[RPPTL LandTen] "Risk Mitigation Fee"

Mon Oct 28 08:39:15 PDT 2019

Hi James,

This is being done in single family management, not multifamily.

The name of the game now is to get as much money out of the owner and the tenant.

Having a tenant pay the property manager a “risk mitigation fee” adds up and increases their income.  The property manager is keeping this fee in almost all the cases I see.

Harry

LAW OFFICES OF 
HEIST, WEISSE & WOLK P.A.
PH: 1 800 253 8428
FAX: 1 800 367 9038
"Serving the Property Management Professional"
Website:   <http://www.evict.com/> www.evict.com 
Email:  <mailto:harry at evict.com> harry at evict.com

 <https://www.facebook.com/pages/Heist-Weisse-Wolk-PA/343965575625870> 

Visit us on Facebook

THIS E-MAIL MESSAGE IS CONFIDENTIAL, ATTORNEY-CLIENT PRIVILEGED, AND INTENDED FOR THE PERSONS NAMED ABOVE ONLY.  ALL OTHER USE, COPYING, OR DISTRIBUTION IS STRICTLY PROHIBITED.

From: landten-bounces at lists.flabarrpptl.org [mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of James Glover
Sent: Friday, October 25, 2019 4:43 PM
To: landten at lists.flabarrpptl.org
Subject: Re: [RPPTL LandTen] "Risk Mitigation Fee"

My thoughts from an apartment community perspective. Right away I'm thinking FHA and Fair Credit Reporting Act issues.

Practically speaking, the Tenants either meet qualifications or they don't. I don't know why you make a downward exception on your qualifying criteria just because a tenant offers you more money. You might as well throw your criteria in the garbage and just raise your rents for everyone. I know plenty of landlords that do just that, and get double market rents being the "felon friendly" apartments. My experience, once you make that departure upward or downward, you've changed the entire tenant mix for your community. You can't just make one-time exceptions per FHA, if you have one eviction tenant, then you rent to any eviction tenant. 

Additionally, if you're giving different terms based on bad credit or credit score, you need to be extra diligent in giving written credit decision notices and justifying your decision criteria per the FCRA. 

Can you charge the additional risk mitigation fee per this scheme? Probably, but the income isn't worth the headaches.

--

James "Jimmy" Glover

General Counsel

Circle Property Management, Inc.

office: 

772-888-0865

email: 

 <mailto:James at circlerentals.com> James at CircleRentals.com

address: 

P.O. Box 1026, Jensen Beach, FL 34958

Licensed Attorney in Florida and Alabama

  <https://docs.google.com/uc?export=download&id=1WkXPKjxY3AsTTxpTJScGNzn_dwQxE2Yp&revid=0B6hCAiZEFt8GWUs1UUpDaTRXQUtUemFwNkJuZ3ZvaFdGdnB3PQ> 

NOTE: This e-mail is intended solely for the use of Circle Property Management, Inc., Chuck's Rentals, Inc., and/or Southern Investors Management, Inc. (collectively, "CPM") and the individual(s) to whom it is addressed. If you believe you received this e-mail in error, please notify the sender immediately, delete the e-mail from your computer, and do not copy or disclose it to anyone else. If you are not an agent or employee of CPM, do not construe anything in this e-mail as forming an attorney-client relationship, and do not disclose anything to Mr. Glover or CPM that you expect to hold in confidence. If you properly received this e-mail as an employee, agent, co-counsel, or retained expert of CPM, you should maintain its contents in confidence in order to preserve the attorney-client or work product privilege that may be available to protect confidentiality. Mr. Glover is not licensed to practice law in Illinois or Indiana.

To ensure compliance with Treasury Regulations (31 CFR Part 10, Sec. 10.35), we inform you that any tax advice contained in this correspondence was not intended or written by us to be used, and cannot be used by you or anyone else, for the purpose of avoiding penalties imposed by the Internal Revenue Code.  Also, to ensure compliance with the Fair Debt Collection Practices Act (15 USC Sec. 1692-1692p), we inform you that CPM may be deemed to be a debt collector attempting to collect a debt, and any information obtained may be used for that purpose.

---------- Forwarded message ---------
From: Harry Heist <harry at evict.com>
Date: Fri, Oct 25, 2019 at 10:59 AM
Subject: [RPPTL LandTen] "Risk Mitigation Fee"
To: RPPTL Landlord Tenant Committee <landten at lists.flabarrpptl.org>

It seems like each day property managers are coming up with fees that I believe will eventually cause a problem and be class action material. 

They are spreading as these managers are on all of these Facebook groups, someone says they are doing it and then everyone thinks it is OK.

The latest one I have been seeing is a “Risk Mitigation Fee”.

This is a nonrefundable fee that the higher risk tenant (bad credit, bankruptcy, eviction etc) is being asked to pay as part of being approved.

Often this “fee” is being kept by the property manager, split with the owner or given to the owner.  More often than not, kept by the property manager.

Does anyone have any info on the legality of this?

In the money lending world, creditors are free to charge a higher interest rate to a higher risk person but this now????

Harry

LAW OFFICES OF 
HEIST, WEISSE & WOLK P.A.
PH: 1 800 253 8428
FAX: 1 800 367 9038
"Serving the Property Management Professional"
Website:   <http://www.evict.com/> www.evict.com 
Email:  <mailto:harry at evict.com> harry at evict.com

 <https://www.facebook.com/pages/Heist-Weisse-Wolk-PA/343965575625870> 

Visit us on Facebook

THIS E-MAIL MESSAGE IS CONFIDENTIAL, ATTORNEY-CLIENT PRIVILEGED, AND INTENDED FOR THE PERSONS NAMED ABOVE ONLY.  ALL OTHER USE, COPYING, OR DISTRIBUTION IS STRICTLY PROHIBITED.

_______________________________________________
landten mailing list
landten at lists.flabarrpptl.org
http://mailman.fsr.com/mailman/listinfo/landten

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/landten/attachments/20191028/7d21c982/attachment-0001.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.png
Type: image/png
Size: 1153 bytes
Desc: not available
URL: <http://mailman.fsr.com/pipermail/landten/attachments/20191028/7d21c982/image001-0001.png>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.png
Type: image/png
Size: 1153 bytes
Desc: not available
URL: <http://mailman.fsr.com/pipermail/landten/attachments/20191028/7d21c982/image002-0001.png>