FOOD
FOR THOUGHT ARCHIVES
Renters' insurance? Send your tenants here for a free quote.
We have long advocated renters' insurance and recommended that landlords urge their tenants to obtain it. Send your Internet savvy tenants
here to get a free quote. Give them the
URL when you hand them our renters' insurance notification letter.
Is your tenant going to move out to buy a home?
You may well lose a good tenant to home ownership. While it is not always the case, young first time homebuyers are most often motivated by that large interest tax deduction. With that pasted over their eyes, they may not have considered other elements of cost, or, for that matter, whether the interest tax deduction will make much difference in their tax picture anyway. We are certainly for home ownership, but it may not be for everyone. Your tenant's best interest, as well as yours, may be served by putting off a purchase for a while. Use this
calculator from Nolo to see if that is true. Point out the things the potential seller may not want them to know. You may salvage a good tenant.
So your tenant complained about a noisy neighbor.
Like it or not, in your capacity as landlord you often assume the role of a father or mother figure to your tenants. One of the more frustrating problems that often arises is the friction between two adjoining and incompatible renters. What happens if one of them makes noise and gets on the other's nerves. You would think that, as adults, they could work things out on their own. This is not always the case, however. Here is a piece from ‘Lectric Law Library, borrowed by them from Nolo, with suggestions on how to deal with
noise wars. Implementing these ideas or, better yet, getting the aggrieved tenant to do so, may get the problem out of your hair and avoid a looming vacancy.
LOOK OUT! It's almost here.
April 1 is coming, and we all look forward to the fun (right!). To get into the mood of the unofficial holiday we thought we would present this
compendium of classic April Fool Day jokes. Some, like the fake 1957 BBC news flash about an early spaghetti harvest in Italy have become classics.
A Buyer Must Honor Existing Leases
We are frequently asked what a landlord can do when he buys an investment property that already contains tenants. Many landlords seem to think that pre-existing leases do not bind them, or that they get a pass on local eviction controls.
In the case of fixed term leases, they bind a landlord to the conclusion of their term. He is also obligated to live up to all of the terms of the leases, and all courses of dealing and oral modifications to the leases. This is not the case with month-to-month tenancies. In the absence of an ordinance or statute to the contrary, the landlord is free to terminate or modify these as he chooses. In the case of month-to-month tenancies in eviction-controlled jurisdictions, the landlord may not cause the tenant to be removed involuntarily unless one of the recognized causes for termination of tenancy is present. These include things such as non-payment of rent, breach of the agreement, nuisance, and so on, but almost never the simple sale of the property.
Remember, too, that security deposits bind you and that rental arrearages do not automatically pass through to you.
For these and other reasons, you should insist that your real estate representative obtain solid documentation of security deposit amounts and that they pass through to you on close of escrow, copies of all leases and rental agreements and disclosure of any oral modifications and courses of dealing, and assignment of all rent arrearages. You should also make sure that he arranges for an attornment letter to be delivered to each and every tenant at close of escrow. See also our article on becoming the
new landlord.
Ever wonder about the headaches of landlords in other countries? There is actually an international tenant union. They had a conference in Berlin in 1991 to adopt an international Tenants' Charter and it will be submitted to the International Union of Tenants this year.
Read about it here.
What should you do before you rent a commercial or residential unit to a corporation?
A corporation may apply to rent a unit from you. This may be a residential unit. Frequently, a corporation may rent a place for one of its employees, or for employee use when they travel to a frequently visited city.
In any case, you should enter into the transaction with some care. Corporations and Limited Liability Companies, such as limited partnerships, shield the officers and owners of such companies from liability to creditors – like you, if you are the company's landlord – if the corporation should be unable to pay the rent.
Unless you are dealing with the likes of Lockheed or General Motors (not likely), be sure you obtain a current financial statement and attach it to the rental application. Check corporate status in your state. This site is for
California , but all states have similar resources, though not always on line. Get as much information as you can, especially the identities and addresses of officers, directors, and the agent for service of process. If the corporation were a small, closely held entity, you would be well advised to insist that an owner or the president or chief operating officer sign the lease, or at least unconditionally guarantee it, as well as the corporation. Be sure to get credit checks on both the company and the officers signing with the company or guaranteeing the lease. Finally, add an addendum making failure to maintain good standing with the Secretary of State or other state regulatory agency a breach of the lease.
Enforce your policies
It is well enough to have policies concerning pets, overnight guests, additional occupants, and the like. In fact, we recommend that you do so. But if you do, you must enforce them. Here, two experts discuss a landlord who seems less than consistent in enforcement of the pet policy, and the
possible ramifications. Remember, even if you can get away with making exceptions, you may end up in a costly dispute with your disgruntled have-nots.
PROPOSITIONS 57 & 58 PASS; SOME THOUGHTS
The California electorate passed both propositions 57 and 58 yesterday, March 2. For those of you outside of the state who might not be aware of it, California was tottering on insolvency, burdened under a $15 billion dollar debt. These propositions, working in tandem, are designed to correct the problem. Proposition 57 floats a $15 billion bond issue, which will pay the debt and carry a much lower interest rate, despite California's currently low bond rating. Proposition 58 – both propositions had to be passed for either to go into effect – places a cap on deficit spending in the future.
This solution is akin to that of a homeowner who, burdened under large credit card debt, obtains a second to pay them off and reduce his payments through a more favorable interest rate. But any homeowner who does that would be well advised to ask himself, in advance, this question, “Can I discipline myself to avoid running up my credit cards again?”
If the cards were charged up for unexpected medical bills, or some such other one-time emergency, then the second may be a good idea. But if they were accumulated because of the inability to avoid spending what he does not have, the homeowner may be making a drastic mistake.
Will the legislature exercise some self-discipline or will they dance around the proposition 58 restraints and continue to spend like drunken sailors? The very same persons who caused the problem are still in the legislature. The long-term prospects, despite the band-aid, are bleak. -Editor
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