerr, with usnews.com U.S. inflation hit a 40-year high last month – possible interest rate hikes this year. Taking rising at its fastest annual pace since

steps to hedge against inflation and prepare

December 1981 – of 8.5% in March.

for higher interest rates should be part of

It's been decades since the U.S. faced significant inflation rates, and financial advisors worry that years of small, steady increases may have left

everyone's financial plan, whether inflation cools off or continues to ramp up in the coming months.

"We've been used to a period of time with

consumers unprepared for today's extended relatively low inflation, so we've all gotten inflationary environment. In May 2020, the

complacent. We're seeing it now, and

consumer price index dipped to 0.1%

economists aren't surprised necessarily, but

before quickly rising over the following

a lot of everyday people are," says David

nearly two years and prompting the Federal Weliver, Reserve to raise interest rates in March

personal

2022 in an attempt to temper inflation and

finance

rising prices.

expert and

Consumers have lived with higher prices for months with no end in sight, and they'll now have to begin absorbing the first of seven 16 / Financially Speaking

founder of Money Under 30.

What Is Inflation?

Inflation means consumers can buy less with the same amount of money.

The rate of inflation is measured by the consumer price index, which calculates the average change over time in the prices consumers pay for a market basket of

goods and services. Inflation typically rises slowly, often unnoticed by consumers.

During periods of high inflation, the effects can become more severe, triggering a cycle of rising prices and interest rates while the value of the currency falls.

MaxMyInterest.com, says, "people have started to acknowledge that inflation is more than transitory."

"Inflation is difficult for people to understand," he adds. "Everyone has been making financial plans with the expectation the Fed would try to keep inflation at about 2% a year. Probably no one planned for 8% inflation each year. It may feel good to get a raise, but unless you’re keeping pace with inflation, you’re further behind."

Why Does Inflation Occur?

Today's inflation is caused by multiple

Over the last century, average annual

factors, Weliver says, including a sudden

inflation in the U.S. has ranged from

demand for goods while supply struggles to

upwards of 10% to lows of -10%. Ideally,

keep up amid the pandemic, low interest

the Federal Reserve aims to reach a target

rates and large amounts of cash in

inflation rate of 2% to 3% in the long term.

consumer pockets following government

This rate represents a balance between

stimulus payments.

inflation that is too high, causing a burden on families seeking to purchase essentials such as food and gasoline, and inflation that is too low, which can weaken the economy.

Inflation can come and go, surging

"What happens when you print money is you put more dollars into the supply and the value of each dollar goes down," Weliver says. "We have these three things going on at once, so not surprisingly, inflation is really

temporarily or hanging over an economy for starting to pop." years, or be confined to certain sectors.

Talk of inflation can also be self-fulfilling,

Today, however, Gary Zimmerman,

Zimmerman says, changing the way

managing partner of Six Trees Capital in

consumers and companies think about

New York and founder of

prices.

17 / Financially Speaking

"In an inflationary environment, the first

sending an influx of cash to consumers in

thing that happens is a company's costs go

the form of checks or rebates – a sort of

up. They pass those costs to customers in

gas pedal.

the form of higher prices," he says. "As long as labor market conditions continue to be tight – the very act of people asking for

raises, or we've seen McDonald's offering large bonuses to people willing to work – that means they must raise their prices, and

The latest personal consumption expenditures inflation projections are 4.4% for 2022, 2.7% in 2023 and 2.3% in 2024,

according to the Federal Reserve Bank of St. Louis.

so it ripples through the economy."

How to Hedge Against Inflation

The Federal Reserve has some levers to

In an inflationary environment, consumers

pull that can cause or temper inflation. In

are reminded of an existential truth: Money

today's high inflationary environment,

is a social construct, mere paper assigned a

raising interest rates can make it more

value that can change overnight. Inflation

expensive for consumers and businesses to breeds fear, but it doesn't have to. borrow for large purchases like real estate,

"Inflation tends to be temporary. Having

thus reducing market demand – a sort of

plans in place can be more long lasting and

brake pedal.

more effective," says Nilay Gandhi, a

On the reverse, government agencies may

certified financial planner with Vanguard's

attempt to stimulate the economy during

Personal Advisor Services. "Sticking to that

periods of low inflation or recession by

plan will generally outpace inflation."

18 / Financially Speaking

As the threat of continued inflation looms, consider these strategies to hedge against inflation: •

Maintain a budget.

•

Spend less than you earn.

•

Delay purchases of goods severely

affected by inflation.

•

Build skills and work toward a promotion

or raise to keep up with costs.

•

Set clear, appropriate goals.

•

Maintain a well-balanced, diversified

investment portfolio.

•

Choose an asset mix that suits your

goals.

•

Stick to the plan.

High inflationary environments can be an

"Focus on the controlables," Gandhi says.

"Choose an asset mix that's appropriate for the duration of that goal and the comfort level of ups and downs that could happen with that time frame."

However, periods of high inflation can also be devastating for a family's budget,

particularly as many families in the U.S. were already living paycheck to paycheck before sudden spikes in price tags at the

investing opportunity. Commodities like gold grocery store and gas pump began popping tend to be considered safe havens in times up last year. of high inflation, and this popular belief can

"Budgeting is the infrastructure for your

be true, Weliver says, but it takes time for

financial life. If you budget, it will allow you

such investments to pay off. Typically,

to get through good times and bad times

commodities should be held as one piece of without the whole house of cards falling a larger portfolio. apart," says Kimberlee Davis, host of The And as inflation rates rise and fall, advisors

Fiscal Feminist. "Discretionary costs are

continue to suggest sticking to a financial

what people need to focus on, and they

plan and following the fundamentals of

might have to be brutal for a while. With

personal finance, such as spending less

inflation the way it is, it’s going to take more

than you earn.

money to do the same things."

19

/ Financially Speaking

Spring & Summer Energy Saving Tips From: energy.gov Here you'll find strategies to help you save

OPERATE YOUR THERMOSTAT

energy and keep costs down during the spring

EFFICIENTLY

and summer when the weather is warm,and you are trying to keep your home cool. Some of the tips below are free and can be used daily to increase your savings; others are simple and inexpensive actions you can take to keep energy affordable through the spring and

•

Set your thermostat at a temperature you

find comfortable and that provides humidity

control, if needed. The smaller the difference between the indoor and outdoor temperatures, the lower your overall cooling bill will be.

summer. For more ways to stay cool while

•

saving energy, check out our Energy Saver

you are away, and lower the thermostat setting

101 infographic, covering everything you

when you return home and need cooling.

need to know about home cooling.

A programmable thermostat allows you to do

If you haven't already, conduct an energy

this automatically and without sacrificing

assessment to find out where you can save the

comfort.

most.

•

USE YOUR WINDOWS TO KEEP OUT

setting than normal when you first turn on your

HEAT

air conditioner. It will not cool your home any

Keep your house warmer than normal when

Avoid setting your thermostat at a colder

faster and could result in excessive cooling and •

Install window coverings to prevent heat gain through your windows during the day.

20 / Get Energy Efficient

unnecessary expense.

USE FANS AND VENTILATION

•

STRATEGIES TO COOL YOUR HOME

take advantage

•

Turn off ceiling fans when you leave the

room. Remember that fans cool people, not rooms, by creating a wind chill effect.

•

When you shower or take a bath, use the

bathroom fan to remove heat and humidity from your home. Your laundry room might

also benefit from spot ventilation. Make sure bathroom and kitchen fans are vented to the outside (not just to the attic).

KEEP YOUR COOLING SYSTEM RUNNING EFFICIENTLY •

For maximum energy affordability,

If convenient,

of daylight instead of artificial lighting, but avoid direct sunlight.

•

Wash full

loads of dishes and clothes for better efficiency.

KEEP HOT AIR FROM LEAKING INTO YOUR HOME •

Seal cracks and openings to prevent warm

air from leaking into your home.

schedule regular maintenance for your cooling • Add caulk or weatherstripping to seal air leaks around doors and windows. equipment.

•

Avoid placing lamps or TV sets near your

room air-conditioning thermostat. The thermostat senses heat from these appliances, which can cause the air conditioner to run longer than necessary.

•

Vacuum your air intake vents regularly to

remove any dust buildup. Ensure that furniture

and other objects are not blocking the airflow through your registers.

CONSIDER A RANGE OF APPLIANCES

LOWER YOUR WATER HEATING COSTS Water heating accounts for about 18% of the energy consumed in your home.

The Consumer Product Safety Commission recommends setting your water heater at no more than 120 degrees

Fahrenheit to prevent scalding. The lower setting will also conserve energy and save money.

AND LIGHTING OPTIONS •

Consider lighting options that operate at

cooler temperatures.

21 / Get Energy Efficient

8 Important Legal Tips for Landlords and Property Owners By: Liran Koren, from luxurypropertycare.com Lawsuits are everywhere and they can

should hold on to pertinent documents that

happen to anyone — including you.

may be considered as evidence.

Rental properties are a lucrative investment This includes all landlord-tenant but they come with the risk of litigation.

communication including emails, text

Aside from making sure that your property

messages, call logs, and the like. Whenever

is “rent-ready”, you should also make sure

you’re discussing important matters with

that you’re prepared to defend yourself in

your tenant (e.g. late rental payment fees,

case you’re facing legal action.

eviction, etc.), it’s best to stick to written

Below, let’s take a look at eight things you

modes of communication.

can do to prevent nasty lawsuits:

#2 Understand Data Privacy Laws

#1 Keep Records of Everything

Although the US doesn’t have federal-level

And by everything, we mean everything. As a property owner, you should keep records of rent receipts, work orders, eviction notices, and more. Proper documentation can protect you when you’re faced with legal issues. To avoid pointing fingers, you

22 / The Legal Corner

data privacy laws unlike the UK’s General Data Protection Regulation (GDPR), the US does have state-level statutes such as the Californian Consumer Privacy Act (CCPA) and the Hawaii Consumer Privacy Protection Act (SB 418). These laws provide consumers with greater control over

their personal data, such as their names, addresses, phone numbers, and more.

The state of Florida does not yet have laws governing data privacy, but there have been talks about introducing a law that is similar to the CCPA.

requirements are within the law. #4 Don’t Enter the Unit Without Notice You may own the rental property, but the moment that it is rented out, you lose the ability to walk inside the home whenever you want. Tenants have the right to utilize

Data privacy laws apply to all landlords

their rented

and property managers that collect

space

personal information from their tenants.

without the

This includes the information found in the

interference

rental application.

of their

#3 Require Renters Insurance

landlord.

This is called

A property owner’s typical landlord

the right to

insurance won’t cover the costs of

the “quiet enjoyment” of their home. As a

replacing the tenant’s belongings in the

general rule, you may enter the

event that they get destroyed or stolen. It

property only when the tenant has given

also won’t cover the tenant’s medical

you permission.

expenses should they get injured on the property.

There are, however, exceptions to the rule. You may enter the rental unit without

To protect yourself from lawsuits, consider notifying your tenant when: requiring your renters to obtain renters • There is an emergency (e.g. gas leak, insurance. Not only does it protect your fire, flood) tenant’s personal property, but it also guards you in the event that your tenant

•

decides to sue.

the tenant has abandoned the property

Keep in mind that including this clause in

•

the rental agreement may be prohibited in

property for an “extended absence”

The is reasonable cause to believe that

The tenant has been absent from the

certain states. Be sure to check with your property manager to ensure that your 23 / The Legal Corner

#5 Require a Security Deposit A security deposit is a fee that a tenant has to pay on top of the first month’s rent. It is a refundable amount that the tenant can get back when they move out. Its purpose is to protect you, the landlord, in the event that the tenant damages the property or fails to satisfy

Florida does not have landlord-tenant laws governing security deposits, hence, you have complete discretion over the amount that you will charge.

Just make sure that it’s a reasonable amount, otherwise, your tenants may change their minds about renting the place.

their financial obligations (e.g. rent

#6 Keep Your Security Deposit in a

payments and utilities).

Separate Account

The law does not require landlords to

Landlord-tenant laws vary by state

collect a security deposit from their

when it comes to where the security

tenants, however, it would be in your

deposit should be stored. Generally,

best interest to do so. If you decide to

you shouldn’t store your tenant’s

require a security deposit, keep in mind security deposit in your personal bank that some states have set a cap on the maximum amount that you can collect.

24 / The Legal Corner

account since it yields interest.

In Florida, you should keep your

(HUD) investigates the claim, you may

tenant’s security deposit as a surety

want to consult an attorney. The

bond, in a dedicated bank account, or

penalty for first-time offenders can be

a non-interest-yielding bank account.

as high as

It’s worth mentioning that security

$16,000 excluding attorney’s fees,

deposits stored in an interest-yielding

damages, etc.

bank account must be returned to the

tenant along with the accrued interest. #7 Follow the Fair Housing Act

#8 File Your Taxes Accurately Filing your taxes is a skill you need to master if you’re planning on becoming

As a landlord, you should know the

a landlord. If you intentionally submit a

Fair Housing Act (FHA) by heart. The

false report of your annual income or

FHA protects “protected classes” by

claim unfounded tax deductions, you

prohibiting discriminatory acts in

may soon be getting a visit from the

housing, such as:

Internal Revenue Service (IRS).

•

Refusing to rent the property due to However, if you made an innocent

race, religion, national origin, etc.

•

Having preferences regarding the

type of tenant/s (e.g. “whites only” and “families only”) •

Failing to provide the same

services, amenities, etc. to tenants of protected classes If a prospective tenant sues you for discrimination and if the Department of Housing and Urban Development

mistake, you should file an amended tax return as soon as possible. You shouldn’t let the period for filing lapse.

Remember, if you purposely attempted to evade your taxes, you may face a maximum fine of $100,000. It’s best to hire a single-family property management company that has its own team of attorneys and accountants to ensure that you don’t violate the law.

25 / The Legal Corner

For More Information Visit Our Website: landlordcollections.net Give Us A Call: (800)-369-6153

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Terri can honestly say she gets up every day and loves what she does. She believes that Serge is a great partner and together they succeed in restoring peace to families who need it most. In her spare time, Terri enjoys spending time with her family, her horses, and volunteering.

28 / Vendor Spotlight

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We specialize in restoration services for residential and commercial properties damaged by water, fire or mold. We manage a 24hr emergency response operation.

Phone: 203-442-4444 Email: Terri@servicemastercm.com Service Areas: Litchfield County, Bristol & Plainville, Milford & Orange, Bethel, Brookfield, Danbury, Monroe, New Fairfield, Newtown, Sandy Hook, Sherman & Stratford 29 / Vendor Spotlight

Rental Application Fraud In The Digital Age By: Paul Jenney, Compliance Officer with TenantTracks The process to apply for a rental unit

The digital pool of applicants adds more

looks much different than in years past.

people to the pile of applications we are

Rather than meeting with a landlord in

getting for every unit, but quite frankly,

person, applicants can send an

many of them are looking for a ‘mark’ that

application online without ever meeting

they can get one over on via one trick or

face-to-face.

another. Small landlords are easier to deceive than major management

Zoom calls are common, as are virtual

companies due to the belief they have a

showings.

less robust set of tools.

Reducing fraud should be a top-tier

One of the leading credit bureaus Trans

concern as it becomes more and more

Union (which is TenantTracks’ primary

commonplace. Every day we are hearing vendor) conducted a study in 2020 about of more scams, from people queuing up

application fraud. They found in addition

people to be their ‘landlord’ for

to the switch from in-person applications

references, to sophisticated operations

to digital applications, the COVID-19

generating paystubs, and even tax

pandemic was another contributing factor

returns.

to the rise of fraud in the rental housing industry.

30 / Tenant Screening Tips & Tricks

They found that: •

The best way to catch fraud is to have

41% of respondents discovered fraud

systems in place to prevent it.

after move-in •

67% are concerned about the future of

Through the process of identity verification,

fraud growth

you can make sure that you are speaking to the person you believe that you are

Over the course of the coronavirus

speaking to. Cross referencing the

pandemic, fraud has steadily increased,

information you see can show you what

and 22% of applicants failed authentication

lines match up and what doesn’t. Does their

or were identified as high risk. During the

government-issued ID match with their

pandemic, fraud reached a high of 15%

other records? That can include credit

compared to 10.3% over the same period in information, eviction history, criminal history, 2019.

and employment records.

It’s important for landlords to understand

Start with a completed rental application.

the risk factors of fraud, as it can result in

Everything should be filled out, and of

several negative consequences. Some

course, a full release to conduct an

lasting impacts of fraud, as identified by

extensive background check. If you are

Forrester (who conducted Trans Union’s

doing this online, have them upload a copy

study), include:

of their government issued ID for a first line defense. If the information on the ID and

•

Increased repetitional damage: 59%I

the application do not much, that should be

•

Increased evictions: 51%

your first red flag.

•

Internal time spent comparing applications to find discrepancies: 46%

From there, you can verify everything your

•

Increased financial loss: 35%

applicant provided, and whatever is

•

Lighter vacancies: 32%

required within your rental criteria (you do

•

Increased bad debt: 22%

have a WRITTEN criteria checklist, right?),

31 / Tenant Screening Tips & Tricks

is accurate and meets with your

identity theft-related fraud in the U.S.

expectations. That would include checking for omitted information,

With fraudsters becoming smarter,

noticeable gaps in their rental or

companies are having difficulties staying

employment history (cue criminal

ahead of their advanced tactics. Some

records possibility here), or references

types of fraud landlords should be aware

that just don’t seem to be as accurate.

of include:

Types of Fraud

•

With increased digitization comes more

practice of lying on a rental application,

types of fraud.

whether it be providing false income or

Rental application fraud: This the

uploading an altered photo.

We have all heard of data breaches.

•

Synthetic fraud: This is one of the

Fairly every week we are being notified

fastest-growing types of fraud. It’s where

that our own data has been

an applicant creates a fake identity using

compromised and offer us credit

real and false information. For example,

monitoring free. You should take

a fraudster may create a fake Social

advantage of these offers. Forrester

Security number and pair it with a real

estimates that one recent breach alone

address to create a fake identity to gain

caused an increase 5% to 10% in

access to a rental property.

32 / Tenant Screening Tips & Tricks

•

First-party fraud: This type of fraud Consumer reporting agencies are

is performed by the individual, which is

extremely good at returning complete

typically the tenant, where they use

and accurate information even when

fake or altered information, such as pay identities are manipulated. It’s central stubs and previous addresses, to

to their business and there are

qualify for a rental property.

extraordinary business and regulatory

•

Third-party fraud: This is when an

pressures on them to do this well.

individual uses another person’s identity or information to qualify for a

They must have sophisticated tools for

rental property, such as

finding addresses, social security

misrepresenting who they are with

number fraud, address matches and

someone else’s Social Security

mismatches, soundex and nickname

number, name, and date of birth.

logic, and a host of other tools to correlate the data supplied vs the

Much of this can be mitigated with

output data that paints a complete

adequate screening both on the due-

picture of the applicant and that it is

diligence phase of calling landlords and actually the individual applying. employers, verifying documentation, and during the tenant screening report. The more homework you do at the outset to prevent fraud, the better the You must learn how to QUALIFY the

outcome for your bottom line.

reference as a reliable historian (this

skill is a must have) to weed out those feeding you false information. You also need to be able to identify if a government issued ID is falsified.

Bartenders been doing this for years, so it’s a skill that can be acquired.

33 / Tenant Screening Tips & Tricks

What’s Happening Near You? The Statewide Events and Meetings calendar is a resource for local landlords and property owners to meet up, network and grow your real estate opportunities.

Get Involved, Stay Informed.

June 2022 Sun

Mon

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Sat

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CTREIA

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CTPOA

ECAR

Events & Meetings & Networking

Connecticut Property Owner Alliance (CTPOA)

CT Real Estate Investors Association (CTREIA)

CT Real Es Investors Associatio (CTREIA

Next Meeting: June 14th

Next Meeting: June 20th

Next Meeting: June

Time: 5:30 PM

Time: 5:45 PM - 9:00 PM

Time: 5:45 PM - 9:00

Where: River Hill Restaurant Where: Sheraton Rocky Hill Where: Keller William 1700 Watertown Ave 100 Capital Blvd.

2777 Summer St, Su Waterbury, CT 06708 Rocky Hill, CT 06067 Stamford, CT 06905 Contact: 800-369-6153

Contact: 860-265-4414

About: Join us for a night of: About: Our Main Monthly Meeting - Central CT with • Networking Attorney Lee Phillips.

Mastering The Tools of • A presentation by Wealth!

Eviction Attorney Dana Guiliano on everything Lee is the nation’s leading you need to know about Connecticut Evictions. In expert in asset protection for real estate investors and addition to her legal insights, Dana served as small businesses. Join us the former Head Clerk of and learn how to make more money while protecting the Waterbury Housing yourself!

Court for over two decades.

Register Here!

• Legislative updates provided by CTPOA •

Food will be served, cash bar.

Register Here!

Contact: 860-265-44

About: Our Main Mo Meeting - Fairfield Co with Attorney Lee Ph Mastering The Tools Wealth!

Lee is the nation’s le expert in asset prote real estate investors small businesses. Jo and learn how to ma money while protecti yourself!

Register Here!

tate s on A)

CT Real Estate Investors Association (CTREIA)

Connecticut Property Owner Alliance (CTPOA)

Eastern CT Association of Realtors (ECAR)

21st

Next Meeting: June 25th

Next Meeting: June 29th

Next Meeting: June 30th

0 PM

Time: 9:00 AM - 1:00 PM

Time: 5:30 PM

Time: 3:00 PM - 5:00 PM

ms uite 700

Where: CTREIA 415 Silas Dean Highway, Suite 304A Wethersfield, CT 06109

Where: The Frosty Mug 269 Beaver Street New Britain, CT 06051

Where: Saltwater Farm Vineyard 349 Elm Street Stonington, CT 06378

Contact: 860-265-4414

About: Join us for a night of:

414

onthly ounty hillips. of

Contact: 800-369-6153

About: Mastering Real Estate Tax Strategies With • Networking Attorney Lee Phillips.

• An overview and update on housing and Saturday he will go into eading environmental issues in more depth concerning ection for asset protection and Connecticut and the legal tools you can • A guest speaker who will oin us use to get security. be announced soon! ake more Lee will also take a deep ing dive into real estate Register Here! taxation and how you can get more money in your real estate investing.

Register Here!

Contact: 860-892-2595 About: Join the ECAR YPN Committee for a networking event on June 30th from 3pm-5pm on the mezzanine at Saltwater Farm Vineyard in Stonington..

Co-Sponsored by Women's Council of REALTORS ® Eastern CT. Register Here!

P. (800)369-6153

F. (888)900-9773

E. info@ctpoa.com

www.ctpoa.com

CT Real Estate Today allows you to hit your target audience for all things real estate.

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ecticut Property Owners Alliance is of experienced property managers, S and landlords working together to usiness conditions for rental property owners.

ow CTPOA: https://www.facebook.com/CTPOA/

About Us Advocates For Property Owners The Connecticut Property Owners Alliance is composed of experienced property managers, realtors and landlords working together to improve the business conditions for rental property owners. The Alliance saves its members money on essential real estate services, reviews and testifies on pending legislation & law changes and offers its members workshops and meetings on topics that impact landlords.

Why The Property Owners Alliance Was Formed The Alliance strives to ensure your success in real estate by: •

Saving you money on essential real estate services

•

Informing you of law changes impacting your business

•

Providing workshops and meetings to help you become a better educated and prosperous rental property owner.