What Are Best Practices for Landlords in Pittsburgh?

October 31, 2011 9:43 AM

I am buying a 3-family house. One unit has tenants. This is in Pittsburgh, PA. What do I need to know?

So, good news is we bought a house. It's a large house with three individual units. The current tenants rent the 2nd unit and have been there for quite some time (I have not met them. I think there are two of them, men, older). They pay what I consider to be a low amount for what they are renting. They have been month-to-month since the homeowner died in September 2010.

My question: what are some good resources to handle having tenants? I would want to know generally (US) and specifically (PA or Pittsburgh). I have only rented before. We are planning on taking a Nolo guide out of the library but beyond that I don't know of the best way to learn the ins and outs. I would want to know specific answers to the following questions:

- How much can we raise the rent once we close on the house?
- How much notice do we need to provide to go into the apartment?
- What situations are we able to go into the apartment immediately?
- What do we need to provide them if we decide to do renovations?
- What if they want a security deposit back? Is that our responsibility?

So any help with those questions, potential problems I haven't thought of, liabilities, etc would be awesome. Anecdotes and personal stories welcomed!

posted by amicamentis to law & government (15 answers total)

You just bought a house. You don't know the answer to very basic landlord-tenant law questions like restrictions on entering your property and the fact that, yes, of course you owe them back their entire security deposit minus necessary and enumerated deductions, because you are their landlord.

I would strongly recommend you hire a property management company to handle this property for you, at least until you learn how things work. And by "strongly recommend" I mean "It is incredibly irresponsible of you and a massive risk, legally and financially, to become a landlord without having learned even the most elementary parts of what that status entails, and the only responsible act is to immediately outsource management to people who know how this works."
posted by Tomorrowful at 9:51 AM on October 31, 2011 [6 favorites]

Almost all that stuff is going to be highly state-law specific --- have you contacted your local landlord's association? You joined a trade, trades have associations. Your local real estate board may be another alternative. One of those two groups ought to be able to point you toward some brochures that address these issues under local law, which is what you're going to need to know.
posted by Diablevert at 9:56 AM on October 31, 2011

Unfortunately... Tomorrowful is probably right. I'd get in touch with the Pennsylvania Residential Owners Association and the Apartment Association of Metropolitan Pittsburgh for more information. They're landlord trade groups in PA and Pittsburgh, respectively.
posted by valkyryn at 9:58 AM on October 31, 2011

In addition to following Tomorrowful's advice, you need to familiarize yourself with Fair Housing laws. Private landlords are required to follow Fair Housing law-- even small landlords, even landlords who are renting housing units that are part of the home they live in. In my experience, a lot of private landlords unwittingly violate Fair Housing law by placing what they believe to be reasonable restrictions on tenant criteria-- for example, by treating tenants preferentially based on employment type ("professionals preferred", etc). You need to be familiar with Federal, state, and local guidelines before you start managing this property yourself.
posted by Kpele at 10:18 AM on October 31, 2011 [1 favorite]

"the only responsible act is to immediately outsource management to people who know how this works."

This is an exaggeration. You can if you want, but mostly, what these property management companies do is collect the rent and call plumbers when plumbers are needed, etc. (and charge you for it). If you live in the building, this shouldn't be too hard to do. Read about Fair Housing Laws, consult an attorney, then proceed as you see fit.
posted by ignignokt at 10:34 AM on October 31, 2011 [1 favorite]

Being a landlord can be painful at times, but average reading comprehension will certainly get you understanding the basic rules and regulations. Remember to check your insurance policy for coverage of rental property/ units.

I'd advice against in trying to raise the rent on the current tenants until you've rented the other unit(s) and really see what the market will bear and how quickly you can get new tenants.

Few months with empty unit costs lot of money vs. ability raise rent by modest sum.
posted by zeikka at 10:37 AM on October 31, 2011

I don't think things are as cut and dry as tomorrowful suggests. Technically amicamentis can't give them back their security deposit since he never took one from them. Unless it was passed to him when he purchased the house, the deposit remains with the estate of the previous landlord. Depending on the size of the deposit, you may want to speak to a lawyer (if its only small it might not be worth it and just eat the cost)
posted by missmagenta at 10:38 AM on October 31, 2011

This is an exaggeration. You can if you want, but mostly, what these property management companies do is collect the rent and call plumbers when plumbers are needed, etc. (and charge you for it). If you live in the building, this shouldn't be too hard to do. Read about Fair Housing Laws, consult an attorney, then proceed as you see fit.

Yes. And being a landlord really isn't all that hard. The thing is, the OP is already a landlord, but doesn't know what she can/cannot do as a landlord, what her responsibilities are, etc. Spinning yourself up to handle basic tenant law is not that hard, and doesn't take that much time, but - speaking as a renter - I would never, ever want to rent from a landlord who didn't already know the relevant law. There's a huge difference between "Soon I will be a landlord, I should make sure I know what that means" and "Right now, this second, I am legally responsible for X Y and Z and don't know it."

So yeah, amicamentis, you'll be fine to take over operations yourself before too long. There's really not that much to it. But in the short term please don't. It's not about the difficulties of acting as a super - that's easy, especially if you also live in the building. It's about the legal side, and the fact that I've had more than a few friends who had to pull out big legal guns just to convince ill-educated small-time landlords that there really are restrictions on what they can do "with their property." And the specific issues cited in the original question are exactly the kind of elementary tenant law stuff that's violated flagrantly all the time. In the long run, this'll be easy to self-manage. In the short term, please don't.
posted by Tomorrowful at 10:51 AM on October 31, 2011 [1 favorite]

On a local level, you might want to contact CCAC and ask about their real estate management classes. It sounds like this class would be worth your while, though it's not on the current calendar.

FWIW, we did a similar class at Pitt before we bought our house (on real estate investing) and found it worth while.
posted by librarianamy at 10:56 AM on October 31, 2011

We live in NYC and rented a small apartment from a property owner who owned a few buildings in Brooklyn. He managed his own properties with the help of his brother. Here is the kind of landlord he was:

- He and his brother were approachable and returned telephone calls (fairly) promptly.
- He repaired things well and with a minimal amount of hassle.
- He abided by NYC landlord/tenant law.
- He respected our privacy and never showed up in our apartment unannounced.
- He trusted us and spoke to us as adults.
- He contacted us if there were issues that he was concerned about but was not accusatory when he did so. (For example, we had a sick cat at one point who was having accidents. We were doing an extra load of laundry every other day or so but were so wrapped up in our little animal drama that we didn't consider the extra water usage. He called and said he'd noticed a spike in the water bill. We were very embarrassed and apologized. He asked us to simply be aware of our usage and try to reign it in a bit. He didn't charge us extra that month for the bill. He was nice and understanding and we handled our situation bearing his expense in mind from that point forward.)
- Our rent was comparable to other properties in the area.
- He did not raise our rent until after we'd been his tenants for two years.
- He kept heat and all appliances in good working order.
- His wife baked us a loaf of cranberry walnut bread at the holidays. Nice touch.

Here's the kind of tenants we were:

- We set it up so our rent was directly deposited into his account on the first of the month. We did not miss a rent payment.
- We respected his property.
- We respected our neighbors.
- We reported problems to him promptly without being accusatory or unreasonable.
- We had the apartment professionally cleaned twice a month.

After four years under his roof, we bought our own place. He provided us a sterling reference to our co-op board.

I also have a friend who owns a property in which he and his wife and kids live, and of which he rents out the ground floor. He educated himself on landlord/tenant law with the help of his attorney prior to closing. The only real issues they've had are noise complaints which were solved by civil discussions between him and his tenant. He says that he is nice to his tenants because they live under the same roof together and he would prefer they feel obliged to give a damn about his property as if it were there own.

Be a conscientious, fair, informed landlord and you'll encourage your tenants to do the same.
posted by TryTheTilapia at 11:20 AM on October 31, 2011 [2 favorites]

Hire a property manager.
Do not become their friend.
posted by Flood at 12:13 PM on October 31, 2011

Lawyer and landlord here, but not your lawyer or your landlord. :)

I'm not sure why some people are giving you a hard time, I think it's great that you're asking these questions before the deal closes. Speaking of the deal closing, your real estate attorney should be able to help you figure out the security deposit issue (and whether the security deposit should be one of the things that you receive a credit for at closing). If you don't have a real estate lawyer for the closing, please get one!

Nthing the advice to get pamphlets and information from your local government regarding landlord-tenant law. Your questions are relatively simple and you should be able to find the answers with a little googling.

Keep in mind that what you MUST provide to your tenants legally and what you SHOULD provide them to keep a good relationship with them may be different. Don't be afraid to go the extra mile for a good tenant. I'd keep the rent at the current rate until you figure out whether these are tenants you want to keep or get rid of.

In my experience a long term tenant is one of your most valuable assets. If they're good, you want to keep them, even if you're not getting the absolute top dollar for the space. My husband and I are taking a little bit of a hit on the rent for his old bachelor pad because we want to keep our really good tenant. We may be charging $50-$100 less than the market rate but we are saving TONS in terms of having a steady tenant that we have a good relationship with. We suffered for a long time (8 months of vacancy) when we were in between tenants.

You will want to get a written lease with them soon. For the most part, I'd approach it like this: these are our proposed terms, they either agree or move out. Check your local landlord-tenant laws for the amount of notice you must give and any terms you must include.
posted by slmorri at 1:13 PM on October 31, 2011

I'm with shmorri -- Tomorrowful is overreacting. The fact is, lots and lots and lots of people become landlords without even asking these questions. It's not hard, and there are plenty of resources out there that will help you do things right without taking 10-20% of your rental income, as long as you're in town and have the time. Property management firms are for absentee landlords, or those who would prefer no contact (or who just can't handle the 3am furnace-not-starting calls).

The two books I always recommend are The New No-Nonsense Landlord and Nolo's Every Landlord's Legal Guide. There are, of course, numerous other works, but these have served me well and earned their easily-accessed position on my shelves.

- How much can we raise the rent once we close on the house?

In almost all US jurisdictions, there is no rent control of any sort. Thus the answer is "what the market will bear", in this case, what the tenants will accept without moving out. Personally, I would suggest you bump it no more than 5% even if it's been low, and probably less than that (typically 1 to 2.5% is what I experienced as a renewing tenant when I rented). Long-term tenants who cause no problems are worth a little hit in the wallet, believe you me. If they were on a lease before the month-to-month, then focus on getting them back into a lease to protect yourself, especially with the other units empty.

- How much notice do we need to provide to go into the apartment?
- What do we need to provide them if we decide to do renovations?
- What if they want a security deposit back? Is that our responsibility?

These all vary by jurisdiction, so you will need to figure out what applies where you are. State law generally, but many (usually larger) municipalities have the power to enact more stringent ordinances.

- What situations are we able to go into the apartment immediately?

This is generally limited to emergencies where there would be a serious problem if you had to wait, such as water overflowing a tub.

If you can, look for landlord training from a non-profit or the city. Network with other landlords, so you can ask for recommendations for plumbers or whomever. You're better off developing relationships with local independents.

Most tenants will not cause you problems. It's an 80/20 split like many things. You'll have a good minority who will nag you about small things like a drafty window or a burned-out hallway fixture, and you'll rarely -- but you should prepare yourself -- end up with a really shitty tenant who will annoy your other renters, bring criminal activity onto your property, and trash the place when asked to leave. It happens.

You may be required to use move-in and move-out checklists. Regardless, take digital photos of the apartment, so you and your tenants won't have a disagreement.
posted by dhartung at 4:10 PM on October 31, 2011 [1 favorite]

Are you in the process of buying, or have you bought the place? If you can still back out, you might consider it. Based on the info you've provided, it seems like you've got a place with 2 out of 3 units empty, and the third on a month-to-month for a lower than desired rent. If the homeowner died a year ago, how long has the place been on the market? Six months? It seems like maybe plenty of other people know something you don't. Is there a good reason to have below-market rent and empty units? Perhaps the that the building is part of an estate explains it, I don't know. Furthermore, since you've bought without researching your rights and responsibilities as a landlord, maybe you also bought without properly researching the market? And your first move is to raise the rent on the only tenants as much as possible while determining if you can stiff them their security deposit should they leave - and should they leave, you now have 3 units empty (or two, if you're living one - but still, empty units).

As presented, it seems like you should bail if you can, because I bet you're in for a hellish surprise. Maybe not- maybe you know what you're up to and you found a primary residence you can easily afford and the two extra units are just gravy on top... but that's not clear from your post and if that's the case, then disregard.

If you can't back out, and you need those tenants to make your mortgage, then focus on being a solid, reliable, responsible landlord. Tenants will stay longer, they'll report problems when they're small, and they'll be more likely to treat your property with respect. And consider leaving the current tenants be until you've got the other unit(s) filled.
posted by everythings_interrelated at 4:27 PM on October 31, 2011

Hello, all. Thank you for the thoughtful replies. We are not relying on any of the rent to pay our mortgage, it's just helpful to pay off the remainder more quickly. The place hadn't been on the market until a week before we looked at it, and there was a lot of interest.

We're speaking with a real estate attorney this week and will take his or her advice seriously. I'm not trying to stiff the current tenants out of any deposit; but not sure how it works when there is an estate involved. I presumed that because they paid this deceased gentleman the security deposit, his estate would be the ones to return it.
posted by amicamentis at 10:30 AM on November 1, 2011