State of California and City of Sacramento Ban Evictions Due to COVID-19 Financial Hardship & State of Emergency
Governor Newsom issued an executive order effective immediately (3/16/2020) that prohibits the eviction of residents who are unable to pay rent because of a substantial decrease in income. This order protects residents who are subject to a layoff, reduction in work hours, or significant out-of-pocket medical expenses as a direct result of Covid-19.
Moratorium on Bank Foreclosures
Also, the executive order requests financial institutions to implement an immediate moratorium on foreclosures, which may provide relief to rental owners who are unable to collect rent from their residents. This executive order expires May 31, 2020 unless extended by Governor Newsom.
Sacramento Issues Emergency Ordinance
The Sacramento City Council also implemented an emergency ordinance (also effective immediately) that places a moratorium on evictions due to non-payment of rent if residents demonstrate that the inability to pay rent is due to COVID-19. Residents must notify their landlord or Sacramento property manager in writing before rent is due, provide verifiable documentation of the reason, and pay the portion of rent that there are able to pay.
Unlike the statewide executive order, the moratorium on evictions passed by the Sacramento City Council only applies to rental properties within the city and will remain in effect until the termination of the local public health emergency is declared by the Sacramento County Public Health Officer. Once the public health emergency is over, residents have 120 days to pay all unpaid rent. The moratorium on evictions will end after this 120-day period.
Click here for the full text of Governor Newsom's executive order.
For more information about how to handle non-payment of rent during this pandemic or anything else related to Sacramento property management, please contact us at Sacramento Delta; we'd be happy to help.
At Sacramento Delta, we are property management experts who know a lot about insurance. But when it comes to insurance matters, we want you to hear directly from an expert in insurance. So, we’ve invited Kurt Bullock with Bullock Insurance to talk to us about what it means to add your property manager as an additional insured to your policy. It can be difficult for a lot of our new clients to understand, especially if they’ve never heard of it before.
Liability Coverage for Owners and Property Managers
If you have an income property and you hire a property manager, you’ll usually end up signing a management agreement. In that management agreement, there is usually an indemnity clause. When you add your property management company to your landlord policy as an additional insured, you’re protecting everyone who deals with the property and the tenants.
For example, if a tenant had a party and a guest was injured and there was a lawsuit, both the landlord and the property owner would be named in the lawsuit. So, when that lawsuit gets turned over to your insurance company for representation, you want all parties to be protected from liability. This is called premises liability. A few carriers will include this for you without any charge, and it’s the best way to protect your property.
Property owners have a laundry list of policies available to them when they’re buying insurance to protect their investment property. As property managers, we provide our owners with eviction protection. We don’t cover the loss of rent because there’s an insurance rider for that. When you have lost rents, you can recover that money through your policy.
Serving Tenants Better as an Additional Insured
During the fires in Paradise and the floods in Houston, we also found out that property managers who were listed as an additional insured on the owners’ policies were able to get help for their tenants faster. We have a lot of investors who don’t live in California, and getting to the site of a disaster right away is impossible. When the property manager is an additional insured, we can act on your behalf immediately. That’s an added benefit that we didn’t know existed until we saw our fellow NARPM members go through it. It’s another good reason to add your property manager as an additional insured.
Additional Insured versus Additional Interest
Sometimes, a landlord insurance policy will add a property management company as an additional interest. That is different than additional insured. They kind of sound the same but additional insured means the property manager is covered under the liability section of the policy. Additional interest simply means that when the policy experiences a change, such as a renewal or cancelation notice, the property manager will get a copy of that notice. It does not offer any liability protection at all. There is no protection when a management company is named as additional interest. It’s a huge difference, and you want to make sure you’re adding the company as an additional insured.
If you have any questions about this, please reach out to us at Sacramento Delta Property Management, and we’d be happy to share more information.
Rental property maintenance requires responsiveness, budgeting, and a great network of professional vendors and contractors. All of us work at Sacramento Delta Property Management to ensure the properties we manage are well-maintained. Today, we’re talking a bit about our process as a professional property management company.
Working with Trusted Vendors
You need to always be on the lookout for good vendors. In our industry, if someone hears about a great vendor, everyone tries to get to them and they get booked up quickly. We’re constantly looking for competitive rates with our vendors, and we do work with some awesome long-term vendors. Many of our maintenance partners have even been with us for over 35 years. Some will only work with Sacramento Delta and smaller companies. This makes it easier to keep the rates low. They don’t have to advertise or market themselves because they get enough business from us.
Maintenance costs are always on the rise. We do our best to keep costs contained, but there is always inflation, and repairs and parts are not going to cost what they did five years ago. Many of our owners benefit from our discounted pricing negotiations with our best vendors. When you work with us, you get a much better price than you would if you were self-managing or getting your management services elsewhere.
Invoicing transparency is important to property managers. As an owner, you’ll receive the original invoice with the exact information from the vendor. There is no hiding anything and we don’t have any hidden costs or upcharges. The owner gets the exact original invoice and we only keep a copy of it for our records. Transparency is important and so is documentation. We like for each property to have a detailed record of exactly when and how things were repaired.
Comparing Maintenance Prices
We also have a long list of licensed and insured contractors to choose from for our bigger ticket items. We will always get second or third opinions when necessary. These vendors are insured and licensed and bonded, so if something is not done completely or correctly, we can always go back to them and have it handled. They are liable for the work that they do, and a lot of times we won’t even pay an invoice until we get a clear photo of the completed work.
For larger projects, we keep things as cost-effective for our owners as possible. We are always looking for ways to save money for our clients because at the end of the day, we want the best-case scenario.
It’s not uncommon for our clients to send one of their own vendors out to get an estimate after we have provided our own estimates. Usually, our vendors are more affordable.
Gathering competing quotes isn’t always possible. If it’s an emergency and a new furnace or HVAC system needs to be repaired immediately, we get it done because it’s a habitability issue. We can’t have tenants without a place to live.
In-House Maintenance is not Always Best
In-house maintenance is always an interesting process for repairs, and it has both benefits and drawbacks. There can be some pretty high bills when companies use their own maintenance teams. Having a neutral third party take care of these repairs will provide more accountability. And, it reduces liability.
The main goal is to get the item fixed, not to make additional money off our owners. Upcharges and additional fees just for coordinating maintenance is not something we agree with as a company. This is included in your management fee and should not be charged additionally.
We are very transparent, and we are never going to throw in hidden fees, especially for maintenance. Our clients also appreciate getting to know our vendors. They know our HVAC guy or our plumbing guy and they know they can trust the work.
At Sacramento Delta, we have a motto that deals with the four “F-s”. Those F-s are:
- Be Friendly
- Be Flexible
- Follow Up
- Fix the problem
If you’d like to know more about our maintenance process, please contact us at Sacramento Delta Property Management.
**Please see our newest blog about changes to this information during the Coronavirus Pandemic.
As professional property managers, we have some strategies for when tenants don’t pay rent. Sometimes, landlords want to jump straight to eviction. But, you really want to avoid eviction if you can. It’s costly and time-consuming.
Today, we’re talking about how we handle tenants who aren’t paying on time.
Property Management and Eviction
Eviction is always available to us, but we like to take steps to avoid that. Everyone has different circumstances that come up in their lives, and I think you do need to take that into consideration. You also want to stay compliant with fair housing laws.
A professional property management company understands the importance of treating all tenants equally. We work hard to communicate and maintain a positive relationship with all our tenants so that if rent doesn’t come in, we can call them and see what’s going on. It could have been an accounting error or something with the mail, but whatever the situation is, always give them an option to respond and at least rectify the situation.
Make sure all late fees are paid along with the rent if it is indeed late. If the tenants aren’t going to have rent for another two weeks, we always call the owner to figure out how that is going to affect their own finances. If you’re relying on that rent payment to make your mortgage payment, you may have a strong opinion on what we do next.
Three Day Notice and Payment Plans
There’s always an option to immediately serve the Three Day Notice to Pay or Quit and move forward with an eviction. However, sometimes it’s better to talk to the tenants and come up with a plan. It provides accountability to the tenants while avoiding eviction. Keeping a good tenant in place for the long term is always the best option for your investment. Some of our tenants have been with us for 10 years, and we don’t want to lose them over one month of late rent. When you evict, you have to pay eviction costs and worry about a vacant property. Tenants who run into temporary financial trouble appreciate when we’re willing to work with them to avoid the eviction process.
Another thing is if it is just a tenant that is delinquent on a regular basis and they are not ever going to be able to catch up, you may need to give them a change of terms. Give them a longer notice so they have time to prepare if they cannot rectify it instead of jumping right to the attorney. Unfortunately, this is also contributing to the housing crisis. But we do want to make sure our owners are getting paid and that tenants are held accountable to their lease terms.
Fair Housing Act
Always be fair and work with your resident. Try to understand their situation and where they are coming from before jumping right into the eviction process. We think you should always treat your tenant the way you would want to be treated.
The most thing that we stress is that the Fair Housing Act is important and cannot be violated. We can’t offer a payment plan to one tenant but not another. It’s the same with late fees; you cannot waive them for one tenant but enforce them for another. It sets up a presumption of discrimination.
Fairness is appreciated by everyone. So, set your standards and stick to them. Then, there are no questions asked. You have a happy owner and a happy tenant.
Choosing a property management company is an important part of your investment success. You want to work with a property manager who understands your goals and your needs as well as the unique needs of your rental property. Today, we’re sharing some things you should look for when you’re finding a Sacramento property management company.
Property Management and Property Type
You want a property manager who has experience working with properties like yours. Multi-family and single-family homes require different types of management. Every one of our California property managers does hold a license to sell real estate if we want to. But, instead of looking for a real estate agent, look for a property management company that understands your home and can help you execute effective rental management.
Transparency and Property Managers
Transparency is a big thing. Property managers and owners should always be 100 percent transparent with each other. You don’t want upcharges or invoices and statements that don’t make sense. Owners don’t want to see hidden fees or surprises. Communication is important in a property manager.
Legal Knowledge and Expertise
You also always want to make sure the different property managers that you are considering are all up to date on the current local, state, and federal laws. That will protect you from liability and lawsuits.
At Sacramento Delta Property Management, many of our team members hold board positions with our local NARPM chapter. This puts us in an excellent position for staying up to date on the current legislation. We know a little bit more than those around us.
With a position as the education chair on the board, we can collect and share all the available information regarding laws that have an impact on how we do our job for our clients. We also get to educate others on property management and the industry’s best practices. When you’re looking for a property management company, make sure they’re involved in NARPM and make sure they understand the laws.
These requirements change on an annual basis. A couple years ago, smoke detectors were required in all the bedrooms and the year before that we had carbon monoxide detectors required in the hallways. Now, we have to be careful not to use mini blinds with strings. There are constant changes within the market, and property managers who deal with that on a regular basis are always going to be in the know. So being up to date on education and actually having an agent that looks into your best interests as far as longevity for your property and the legal rights of their tenants is really important.
We always start the rental process by giving the owners and the tenants a document that informs them of what their rights are.
Check the Rental Agreement
When choosing a property management company, you also want to make sure that they have a flawless rental agreement. This is especially important if you already have a tenant in place and you are just choosing a property manager to take over. Update your rental agreement because there are new clauses that get added yearly.
Look for a Certified Residential Management Company, or a CRMC. Property managers who gain this certification have to go through audits and complete extra training to be given that distinction. It is a highly coveted honor and there are only a handful across the country who have this. We’re proud to be one of those companies.
Education is important with our team. You need to look for a property manager who never stops learning.
If you’d like more information about choosing a property manager, please contact us at Sacramento Delta Property Management.
Security deposit disputes can be quite common, especially if there’s a lack of communication and expectations are not discussed ahead of the tenancy and the move-out process.
Today, we’re talking about how landlords can avoid security deposit disputes with their tenants and how a property management company can help with documentation and distinguishing damage from wear and tear.
Treat every move-in process like you are going to end up in court.
In that head space, you are documenting everything as if it’s going to be presented to a judge. Photographs are always the biggest benefit you can offer when it comes to move-in inspections. You want to thoroughly document how the property looked before move-in so you can compare it to how things look at move-out. Open cabinets and drawers and take pictures showing that everything was thoroughly cleaned prior to the tenant taking possession. Really note every little thing. If it does not say it was cleaned on the move-in inspection report, then how do we really know it was?
Document everything no matter how big or small.
Wear and Tear and Life Expectancy
Property managers are good at taking into consideration the life expectancy of the household items that are worn down during a tenancy. If there is a hole in the door that the tenant caused but the hole is on an original door from when the home was built in 1950, the price of that door is probably $20 minus depreciation. When it comes to carpets, if the tenant was there for three years and had a pet that ruined the carpet, you technically can only charge them for the time remaining with the carpet since the life expectancy for the actual carpet is really only seven years.
Owners need to be aware of what they can actually charge the tenant for versus what is considered wear and tear. Fairness is important, and you have to know what you’re responsible for as a landlord and what tenants can reasonably be charged for after moving out of a property.
Re-Evaluate any Tenant Dispute
If the tenant is disputing some of the charges against them, you do need to re-evaluate. You should never just automatically assume you are right and try to nickel and dime the tenant. Always re-look at things and decide if the life expectancy of the items you are charging the tenant for has passed or if there is room to negotiate.
At the end of the day, our owners decide what should be charged, but as property managers we work hard to educate our owners. You need to know whether a dispute is really worth the $100 you’re arguing over.
Strong Lease Agreements are Critical
It is also important to have a really good rental agreement in place. This will tell you what you can charge the tenant for throughout the tenancy. Just yesterday, we had to refund a tenant a full deposit because there was no move-in inspection report from a previous management company. We couldn’t charge them for anything because nothing was documented upon move-in.
Conduct an interior inspection from time to time, especially if you have a tenant that has been in place for five years. Things may have gone wrong, and documenting them on an annual basis gives you a timeline to refer to so you know when things broke or needed repairs. It’s easier to distinguish wear from damage. Having accurate records of when things were repaired and replaced can always help when a dispute is present in regards to the security deposit.
If you have any questions or need some help with a security deposit, please contact the property managers at Sacramento Delta Property Management.
Achieving a great return on investment, or ROI, is the goal of every rental property investor. We’ve invited Bob, a real estate agent with Keller Williams, to talk to us about ROI on today’s blog. We will often have people buying rental property ask us about whether a particular property will provide a good return. We’ve asked Bob to shed some light on what that means and how to increase your own ROI.
Understanding What Factors Impact ROI
Whether you’re buying an investment property or selling one you currently own, you’ll want to know what kind of value it holds on the market. Rental projections are important numbers, and so are numbers like what the property could rent for and how long it may remain vacant before you earn any money on it. Those are two key factors.
Other areas to look at when figuring out the ROI would be the costs to remodel or clean up the home before it’s ready for the rental market. You would have all of that answered after the property inspection or the home inspection was performed. Other items on the list that may impact your ROI include property tax including assessment taxes, management and maintenance fees, and insurance expenses. Once all that is put together on a spreadsheet, you should review it and maybe take it to an accountant or a CPA. The amount of ROI you can expect often depends on your financial situation at the time.
Working Together with Real Estate and Management Partners
At Sacramento Delta Property Management, we do not sell real estate. At Keller Williams, Bob helps people buy and sell homes. When you’re planning to buy a rental property and you need to know what you’ll have to spend and what you can expect in terms of rent and ROI, it’s important to talk to both of us. We each do different things every day, and you’ll need a lot of expertise in order to make the right decision and have a successful investment experience.
Keeping the buying and selling part of your transaction separate from the property management portion of your investment will help you gain as much expertise and as many resources as possible during this process. I love referring clients to Realtors when they want to buy something, because they really are experts at what they do. Bob knows how to buy and sell solid real estate property and he knows how to deal with non-owner occupied properties. He definitely gives us a lot of support on the investment side, which is great.
Property management that’s professional and experienced allows you to earn more on your rental property. We keep your tenants happy and paying rent. The last thing we want are hostile tenants. We want to get a good understanding of how they feel. Tenants are just as much a part of earning more ROI as your rental value and your vacancy rate.
We’d love to tell you more about how to earn a better return on your Sacramento investment property. Please contact us at Sacramento Delta Property Management.
- Inspections: How a Sacramento Property Manager Protects Your Rental Home
- How to Get the Most Money for Your Sacramento Rental Property
- How to Properly Screen Sacramento Tenants to Avoid Eviction
- Inspections | How a Sacramento Property Manager Protects Your Rental Home
- How to Get the Most Money for Your Rental Property
- How to Properly Screen Sacramento Tenants to Avoid Eviction
- Sacramento Property Management Update - How to Handle Tenant Evictions during Coronavirus
- How Additional Insured Can Help Landlords
- Sacramento Delta Property Management
- Sacramento Delta