If you own a rental property then you have had experience with a tenant claiming there is mold in their unit. Whether you think that it is valid or not, mold is not something you should turn a blind eye too. If there is water damage to one of your rental units, it is even more important to have the unit tested for mold. Mold grows due to mositure remaining in one area for an extended period of time.
Even if there is no water damage, if a tenant reports mold, you need to get it tested right away. Not only could you be exposed to serious liablity if you do not address the issue, but you could be exposing your tenant to health risks.
The best actions to take towards a mold complaint is to get it tested and then properly cleaned by a quailifed company if mold is found.
The most concerning part about fake pay stabs is that it is not illegal to make them. The illegal part is if they turn them into you, as a landlord. The minute they use them as "valid" proof to their income, you are permitted to turn it into the police.
How to spot fake paystubs?:
1. Spelling, grammar, or calculation errors.
2. Missing birth date
3. To many zeros because real pay amounts don't add up to perfect zero amounts.
4. Incorrect federal or state withholdings
Have you ever received a fake pay stub?
Creating an LLC is how you protect yourself from having other assets that you own at risk if there is a lawsuit. This is how you protect your personal finances and separate your rental business from your personal life.
It is also beneficial for tax purposes as you keep your rental business separate from your personal finances. This is how you reduce capital gains taxes and only pay taxes as an individual, not as a business.
Are your properties under your name or an LLC?
If you thought things couldn't get worse, you will not be allowed to increase rent until one year after the pandemic has been declared a non emergency.
With moratoriums extended until January 31, 2021, there is a good chance that landlords will not be able to increase rents until January 31, 2022!
So what can we do to ensure that we are getting the most out of investment properties?
According to California law you are not required to give your roommates portion of the security deposit back when they move out. Only if all of the tenants/roommates on the lease move out do you return each persons portion of the security deposit.
The landlord is subject to keeping the total security deposit until they have regained possession of the property. Regaining possession could mean they legally give notice and move out on an agreed upon date or an eviction.
A landlord is only responsible for returning the security deposit after the unit has had a detailed inspection of damages or wear and tear, regardless of when roommates change.
ADA Compliance at Investment Properties.
COVID-19 has not stopped ADA compliance lawsuits from happening. Although we cannot evict anyone for non payment of rent, as a landlord, you can still be sued for ADA non compliance.
Obtain a CASp report to audit what needs to be done at your property. Then have a qualified contractor take a look at the report and approve what you can afford to fix. "Accessible Routes" are the most important as they are one of the top reasons for ADA lawsuits. Check all of your entry points and upgrade the property in order to be in compliance.
Make sure to receive counsel from an ADA Designer as they are qualified to approve all the work that needs to be done. It is important to have the proper people in place when performing any work.
Is your property in compliance?
"The Tenant, Homeowner, and Small Landlord Relief and Stabilization Act of 2020" is just a temporary solution to a very very large problem.
California's elected officials are using this Bill as a way to kill time, until they find a permanent solution. That permanent solution might not be in the favor of small landlords. This is a growing concern throughout the "mom and pop" building owner community as they are concerned whether or not they will ever get their unpaid rent back.
If you own a property or know someone who does, how much rent have you been collecting since the pandemic?
If you, as an owner, accept money from the City of Los Angeles Covid-19 Emergency Renters Assistance Program, then you are subject to follow some rules.
If you accept the money then you are not allowed to raise the tenants rent during the entire repayment period, after the local emergency is lifted. You also cannot evict them for unpaid rent if it was due prior to January 31st 2021. This means you would not be able to evict them for unpaid rent prior to that period, until March 4, 2022.
If you are struggling then excepting the assistance payment is understandable but make sure that you fully understand what you are getting into.
Why do we run prospective tenants credit?
It is important to evaluate a prospective tenants finanical abilities. With the times that we are living in, it is important that we have fiscally responsible tenants moving into vacant rental units. Dealing with evictions or complicated tenants is something that you want to avoid at all costs. A credit score is the first step to evluating whether or not a prospective tenant is responsible for their obligations or not.
California lawmakers have extended the eviction moratorium through June 30th, 2021. There will also be roughly $2.6 billion in federal funding to help renters and owners.
This was to be expected as the moratorium was expected to expire this Monday and many residents were concerned about facing eviction.
Hopefully the federal funding will help landlords recover months of deferred rent.
What do you think about the eviction moratorium extension?
Los Angeles City Renters Assistance Plan:
It is being proposed that a new renters assistance plan, is going to allow tenants to get their security deposit back from landlords. The contingency is that if the renter gets the security deposit back, they must have an insurance policy within 90 days.
Owners will have to make claims with the renter’s insurance company in order to regain funds from damages caused by the tenant when they move out. This is very concerning for owners as a lot of them have been struggling with renters not paying, that they had to use security deposit money to pay bills.
There is no criteria for what type of insurance the renters need to have. If this plan goes into effect it could have a detrimental effect on landlords who are already struggling.
National Multifamily Housing Rent Payment Tracker Results November 2020:
These results might be shocking to some people depending on what state you are in. In California, Los Angeles specifically, we have to consider that we have been on a stricter lock down than other states.
The results were driven by collection percentages/rates from every state in America. What is being considered for the higher percentage than the previous year (November 2019 79.4%), is that there have been government or local subsidies handed out. These subsidies have proven effective and helped landlords collect past due rent.
Do you think there should be more subsidized programs to help people who are past due on rent?
** Vendor Advice **
Make sure to know the insurance policy that the vendors you are using have. It is important because if they do not have a policy that covers for damages, that could be caused by them during their work, then you will end up having to pay for it out of pocket or your insurance company.
Often times your insurance company will not want to cover neglect or malpractice from a vendor that you are using, so this is very important when choosing what vendors to use. Ask what their insurance policy covers and understand that you might be paying more for a quality vendor that has a good insurance policy.
