on-site (seattle metro) rental housing journal - september 2014

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September 2014 - Vol. 8 Issue 9

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3. Benefits of Hiring a Property Manager to Manager Your Single-Family Investment

5. The Human Element: Behavioral Interviewing Skills

10. Five Ps for Your Social Media Marketing Success

14. WMFHA: Going Smoke-Free

15. Mind Your Business

18. The Coach: Three Important Steps For Building Property Management Compensation Plans

19. Dear Maintenance Men

21. Help Your Process Server to Save Time in Your Eviction

22. Disposition of Personal Property of Deceased Tenants

23. How Do You Compete With the New Apartment Communities?

Market Overview & Multifamily Housing Update

By Jade Bossert

Multi-family property own-ers have several options, to generate passive income

in retirement, that are unique to owners of income property. They include placing your residential income property under professional management and forgoing the day to day management duties, effecting a IRC 1031 exchange into a commer-cial triple net leased property, or tak-ing on the role of a lender by provid-ing seller financing, to the buyers of your income property.

Seller carry back financing is the most popular vehicle active owner/managers of multi-family properties use to fund their retirement. The major benefit is“mailbox money”, which is a monthly check sent elec-tronically or by mail to the seller every month, for a set period of time. The current market interest rate for seller financing is 5.5% to 6.5% interest.

A strong down payment, of 20% to 30% of the sale price, is recom-mended when financing a buyer. Property tax, insurance and the monthly payment should be collect-ed by a title company or bank and disbursed to the seller. The property should be collateralized by a note and deed of trust that detail the terms of the carry back. The terms should include a late fee. In the event the seller is concerned about being paid off, a steep prepayment fee of 12% to 20% of the principle

In business, the only thing that matters is what works, says Peder Johnsen, a third-generation spe-

cialist in senior living communities. “The people in your company

who are dealing with your custom-ers – the clerks, the caregivers, the customer service reps – are where

the rubber meets the road,” says Johnsen, CEO of Concordis Senior Living, www.concordisseniorliving.com, which owns, operates and develops senior housing communi-ties.

“That’s why it’s essential for the company leaders, the men and

women in the offices that are often far from the front lines, to be where the action is on a regular basis,” he says.

Concordis’ specialties include managing senior-living communities for other owners and developers, an

continued on page 7 continued on page 7

3 Proven Management TechniquesThat Work in Any Business

Identify the ‘Influencers’ on Your Front Lines, CEO Advises

Fund your Retirement with

Seller Carry Back Financing

Seattle WARED Capital Group2Q14, September 2014

2Q14 PAYROLL TRENDS AND FORECAST

The Jet City economy remained in a steep ascent during the second quarter, adding payroll positions at a 42,800-job, 2.9% year-on-year pace, up from 1Q’s strong 39,800-job per-formance. Skilled service and con-sumer-driven sectors led the way. Business, health care and education service employment increased at a combined 15,000-job, 3.6% rate (the education component alone advanced at an 11.8% pace), while construction, retail trade and leisure service headcounts expanded at a 5.2% rate. Conversely, aerospace manufacturing represented a small net employment drain as industry payrolls fell at a –2.5% y-o-y rate

during 2Q. Seasonally-adjusted data were

commensurate, showing a solid 12,800-job net add April through June, up from 8,400 during the prior quarter and 9,800 in the year-earlier period. Preliminary July data were somewhat weaker as headcounts increased 900 from June, comparing unfavorably to a 6,100-job add in the previous month and July 2013’s 5,400-job performance.

RED Research’s Seattle payroll model employs U.S. payroll growth; S&P500 returns and interest rate variables to achieve a 95.1% adjust-ed-R2. The model produces a bullish outlook through 2016, with payroll growth rates remaining consistently above 2%. But our GDP model fore-casts slower economic activity in 2017, which will bend the Seattle growth curve down.. The most prob-able outcome is for annual growth to

slow to about 25,000 jobs in 2017, down from 2014-16’s 35,000- to 45,000-job performances

2Q14 ABSORPTION AND OCCUPANCY RATE TRENDS

Households exhibited strong rental space demand during the sec-ond quarter as tenants net leased 1,689 vacant units, according to Reis, the highest absorption tally in any spring quarter since 2004. A corre-

PAYROLL JOB SUMMARYTotal Payrolls 1,544.9mAnnual Change 42.8m (2.9%)2014 Forecast 41.6m2015 Forecast 42.2m2016 Forecast 34.6m2017 Forecast 25.2mUnemployment (NSA)

5.0% (July)

continued on page 9

2 Rental Housing Journal On-Site • September 2014

RENTAL HOUSING JOURNAL ON-SITE

3Rental Housing Journal On-Site • September 2014


By Cliff Hockely

Buying real estate as an invest-ment has been a well-estab-lished investment strategy for

thousands of years. You purchased or inherited a home or condominium and now you have to figure out how to get your arms around it. Perhaps you were transferred and don’t think it is time to sell the home yet, you want its value to appreciate more. From a management standpoint, you have two choices, manage the prop-erty yourself or hire a property man-ager to take care of it. This article will help you make a decision on which way to go.

Setting investment goalsFirst of all, realize that you need

to set investment goals. In other words, ask yourself what you intend to do with the property. If it is free and clear you could save the money you earn and invest in more real estate… or pay for college tuition for your children. When they are done with college you could use the cash flow to prepare for or amend your retirement plans. If you have a mort-gage you have less cash flow to meet your needs which will affect your

decisions. A few investments goals to consider:

• Hold the property until it is paid off and use the income for retirement

• Hold the property until the marketplace appreciates – then sell the property and:

• Reinvest in another property/ properties (maybe in better locations)

• Take the money to the bank.

• Spend the money you made.

• Sell the property and use it to:

• Buy another home in another part of the country.

• Refinance the property after some of the equity has grown and buy an additional home.

Making the decisionIf you have time and are a hands-

on investor, you will want to screen the tenants, make the repairs, com-plete the tenant turns and do the accounting yourself. More often than not, you get busy with life and don’t want to deal with the investment yourself.

If you hire a property manager

they deal with the myriad issues involved with property management for you.

Property managers handle: Rent collection:

They know what it takes to get the monthly rent collected from ten-ants. They deal with the tenants that won’t pay/ can’t pay, up to and including tenant evictions, some-thing most landlords are unfamiliar with and very nervous about.Tenant selection:

More often than not they have screened the tenants before move in, evaluated their rental history and their credit history and established their ability to pay. Property manag-ers are like you, the fewer tenant turns they have the better, and the more money you make.Dealing with problem tenants:

Sometimes a tenant goes through a divorce, a loss of a job, or some other crisis that turns them from being a cooperative tenant to an uncooperative tenant. Property man-agers know how to handle those sit-uations and can typically solve prob-lems related to difficult tenants.Maintenance:

Most property management com-

panies handle property management emergencies 24 hours a day. They either have their own maintenance department to take care of your property or they have a vast pool of vendors that are prequalified to take care of your property issues. These vendors deal with many property issues from basic carpentry to plumb-ing, electrical, roofing and mold remediation.Vendor selection:

Property management companies have an extensive list of vendors they have good experiences with. Property managers need good results for their clients and take time choos-ing the vendors they work with. In addition, property managers are sen-sitive to property maintenance costs and look hard to find cost effective vendors.Bill paying – financial reporting:

Not only are property managers required by licensing laws to submit monthly financial reports to their clients, it just makes practical sense to know how your property is per-forming on a monthly basis.Marketing of vacant units:

Property managers have a deeper pool of tenants looking for rentals,

continued on page 4

Benefits of Hiring a Property Manager to Manager Your Single-Family Investment



Benefits of Hiring...continued from page 3

enabling them to rent units faster than an individual owner can. It is good to find a company that invests in its website and search engine opti-mization (SEO) to find as many ten-ants as quickly as possible for their clients. However it is good to diver-sify your presence with a wide vari-ety of digital and traditional adver-tising including our website which easily guides prospects to our avail-able units. vFlyer pushes out gor-geous digital flyers to many well-trafficked rental websites such as Craigslist, Hotpads, Zillow, Trulia and more. We also upload flyers to Postlets, Rent.com, etc. Good prop-erty signage draws many inquiries as well.Tenant discrimination:

Property managers are focused on equal housing opportunity. They do not discriminate on the basis of race, national origin, color, religion, sex, familial status, handicap, source of income or sexual orientation. This protects the landlord from federal, state, county and city fair housing investigations and litigation.Watching Your Property:

Property managers have local

offices so they can take care of your property and your interests when you are not available.

Compliance with laws: Property managers work hard to comply with the many federal and state laws. In that vein they have hundreds of forms that meet current regulations that are used in the day to day opera-tions of managing properties.Value:

Property managers deliver a huge value for the small amount they charge. They pay for themselves every day the investor owns the property.

Choosing the right property manager

Making the decision to manage a single family property is not easy. If you have the time and skills it clearly makes sense to manage your own property, but it is challenging and you would want to become a mem-ber of a local landlord association to stay on top of the ongoing business changes. If you don’t have the skills, consider hiring a property manager.

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As with most organizations, your people are your great-est asset. But it seems that

in OUR industry, we still habitually hire out of desperation, a shortage of time to fulfill the position, from a seemingly dwindling pool of “really good talent”, AND with little fore-thought into what we actually NEED for the position we are trying to fill! More importantly, we don’t hire peo-ple to FIT into our existing teams to make that team run more cohesively … more efficiently…more produc-tive.

Hiring the RIGHT Person for the RIGHT Job!

The skills, talents, abilities, per-sonalities, and experiences that employees bring to your company are the “heart” of what separates your company from the competition. Although competitors may have basically the same apartment styles, same amenities, same marketing advantages, same prices, they don’t have the same PEOPLE.

Why bad hires are bad for your company’s reputation?

Rich Layton, Paul Shay, and Matt

Terronez, from www.WalktheTalk.com, wrote a book entitled “Three Dimensional Interviewing” about the results of interviewing 500 com-panies in a nationwide, study, regarding hiring the wrong employ-ee and what the effects it had on the rest of the team. Here were their findings:

1. 68% of the companies experienced a decrease in employee morale

2. 66% experienced a decrease in work productively

3. 51% had a dramatic increase in training costs

4. 40% increase in severance costs

5. 54% experienced a loss of customers or market share

So what does this tell us? Actually it says a whole lot about trying to put the proverbially “square peg in the round hole”. By not finding out more about a new employee’s “historical work behavior background” we risk damage to our entire team’s perfor-mance, loss of our good customers (residents), and higher expenses to solve the problem of getting rid of the mistake.

The art of communication: What is behavioral interviewing?

How can we interview to find not only the best candidate for the spe-cific job requirements, but the best PERSON that will help make the performance of that particular team more productive? What process should we follow? What questions should we be asking instead of those “vague, general standard” type questions that will solicit the “REAL” qualities we need to make a success-ful match? GREAT QUESTIONS!

Behavioral interviewing is based on a singular premise: a technique used by employers in which the questions asked assist the employer in making predictions about a poten-tial employee's future success based on actual past behaviors, instead of based on responses to “hypothetical questions”.

Questions such as “Tell me what are your top 3 strengths?” does not tell the employer if in fact those strengths are realistic, any examples of using those strengths, or just the employee’s opinion of themselves.

Questions can be categorized by specific skill sets such as honesty, time management, delegation, con-flict resolution, or motivation. Here

are some great questions to solicit more realistic responses:

• Computer Skills

• What specific computer skills helped most with your last job?

• Describe what computer report you used to track renewals?

• Customer Service Skills

• From your past experience, how did you handle an upset resident?

• How would you handle this situation…? ”you overheard another employee speaking unprofessionally to a resident”

• Decision Making Skills

• Was there ever a decision you made that you regretted making?

• Give me a specific example of a time when you had to conform to a policy with which you did not agree.

• Conflict Resolution Skills

• What is your typical way of dealing with conflict? Give

The Human Element: Behavioral Interviewing Skills

continued on page 8



By: Jeremy Juhasz

Small businesses and nonprofits face a different set of circum-stances when it comes to social

media marketing than their larger for-profit counterparts, namely, smaller budgets, fewer employees and a greater priority on traditional forms of marketing.

For those charged with market-ing, the biggest first step toward making social media an integral component of the plan may be con-vincing your organization. Despite widespread use of social networks for personal connections, the leader-ship of smaller organizations often questions its effectiveness as a mar-keting tool and whether they’ll see a return on their investment.

I’ve developed and implemented social media strategies for a variety of organizations -- for-profits, non-profits, and individuals. For all of them, I’ve discovered, when it comes to social media, it’s important to remember the 5 P’s:

PlanIdentify what you hope to accom-

plish and create a strategy to take you there. Too many nonprofits and small businesses dive into social media because they “have” to and don’t consider a plan of action before they do so. Make a list of what you want to accomplish. Is it to gain

more donors? Get a higher atten-dance at your annual fundraiser? Increase sales?

Make it a priority to identify goals so you can create the social media strategies for meeting them.

PatienceNothing happens overnight. It

takes time to develop relationships and establish credibility with your brand and your target audience. Over time, events and a steady pace will win out. Rushing leads to mis-takes.

The type of patience I’m referring to is a long-term mind-set. When day-to-day activities seem arduous and, at times, unfulfilling, know that each day builds to the greater goal. March on.

PersistenceYou must be stubbornly commit-

ted to your goals and your strategy. Keep plugging away and give your plan a fair amount of time and analy-sis before you pull the plug. If you know the plan is a good one, it’s not a good ideas to panic and change course simply because you’re not seeing results as quickly as you’d like.

That said, circumstances change, not every strategy works, and you need to also be willing to recognize that it is time to try something new.

Be persistent in implementing

your plan and in monitoring wheth-er you’re reaching the objectives that will take you to your goal.

Pay (what you can)These days, especially on

Facebook, it’s a pay-for-play land-scape. Pay where you can, if you can. The results can provide the spark you need to drive a specific cam-paign or to increase your overall vis-ibility to your target market. It can also be a very affordable alternative to other digital advertising options.

PrioritizeI can’t stress enough the impor-

tance of time management. If your marketing staff consists of only one or two people, it’s essential that you stay on top of your social media strategy by prioritizing your quar-terly, monthly, weekly and daily objectives and goals. Nonprofits and small businesses face countless new daily challenges. Sometimes we lose track of what’s most important. Take

Five Ps for Your Social Media Marketing Success

continued on page 12



Management Techniques ...continued from front page

art it has perfected, Johnsen says. “We developed certain practices

over the decades, first by building assisted-living communities and then by operating them,” he says. “These practices work in any busi-ness because they keep the leader-ship actively involved in what’s going well – and not – on the front lines, and provides a system for reg-ular communication through all lay-ers of the company.”

Johnsen offers these tips for man-agement that produces excellent results:

Identify the ‘Influencers’ in each work group.

As with most businesses, senior living communities require teams of staff, from administrators to house-keepers and everyone in between. Within the various groups that make up your business, identify the key players – the people who influence others’ behavior, whether or not they

hold a title or official authority. Meet with them on a regular basis so you can stay plugged in to what’s hap-pening on the front lines.

Identify areas that need improvement. Talk to them about systems and areas that need to be fixed, overhauled or eliminated, and about how team members are working together. They’ll often have ideas for innovations. The idea is not to look for people or problems to blame, but to work together to develop solutions and improve the team’s overall efforts.

“The information you get in speaking with these key players is invaluable,” Johnsen says. “There may be nothing at all wrong, which is great, but these meetings give you, the CEO or manager, the information you need to constantly improve. It also reinforces the message to employees that they and their ideas

are valued members of the team.”

Figure out those “wildly important goals.”

You can have the best people in the field working for you, yet if they’re not specifically guided to a certain goal, they are putting their time and effort toward an end that they’re assuming is correct. CEOs and other upper-level managers have the 30,000-foot view, so it’s up to them to guide everyone beneath them.

“Short-term priorities may change slightly or drastically on a regular basis,” Johnsen says. “Your team may be self-sufficient, but their vision is limited to their daily duties. If they don’t know that a goal or objective has changed, they can’t work toward it.”

Peder Johnsen is the CEO of Concordis Senior Living, www.con-

cordisseniorliving.com, which owns, operates and develops senior housing communities. He’s a third-generation

assisted-living specialist whose grandfa-ther and father built one of the first

contemporary-style ALFs in Florida more than 30 years ago. Johnsen took

over administration of two small facili-ties at age 18. Today, he runs the full

spectrum of ALFs – from “ALF lites,” where most residents live very indepen-dent lifestyles but know assisted-living

services are available if they should need them, to homes specializing in care for

residents with Alzheimer’s and demen-tia. He is an industry leader in staff development and training, and has

overseen the development, acquisition and financing of several communities.

Funding Your Retirement...continued from front page

balance should be detailed in the note. If the property is 5 units or larger, it is considered a non-con-sumer transaction and not governed by federal Dodd Frank Laws.

Sellers are often able to get a sale price premium, when offering seller carry back financing. The loan can have a balloon payment or can be fully amortized. Fifteen year fully amortized loans are a great option for owners liquidating in their mid sixties. The monthly payments to the owners would probably be between 40% and 50% of the current gross rents. The first ten years of retire-ment are considered the go-go years, with retirees traveling, golfing and pursuing activities that are relatively expensive. Usually, by their late sev-enties retirees slow down. A fully amortized fifteen year loan could provide the income for active retirees to pursue many of their dreams worry free.

Just as you pay mostly interest in the beginning of paying on a mort-gage, when financing a buyer, you collect mostly interest. Therefore, the principle of the loan is preserved for an extended period of time. It is important to review a buyer's credit report and financial strength, just as would any prudent banker.

Once you sell the property, you don't want to foreclose and revert back to being a landlord. Put your-self in the buyers' shoes and struc-ture the deal so it is a win-win. If you know the property will need a new roof in the next couple of years, put it on before offering it for sale, Likewise, if a few units are ready for new air conditioners, replace them before selling. You can recapture the cost in your sale price.

For generations, many people have funded their retirement and enjoyed their golden years by bene-fiting from seller carry back financ-

ing. It is one of the unique“ exit strategies” of real estate ownership.

Jade Bossert has sold real estate in Arizona since 1979. She is an Associate

Broker with Tierra Antigua Realty in Tucson and specializes in the sale of

apartment complexes. Contact her at 520-797-6900 or tucsonrealestate@

mindspring.com



Human Element ...continued from page 5

me an example.

• Tell me about a recent situation in which you had to deal with a very upset customer or co-worker.

• Initiative Skills

• Tell me about a time when you had to go above and beyond the call of duty in order to get a job done.

• Team Building Skills

• Describe a time when you anticipated potential problems and developed preventive measures.

• What was the best idea you ever had for building a good team?

So how can you hire the RIGHT people for your company?

It’s a simple three step process: prepare for the process, conduct the interview utilizing the behavioral interviewing questions, and evaluate the candidates.

Step 1: Prepare for the InterviewCreating a detailed Job Profile

• Use a common industry recognized job title to clarify the position. Summarize all tasks of that position in order of importance.

• Make sure to indicate if position

is full time, part time, seasonal, or temporary. Include working conditions such as travel time, physical abilities needed to do the job and a summary of the basic qualifications needed, education, skill specifications, licenses, software knowledge, etc.

Prepare the Room and Yourself for the Interview

• Not in your office! Away from telephones and other interruptions. Even prepare by putting a note on the door, “Interview in Process: Do Not Disturb”

• Have bottled water for both yourself and the applicant

• Create a “note taking” page for your notes. Never write on the application or resume itself.

• Make a time schedule and stick to it. You need enough time to get to know the applicant as well as you can and get your behavioral interviewing questions answered.

• Finally, make sure you are mentally ready for the interview too. Sometimes we are so caught up in “other duties” we are physically there, but not mentally there. Remember you are looking for that “best fit” for your existing teammates.

Step 2: Conduct the Interview

Which Behavioral Questions Will You Need?

• Determine which of the skill set areas from the Job Profile needs and match to the appropriate Behavioral Interviewing Questions. You don’t want to have too many questions, but you need to have the “right ones” to glean the right skills most valuable in this position.

• Use their application or resume information to help you formulate a “true picture” of this applicant actually doing the job for you.

Be Aware of RED FLAGS during the Conversation

• Gaps in employment history, lack of clarification of previous job duties, or technical status can be areas of concern of behavior and skill abilities.

• Face to Face interviews allow you, the employer, to assess the candidates and give them a clear picture of the job expectations.

Give Them Time to Ask Their Questions too

• Remember it isn’t all about “selling them on the job”, but allowing them to ask you questions about the position and the company. Letting them know they are part of more than just the job they are applying for will give them the feeling of how your company’s culture works together.

Step 3: Evaluation of the Information

Analysis of Each Applicant

• Putting all the information together including contacting references, background checks, etc. to make the best decision for the position.

• Review those Behavioral Questions and compare by asking yourself...

• “How will the person fit in with the other team members?”

• “Would the other teammates feel comfortable with them? Respect their authority? Compliment the shortcomings of the other teammates?”

• “Do they have the personality to work well with other, teammates, residents, corporate, vendors, prospects, etc.?”

• “Which applicant had the best all around skill set to add value to the position?”

• “Which applicant had the most believable response to the Behavioral questions?”

Finally: Why is Behavioral Interviewing So Important?

Companies go through thousands of applications and resumes each year. Many hire those who apply thinking they have found that “per-fect fit” just to find out in a few weeks that they really didn’t find out enough about the individual and it wasn’t a good fit at all. And once again, the challenge of finding that good employee continues. How can you grow a business team if you con-stantly have to replace members of the team?

The key successful fulfillment of a position is to get comfortable with the interviewing process and these behavioral questions not only for new hires, but for annual reviews to support decisions to promote, reward, demote, transfer, or in some cases terminate.

Remember, the best indicator of future behavior is always historical behavior whether dealing with day to day operational situations or those emergencies that require quick, fast on your feet, logical thinking. Dedicated, forward thinking, self motivated individuals have had those traits and skills all along. Our job is to differentiate these excep-tional applicants with those histori-cal traits from those who are just “great interviewees” with a good gift of gab. Time is the equalizer.

So, how do you build a high-per-formance team? One GREAT HIRE at a time!

Jackie Ramstedt, CAM, CAPS, CAS is a nationally renowned Motivational

Keynote Speaker, National Trainer, Operations Consultant, and

Performance Coach who has more than 29 years experience in the multi-hous-

ing industry. She may be reached at: Voice: 800-925-5169 ~ Web Site: www.

jackieramstedt.com ~ Email: [email protected]

Please Vis i t us at www.RentalHousingJournal .com



Market Overview ...continued from front page


sponding increase in new supply was at least part of the equation, as developers put finishing touches on properties encompassing a total of 2,164 units, representing the equal largest single-quarter vintage observed in the 16-year quarterly Reis data series. Occupancy declined sequentially to 95.8% as a result, con-sistent with levels observed over the past three years.

Axiometrics surveys of 359 stabi-lized properties recorded an 96.3% average occupancy rate, up 40 bps year-over-year. Class-B and C com-plexes reported comparable average occupancy rates (96.3% and 96.4%, respectively), while class-A proper-ties posted a 95.8% metric. Lease-up at new properties was brisk, averag-ing 12 units per month. New Downtown and North Seattle mid-rise buildings seemed to encounter particularly avid interest from rent-ers.

RCR’s Seattle absorption model relies on inventory and rent growth, S&P500 returns and vacancy vari-ables to reach a 93.6% A -R2. This model foresees demand trailing sup-ply in 2015 and 2016, resulting in a most probably 110 bps decrease in occupancy outcome. Firmer demand is projected in the forecast out-years, keeping occupancy steady at about 94.8% in 2017 and 2018.

2Q14 EFFECTIVE RENT TRENDS

Reis surveys found that metro effective rents increased $23 (2.0%) sequentially, the largest quarterly gain since 1Q13. Expressed on a year-on-year basis, rents were 6.4% higher, up from 5.9% during the first quarter. Reis found most of the impe-tus coming from the class-A sector, where asking rents surged 2.2% sequentially, comparing favorably to a 1.0% gain posted among B&C properties.

Axiometrics surveys of 359 stabi-lized same-store properties recorded an average effective rent of $1,483, up 7.1% y-o-y. This service found that class-B apartments chalked down the fastest growth (7.4%), fol-lowed by class-C (6.9%) and class-A (5.8%). Reis report that the Downtown (10.7%) and North Seattle (9.5%) submarkets recorded the fast-est annual rent growth rates, benefit-ing for the delivery of new luxury mid– and high-rise buildings. Analysis of Axiometrics stabilized same-store property data suggests that the northern tier suburbs enjoyed the largest percentage gains, especially Bothell, Kirkland, Everett

and Edmunds. RCR’s Seattle rent model employs

five lags of the dependent variable, personal income, inventory and occupied stock growth, and home price variables to achieve a 97.1% A-R2. The model projects an above average 4.0% compound annual rent growth rate through 2018, ranking 9th among RED 46 peer group.

2Q14 PROPERTY MARKETS AND TOTAL RETURNS

Sales velocity accelerated during the second quarter as integrated funds managers, pension funds, REITS and private equity investors stepped up Seattle buying programs. A total of 22 properties valued at $5 million or more exchanged owner-ship, generating total sales volume of $840mm. By way of comparison, investors closed on 16 and 14 deals during 1Q14 and 4Q13, respectively, for aggregate proceeds of $497mm and $745mm.

The 2Q14 average price per unit metric was $178,792. This datum rep-resents a small increase from the prior quarter ($162,633), but a sharp decline from 4Q13’s trophy-rich $256,293 result.

Cap rates appeared to drift high-er, largely because property NOIs ascended at a faster pace than asset prices. Class-A properties traded to yields in the mid– to high-4% range, while going-in yields for class-B assets gravitated toward the 5.25% - 5.75% area, in each instance about 25 bps above levels observed earlier.

To account for the NOI-driven increase in Seattle cap rates, we elect-ed to increase the generic metro pur-chase yield by 25 bps for the second consecutive quarter, in this case to 5.25%. With a terminal cap rate assumption of 6.0%; model derived rent, occupancy and expense infla-tion forecasts; and Reis-based oper-ating expense levels, we estimate that an investor would expect to achieve a 7.3% 5-year, unlevered total return from a Seattle asset, rank-ing 15th among the RED 46 peer group.

OCCUPANCY RATE SUMMARYOccupancy Rate (Reis) 95.8%RED 50 Rent Chg. Rank 26thAnnual Chg. (Reis) -0.3%RCR YE14 Forecast 96.3.%RCR YE15 Forecast 95.2%RCR YE16 Forecast 94.6%RCR YE17 Forecast 94.8%

EFFECTIVE RENT SUMMARYMean Rent (Reis) $1,174Annual Change 6.4%RED 50 Rank 3rdRCR YE14 Forecast 6.0%RCR YE15 Forecast 5.4%RCR YE16 Forecast 3.0%RCR YE17 Forecast 3.1%

TRADE & RETURN SUMMARY$5mm+ Sales 22Approx. Proceeds $840mmAvg. Cap Rate (FNM) 5.4%Avg. Price/Unit $178,792Expected Total Return 7.3%RED 46 ETR Rank 15thRED 46 RAI Rank 35th



SUBMARKET TRENDS (REIS)Effective Rent Physical Vacancy

Submarket 2Q13 2Q14 Change 2Q13 2Q14 ChangeAuburn/Enumclaw $834 $857 2.8% 3.0% 1.9% -110 bpsBeacon Hill/Rainier $999 $1,033 3.4% 6.3% 5.5% -80 bpsBellevue/Issaquah $1,324 $1,412 6.6% 4.9% 5.1% 20 bpsBothell $1,096 $1,150 4.9% 3.2% 3.5% 30 bpsDes Moines/West Kent $878 $920 4.8% 2.5% 2.0% -50 bpsDowntown/Capitol Hill $1,520 $1,683 10.7% 6.2% 7.6% 140 bpsEdmonds/Lynnwood $925 $974 5.3% 3.4% 2.8% -60 bpsEverett /Mukilteo $931 $982 5.5% 3.0% 3.3% 30 bpsFederal Way $906 $930 2.6% 3.1% 2.6% -50 bpsKent $898 $925 2.9% 2.6% 2.0% -60 bpsKirkland/Juanita $1,287 $1,356 5.4% 2.7% 4.0% 130 bpsNorth Seattle $1,104 $1,209 9.5% 4.2% 6.3% 210 bpsRedmond $1,265 $1,333 5.3% 4.7% 2.7% -200 bpsRenton $976 $994 1.9% 2.7% 2.1% -60 bpsTukwila/Sea-Tac $792 $811 2.4% 1.9% 1.4% -50 bpsWest Seattle/Burien $932 $987 5.9% 4.6% 3.9% -70 bpsMetro $1,103 $1,174 6.4% 3.9% 4.2% 30 bps

NOTABLE TRANSACTIONSProperty Name (Submarket)

Property Class/Type (Constr.)

Approx. Date of Transac-tion

Total Price / Appr. Value (in millions)

Price / <Appr. Value> per unit

Esti-mated Under-written Cap Rate

Collins on Pine (Downtown / Capitol Hill)

A / MR (2014)

23-May-2014

$29.1 $383,115 4.7%

Park South (Tuk-wila / Sea-Tac)

C / GLR (1986)

29-May-2014

$29.7 $118,033 5.5%

Stream Uptown (Downtown / Capitol Hill)

B+ / MR (2013)

9-Jul-2014

$32.9 $273,956 4.8% / 5.3% p.f.

Rock Creek Land-ing North (West Kent)

C / GLR (1986)

1-Aug-2014

$73.8 $128,150 5.7%

Light Box (North Seattle)

B+ / MR (2014)

27-Aug-2014

$45.3 $281,099 NA / 4.8% p.f.

The information contained in this report was prepared for general in-formation purposes only and is not intended as legal, tax, accounting or financial advice, or recommenda-tions to buy or sell currencies or se-curities or to engage in any specific transactions. Information has been gathered from third party sources and has not been independently verified or accepted by RED Capital Group. RED makes no representa-tions or warranties as to the accuracy or completeness of the information, assumptions, analyses or conclusions presented in the report. RED cannot be held responsible for any errors or

misrepresentations contained in the report or in the information gath-ered from third party sources. Under no circumstances should any infor-mation contained herein be used or considered as an offer or a solicita-tion of an offer to participate in any particular transaction or strategy. Any reliance upon this information is solely and exclusively at your own risk. Please consult your own coun-sel, accountant or other advisor re-garding your specific situation. Any views expressed herein are subject to change without notice due to market conditions and other factors.



For more information about red’s research capabilities contact:

Daniel J. HoganDirector of Research

[email protected]+1.614.857.1416 office

+1.800.837.5100 toll free

James P. HensleySenior Managing Director

Head of Multifamily [email protected]

+1.770.753.6472 office+1.800.837.5100 toll free



the time to identify those tasks criti-cal to your success and make them a priority.

You can succeed with social media even if your organization doesn’t have the brand recognition of a multi-billion dollar corporation. If you remain even-keeled and set realistic goals, the return on invest-ment will follow.

Jeremy Juhasz is a social media strategist at EMSI Public Relations and a panelist for the Tampa Bay Marketing Summit, (www.tam-pabaymarketingsummit.com) on

Aug. 8. Jeremy has years of experi-ence managing social media market-ing for the nonprofit sector, includ-ing launching social media and online strategies for Feeding America Food Bank and Goodwill affiliates. His multi-media back-ground includes work as a newspa-per reporter and as a marketing professional. He’s a graduate of Alfred University and attended Kent State’s School of Communication and Information, public relations.

Five Ps ...continued from page 6



• Executive Director – Jim Wiard • President – Gail Duke – Vice President – Kris Buker • Secretary – Becky Sanders • Treasurer – Brett Stevens • Vice President of Suppliers Council – Barry Savage • Immediate Past President – Jay Olson

18300 Cascade Ave. S., Suite 130Tukwila, WA 98188

(425) 656-9077(425) 656 9087 (fax)

[email protected]

Going Smoke-FreeAt our recent Membership Meet-

ing – “Residential Issues from Pets to Pot”, attendees were treated to expert speakers on the confusing subjects of animals, marijuana, do-mestic violence and smoking policies as they apply to our industry.

With Washington’s recent adop-tion of legalized recreational mari-juana use under certain conditions, property managers are receiving more and more complaints from resi-dents about the intrusion of not just cigarette smoke but now marijuana smoke. This is raising issues of hab-itability and health concerns.

One of the best ways to counteract these complaints regarding smoke and odors of either kind is to imple-ment a no-smoking policy at your community.

Establishing a Smoke-Free Policy is becoming a growing trend with multifamily landlords in Washing-ton and across the country. Property owners find this kind of policy is good for business and a clear win-win, lowering costs and risks for an owner and providing a healthier, saf-er, greener environment for happier residents.

Smoke-free policies can help land-

lords protect their residents from the dangers of second-hand smoke and provide benefits for their owners’ in-vestments.

The benefits to owners include reduced cleaning and maintenance costs to turn over apartments at move-out, reduced vacancy loss re-sulting from shorter turnover time, fewer property fires caused by care-less smoking, reduced insurance costs as a result of reduced insurance claims, lowered risk of resident war-ranty of habitability liability claims over adverse health effects caused by smoke, and the increased market-ability of providing a healthier, safer living environment for residents.

No-smoking policies will also pre-serve and enhance property re-sale value. Surveys have shown that the vast majority of renters favor policies eliminating smoking in apartment homes, and they would pay higher rent to live in a healthier, greener community. It is widely accepted that no-smoking policies do not vio-late Fair Housing Laws.

Establishing a no-smoking policy in a newly constructed apartment community is relatively easy, com-pared with converting an existing

building to no-smoking. However, there is a market for healthy living homes created by no-smoking poli-cies. If you don’t have a no-smoking policy in your community, now is the time to make a change.

Landlords nationwide and locally have developed a reasonable step-by-step process for implementing a smoke-free policy in their communi-ties: Step 1 – Develop Your Policy

The most important part of Step 1 is making the decision to go smoke-free. Consulting with building own-ers, employees and residents will give you the initial buy-in needed to make the commitment. Then de-velop a clear policy and understand and communicate the reasons for the decision.Step 2 – Develop a Transition




By Tia Politi

Damages, Depreciation, and Normal Wear & Tear

Assessing charges to a tenant’s deposit is fraught with peril for many landlords. What are damages? How do you calculate depreciated damages? What is normal wear & tear? These questions are common to our business as landlords and I hope that the following will help guide you in assessing fair and reasonable charges you are owed, without end-ing up losing a court battle because you assessed improper charges.

Damages in the context of land-lord-tenant relationships are related to actual failure of the tenant to take ordinary care; accidental or inten-tional acts of violence to the premises by tenants or guests; or unpaid ten-ant charges related to the tenancy, such as rent, fees, and unpaid bills. Damage charges can also encompass items which a landlord chooses not to repair, loss of use of the rental dwelling during repairs (as long as repairs are performed in a “timely fashion”), and depreciated value of the rental dwelling as a result of ten-ant destruction.

So, for example, say your tenant

punched a hole in one of the walls. You can patch it so that it is useful for another tenant, but your property has suffered depreciated damage as the wall will never be the same unless you take a large section down to the studs and repair it properly. You may charge the full repair cost for this damage even if you choose not to fully repair it at this time.

I had a tenant who moved in to a unit with brand new linoleum, and when she moved out a year later, we discovered a large crescent-shaped burn in the new flooring. The owner chose not to replace the linoleum as it still had a lot of wear left in it, but we did fairly charge her as though we had replaced it. A tenant can also be financially responsible for failing to disclose repair issues that result in ongoing damage to the property from things like leaks; however, landlords can also bear at least par-tial responsibility if they fail to per-form reasonable inspections during which damages could be noted and mitigated.

So, if your tenant lived in your property for eight years and you never inspected, but discover a leak on move out that has completely rot-ted the kitchen floor, how is it rea-sonable to charge the tenant 100%?

What is reasonable in a case like this is a difficult question to answer, but I always say that you should imagine explaining yourself to a judge in court, which usually clari-fies the issue to some extent.

Depreciation is an honest attempt to assess charges for damages to a tenant while considering the age and prior condition of the damaged item. So, in one case, I had tenants who left two damaged items in the house

they rented: the kitchen counter and the living room carpet.

The counter was brand new on move in and absolutely perfect on move out except for a large circular burn adjacent to the cook top where apparently the tenant set a hot pan. As this was a laminate counter, there was no way to effect a repair and the entire counter needed to be replaced at a cost to the tenant of 100% using

Mind Your BusinessTia’s Tips for better rental management




comparable materials. The living room carpet had been

burned when hot coals had popped out of the fireplace. There was no way to repair it; however, the carpet was six years old and had a lifespan of ten years under normal wear con-ditions.

In this case, we charged the ten-ants 40% of the replacement cost of comparable carpet. You may not use a tenant’s responsibility for damage to upgrade your home at their expense. So, if we had decided to replace the living room carpet with a high-end wool carpet, for example, we would have gotten a bid for replacement of the normal carpet, charged that amount and the owner would have absorbed the rest.

If you’re not sure what a fair charge is for a specific repair, contact an experienced contractor for advice.

Normal wear and tear first of all, depends on the length of the tenancy. In a tenancy of 10 years, there will be much more wear and tear than there would be with a tenancy of only one year. Other factors would include the number of residents or animals liv-ing in a unit, the quality of the mate-rials used in the property, the condi-tion prior to move in, and the age of things like carpet and paint.

A good interior paint job can be expected to last 5-7 years, with some minor touch ups between tenancies. The lifespan of flooring depends on its quality as well. Your average car-pet can be expected to last between 7-10 years (or more for high quality carpet) of normal usage. Hard floor-ing can have a lifespan of 7-25 years, again depending on quality.

Normal Wear & Tear – Includes, but is not limited to: • Minor scuffs on floors or trim

• Nicks on corners of walls

• One or two pictures holes on walls

• Minor scratches around knobs or handles

• Wear patterns in flooring in high-traffic areas

• Dingy paint (depending on lifes-pan of paint & tenancy)

• Cupboard finish deteriorating

• Caulking

• Broken window seals

• Aged fixtures

• Replacement seals on appliance doors

• Mold/mildew/peeling paint related to failure of housing com-ponents such as fans, leaky win-dow, leaky roof

• Damage to floors, counters, etc., from poor caulking

Damages – Includes, but is not limited to:• Filth, grime, staining, trash inside

or out

• Gouges/scratches/burns/stains on floors, trim, counters, appli-ances, cupboards, walls, ceilings, etc.

• Chunks of drywall broken off

• Multiple or extra large holes in walls, ceilings, or trim

• Bent or missing hardware

• Dented metal doors

• Ripped, gouged, stained or frayed flooring

• Unauthorized tenant “improve-ments”

• Urine/feces

• Unkempt yard

• Broken globes or wrong wattage bulb in fixture that causes it to fail

• Broken shelves, door guards, drawers on appliances

• Mold/mildew related to tenant lifestyle (lack of ventilation, heat, circulation)

Figuring out what is fair for each situation is at best an imperfect sci-ence. So, be reasonable and act in good faith and you should avoid many troubles. Please call the Help line if you need assistance with a specific situation.

Tia Politi, ROA Board Member, Rental Owner, Lead Property Manager

at Acorn Property Management

Mind Your Business ...continued from page 21



During the course of your pro-fessional career as a property management executive,

building new compensation plans will be one of the most important projects you ever undertake. In fact, this project has the potential to be an explosive issue for your team of SuperStars and must be designed with great care. The information in this article will outline three impor-tant steps for building powerful compensation plans and will share many secrets for your success. When a compensation plan is built right, your team will love you and your company success will soar!

Gathering information and set-ting objectives: Start by evaluating your current compensation plans to see how closely it aligns with the critical success factors for your prop-erty management company and your historical financial performance. Next, review what percentage of each person’s compensation is salary versus commission/bonus and com-pare this to competitive positions within the geographical locations you manage. Lastly, develop specific compensation objectives, such as: performance to budget or goals,

occupancy for each apartment com-munity, fiscal performance of this quarter compared to the same quar-ter last year, resident retention and/or resident satisfaction surveys.

Tip From The Coach: Remember, each person on your property man-agement team must see a direct con-nection between their efforts and their compensation plan. In addition, how you define the objectives for your compensation plans will be a direct reflection of the exact individ-ual or team performance you will receive.

Developing performance mea-surements and plan options: Once you have defined your compensa-tion objectives, the next step is to determine how you will measure performance. For instance, will your new compensation plan reward indi-vidual performance, team perfor-mance or a blend of both? In addi-tion, your compensation plans should also consider how often com-missions/bonuses will be paid and what will be the impact if an indi-vidual or your team does not meet or exceed their compensation objec-tives. Next, design several compen-

sation models on a spreadsheet so you can see how annual compensa-tion will vary as you change or mod-ify the performance/pay variables. In addition, calculate the range of income your SuperStars will be able to earn over the next 12 to 60 months. Lastly, test and run your historical results through your new compensa-tion plans to verify performance lev-els and income expectations.

Tip From The Coach: Some of our property management clients like to confidentially share prelimi-nary compensation models with just a few SuperStars in their company to gather some additional insight before finalizing their new compensation plans. In addition, some of our cli-ents will grandfather the compensa-tion for their current team but all newly hired team members will be paid based on the new compensation plan. Remember, there is no such thing as a perfect compensation plan, but there is a compensation plan that is well-suited for your property man-agement company. Lastly, just because a compensation plan has worked in the past, does not mean it will work in the future as the prop-

erty management profession is changing and evolving rapidly.

Selecting and evaluating your options: Once you have tested your compensation plans for accuracy and performance expectations, select the plan that most closely aligns with your company objectives. Sometimes it can be helpful at this point to have another set of eyes, outside of your property management company, review your new compensation plan to ensure it’s clear and reasonable. Next, consult with your internal resources to be certain they can design and produce the information required by your new compensation plan. In addition, your team will need a written description of their new compensation plans and a finan-cial spreadsheet detailing exactly how this compensation will impact them over the next 12 and 24 months.

Tip From The Coach: Once you have presented your new compensa-tion plan to your property manage-ment team schedule a monthly appointment over the next six months to vigorously review and evaluate the results. In addition, ask


By Ernest F. Oriente, The Coach {Article #221…since 1995}

Three Important Steps For Building Property Management Compensation Plans©



By Jerry L'Ecuyer & Frank AlvarezDear Maintenance Men:

Dear

Maintenance Men:Can graffiti scratched windows

be repaired? I have a number of windows that have been scratched or etched by graffiti vandals. Replacing the window is very expensive. Do you have any recom-mendations?

Jessie

Dear Jessie:Yes, graffiti damaged windows

can be repaired. It is often a two step process involving removing the scratches or etching with a buffing compound and using anti-graffiti film over the glass. Cerium Oxide rubbing compound is typically used with an electric buffing wheel for getting the scratches or etching out of the glass. Cerium Oxide can be found on the internet, glass & stone shops or good hardware stores. 3-M makes a very good anti-graffiti film that can be used as preventive pro-tection or as a sacrificial layer. If you decide to do the work yourself, be careful with the electric buffing wheel. Keep the buffing wheel mov-ing over the scratches and never concentrate on one spot for long as it will burn the glass. Removing

scratches from glass is a bit of an art and we recommend contacting a repair firm specializing in glass graf-fiti removal.

Dear Maintenance Men:While getting a unit ready for

rent, I painted the concrete patio with flat concrete paint. The patio looks much better; however I am worried the surface may be slick when wet. Should I be concerned and what can I do about it now?

Kristina

Dear Kristina:Concrete patios can be slick when

wet and more so after they have been painted. A simple solution is to use grit mixed in with the paint to give the concrete surface a bit of grip when walked on. Look for a clear non-slip polymer grip additive. The additive is mixed in with the paint or sealer and applied to the concrete with a roller. The polymer grit can be found at any hardware store in either the concrete or paint departments. Polymer grit infused paint can also be purchased if you do not want to mix in the grit. Avoid using silica sand or aluminum oxide; they both work, however they may change the appearance of the surface. Our rec-

ommendation for peace of mind would be to repaint the patio floors using the above information as a guide.

Dear Maintenance Men: I have a number of patio decks

coved in artificial turf. Because of the sun and use, the “turf” is looking worn and tattered. What can I do to make it look better? Do I need to remove the old turf before putting down new artificial turf or can I glue down over the old? How do I remove the old turf and is it difficult? If I want to go back to a natural surface, how do I remove the adhesive?

KC

Dear KC:Sounds like you have your work

cut out for you! In order to get the new turf/carpet to look good on the deck, the old must be removed. The new turf/carpet will not stick to the old carpet and the old glue will need to be removed as well. If you have a small area of glued down turf/car-pet to remove, use a hand scraper to pry the carpet off the surface. If you have a large area; use a roofing scrap-per to quickly remove the carpet. The old glue can be removed using a scraper and applying an adhesive

removal solvent or a heat gun. Never combine the heat gun and the sol-vent as the solvent is flammable. The solvent can be found at any hard-ware store and should be used in a well ventilated room. If you don’t want to use a solvent; use a heat gun to soften the glue and use the scraper to remove the glue. Both methods are messy and labor intensive; how-ever the heat gun is the less toxic of the two. If you are not replacing the carpet and want to return to a natu-ral surface; power sanding or media blasting may be needed to remove any trace of the glue. The surface will need to be sealed to complete the job.

Please call: Buffalo Maintenance, Inc for maintenance work or consultation.

JLE Property Management, Inc for management service or consultation

Frankie Alvarez at 714 956-8371 Jerry L’Ecuyer at 714 778-0480 CA contrac-

tor lic: #797645, EPA Real Estate lic. #: 01460075 Certified Renovation

Company Websites: www.BuffaloMaintenance.com & www.

ContactJLE.com www.Facebook.com/BuffaloMaintenance



Smoke-free ...continued from page 14

PlanDetermine when and how you

want to implement your new policy. What is the starting date for any new residents? When is the starting date for existing residents? Develop your legal lease language. Sample lease language to use either in a lease doc-ument or a separate lease addendum is available on many different web-sites such as www.smokefreewash-ington.com.

Step 3 – Notify Your

Residents Prepare your legal written notice

to residents giving notification of the change in policy. It is best to give ample time, beyond the legal notice requirements, to give existing resi-dents time to acclimate to the new policy and have time to meet with management if desired. You may de-cide to honor existing term leases in place and enact the new policy when those leases expire in the future.

Step 4 – Market the Benefits

of the PolicyTrain staff to be spokespersons for

the new policy and the reasons the property has chosen this new rule. Make sure in your leasing presenta-tions that the benefits of the amenity of a no-smoking policy are promot-ed. Include “no-smoking” in your online and print marketing. The property offers a cleaner, healthier environment for all residents, free from smoke drift that can cause health issues for infants, children, el-derly and those with existing health conditions. Sell this benefit. It may set you apart from the competition.

Step 5 – Enforcement of the Policy

Enforcement starts by setting clear expectations at the outset of the ten-ancy. Then, enforce your new poli-cy just as your management would any other policy, such as loud mu-sic, parking infractions, clutter, etc. Document any potential violations, meet with residents to discuss any potential policy violation and follow your standard progressive discipline measures of resident notification. Simply working with residents in a customer-friendly manner typically achieves the best results.

Keep in mind, residents who

smoke do not need to move out. Smokers simply cannot smoke inside their apartments, in common areas or in proximity to buildings where smoke can drift into other apart-ments.

Studies have shown that in most cases, after implementation of a no-smoking policy, you will find that turnover costs will drop, fire claims will be reduced, resident complaints of smoke drift will decline, and in-surance costs will ultimately go down. Customer and employee sat-isfaction will increase, and occupan-cy in many cases goes up due to the attractiveness of the amenity. You will have happier residents who will want to stay in your community.

Implementing a no-smoking policy may be in the best interest of a property owner and is not as challenging as one might suspect. There is clear precedence and many resources for making this happen, and now may be the time to act.

For more information or for assis-tance, please feel free to call us at the Washington Multi-Family Housing

Association at 425-656-9077.



By Ted Kimball

One of the longest delays in processing evictions occurs when not all occupants are

served personally (hand to hand) with the unlawful detainer summons and complaint. More often than not, the occupants know they must be le-gally served in order for the court to award a judgment for possession of

the subject property. If they are so-phisticated, they know that they can delay the time for the eviction by two to three weeks if they successfully avoid the process server.

If the unlawful detainer is not served in person, it can be served on another person who resides at the property or on the person in charge of the place of employment of the occupant, so long as they are of

sound mind and at least 18 years of age. If no one can be found to substi-tute serve, then the court will allow the process server to post the unlaw-ful detainer on the front door of the subject property and mail a copy by certified mail, but only after the court has signed an order allowing for this method of service.

Most courts also require process servers to attempt to serve the unlaw-

ful detainer personally for three con-secutive days, with both morning and afternoon/evening attempts before the suit can be served by sub-stituted service. Once served by sub-stitution, the occupant has a total of 15 days to file responsive papers in court instead of the normal five days following a personal service. Therefore it is crucial that the process

Help Your Process Server to Save Time in Your Eviction




Dealing with the death of an-other is never easy. Dealing with the death of a single

tenant living along in a rental prop-erty is made more difficult by ap-plicable laws in Washington. Many landlords and property managers do not know what to do or how to handle deceased tenant’s property. The existing statues are helpful when the deceased’s estate is probated but are painful in their application to small estates that frequently are too small to probate. A change in law is needed.

Contrary to popular belief, the death of the tenant does not auto-matically terminate the tenancy. In re Barclay’s Estate, 1 Wash. 2d 82, 95 P.2d 393 (1939). The Notation of con-

tinued tenancy is problematic when the tenant lives alone and the rental agreement prohibits assignment or subletting of the tenancy. It’s hard to envision the public interest in requir-ing the landlord to continue renting to a deceased person. It’s similarly baffling as to why the deceased estate should be required to continue pay-ing rent for an uninhabited dwelling.

SynopsisThe following is a synopsis of the

current Washington statutory author-ity relating to the disposition of deceased tenants’ personal property. Included is a summary of applicable statutes: RCW 11.08.300 Transfer of property to the department of reve-nue; RCW 11.42.010 Notice B

Qualifications; RCW 11.42.020 Notice to Creditors B Manner B Filings B Publications, and a Non-probate Notice to Creditors RCW 11.42.030; RCW 11.48.020 Right to possession and management of estate; RCW 11.62.010 Disposition of personal property, debts by affidavit, proof of death - contents of affidavit B proce-dures B securities; and RCW 11.62.020 Effect of affidavit and proof of death - Discharge and release of transfer or Refusal to pay or deliver B Procedure - False affidavit - Conflicting affida-vit B Accountability.

RCW 11.08.300 Transfer of prop-erty to department of revenue pro-vides in part:

Escheat property may be trans-

ferred to the department of revenue. The department of revenue shall fur-nish proof of death and an affidavit meeting the requirements of RCW 11.62.010 to any person who has pos-session of any personal property belonging to the decedent. Upon receipt of such proof of death and affidavit, the person shall deliver the personal property, or as much of either as is claimed, to the depart-ment of revenue pursuant to RCW 11.62.010.

RCW 11.42.010 Notice agent B Qualifications provides in part:

(1) Subject to the conditions stated in this chapter, and if no personal representative has been appointed in this state, a beneficiary or trustee is qualified to give non-probate notice to creditors under this chapter.

(2) A person or group of persons is deemed to have received substan-tially all of the decedent=s probate and non-probate assets.

(3)(a) The Anotice agent@ means the qualified person who:

1) Pays a filing fee to the clerk of the superior court in a county in which probate may be com-menced regarding the decedent, the Anotice county@, and receives a cause number; and

2) Files a declaration and oath with the clerk.a) The declaration and oath must

be made in affidavit form or under penalty of perjury and must state that the person making the declara-tion believes in reasonable good faith that the person is qualified under this chapter to act as the notice agent and that the person will faithfully execute the duties of the notice agent as provided in this chapter.

RCW 11.42.020 Notice to creditors B Manner B Filings B Publications provides in part:

(1) The notice agent may give non-probate notice to the creditors of the decedent if:

1) As of the date of the filing of the notice to creditors with the court, the notice agent has no knowledge of another person act-ing as notice agent or of the appointment of a personal repre-sentative; and

2) According to the records of the court, no cause number regarding the decedent has been issued to any other notice agent and no personal representative had been appointed.(2) The notice agent must give

notice to the creditors of the dece-dent, as directed in RCW 11.42.030, announcing that the notice agent has elected to give non-probate notice to creditors.

1) The notice agent shall first file the original of the notice with the court.

2) The notice agent shall then

Disposition of Personal Property of Deceased Tenants




How Do You Compete With the New Apartment Communities?

By Alexis Hammond

The Wall Street Journal recently noted that the share of new homes being built as rental

apartments is at its highest level in four decades. While it certainly helps the economy, an increase in apartment homes can strike fear in the hearts of many property manag-ers. After all, these newer units will likely boast state of the art features,

along with a long list of amenities designed to attract renters. So how does your (older) property compete with these sparkling new communi-ties? Here are just a few suggestions:

Play up your property’s best fea-tures. Does your community offer incredible views? Make sure you note that in your advertisements. State of the art work out room? Brag about it to the health clubs in the area. Take whatever is the best part

of your property and make sure that you prominently display it at all times.

Keep your property pristine. While it may be difficult initially to compete with a brand new property, letting your own become cluttered and dirty won’t do you any favors. Always keep your windows spar-kling clean, trash picked up and landscaping neat. Create your own good first impression.

Use their marketing efforts to your own advantage. New housing will likely drive more people to the area, providing a great opportunity to market the benefits of your own community to a new set of prospec-tive tenants.

Consider a community facelift. Has the arrival of a new property made you realize that it may be time to update your own? Even some-thing as small as pruning overgrown trees, or a new paint job can make your property more competitive.

Focus on tenant retention. If your community has a high occu-pancy rate, you should concentrate on retaining your current tenants rather than worrying about the com-petition in the area. It costs less to

retain a current tenant than it does to find a new tenant. Keep the ones you have.

Embrace the challenge. We can all become complacent in our daily lives; both personally and profes-sionally. Look at your new competi-tion as a challenge to manage the best property you can in the best way you can.

Don’t compete. If you’re happy with your property, just continue to manage it the way you always have and don’t worry about the competi-tion.

Let’s face it; there will always be competition for renters. By concen-trating on making your property the best that it can be, you’ll be able to handle the new competition with ease.

PropertyManager.com a Service of AppFolio

PROPERTY NAME

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RENTAL HOUSING JOURNAL



Deceased Tenant ..continued from page 22

cause the notice to be published once each week for three succes-sive weeks.

3) The notice agent may at any time give actual notice to credi-tors.

4) The notice agent shall also mail a copy of the notice to the State of Washington department of social and health services=.The notice agent shall file with the

court proof by affidavit of the giving and publication of the notice.

RCW 11.48.020 Right to posses-sion and management of estate pro-vides in part:

Every personal representative shall, after having qualified, by giv-ing bond as hereinbefore provided, have a right to the immediate posses-sion of all the real as well as personal estate of the deceased Y and shall keep in tenantable repair all houses, buildings, and fixtures thereon, which are under his control.

RCW 11.62.010 Disposition of personal property, debts by affidavit, proof of death B Contents of affidavit B Procedure B Securities provides in part:

At any time after forty days from the date of a decedent=s death, any person who has possession of any personal property belonging to the decedent which personal property is an asset which is subject to probate shall deliver such property to a per-son claiming to be a successor of the

decedent upon receipt of proof of death and of an affidavit made by said person which meets the require-ments of subsection (2) of this sec-tion.

An affidavit meeting the require-ments of RCW 11.62.010 (2) shall state:

1) The claiming successor=s name and address, and that the claiming successor is a Asuccessor@ as defined in RCW 11.62.005;

2) That the decedent was a resi-dent of the state of Washington upon date of death;

3) That the value of the decedent=s entire estate subject to probate does not exceed one hundred thousand dollars;

4) That forty days have elapsed since the death of the decedent;

5) That no application or petition for the appointment of a personal representative is pending or has been granted in any jurisdiction;

6) That all debts of the decedent including funeral and burial expens-es have been paid or provided for;

7) A description of the personal property and the portion thereof claimed, together with a statement that such personal property is sub-ject to probate;

8) That the claiming successor has given written notice, either by per-sonal service or by mail, identifying his or her claim, and describing the property claimed, to all other succes-sors of the decedent, and that at least ten days have elapsed since the ser-

vice or mailing of such notice;9) That the claiming successor is

either personally entitled to delivery of the property claimed on the behalf and with the written authority of all other successors who have an inter-est therein.

(A copy of such affidavit is attached for your review. Said affida-vit upon receipt must be mailed to the department of social and health services, office of financial recovery. )

RCW 11.62.020 Effect of affidavit and proof of death B Discharge and release of transferor B Refusal to pay or deliver B Procedure B False affida-vit B Conflicting affidavits B Accountability provides in part:

The person delivering personal property pursuant to RCW 11.62.010 is discharged and released to the same extent as if such person has dealt with a personal representative of the decedent, unless at the time of such delivery, such person had actu-al knowledge of the falsity of any statement which is required by RCW 11.62.010 (2). Such person is not require to see to the application of the personal property, or to inquire into the truth of any matter specified in RCW 11.62.010 (1) or (2).

An organization shall not be deemed to have actual knowledge of the falsity of any statement con-tained in an affidavit made pursuant to RCW 11.62.010 (2) until such time as said knowledge shall have been brought to the personal attention of the individual making the delivery of the personal property claimed under RCW 11.62.010.

If any person to whom an affida-vit and proof of death is delivered refuses to deliver any personal prop-erty, it may be recovered or its deliv-ery compelled upon proof of their right in a proceeding brought for the purpose by or on behalf of the per-sons entitled thereto. If more than one affidavit is delivered with refer-ence to the same personal property, the person to whom an affidavit is delivered may deliver any personal property in response to the first affi-davit received, provided that proof of death has also been received, or alternatively implead such property into the court or payment over to the person entitled thereto. Any person to whom delivery, transfer, or issu-ance of personal property is made pursuant to RCW 11.62.010 is answerable and accountable there-fore to any personal representative of the estate of the decedent or to any other person having superior right thereto.

The above statutes appear to indi-cate that upon the demise of a tenant

the landlord/management company has the ability to surrender personal property to an individual who pos-sesses letters testamentary or other proof that he/she is appointed the personal representative, executor, executrix, or notice agent of the dece-dent’s estate. If there is no such per-sonal representative or notice agent, the landlord/management company must wait forty (40) days after the tenant’s death prior to delivery of personal property of the decedent to an individual who furnishes and affidavit consistent with require-ments set forth in RCW 11.62.010. If no such personal representative, notice agent or affiant claims per-sonal property of the decedent then it appears that the decedent=s per-sonal property may be transferred to the department of revenue pursuant to RCW 11.08.300. The current pro-cess requires either the costly pro-bate of the deceased tenant’s estate or a delay of over forty days to claim tenant property. The current process is not helpful to heirs of very small estates not landlords.

Change in the LawThere are different approaches to

dealing with deceased tenant prop-erty. The national Revised Uniform Landlord Tenant Act (RURLTA) dic-tates a process similar to dealing with abandoned personal property. The RURLTA process provides for a storage period of up to sixty (60) days. The RURLTA approach is like-ly better than Washington’s current law but a more efficient and expe-dited process is available.

Several states such as Oklahoma, Kansas and Texas provide for the appointment of a designated repre-sentative for the tenant at the onset of the tenancy. The WAA believe this type of statutory scheme is better than existing Washington law. Last year, WAA proposed a deceased ten-ant property initiative in House Bill 1520. Under his bill the designated person is empowered, upon the ten-ants demise, to access the tenants personal property and wrap up the tenancy. The designated representa-tive remains liable and accountable to the tenant’s estates. If the desig-nated representative fails or refuses to take possession of the deceased’s personal property after Notice the statue would allow disposal of the property by the Landlord.

Please contact Mark Gjurasic or Chester Baldwin at Public Affairs of Washington, LLC to pledge your support for this necessary change in the law.

www.rentalhousingjournal .com



The Coach ..continued from page 22

for feedback on your new compensa-tion plan and swiftly address any problems you or your teams discov-er.

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Help Your Process Server ...continued from page 23

server is able to serve each occupant personally (hand to hand) to avoid a two to three week delay in your case.

The more information provided to the process server, the more likely he/she will be able to quickly serve all occupants personally with the unlawful detainer action. We recent-ly polled our process servers to find out what is most helpful to them in serving all occupants personally with the unlawful detainer. Below are some of the most helpful ways you can assist your process server in achieving a personal serve on all occupants.

Places of EmploymentIt is much easier to avoid a pro-

cess server at home, rather at the occupant’s place of employment. To avoid the process server at home, they simply don’t answer the door. Therefore, it is important to include the occupant’s verified place of employment to improve your chanc-es of a personal serve.

Description of Occupant’s Vehicle and Parking Space Number

It is easy for the process server to tell if the occupants are home by checking their parking space and/or description of their car with license plate. If a stake out is necessary, it is also a good place to wait until the occupant wants to leave in their vehicle.

Best Time to Find HomeIt is helpful to know the best time

to find the occupant at home. Occupants who work a late shift ver-

sus someone who is unemployed makes a big difference as to the best time the process server can expect to find the occupants at home.

Security Codes or KeysMany times our process servers

have to wait for someone to enter or exit the property before they can even get to the occupant’s door. It is very helpful to give the process serv-er the gate code or keys so they can gain entry. Every process server we use is licensed and bonded.

Dangerous Animals or ConditionsIt is important to keep the process

servers aware of any dangerous con-ditions or animals on the property so they can take necessary precautions.

Additional Descriptions of the Subject Property

It is very helpful to identify the name of the apartment community in addition to the street address and unit number. If there are several buildings, describe the building where the subject property is located so the correct unit is easy to identify.

An important part of our unlaw-ful detainer practice is to ensure the process server assigned to your case has all of the information necessary to serve each occupant in person. If your process server has all of this information, you too could save valuable time in the unlawful detain-er process.

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on-site (seattle metro) rental housing journal - september 2014

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