The Official AppFolio Blog

Our most recent webinar with Grace Hill featured Fair Housing Expert, Trainer Donna. Donna covered a range of issues and offered many great best practices on how to stay compliant with Fair Housing laws. The webinar was so popular that we hit our maximum attendance again! Below is the recorded webinar.

Our next webinar is in May, featuring Lisa Trosien. Stay tuned for more details!

Fair Housing Q&A with Trainer Donna

To learn more about Trainer Donna, visit her website www.mytrainerdonna.com.

Are military discounts considered discriminatory?
It is fine to offer a military discount.

Can you provide the web address for the suggested Fair Housing word list?
http://www.mvfairhousing.com/pdfs/ad-word-list.pdf

Are apartment complexes allowed to restrict large dog owners to the first floor?
Yes! Dogs are not a protected class. However, if a person with a disability was to request a higher floor level it would be a reasonable accommodation.

Can you elaborate on the breed limitations for service animals?
A housing provider may exclude an assistance animal from a housing community when that animal’s behavior poses a direct threat and its owner takes no effective action to control the animal’s behavior so that the threat is mitigated or eliminated. The direct threat provision of the Fair Housing Act requires there be an existence of a significant risk, not a remote or speculative risk. The determination cannot be the result of fear or speculation about the types of harm or damage an animal may cause, or evidence about harm or damage caused by other similar animals.

Do we have to simply take their word for it that their pet is a service animal? What kind of documentation can we ask for?
You can request a letter from his/her health care provider verifying that he has a disability (but no details about it) and has a disability-related need for this animal.

Is there a limit to the number of service animals allowed per resident?
If a health care provider says the person needs 3 animals for their disability then that’s the requirement for that person. But you then need to determine if this is a reasonable accommodation for your area, city ordinance, etc.

Where may I go to find information about the rights of a landlord when there is harassment coming from residents?
Be sure to discuss the situation with your supervisor, human resource department or corporate attorney to get directions or guidelines for handling. Most companies have policy and procedures for this sort of harassment.

If I received some phone calls throughout the day where I stated that we had a certain type of apartment available and than an application is returned from the day before along with a deposit, do I have to call back everybody I spoke with to let them know the apartment is no longer available? Should I always state that I have a certain number or type available at this time but that could change at any given moment?
When letting telephone prospects know what’s available it’s a good idea to let them know that availability could change. More importantly is ensuring you have written documentation of your availability ever day!

If a prospective resident says he/she has allergies & wants the carpet removed & the floor tiled – we can have them pay for this modification, correct? Do we have to make this modification?
Yes, you could require the prospective resident pay to have this done. Do you have to make the modification would depend on if it was a reasonable accommodation for your community.

If a person applies for an apartment and the property does not have a handicapped accessible unit, who converts the unit and does the person have to put funds in escrow to replace the unit back to original condition?
A person should be allowed to make a “reasonable modification,” and when doing so management may request that the work be done in a professional manner and that required permits be obtained. The management company may also require funds be put into escrow to put the apartment back to original condition if the modifications will interfere with the next person living in that unit. The Department of Justice and HUD published extensive guidance regarding reasonable modification issues in a document entitled Reasonable Modifications Under the Fair Housing Act which can be found on HUD.gov.

Would we have to provide handicapped parking for an older resident who requests it? When is handicapped parking required?
A state disabled parking permit is sufficient proof of need for a reserved accessible parking space. Or, if they provide documentation from a health care provider.

Why is it acceptable to say “no college students” (on mvfairhousing.com list)? Isn’t this age discrimination?
It depends on your state and local laws. If students are an additional protected class in an area then this would not be acceptable. Keep in mind that the word list is a guideline not the law.

How fast can you turn around your vacancy and move in a new resident? Quick turn around for apartments and houses is so important in our industry. You will always need a few days in between move-out and move-in to clean and inspect but the shorter you can make that window, the more money you can make. We’ve made it pretty easy to minimize this window with AppFolio’s work order functionality.

Recurring Work Orders – Set It And Forget It
The nice thing about reccurring work orders is that you can set them up to trigger at certain times. For example, everyone inspects a unit after a move-out to make sure that there are no damages. You can set up a recurring work order for an inspection to occur right after the resident moves out. If you have other standard maintenance tasks like carpet cleaning, or even the monthly gardening service, you can add these too. These work orders will be triggered automatically – saving you the effort of scheduling them and also making this process much faster for you and your staff.

Once the work order is automatically created, you can email your vendor the work order right away, so you get the work done sooner. You can also pay vendors using ACH so you don’t even have to write them a check!

Easily Tie Work Orders to Invoices
When you enter a work order, you can tie it to a bill and generate an invoice. This invoice is always attached to the work order so it is easy to pass on the charges to the resident or property owner. For example, if a resident breaks a window, you can create a work order for the broken window, send it to your vendor, and charge the resident for it with just a couple of clicks.

Warnings That Help With Compliance
One of the things we’ve added recently to work orders helps our property management customers stay compliant. For example, you can enter into AppFolio the date of home warranty expiration – if that property is under a home warranty and you go to put in a work order, AppFolio will warn you. You can avoid the hassle and expense of accidentally spending money to repair an item that is already under warranty!

We also have fields in AppFolio that track the year a home was built. There are many EPA regulations (with expensive fines!) around the notification of lead-based paint in the home. When you generate a work order for a property that was built before 1978, AppFolio will warn you so that you can hand out the appropriate lead-based paint information pamphlets.

In addition, on the Vendors page in AppFolio you can track important details about each vendor:

• Worker’s Compensation Insurance Status
• Liability Insurance Expiration Date
• If the vendor is EPA Certified and if they have taken a special class regarding the lead-based paint laws.

When you create a work order and assign it to a vendor that has expired liability insurance AppFolio will alert you to this issue. This really helps avoid mistakes and provides safeguards that can help protect property managers from lawsuits.

Bottom line – make sure you’re taking advantage of all that AppFolio’s work order functionality has to offer.

In honor of Fair Housing Compliance Month we wanted to share with you the different ways that AppFolio helps property managers with Fair Housing compliance.

Fair Housing Compliant Questions with Online Applications
Our application asks for specific information from prospective tenants and it only asks questions that are compliant with Fair Housing. For example, the online application never asks about race or gender or any other discriminatory question. We include the standard questions that are compliant with fair housing such as, “Have you been convicted of a felony?” It’s okay to base decisions on this kind of data. We’ve also designed the online rental application to be simple and only contain the minimum amount of data for the applicant and not extraneous questions that could open you up for discrimination issues.

Make a List of the Qualifying Criteria for Your Potential Residents
I recommend for all of our customers to make a list ahead of time, before accepting applications, of criteria for qualifying a resident. Then make sure you stick to that list! This will help tremendously if you ever get sued for discrimination. You can always go back to your list and point out the criteria for a qualified applicant – common examples include setting a credit score minimum, or requiring that the applicant was not convicted of a felony in the last 5 years.

Most property managers actually have different criteria. For example in the past, foreclosures may have been on a property manager’s exclusion list. But in this economic climate, more people may have had a foreclosure and they still make great renters. In addition, that criteria is something you can put into our online application so it is right there on the application. So if the applicant applies, he/she signs that online application and confirms they read and understand the application requirements.

A lot of property managers don’t realize how important it is to have that written criteria and avoid making one-time exceptions. Don’t forget that you can make your criteria specific – you can say that a felony of violent crimes may not be okay but a felony of non-violent crimes is allowed, for example. It is up to you but you absolutely should be consistent.

Time of Application is Important!
When using AppFolio’s online applications, the applications are all stored in AppFolio and sorted by date and time. An important Fair Housing requirement is if you have 2 applicants and both parties are equally qualified, then you have to give the rental to the first person that applied. If both people pass your qualifications (such as a resident must apply with a minimum credit score of 600) and both applicants meet this requirement, then in AppFolio you can look at the date/time the application was submitted and make sure you go with the person who completed the application first.

Resident Screening is Built-In
Another way you can stay compliant with Fair Housing is with the resident screening feature (optional) that is built into AppFolio. Screening prospective applicants helps property managers make qualified decisions by providing data on criminal backgrounds and credit scores. You can make move-in decisions based on looking at the full screening report to make sure that you comply with your qualifying criteria.

The bottom line in Fair Housing is to make sure you treat all applicants equally!

You’re a professional and understand how to manage risk. One of the tools in your arsenal is screening prospective residents – you know that making the right leasing decisions reduces bad debt and keeps occupancy high. With the economic downturn, proper screening is essential because more applicants have prior issues such as poor credit history or even a prior eviction.

Like most property managers, you’ll likely order a screening report on applicants and then call references. But if your screening report consists of only credit bureau data, you may not be getting the whole picture.

Property managers are more frequently turning to resident screening services that provide a comprehensive view of an applicant’s credit, eviction history, criminal history and other data.

A prospect’s prior rental history is a predictor of future rental behavior, so past evictions are relevant to a leasing decision. However, many court filings will never appear on the credit report. It simply makes sense to know whether an applicant’s former landlords have taken court action, and nationwide eviction database records that include initial filings and judgments can help you identify potential poor residents.

Many property managers go one step further and order a criminal background check and sex offender check. Whether you do this depends on many factors, including the type of property you manage such as public housing, your state requirements, and legal advice you may have received.

When you are reviewing the data, fair housing laws require that you consistently apply your screening criteria. You must also ensure that the information you use must comply with the Fair Credit Reporting Act and the consumer’s right to privacy. Of course, eviction and criminal data, just like credit data, has the potential for error. You must make an effort to confirm information to weed out potential inaccuracies.

Screening solutions abound. How do you find the solution that is right for you?

• Save keystrokes and potential errors – we’ve built resident screening right into AppFolio
• Give fast information so you can make a rapid decision and not lose a qualified prospect.
• Show prior nationwide eviction court filings.
• Give you the option of conducting a nationwide criminal and sex offender search.

In a weak economy, you may be tempted to reduce screening costs by ordering only a low-cost credit report. Yet at what cost? Getting a thorough screening report may actually be a form of low-cost insurance. If you are not screening your applicants adequately, your bottom line may be at risk.

Tell us about your background and how you co-founded AppFolio? Why did you choose to build software for Property Managers?
This is the 3rd company where I have been the CTO and the first two were successfully acquired — I just love the process of building a company, this is the fun part! As my last company was winding down, I had lunch with Klaus and we both saw that there was real opportunity to build web-based software for specific industries be because they need good and easy to use software and they didn’t have it at the time. We wanted to change that.

I was attracted to property management partly because I had a bit of experience dealing with rental homes in the past. I have to admit that back then, I would consider myself at the “elementary school” level of education in property management, and today I am well on my way to a graduate degree. Early on we also started talking to many property managers and realized that there was a need for a new web-based property management software. None of the property managers we spoke with said they loved their software! Our customers work really hard to provide a great service to their owners and that’s something that we can relate to.

How do you, as the leader of the engineering team, work with UCSB?
We have a really great internship program so every summer we bring in a new class of interns and they work on relevant projects – exciting stuff that our customers end up seeing! Last summer we focused on our search functionality and a prototype of the AppFolio iPhone application. We also sponsor some events on campus, especially related to the engineering department. There is a grad student coffee hour and we sponsor some of the research events as well.

Our team will also collaborate with students when they are working on research where we have some expertise. Klaus and I are sometimes guest speakers and we tell the students about what we are doing and what is going on in the industry. We give them some real-world information that relates to what they are studying academically.

Our engineering team works really fast – we have a new product release/ update every 28 days. How does the team do it?
It really takes a lot of work to make it happen, but it is definitely worth it! We hear so much positive feedback from our customers that they really appreciate how fast we develop, and this makes it very rewarding for all of us.

First of all, we can do this because we have a brilliant engineering team and they make a commitment to what they can accomplish in 4 weeks and they work hard to meet these commitments. We also have invested in technology to automate everything that we can. We have a huge suite of automated tests that ensures that when we do a release everything still works as well as it did before. We also have a large number of customers and when you are making releases every month, the actual process of the release is a very big task. We’ve automated quite a bit of this process as well. The third thing that really makes this work (and it is potentially the most important!) is that we rely on customer feedback. We release a version of a feature that might not have every bell and whistle and then we rely on our customers to tell us what to prioritize next.

Every AppFolian sees every customer request email and I think this is really important. It is amazing how willing our customers are to spend time with us on the phone and help tell us what they need.

What do you think is the future of SaaS – has it peaked or is there still a ways to go?
I think that this is really interesting because on the consumer side, it seems mainstream and you can see the most acceptance. There are a lot of people using Facebook, Hotmail, and Gmail and things like that. I just read the other day that there are a 100 million people in the U.S. using social networks.

From my perspective, there is still a lot of opportunity for businesses to develop and use web-based software. It is still early but people are starting to really see the benefits of it. To me, use of web-based software in business will come in like a tidal wave – it’s on the way.

You were a basketball player at Westmont (I can tell because you’re tall!) how did playing college basketball impact your approach to founding companies and managing engineers?
It’s funny because my coach from college is the VP of Player Personnel for the Miami Heat (Chet Kammerer). I was just out visiting him in Florida and I was telling him that most of what I learned about managing people and running a business is from him.

One of the things I learned from him was that every person is unique. I would see how he would treat each person on the team differently. Some people needed praise and some people needed him to be tough on them. This was interesting because I was used to the idea that you should treat everyone on a team the same. Now I try and recognize that certain people need different things. Another thing I learned from him was that people really want to be challenged to reach their full potential. Lastly, an important thing I learned from him was part of a story he shared with me. A friend of his was getting involved with coaching and went to talk to him for advice. His friend was expecting to hear all about the strategy and important coaching techniques he should learn first. But Chet told him to forget about all of that and that the most important thing to remember is to recruit great players. We try to do this 100% of the time at AppFolio and I’m really proud of all of the great people at AppFolio. I think we feel like a team here and I like the idea of succeeding as a team opposed to succeeding as an individual.

The webinar with Jackie Ramstedt and our co-host Grace Hill was such a success that we had record high attendance and hit our maximum capacity of attendees! Jackie is an energetic presenter who offered many great ideas on what you can do to increase resident retention in your portfolio.   Some highlights from the webinar polling questions included an almost unanimous response from attendees that when it comes to monthly increases in rent, residents think that $25 (max) is still affordable and that residents consider same day service a quick and appropriate response to service requests.

And, of course we ran out of time so Jackie was gracious enough to answer questions from the audience:

How often should you send out resident surveys, and when should you send them out?
You should definitely survey people within the first 30 days to see if their “expectations” were met during move-in. Then, I recommend a “touch point” after 90 days to call the resident and ask how things are going.

If they have made a service request, it is important to confirm that the problem was fixed and that everything is good. About 120 days before your renewal goes out, you should send a “How Do You Like Living Here?” survey which asks them to rank their experience so that there are no surprises at renewal time. This also allows you to correct a problem well in advance of asking for that renewal increase.

Also post the results in your newsletters and with your company to show the performance of your on site efforts. CAUTION: Make sure that what you are posting for the world to see IS “improvement” and positive. If you receive negative feedback, this is your opportunity to correct it FAST!

Do you have any ideas on how to get the residents to respond to the surveys and return them back to us?
Have an incentive for them to send the survey back! Even if it is a discount or a “BOGO (buy one get one) coupon or a $5.00 gift card for gas, people want to be rewarded for taking time from their already busy schedule to fill it out. Also remember that the survey shouldn’t be more than 6 to 10 questions “tops” and can be done easily through a scale method of satisfaction, i.e “1 for worst, 5 for best”. Make sure to leave room for comments for those who DO want to tell you more than just a quick “score”.

How do you make things easier for the residents and keep them happy?
You need to know your residents, but reducing stress and increasing convenience is really the key. If you manage student housing or cater to a younger audience, then it is very important to make things fast and easy for them to access information as they prefer to communicate via email and be able to pay their rent online. If you manage housing for seniors, they may want some “face time” with you.

Having systems in place with a variety of options by which your residents can communicate and conduct their business with you when “you” aren’t around is VERY important to them. AppFolio’s resident portals gives your residents that advantage by allowing them to pay their rent on line even after your office is closed and it’s the last day to pay.

Everyone is on a “tight schedule” these days so you really have to balance between “too much contact” and people complaining that they never hear from you. Utilizing the “tools that are available” in our industry will help keep your residents happy!

How should we handle a resident that is paying $200 above current market rates and wants a rent reduction? We are focusing on moving forward from a down economy.
This is a real problem and difficult to actually answer without more specific information. With the economy the way it has been the past few years, our market rates have been all over the map! Obviously we don’t want to give the resident a $200.00 cut in their renewal, so start by researching just what was going on at the time they signed their current lease to be paying so much above the current market rate now. Sometimes it was because they had a longer lease term holding their rent amount “higher” all through the “bottom falling out of your local market area”. If you can’t reduce their rent…you might have to “increase” another floor plan to offset the pricing. You have to ask yourself….”Can I afford to lose this resident and gain another vacancy?”

How do you deal with a renewal that had a great concession from last year due to the recession?
This is much like the question on the rent being $200 ABOVE market rent. You need to educate your residents during the year. If you think that the rent is below market price, show them the market increases and offer to go a “percentage” on the difference in price from what they are paying now and what the current market rate is for their floorplan. Don’t forget about Fair Housing perceptions! Whatever you decide on should be based on “supply and demand” of a particular floor plan, NOT on the resident themselves. The key is to give the residents plenty of notice and remind them of the value in their current living situation in your market and document your monthly policies of why you are charging what you do for your renewals.

We are a new management company that has taken over a property that didn’t charge pet fees. On our renewal we are going to now charge $25 per pet. This is upsetting to current residents. What is the best way to explain it to them?
Anytime there is ANY change with a community, the residents will begin to complain about many things opening with the line, “But the old management didn’t do it this way!”

Question: Is this a “one time charge” or an added amount per month? Explaining just “why” you are charging for these pets now and what the money is going for while reminding them of the “costs” the company is incurring due to pet excrement removal, etc. Find out what is going on in your market area and what other properties are charging; typically it is higher than just the $25.00 you are charging, so they are actually saving money by living at your property.

We supply a maintenance survey with each work order. Is this to many times?
Not really, many companies even add a “fake invoice” stating that if you had to pay an outside person to do this service request it would cost “X” amount of dollars! But because you live here, it is part of what your rent pays for. Reminding your residents of the “value” of the service you provide is what gives credibility to your rental amounts AND to the professionalism of your service team.

However as with anything, if your response isn’t getting better, then maybe you should hold off a while, and start again in a month or so. Too much of anything regardless of its purpose, can have a negative impact.

Is there a time of year that is typically slow for most properties as far as leasing is concerned?
Sure, however trends vary from state to state especially when bad weather sets in…i.e. snow and blizzards in the northern states. Also depending on your resident profile, traffic and leasing can be very different from a normal conventional community to a student housing property. Overall, here is what most properties experience:

1. Most trends follow the school year, meaning June, July and August seem to be the “most active” months for people.
2. Once September comes and people settle in to their routines and school starts, traffic begins to slightly slow down and continues right through the end of the year with all the holidays.
3. However, January, February, and March are typically the slowest times of year, again, depending what type of property you have and where you are located in the country. Talk with other properties in your market area.

My renewal notice looks as boring as your example! How do I make it look more inviting?
Think of it this way. This is the most important form of communication to your residents that shows your professionalism and pride. Purchasing really “good” stationary to print the letter on is a must. Even adding in a handwritten note with that “official” letter to give it an “individual” more personal touch is good.

What you say about them as a resident and how much you enjoy having them at your property is crucial. They want to know you “want them to stay” besides giving them the “official information” needed per your lease contract stipulations. Lastly, the “way” you send this letter makes a huge impact too. Of course, depending on how large your property is and how many you have on your staff makes a difference in your method. If possible, deliver the letter in person with a beautiful token of appreciation “gift” (one that your budget can afford). If you have been keeping in touch with them throughout their lease term, the “increase” should not be a surprise, and much easier of them to adjust to.

What is a good way to get residents involved in activities?
Make them plan it! There are always residents that want to be involved, so make good use of that, “Can I help?” offer from them. If possible try and find a “representative” from each building or floor (in high rises), to be the “go to” for resident activities. Build a “team effort approach” with the residents. After all they know what’s going on with their neighbors more than we do! Get them to spread the word and the excitement AND the volunteering to do things needed for the event. Residents helping residents…great way to get people involved!