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What Cleveland Ohio landlords need to know about large deposits and deposit accounting

Landlords accept security deposits as a form of insurance. If the tenant damages the property or leaves with unpaid bills, the landlord can use the money from the security deposit to help cover those expenses. When accepting a security deposit, there are several things landlords need to understand to protect themselves and their property.

  1. The security deposit does not belong to the landlord or in our case, the property manager. That money needs to be held in a secure account, so when the tenant moves out, it can either be returned or applied to acceptable expenses. That money cannot just be put into an account with the rents and other income streams to be spent as needed. It needs to be available if and when the tenant moves out.
  2. You may have to pay interest on the security deposit. If you collect anything over the first month’s rent, you have to pay 5% interest on that amount on the one-year anniversary of accepting the money and every year after that. For example, if the rent is $1000 per month, and you collect a $2000 security deposit, you will have to pay interest on the $2000.
  3. Withholding security deposit money for damage is not always supported by law. The law states that ordinary wear and tear cannot be deducted from the deposit. However, the description of “ordinary wear and tear” is highly subjective and judges enforce it differently from one community to the next. For example, I do not believe having to repaint due to the walls being so dirty they can’t be cleaned or full of scratches and marks should be considered “ordinary.” Most courts, however, do not agree with that and will not allow landlords to deduct for painting costs. Our policy is to make the deductions we feel are necessary and appropriate and then if the court questions it, we can make our case and work with the owner regarding what the court decides. This is another example of when before and after video inspections become helpful
  4. You MUST provide an accounting of the deposit within 30 days. By law, the landlord is required to either provide the tenant with their deposit, and itemized account of repairs needed that used up their deposit, or a combination of part of the deposit and the itemized list of repairs. It does not matter if the tenant is getting nothing back due to damage to the apartment, the landlord MUST provide the tenant with a written statement regarding the deposit. If the tenant can prove the landlord did not provide this within 30 days, they can get as much as double their deposit back.

As a property manager, I understand the laws regarding security deposits inside and out. I am also familiar with the courts in the greater Cleveland area and what each of them generally finds as acceptable wear and tear. That knowledge along with the various processes and checklists we have in place to run our business enables me to provide the best care for the properties I am entrusted with.  Regardless of whether the property owner is local or out-of-state, they can rest assured that their security deposits are protected, and they are protected from needless fines and aggravation.


Our experienced investment property management team can relieve you of the burden of managing your rental property while saving you some serious money! Call us today at (440) 220-7300 to see how we can help you!

How to handle utilities on single family rentals in Cleveland Ohio


Cleveland is a great cash flow market for investors looking to purchase property. However, there are a wide array of intricacies involved in handling the utilities for these homes.

One key issue is the difference between public utilities and City of Cleveland utilities.

Gas and electricity aren’t city utilities, so they can be put in the tenant’s name pretty easily. There’s no real issue in doing this and once the utilities are in the tenant’s name the landlord isn’t really responsible.

On the other hand, water and sewer are very different issues because— even if they’re put in the tenant’s name— they’re ultimately the responsibility of the owner. And, in the event that the tenant doesn’t pay, that can stick to the owner’s property tax.

Left unpaid, the house can be foreclosed on years later for non-payment of utilities.

So, as you can see, dealing with water and sewer— and other City of Cleveland utilities— can be tricky.

And, another important aspect of this issue is that, in Cleveland, the water bill only comes out every 90 days. Which, for a lot of tenants, can be very difficult to pay. Many of them end up getting behind in their utility payment for any number of reasons. They may not be great at managing their money and when that bill comes every 90 days it completely throws off their budget.

Here at Realty Trust Services, we deal with this situation in four different ways.

1. The tenant puts the utility in their name. Usually there’s a large deposit and we’ve found that many tenants can’t afford that. They can afford the deposit when they move in— they can afford their rent— but they can’t afford the large deposit required by the water department, and that can create a problem when you’re trying to get someone moved in.

Here at Realty Trust Services, we have a checklist that we use before the tenant gets the keys. They have to show us that the utilities are in their name if that’s required.

So, for some tenants, that means they thought they could afford the house, but they can’t move in until they satisfy the conditions of that checklist.

2. The second way we handle City of Cleveland utilities here at Realty Trust Services is that we have the bills forwarded to our office. We then send it directly to the tenant. We also save a copy online on their account.

The beauty of this is that we can actually see the bill. It doesn’t have a chance to rack up. We’ve seen some tenants run up bills over $2,000 that we had no idea about because we weren’t seeing it.

This method lets us see the bill; lets us know if the tenant doesn’t pay it; and we’re also able to see any abnormal usage, like what might result from a leak or someone else staying in the house and using more water than usual.

This helps us manage the property more effectively and, if the tenant doesn’t pay, it will usually get shut off sooner rather than later this way.

Which is a great benefit for the owner because we’ve seen water bills get up into the thousands. More often than not, the City will shut off the water when the bill gets to around $700. Which works out in our favor because our only way of collecting the amount due if they don’t pay is to evict them, send them three day notices, call them… But, ultimately, if they still don’t pay we have no other choice but to evict them.

Eviction isn’t a great option…

Eviction isn’t really a great option or something we want to rush into doing. It’s not the best course of action for the owner or the tenant. But we’ve found that if the utility company shuts off the water, the tenant oftentimes pays it and the City restarts the service. That’s a much better alternative than losing a tenant that was otherwise paying all of their other bills except the water bill.

You might ask, “Can you, as the management company, or I, as the landlord, turn off the water?” No. That’s illegal. You can’t turn off the water because doing so is actually considered a self-serve eviction. The water company can turn off the water, but neither the owner nor the management company are legally allowed to.

3. Another option some landlords prefer is to keep the utilities in their name, they pay the water bill, and then the management company collects reimbursement from the tenant. Some landlords will go this route because they worry that— since the water bill is in their name— if it’s not paid, it will reflect badly on their credit.

Water Bills Are Not Reflected On Credit Reports 

I can tell you from a wealth of personal experience (I’ve seen many hundreds, if not thousands, of credit reports), that I’ve never once seen a water bill on anyone’s credit report.

The reason why unpaid water bills don’t affect your credit score is pretty simple. The water company is always going to get its money because they go in as a first lien— before a mortgage, before judgment, and before a lot of other liens— right alongside property taxes. They’ll get their money eventually.

Truth be told, unless there are some unusual circumstances— the property is worth $0 or its a toxic waste dump and it won’t sell for anything in a foreclosure sale— the water company will get their money. So they tend to not worry too much about whether or not its paid when its due.

But that’s an option a lot of landlords choose to use. They pay the bill and then we, as the property management company, collect reimbursement from the tenant. It’s handled just like rent.

But, if the tenant doesn’t reimburse the owner, the owner is out of money. That can start to build up over time and eventually the owner has the problem of, “Do I want to evict this person because they didn’t pay their water bill?”

There are times when that’s the only real choice an owner has to get the tenant to pay what they owe. It’s not a good position to be in and I personally think people should avoid ever going down that road. It can cause a needless complication. Make the tenant pay their own bill directly to the water company. It’s ultimately much easier for everyone involved.

4. The last option I want to talk with you about is budgeting.

As I mentioned, in Cleveland the water bill tends to come out every 90 days and the amount can substantially accrue in that time period.

One option we here at Realty Trust Services have for our clients is that we can set them up on a budget. On this budget, they pay a certain amount every month. This amount is based on what we think typical water use would be each month for that property.

Then, when the bill comes in, we pull from the amount the tenant has paid in.

So, for example, let’s say the bill came out and the total was $250. Well, for the last three months the tenant was paying $100 a month. So when the bill comes in on that 90 day mark, the tenant has $300 in their account. We pay the water bill out of that and the tenant has $50 left to roll over to the next water bill cycle.

This way, the tenant is happy that we provided a service to them, we can verify that the bill is getting paid, and it’s a win-win situation.

These are just some of the methods you can use to manage the water utility for a single family property. If you’re dealing with a multi-family property, there’s an entirely different set of techniques for dealing with this. We’ll look at those in another blog.

Contact Realty Trust Services

To get started with effective Ohio Property Management for your rental property contact us today by calling (440) 220-7300 or click here to connect with us online. 

Realty Trust Service Company Mission And Values

images I wanted to take some time today to go into a little discussion on our company mission statement and our values here at Realty Trust Services. Whether you’re a new employee, a potential owner who’s considering using our property management services, a current owner we work with, a tenant, a potential tenant… whatever the case may be, this is meant to be an exercise in one of our guiding values: education.


Our mission here at Realty Trust Services is to deliver peace of mind. Why is this our mission and how do we work towards it? Well, there are two reasons why it’s our mission. One, I think it’s what people want more than anything when they deal with our company. Two, I couldn’t remember anything longer than that. So it had to be something simple and direct that we could focus on and strive to deliver. I want to create a certain end effect when anyone associated with Realty Trust Services dealt with other people. Whether those people be owners, tenants, co-workers, vendors… whoever it might be… when they go to bed at night— at least if they’ve just interacted with us— to hopefully sleep a little better; a little more peacefully. Now, obviously, achieving peace of mind is a little more complex than interactions with your multifamily property manager at whatever level you’re interacting with them on, but that’s the idea. easy way hard way I believe that, if we can deliver peace of mind, it’s kind of a win-win solution. It’s something that we can give to others that they can, in turn, give back to us. That’s a lifestyle choice and that’s what I want. Everything we do at Realty Trust Services should be focused on creating a positive feedback loop. We can all accomplish so much more if we’re in that mindset as opposed to the less-than-positive interactions that often pervade this industry. So how do we deliver peace of mind? To that end, I came up with three values that I feel are foundational. I believe these three things will help us to accomplish that mission of delivering peace of mind. This is how I visualize this system… The mission is a golf ball sitting on a tee. Or, in this instance, a T.E.E. T.E.E. stands for Transparency, Empathy, and Education. Let’s break that down.


Transparency means that you tell the truth, even if it’s bad news or no one wants to hear it. You know people will be upset by it, but you tell them anyway because they need to know. You tell the truth even though it might be painful at that moment. Transparency gives you the freedom to get on with finding a solution. There’s no need to avoid or doge or hide from the issues. And that’s important because trying to avoid dealing with an ugly truth just fuels negative energy. Instead of being a positive cycle or productive change, it becomes a negative cycle. It becomes all anyone thinks about. “What’s wrong?” “What aren’t they telling me?” “What do I need to hide?” “What don’t they know? What do they know?” All of those things are distractions from providing the excellent service it takes to create positive, trust-filled interactions. So the idea of transparency is that we admit our mistakes. There’s no room for ego in a high-performance team. Once we agree that everyone is on the same side and we’re all trying to provide each other peace of mind, we can bring people together. So owners aren’t just trying to operate their property for the cheapest price possible, tenants aren’t just trying to get whatever they want out of any given transaction, but everyone’s actively trying to work together. At first, that may seem a little more expensive one way or another, but, when you’re working together for a common purpose, things start to happen that are synergistic. Maybe the tenant takes care of the property a little bit better so the owner is a little more willing to see to the tenant’s concerns and spend money to make things better for them. These things work in a positive circle. If you look at it systematically, oftentimes what you do will be different and the vision and values are what organize the system and allow us to get the result we’re after. That’s why it’s so important to talk about it and think about it. Ultimately, the effect of high transparency is that the trust in a relationship is much higher and that gives us the framework to work together more effectively.


“People don’t care what you know until they know that you care.” Empathy is when you have a sense of what others are feeling. And many people don’t know how to experience empathy, for a number of reasons. Sometimes it’s just how they grew up. You model certain things from your parents and other sources and they may not have demonstrated empathy for their own unique reasons. Trauma can be another reason why a person isn’t good at empathizing with others. Trauma can create the inability to have any kind of feeling, let alone an empathic one for someone else. If you start to feel like emotions are painful in general— positive or negative— you make yourself disconnect. That happens to more people than you might expect. But we always seek to insert empathy into our interactions. Empathy is one more thing that increases the trust in the process of what we’re trying to achieve. And trust is so vital. It makes everything else better. download I recently read a book called The Upside of Irrationality by Dan Ariely. One of the interesting experiments he did was he would intentionally irritate people. The opposite of empathy. They created these situations where people had the opportunity to take advantage of them and they tested whether or not being intentionally rude to the person beforehand affected their behavior. What they found was that 70-80% of people wouldn’t take advantage of a difficult situation if they were feeling respected and there was a trusting, empathic relationship. On the other hand, an overwhelming majority of the people they irritated took advantage. These were ordinary people who weren’t really bad— you wouldn’t consider them to be dishonest or anything like that— but the same person that was not irritated would not take advantage of a situation where the irritated person would. My point here is that empathy is important, especially for landlords who offer property management in Ohio. It’s important that we show empathy to our tenants because it’s going to make a big difference in how they treat the property. Because if they’re feeling taken advantage of or that someone was rude to them or didn’t take care of their needs, they’re going to want to exact revenge. Revenge doesn’t have to have anything to do with killing someone or drastically hurting someone in order to get even. It might not even be a particularly rage-filled action they take, but— at least in most cases— people who feel slighted will still engage in vengeful behavior. Relationships mitigate risk. Having that empathic relationship and caring makes a big difference for everyone involved. Yet there’s this fear of empathy. Some people feel like they have to be mean or rude to someone if they disagree with that other person. Say, for example, that a tenant is being unreasonable in asking for something. One of the rules that I’ve created to help us maintain a high level of empathy is that we will always seek to find a solution, even if we aren’t it.

To illustrate this… Today, a tenant asked me to come plow their driveway. There was a foot of snow out in front of this duplex. Well, we don’t operate plowing services for properties under five units. So I had a choice… I could have said, “screw you, we’re not doing it,” or I could try to identify with their concern. I chose the second option. I expressed my sympathy with their situation and then I provided several potential solutions. I tried to provide some ideas on how he could solve the issue of needing the driveway cleared and I even sent him over some tips on driveway shoveling. The tenant came back to me and said, “You know what, I would be willing to pay for it. Could you provide the service and I pay for it?” So I provided him with some vendors who could do the job and, in the end, everything worked out as a win-win. I could have just said no. And, I suspect that, if I had done that, he might have dug in and started looking at city regulations trying to find an angle to force us to do what he wanted. There are two ways that scenario could have gone and I’ve seen it go the other way too many times because people weren’t thoughtful enough to make an empathic response. It’s not that hard, but it makes a huge difference, and that’s why I say empathy is such a big part of our mission here at Realty Trust Services.


Education is a long-term effector. It usually doesn’t get immediate results, but, over time, education improves us all. It improves the quality of our relationships, it improves who we are as individuals, it changes our character, it changes our skill level, and it changes our interactions. It gives you more options for doing more and getting more accomplished. And, on top of all of that, it makes people feel that you’re dependable and concerned with improvement and it gives them a little more peace of mind. Most of the time, education is an upfront expense. You have to spend time and— sometimes— money investing in resources and you have to put in the hours to get the work done to learn whatever it is you’re working toward. But it’s a worthwhile investment because it’s an investment in people. And education is universal. Employees should be educators, just like the business owners themselves. I’m doing putting together this blog to educate and I’m actively trying to get the people I work with to do the same and provide their knowledge to tenants and owners. Avon Lake Ohio Education happens at a lot of different levels. Sometimes you’re just educating people on the fact that you know what you’re doing and that they can depend on you to do it well. Manuals and processes are education because they let us learn important systems. By creating a manual that anybody can use to do something we can easily get everyone in an organization armed with knowledge that lets us deliver a consistent service and, thereby, peace of mind. If something is consistent, you can trust it to work out. Here at Realty Trust Services, we offer incentives to employees who actively read books and work to improve themselves with various training materials. I particularly recommend business-related and self-help materials that help people grow and interact more effectively. Education sharpens everything it touches and makes entire systems work better. The last piece is the systems we use to keep everything running smoothly. Having these systems in place makes our business much less chaotic and lets us set parameters on how we start and end certain relationships and how we do everyday tasks. CONTACT US Covering our T.E.E. with a “club” of streamlined systems takes us further and faster towards achieving our mission than we could ever do alone. To learn more about our property management services contact us today by calling (440) 220-7300 or click here to connect with us through our website.

The Lean Property Manager?


Let’s face it, property management tends to be a backwards industry. Both in the USA and even mores so in Cleveland Ohio.  In fact there maybe one or two property management companies that have been in business more than 5 years in this area.

At Realty Trust Services we are constantly looking at ways to be more effective and innovative.

In the last 30 years major innovations in manufacturing have been coming to united states from Japan, which incidentally got its start from the leading united states statistician Edward Demings. Toyota innovated Deming’s teachings into the Toyota Production System (TPS) and as American companies have adopted techniques from the Toyota Production System this series of ideas and techniques has been called “Lean” because of the obsessive focus on eliminating inefficiencies / waste or any financial or energy expenditure that doesn’t directly provide value to the end customer. 

As business becomes more competitive and transparent and consumers more demanding, service companies are also starting to look at the techniques and philosophies from Lean Manufacturing to bring Lean Service offerings.

At Realty Trust Services we have begun a journey towards improvement using lean techniques. All though any mode of improvement is a never instant we wanted to talk about some of the things we are working on to improve.

What allows lean to take hold in a company is that it is part of the culture. To that end it is something that we talk about daily we study it together in daily meetings.

According to Paul Akers, author or “2 Second Lean” the highest pillar of lean is the ability to “see waste.” Lean systems all are designed so that waste and inefficiencies are immediately visually apparent company wide. This then allows the workers within the company to immediately respond and keep processes running smoothly and allows us to make full use of the “human resources” of the company. Examples of how we are exposing the business processes in a visual way is that have 4 LCD’s displays on our main office walls as dashboards for essential company processes. Data connectors to display tenant charges, maintenance work orders, indicators of email backlog for each employee, and rental market times are all being created so that the entire team is up to date on every part of the business


Lean companies use cross functional teams arranged together in work groups to increase efficiency in communication and we too have adopted this in our work force.

Let Us Help Your Grow Your Portfolio

As a Real Estate investor your goal is to grow your portfolio of income producing Ohio Rental Property and generate more monthly cash flow.

Realty Trust Services is continually improving ourselves so that we can help improve your business and profitability. We are not comfortable simply being better than the very low standard this industry has set.

Doing all of this means that you (landlord) can count on us to help you efficiently grow your portfolio of rental properties in Westlake Ohio and generate more cash flow from those properties than you may have in the past.

From our innovations we have even created an alpha version of a program that we are releasing here which we believe could change the way businesses use the internet. See the video on this below and a link to the website for this product here: http://Snapextual.com

We aren’t perfect and we have plenty of “waste” to eliminate. However if you’re not satisfied with your current property management company, or are frustrated with managing your Ohio Rental Property yourself, consider joining a company that will continue to grow and improve with you and consider your suggestions.

Get Ohio Property Management

To learn more about Realty Trust Services, or how we can help you contact us today by CLICKING HERE to connect with us through our website or by calling (440) 220-7300.

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