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Package Management – An Expected Amenity

According to a recent National Multi-Housing Council study on renter preferences package management ranks second in importance after fitness centers and before WiFi, according to Barry Hume, president of Package Concierge.

Hume moderated the Package Management, From Courtesy to Competitive Necessity: Why It Matters session at the 2016 NAA Education Conference & Exposition.

“NMHC has done study after study on the topic and package management comes up as one of the most important amenities to residents every time,” Hume says. “There’s going to come a point in the not to distant future that it will become the most important amenity.”

The panel shared that Amazon Prime now offers fee memberships to college students while its general membership has more than doubled in the last two years. The service now boasts 64 million paid memberships. Further ramping up the package delivery game, the ecommerce juggernaut has launched same day delivery in 27 regions across the country.

“Residents are ordering packages, and their expectation is that the packages are delivered to their homes,” Hume says. “Furthermore, residents believe it is our problem to deal with, not them. We need to figure out how.”

Fellow panelists Dean Holmes, COO, Madison Apartments and Craig Meddin, COO, The Postal Solutions Companies echoed Hume’s sentiments that now is the time for apartment owners and operators to shift their view of package management from one of a resident courtesy to being a competitive necessity.

“A proactive and well-evolved package management policy can be a competitive differentiator,” Holmes says. “Most of us are choosing to find solutions to manage packages for our residents.”

But why should an apartment community justify the shift from courtesy to competitive necessity? The answer, according to the panel, is two-fold. First, it improves resident satisfaction and, second, the return on investment can be profound.

Although the direct impact of package management varies, 30-60 percent of residents indicated that package management solutions/effectiveness have a positive impact on their decision to renew.

“A planned package management solution is definitely impactful,” Hume says. “There’s a real business case for having something in place that will affect the resident.”

If resident satisfaction isn’t enough of a reason to make package management a must-have amenity, the numbers are intriguing.

It is estimated that the time it takes on-site personnel to deal with a single package is five to six minutes, according to the panel. That is roughly one hour for every 10 packages. Data shows that a 250-unit property averages 30 package deliveries per day, which equates to three hours of package management. When processed manually, the average cost to accept and deliver a package is $2.08 per package.

“Package management is an expectation now, an expectation that most of our residents and prospects take for granted,” Holmes says. “It’s not an optional amenity anymore.”

For more coverage on package delivery solutions, see the June issue of UNITS magazine. Get more insights on current trends in the apartment industry via our REWIND program, which recaps every session from the 2016 NAA Education Conference.

Los Angeles Landlord Wins Unlawful Detainer Against Tenant Renting on Airbnb

Recently, a Los Angeles landlord successfully evicted a tenant who was renting part of her unit on the short term rental website, Airbnb. Chen v. Kraft provides some guidance to Los Angeles landlords looking to evict rent control tenants who are renting their units on Airbnb or other short term rental websites.

In 1997, Tenant had entered into a rental agreement in the Los Angeles neighborhood of Venice. The rental agreement allowed for Tenant to live there with her two young sons visiting on weekends. The rental agreement required that Landlord give ten days notice to Tenant to cure any breaches in the rental agreement.

On February 14, 2014, Landlord filed an unlawful detainer against Tenant after Landlord had served Tenant a 10-Day Notice to Perform or Quit requiring Tenant to stop subletting the unit to short term renters. Defendant responded that the prior landlord had allowed her to sublet. The Landlord filed a Motion for Summary Judgment alleging that there were no triable issues of material facts. The trial court granted Landlord’s Motion for Summary Judgment.

On appeal, the Court first found that Landlord could evict a tenant under the Los Angeles Rent Stabilization Ordinance if the tenant used or permitted the premises for any illegal purpose. Here, the Court found that the Tenant was operating a bed and breakfast facility and that such use would be a violation of the Los Angeles Municipal Code which prohibits bed and breakfast facilities from R-1 zones.

In response to Tenant’s argument that the prior Landlord had allowed Airbnb rentals, the Court found that such contract would be illegal and void or enforceable. A court cannot enforce an illegal contract. Here, any agreement, whether written or oral, that allowed Tenant to sublet her unit on Airbnb would be illegal because Tenant would not be allowed to run a “bed and breakfast facility” or a transient occupancy use from her apartment, which was not zoned for such uses.

This case has important implications for landlords seeking to evict tenants who are subletting their units on Airbnb. This is of particular importance for landlords of rent control properties in the City of Los Angeles.

 

By |2016-01-21T01:48:25+00:00January 21st, 2016|Landlord-Tenant|Comments Off on Los Angeles Landlord Wins Unlawful Detainer Against Tenant Renting on Airbnb

What You Get/ Property Management?

All owners want their properties to have increased income and so increase in value during their period of ownership.  The first-rate property will command the highest price when it is sold.  To achieve these goals, income property must be properly managed.  The major error that can be made by an income property owner is saving money by self-management.  Enhanced value usually comes from professional management.

Since professional management teams have experience and training in the field, they will usually increase revenues and cut costs.  Since the value of a building is based on the condition of the property and the cash flow, this management should increase the value and keep it at its highest potential.  The difference is the professional’s ability to define and execute management duties.

The key management duties are: tenant relations; maintenance and protection of the investment.  To handle these duties, the professional management company will do the following:

  1. Plan the rent schedules
  2. Find the tenants who can meet this rent schedule
  3. Qualify these tenants by a thorough credit investigation
  4. Prepare the lease or rental agreement and have it executed
  5. Prepare specifications for decorating, securing estimates, awarding the contract and supervising the work
  6. Purchase all supplies needed for the operation of the building
  7. Audit and handle payment of bills
  8. Advertise and publicize vacant space through the proper media and in cooperation with other brokers
  9. Plan alterations and modernization programs
  10. Inspect vacant space in the property
  11. Keep abreast of competitive market conditions so rent schedules will be correct at all times
  12. Maintain a complete system of records available for immediate reference
  13. Prepare accurate and periodic financial statements and a complete accounting of funds handled
  14. Pay insurance premiums and taxes and recommend tax appeals when warranted

To put this into the simplest terms, real estate management means someone’s efforts to maximize income and value by:

  • Preserving the physical desirability of the property (checking for ways to prevent physical deterioration; studying and anticipating functional obsolescence; being alert to interior and exterior maintenance needs); and
  • Maintaining high standards of service to tenants (being conscious of tenant and public goodwill; valuing the reputation and appearance of the building; being alert to extending services that will attract reliable tenants).

 

Fee Simple vs. Lease Fee Valuation

The Uniform Standards of Professional Appraisal Practice (USPAP) specifies the procedures to be followed in developing and communicating an appraisal, as well as the ethical rules for appraisal practice. Professional appraisal standards specifically require the study of all value influences. Prior to the valuation process and a Highest and Best Use analysis, the property rights must first be determined. Will the interest appraised be Fee Simple or Leased Fee?

A fee simple estate is the absolute ownership unencumbered by any other interest or estate. The bundle of rights associated with fee simple ownership are the right of possession, right of control, the right of enjoyment, the right of disposition, and the right of exclusion. Basically, as an owner-user, you have the right to occupy, enjoy, sell, and/or deny others to access the property.

In contrast, the leased fee interest is an ownership interest held by a landlord with the right of use and occupancy conveyed by lease to others. Anytime the subject property is encumbered by a lease, including partial lease, short-term lease on a single-family residence, a ground lease, or billboard lease, the leased fee interest should be valued. A lease gives a tenant temporary access to occupy the property. The lease contract does not remove the rights, but rather, is an addition to the fee simple estate. This is evident when a property that is leased is sold. The lease is transferred to the owner. The new owner gets the full bundle of rights and the lease. As a result, the lease is considered a quasi-personality property.

It is important to have knowledge if a lease exist or if the subject property is owner-occupied to assist the appraiser in determining the most probably user (buyer) within the Highest and Best Use analysis, and provide the bank with a more accurate valuation of the subject property.

 

Reproduced from East West Bank  Newsletter May 2016

 

Service Dog for Emotional Support

By Mark Weiner | mweiner@syracuse.com The Post-Standard
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on May 05, 2016 at 3:56 PM, updated May 05, 2016 at 4:12 PM

WASHINGTON, D.C. – An Oswego landlord has been charged with housing discrimination after refusing to allow a tenant to move in with a service dog for emotional support, the U.S. Department of Housing and Urban Development said Thursday.

HUD charged Hillside Park Real Estate in Oswego with violating the Fair Housing Act, claiming the company denied or limited housing to a person with a disability who requires the use of a service animal.

Federal law requires property owners to waive “no pet” policies in cases involving assistance or service animals.

HUD officials said the case involves a woman with a mental disability who filed a complaint after Hillside Park Real Estate denied her request to keep a 66-pound American Staffordshire terrier in an apartment she had leased.

The service dog helps treat the mentally disabled woman’s symptoms, giving her “a sense of calm and safety, allowing her to sleep at night,” HUD said, and helps calm the woman during panic attacks.

Stephanie Castaldo-Gorgoni, the property manager for Hillside Park Real Estate, was also charged in the case. She did not return phone messages Thursday. The company’s lawyer, Joseph P. Gorgoni of Syracuse, declined to comment.

HUD officials said the tenant had registered her dog with the National Service Animal Registry in June 2015, after signing a lease in April 2015. She was due to move in to the apartment July 1, 2015.

But Hillside Park Real Estate canceled her lease, and told her in a subsequent letter that she had not provided sufficient documentation that an emotional support animal is required, HUD said.

The federal complaint seeks $16,000 in a civil penalty against Hillside Park Real Estate, as well as damages to compensate the woman who was denied the right to rent the apartment.

Gustavo Velasquez, HUD Assistant Secretary for Fair Housing and Equal Opportunity, said the agency will take enforcement action whenever the rights of persons with disabilities are violated.

“Persons who require assistance animals have as much right to housing as anyone else, and shouldn’t have their requests for such accommodations unlawfully denied,” Velasquez said.

The case is due to be heard by a federal administrative law judge.