Welcome to the SMLA Blog

  • 26 Jul 2019 6:02 PM | Nicole Burt (Administrator)

    Let’s get back to basics with a case study in, “What can I do with my security deposit?”

    Here’s a tenant on a lease for $900/mo which expires August 31st.  S/he pays the May rent but nothing comes in for June.  On June 7th the landlord reaches out.  The tenant says that s/he moved out a couple of weeks ago and never got around to notifying the landlord.  Fortunately, the unit only shows normal wear and tear, and a new leasehold tenant moves in on June 16th

    The landlord is holding $1,200 security deposit and asks what to do.  My analysis and advice:

    0.  WHY DIDN’T YOU ALREADY KNOW?  This incident is a gigantic wake-up call to inspect, inspect, inspect!  Your unit is your investment – guard it!

    A.  The Lease Contract:  The lease is a contract requiring the tenant to pay monthly rent through August, subject to the landlord’s duty to take reasonable steps to re-rent the unit if the tenant bails.

    B.  The Security Deposit is the tenant’s money, held by the landlord, as collateral against all actual recoverable damages but subject to applicable law.  That means the security deposit covers all manner of actual recoverable loss – lost rent, property damage (beyond normal wear and tear) and other outstanding allowed charges. 

    C.  The Loss:  In this situation, the landlord has lost one-half month’s rent at $880/month, for a total loss of $440.00.  The landlord is not allowed to “double-dip” for the second half of June – Maine law does not allow residential landlords to include an ‘early termination penalty.’

    D.  Retaining the Security Deposit:  The landlord is allowed to retain $440.00 if and only if the landlord timely sends notice.

    E.  The Notice:  For a leasehold tenant, the landlord must mail, via USPS, a notice to the tenant’s last known address within 30 days unless the lease says something different (which is less than 30 days).

     You astutely ask, ‘Within 30 days of exactly what?’  Unfortunately, 14 MRS § 6033(2)(A) does not say.  The following section, which applies to tenancy at will, say, “21 days after the termination of the tenancy or the surrender and acceptance of the premises, whichever occurs later.”  But that does not apply to a lease, and if the result is longer than 30 days, the lease can’t say that either.  Deep sigh here.

    There is NO REASON TO WAIT TO SEND THE NOTICE.  If you miss the deadline, the landlord loses the legal right to retain any of the deposit, no matter how much it is rightly owed by the tenant.

    The notice is five lines long.  Here it is:

    Dear Tenant:

                I was holding $1,200.00 for security deposit.

                I am withholding $440.00 due to your failure to pay June rent, after applying prorated rent for June 16-30 received from my new tenant.

                I am returning to you $760.00.

                            Love, Your Landlord


  • 02 Jan 2015 9:39 AM | Deleted user

    End of Year Multi-Family Market

    This is a good time to check in on the market activity as the year ends. Rather than give you a bunch of data, which I’ll do in my forecast report later in January, I’ll keep this anecdotal.

    • Buyers are actively looking, both owner occupants and investors.
    • Munjoy Hill values are completely detached from the rest of the market. Recent 3 unit sales all north of $450,000.
    • “Pretty” buildings are commanding a premium and even location can be largely overcome by quality and presentation.  
    • On the other hand, properties that are a little tired, don’t show well, or have some deferred maintenance, struggle to find buyers even when the price appears to account for the deficiencies.
    • Commercial sized multis (5+ units) have increased in value as in and out of state investors accept lower cap rates (which equals higher prices).
    • One out of state investor paid roughly $100/unit for several B/C class properties. While values are increasing, these sales are not strictly reflective of the wider market and appraisers are trying to figure out how to incorporate these sales.

    New Development

    Rising rents and projections for continued strength in the rental market has spurned the first round of new market rate development in Southern Maine for many years. Below are few of the projects currently underway or planned.

    Portland

    • West End Place – 39 Luxury Apartments is nearly complete
    • East Bayside – Redfern is beginning plans for 56 units in the location of the current 3G’s Auto
    • Midtown – It was recently announced that this project is being scaled back as a compromise with opposition groups. The entire structure is now planned to be built in one phase.

    Saco

    • Cascade Falls is a new development of 60 – 96 market rate apartments. Rents are project around $1,400++ for 2 bd units.

     

    Brit Vitalius is the owner of Vitalius Real Estate Group and President of Southern Maine Landlord Association.  He can be contacted at: 306 Congress St, Suite 3, Portland, ME 04101, 541-3755, brit@vitalius.com.


Postal Address:
306 Congress Street
Portland, ME 04101

Phone: (207) 358-9853

Email: smlaemail19@gmail.com



Follow Us On Facebook For Updates And Announcements

Powered by Wild Apricot Membership Software