E-Renter News

A Pennsylvania Superior Court ruled that a landlord was not responsible for injuries suffered by a child who was bitten by a pit bull on his property. The court decided that the landlord had no knowledge of the dog’s propensity to be dangerous.

The case started in June 2008, when a pit bull bit a 10-year-old boy on the nose while on the premises owned by landlord Robert Miller. The girlfriend of Miller’s tenant owned the dog. The child’s parents sued the tenant, the girlfriend and the landlord.

The mother argued that the dog had dangerous propensities and the landlord was liable for damages, because he knew or should have known about them, and failed to remove the dog from the premises or warn of its presence.

The landlord, who in turn sued his tenant, his girlfriend and the boy’s grandparents (who brought him to see the dog), denied that he permitted the tenant or the girlfriend to keep the dog on the premises. He also denied he ever had knowledge of the dog’s alleged dangerous propensities.

A court found in the landlord’s favor in December 2010. The boy’s mother appealed and the Superior Court upheld the previous ruling. The judges on the panel agreed that although there was an issue about whether or not the dog had dangerous propensities, the plaintiff did not produce evidence that the landlord had actual knowledge of them.

The court ruled that “actual knowledge of a dog’s dangerous propensities is required before a duty is imposed upon a landlord to protect against or remove an animal housed on a rental property.”

In Dunwoody, Georgia, a judge rejected a motion from landlords who sought to have a dog-bite case against them dismissed. Instead, a lawsuit brought by the parents of two children bitten by a pit bull will go to a jury trial—and could set a precedent in the state.

The parents also sued the dog’s owners, who used to live in the other half of a duplex owned by the landlords. The case stems from an attack by the dog when their son was four and their daughter was nine years old. The dog first attacked the boy and then ihs sister, who tried to help him. Their mother heard screams, and found the dog holding the little boy by his shoulder, shaking him side to side.

In court documents, the landlords said that they knew nothing about a so-called vicious dog staying with their tenants. They contend the incident is the fault of the parents and the dog’s owners. The parents assert they repeatedly complained to the landlords about the dog in question, as well as another pit bull owned by their neighbors. Another neighbor said she and others also complained about the dogs, and that she helped the mother of the children file a complaint with animal control.

The parents’ attorney said that the landlords, as well as the owners of the dog, have a responsibility in this case. “The landlords…have a duty to ensure that common areas…are, in fact, safe for use,” he said. He pointed out that the leases with both tenants specified dogs were not allowed; yet the clause was not enforced.

The attorney stated further than the landlords had heard complaints from the tenants for 10 months before the incident and that he hopes the case will send a “strong message to other landlords” that they will be “held responsible for keeping their tenants safe, including safe from the attacks by vicious animals owned by their tenants.”

A date has not yet been set for the trial, but we’ll keep you posted as the case progresses.

Home ownership reached a peak of 69%in the U.S. in 2006 and has been declining steadily since. The housing bubble revealed that with no-money-down mortgages, many Americans never really owned the homes they were living in.

Now, consumers can’t or won’t borrow the funds required to buy their homes, and renting has become a much more economically efficient way of securing shelter. By late 2011, it was cheaper to rent than to own in 72% of metropolitan areas in America, according to Moody’s. That’s up from 54% in 2001. Just as it was for buying an expensive house, renting is now seen as more acceptable and desirable because more people are doing it.

Easily accessible rental housing means people can be flexible to take jobs where they need to. Homeownership tends to keep people “stuck” if they can’t find a job in their city or sell their home to move to a new one. As a result of various economic factors, three million more households rent today than at the height of the housing bubble. That’s good news for landlords and for builders. Multifamily housing is driving the construction industry right now, as multifamily starts were up 26% in the first quarter of 2012.

And housing isn’t the only thing Americans are renting. Cars, textbooks, jewelry, dresses and handbags are all being rented in increasing numbers. And more people are wiling to rent a room in their house or their apartments to vacationing strangers through sites like AirBnB.

Renting is a trend that America can expect to see a lot more of in coming years.

A new study indicates that Americans prefer to rent units in houses than high-rise (or low-rise) apartment buildings. A CoreLogic economist analyzed data from the U.S. Census, and found that nearly 21 million rentals are in homes with one to four units, compared to 17 million in rental properties with five or more units.

As home ownership in the U.S. continues to decline, the numbers are expected to skew even more toward renting in homes. Former homeowners, it seems, are more likely to move to a house than to an apartment.

Property investors should take note of this trend. As more Americans lose their homes to foreclosure, and the job market remains lackluster, plans for buying a home will likely be delayed for millions of people. There could be real opportunity in the single-family rental market for the foreseeable future. Large hedge funds have been buying up thousands of foreclosed homes and hiring local property management companies to oversee them.

Some investors say that while single-family rental homes are more difficult to manage than apartment buildings, the rock-bottom prices in many markets make the scenario more palatable.

Are your rental property holdings concentrated in multi-family buildings or single-family homes? Do you plan on expanding your business by purchasing foreclosed homes in the near future?

Legal disclaimer:
The contents of this article are intended for general information purposes only, and should not be relied upon as a substitute for obtaining professional financial or investment advice applicable to your situation.

The economic analysts at Barclays Capital say that the housing market is no longer dragging down the U.S. economy, thanks to the strong rental market. They also paired economic data with the latest round of homebuilder results and decided they are more bullish on housing.

Others paying attention to economic news today weren’t as optimistic. Jobs numbers for April were disappointing, with only 115,000 jobs added. That news sent the stock market down.

Barclays analysts look to the nation’s strong rental market as proof of an improving overall housing market. Multifamily construction starts doubled over the past two years, and permits continue to be issued—an indicator that future demand and growth will continue.

Single-family housing demand is still weak, due to high inventories and lower demand—possibly due to a weaker-than-expected jobs market. But a recovery could be coming there, too. New single-family home sales were revised in March to 328,000. New home inventories dropped to 144,000 units, or 5.4 months of sales. This is lower than the average of 4.5 months before the bubble burst.

Homebuilders saw a 22% growth in orders in the first quarter, and even hard-hit areas are seeing prices begin to rise. Some economists say that housing will again soon be a boost to economic growth.

A real estate investor in Memphis, Tenn., found the biggest mess imaginable after a hoarding tenant moved out of his rental property. His lesson to other landlords? Check in on tenants more frequently. He admitted that he didn’t do regular inspections of his rental home, which may have cost him greatly.

Here’s what happened: after asking the tenant to move out, the landlord checked on the house and discovered his seven-year tenant, a schoolteacher, had severe hoarding issues. She apparently could not throw anything away: not garbage, nor newspapers, nor her cats’ used kitty litter. In fact, she couldn’t even flush her toilet, the details of which are too disgusting to share.

Every room in the house was filled knee-high with mounds of garbage. It was nearly impossible to walk through the house, and flies and bugs were everywhere. The tenant had simply walked away, leaving the mess for the landlord to deal with.

It took several hazmat experts an entire day and three trailers to empty the home of garbage. Then, the house needed to be decontaminated, which took another two days. Subsequent renovation cost the landlord over $10,000.

In the meantime, the tenant checked herself into a mental health institution, according to her family. The landlord expressed concern for the tenant’s condition, and was happy to hear she is getting help. While many people would be angry and frustrated at this situation, this landlord’s attitude is admirable. He said he was grateful that he could afford to fix the property, and for the reminder that his life is “pretty good.”

He plans to be “more vigilant” about the new tenants who are moving in.

Last week, Maryland’s highest court ruled that owners of pit bulls or mixed breed pit bulls, as well as landlords who allow tenants to own such dogs, are liable for damages resulting from an attack by these dogs. In modifying an existing law, the court ruled that it is no longer necessary to prove that a pit bull is dangerous. The presence of the animal on a property is enough to establish a case for damages.

The case began in 2007, when a 10-year-old boy was severely injured by a pit bull. He spent 17 days in ICU and a year in rehabilitation. His parents filed a suit against the dog’s owners, seeking monetary damages. They declared bankruptcy. The parents then sued the dog owners’ landlord.

During the trial, the court ruled there was insufficient evidence that the landlord was aware of the dog’s vicious nature. In 2011, the Court of Special Appeals reversed the lower court’s decision. The landlord’s insurance company appealed to The Court of Appeals of Maryland, which upheld that decision and further ruled that “pit bulls and cross-bred pit bulls are inherently dangerous.” The court also reduced the standards necessary to hold “owners and others liable for the attacks of their pit bulls.” This means landlords.

This ruling means that whether or not a dog has a history of being dangerous or ever showed any signs of viciousness, the owner and/or landlord who know a dog is part or full pit bull are liable for its actions. In the past, a victim of a dog attack had to prove the owner or landlord knew the dog was dangerous.

Will landlords in Maryland be adding “no pit bull or pit bull mix” clauses to their leases as a result of this ruling? Do they have a choice? Opponents of the ruling worry that pit bull owners will find it more difficult to find housing. Considering the dogs are banned outright in many municipalities, it’s the reality they must face. This ruling doesn’t outlaw pit bulls; it simply makes the owner and landlord financially responsible for injuries people suffer as a result of attacks by them.

In Toms River, New Jersey, a landlord and his tenants are at odds over a rental property the tenants say is haunted. The tenants fled in the middle of the night after living in the three-bedroom home for just one week.

The landlord, Richard Lopez, contends that the tenants have negatively affected his ability to lease or sell the house in the future, and he’s filed a lawsuit for $15,000 in damages. He claims the couple can’t afford the rent, so they moved out. Meanwhile, the couple hired a team of “ghost busters” to prove their claim.

The tenants have countersued, demanding that the landlord refund their $2,250 security deposit. They assert that the landlord initially agreed to release them from their one-year lease and return the deposit after they told him about what was happening in the house, and then changed his mind. Among their claims:

• Clothes and towels were spread all over the floor while they were away from the house.
• Doors would open and slam shut on their own.
• Footsteps could be heard in the kitchen after the couple and their children were in bed.
• They heard sounds of strange voices whispering and something being dragged through the basement.
• Lights turn on and off on their own.

The landlord’s claim that he would be unable to sell or rent the house stems from disclosure laws that would require him to inform future prospective tenants or buyers that previous tenants claimed the house is haunted.

The story has sparked international attention, with an appearance by the tenants on ABC’s Good Morning America. The syndicated show The People’s Court is reported to be interested in having the litigants settle the matter on the program.

Two reports this week reveal a mixed message about the housing market in the U.S. The first, the S&P/Case-Shiller index of home prices came out on Tuesday, and reported that home prices in major metropolitan areas had fallen in February by an annual rate of 3.6%. While this figure reflects dips in some areas to new lows, it’s still an improvement over January (-4.1%).

The details reveal some bright spots and some dark ones: Phoenix, which was hit hard by the housing crisis, has posted two consecutive months of positive annual returns, and five consecutive positive monthly returns. On the flip side, Atlanta had a double-digit negative annual return of -17.3%—its fifth in a row. While only five of the 20 metropolitan areas studied had positive annual returns, 15 of the 20 saw improvements in February over January. So, while things are still down, they’re not as bad as they were.

In February, nine metropolitan areas: Atlanta, Charlotte, Chicago, Cleveland, Las Vegas, New York, Portland, Seattle and Tampa, hit new lows since the housing bubble burst.

Another report, from the Federal Housing Finance Agency (FHFA), said that home prices were up .4% in February 2012 over February 2011. This is the first time since July 2007 that this index has shown an annual gain. It was also up .3% from January to February 2012.

The FHFA numbers only include mortgages backed by the government’s Fannie Mae and Freddie Mac. These loans typically have lower defaults and foreclosure rates, so the home prices they reflect are more stable, according to economists. Still, this index is 19.4% below its April 2007 peak, and at the same level it was in January 2004.

On Wednesday, Zillow released data that indicates home values were up .5% in March over February, though still down 3.1% from a year ago. Phoenix and Miami saw strong gains in the first quarter, while Denver, St. Louis and Dallas appear to be closer to recovery. Atlanta and Chicago, along with Las Vegas and Sacramento, continue to see falling prices as a result of weaker economies, higher foreclosure rates and overbuilding.

The U.S. Supreme Court has declined to hear a Manhattan landlord’s case regarding New York City’s tough rent stabilization laws. We’ve been watching this case since December. That’s when the landlord—who claimed that his tenants could afford to pay market rent but he was hindered by law from charging it—decided to take his challenge against rent regulations to the highest court in the land.

In January, the court indicated it was interested in hearing the case, but yesterday, it decided to let the city’s rent regulations stand.

The landlords, James and Jeanne Harmon, inherited a brownstone near Central Park nearly 20 years ago; they rent out six apartments in the building. Tenants pay about $1,000 per month, which the landlords claim is 60% below market rent. Harmon had petitioned the court to ban rent regulations that keep rents artificially low, based on a clause in the 5th Amendment that prohibits the government from taking private property for public use without just compensation.

In a statement, Harmon said, “We still believe the Constitution does not allow the government to force us to take strangers into our home at our expense for life. Even our grandchildren have been barred from living with us. That is not our America.”

A lawyer for the city commented that the court “properly left it to the elected state and city officials to decide [rent regulation’s] future.” Officials had urged the Supreme Court to not hear the case, defending rent regulations as a necessary response to housing shortages. The vacancy rate in the city is 5%, the required minimum to keep regulations in effect—which they have been for 40 years.

The president of the Rent Stabilization Association, a landlord group, said the court missed an opportunity to “at least have provided an opportunity to have a policy debate. This law needs to be revisited and directed towards those who need it… [not to those who] can well pay their fair share in terms of rent.”

Some involved in the case say rent regulation helps low- to moderate-income tenants, while others say it creates more shortages by discouraging people from entering the rental business.