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Seattle City Council Deals Another Blow To Landlords Rights

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By The Editors
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Seattle City Council Deals Another Blow To Landlords Rights

The Seattle City Council has passed three ordinances restricting landlords rights involving evictions and lease renewals, according to reports.

The ordinances were described by officials as “renter protections.” The first says if tenants do not pay rent, landlords cannot initiate an eviction during the school year if there are students or educators living in the house.

Tenants will be able to cite the new city ordinance as a defense to eviction.

Councilmembers argued evictions can interrupt learning and create homelessness among children.

The ordinance defines children and students as anyone under 18 and anyone enrolled in child care through high school; and it will define educators as anyone working at a school, including teachers, janitors, counselors and cafeteria workers, according to reports. There are exceptions for evictions from condemned buildings, for criminal activity or if landlords move into their own rentals.

Councilmember Kshama Sawant (District 3, Central Seattle), chair of the Council’s Sustainability and Renters’ Rights Committee, said in a release, “By getting organized, today we won the nation’s strongest ban on school-year evictions, the resolution to extend the eviction moratorium, and the strengthening of our city’s eviction defense laws.”

Seattle City Council Deals Another Blow To Landlords Rights
Councilmember Kshama Sawant said, “Let’s continue fighting for a full Renters’ Bill of Rights – for rent control and to cancel COVID debt!’

Sawant also wants to cancel covid-19 renters debt and put rent control in place.

Landlords required to offer new leases to existing tenants

Under another ordinance passed, landlords are required to offer new leases to tenants before their existing lease expires and before seeking a new tenant further impacting landlords rights. This would bar landlords from allowing a lease to expire and then seeking a new tenant.

Councilmembers in favor of the new ordinance said it would close a loophole that allows landlords to evict tenants without cause.

A third ordinance passed in early June allows a COVID-19 defense against eviction if tenants have a large unpaid rent debt incurred during the pandemic. Tenants would need to sign declarations that they suffered financial hardships during the crisis.

Small landlords say “renter protections” are pushing them out of the market

A group of small landlords say the Seattle City Council actions are pushing them out of the business, and that they are being unfairly grouped in with policies aimed at corporate landlords.

“The impact on small mom-and-pop landlords is huge. And the effect of this kind of legislation is it’s going to push people like us out,” said MariLyn Yim. Her family owns and lives in a triplex in Seattle and rents the additional two units.

Yim argues the policies are aimed at corporate rental companies, and small landlords rights are being left behind.

“Every bill they craft is based on the assumption that landlords are greedy and rich and we have deep pockets and can pay for everything. Well, that isn’t all of us,” said Charlotte Thistle, who owns one rental property, in an interview with King5.com.

“When you have something like the eviction moratorium and you have one tenant who’s not paying rent, well, if you have one property that’s one hundred percent of your income,” Thistle said, “You still have to pay property tax, mortgage, and utilities. Nobody is giving us a free pass on those expenses,” she said.

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11 Questions to Ask When Hiring a Property Manager or Company

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Justin Becker
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11 Questions to Ask When Hiring a Property Manager or property management Company

If you are looking considering hiring a property manager or property management company to handle your rentals here are 11 questions to ask when hiring a property manager from veteran Justin Becker.

By Justin Becker

If you’re the owner of residential real estate, one of your main aims is probably to earn the highest possible profits with the least possible hassle. After all, no landlord or owner can be there to supervise all their real estate all the time.

That’s where a reliable property-management company comes in. Of course, the most important word here is “reliable.” This is the company or property manager that will potentially be in charge of your investments and incomes. So, it’s important to have a vetting system in place.

Whether you have some mobile homes for sale or are part of a land-lease community, real estate investment isn’t cheap or easy to oversee. With an experienced company or manager by your side, the daily running of your property should become much easier.

When you hire an employee for any task, he or she must go through at least one interview. The same goes for a property management company; of course, the questions might be more detailed, since there’s so much at stake.

Not sure about what to ask your potential property managers? Let’s have a look at some of the top questions to keep in mind.

Questions to Ask When Hiring a Property-Management Company

Before you hire any property manager or property-management company, have these questions on your list:

No. 1: How Familiar is Your Team with Current Trends in Real Estate?

Real estate investment is a fickle game. So, you want to make sure to ask your potential property managers about the trends in place right now. This will show you how much market knowledge they have. That’s important for managing and maintaining your real estate in the best way.

Your potential property manager should be able to reach out and find reputable tenants to fill your property. This is an easier task than it was in the early 2000s, as the number of people renting property within the United States has gone up in various cities.

No. 2: How Do You Stand Apart from the Competition?

While it might be a bit awkward mentioning competitors to any potential property manager, this is a good way to filter out the really good companies. If you’re interviewing a genuine professional, he or she will  mention the competition respectfully and display knowledge of the local market trends.

Asking about the competitors will also bring the conversation to how this potential property-management company is unique in its pricing and services. The company representative should be able to explain what makes the company different and better than the rest. Ideally, they should also provide some client references so you can be sure about going ahead.

No. 3: What’s Your Company’s Record with Rental Properties?

If you interview a relatively new company, chances are that they won’t have relevant experience in the real estate industry. Their prices might seem affordable, but it’s just not worth taking the risk.

The questions you ask will tell you if the company is efficient and reliable enough to run everything properly. Even an expert can find it difficult to maintain real estate these days. So, you should ask to get in touch with previous clients as well.

You can also ask why and after how long precious contracts ended, whether there’s a record of unethical practices, etc. Such details are critical. So, don’t feel strange about asking.

No. 4: What Kind of Technology Do You Use?

Keeping up with real estate trends also means that modern property managers should stay updated on the most important digital tools. Almost every industry has made changes to incorporate software and other forms of technology to make its process easier and smoother.

Ideally, your potential property-management company should have software solutions that make its system easy to work for you. You should also be comfortable with the setup the company has, since this is what will be used to maintain your real estate.

The communication software the company uses is also important. This is how the company will get in touch with you. So, make sure that it fits your requirements.

No. 5: What Will the Income Structure Be Like?

One of the most essential questions to ask a potential property manager is about the income from your real estate. This usually means determining what the rent will be from the tenants. The answer to this concern lies in knowing how real estate works within your state, city, and specific area.

Make sure you know about the details of the rent formula from the property manager. This is also the point where you give your own views about the rent and how it’s set. That way, both parties will remain on the same page and can move forward without much confusion or resentment.

No. 6: How Will Rent Collection Be Handled?

Rent collection is usually be the responsibility of property-management companies. This is why it’s best to hire one that has been working with the latest solutions. With automated payments and online systems, you can be sure of quick, convenient collection on all sides.

If your potential property manager has a quality software solution in place, you should consider hiring him or her. With updated decent software, you can also rely on the accuracy of your transactions.

There’s also the fact that some tenants might want to pay cash or make payment through some other method. Question the company about any alternative solutions for such cases.

No. 7: Do You Have Credible Licensing for this Service?

Whether you’re interviewing family-owned property management companies or those with a more corporate structure, make sure their license is up to speed. Keep in mind that the different states will have varying licensing rules and regulations.

In addition to simply asking this question, you’d also have to conduct research on your own. See what qualifications are required for your region and ask the potential manager if he or she has the needed licensing.

To be on the safe side, ask for licensing proof as well. Certain states might require a more direct link to a known real estate organization. Others might require a real estate broker license before one becomes a property manager.

No. 8: Who Will Handle Maintenance Issues, and How?

One of the main concerns related to residential property management is that of repairs and maintenance. When a tenant experiences leaks, breakages, infestations, or any other problem, the issue must  get proper and prompt attention.

A homeowner in the United States can expect to spend one to four percent of their real estate’s value on its maintenance. Keep this in mind so that you’re not thrown off by sudden repairs.

Property management companies will usually be dealing with these issues. Be sure to ask about them during an interview. A manager’s way of dealing with work orders and experience will count for a lot.

No. 9: How Will Financial Responsibilities Be Divided?

Financial transactions are often a tricky business, but that’s why you have to be clear-cut in this area. Remember to inquire about the fees of the property managers or the property-management company. Both parties need to properly understand the financial section of the mutual agreement before moving forward.

One of the first details to sort out is the rent percentage that will go to the property manager or management company. If you do some research about the trends for paying such services, you can negotiate the fees in an informed manner.

It’s also logical to ask whether there are hidden fees anywhere. Make sure to read the fine print before signing anything!

No. 10: What Kind of Compensation Plans Does the Property Management Company Have?

Any potential property manager should know about repairs and maintenance issues. However, it’s also very important to clarify which party is going to be held responsible for handling costs associated with repairs or any damages. Make sure to have everything covered through a written policy.

When you ask a property manager about such a policy, you’re covering your own bases. No matter how careful a manager or managerial team is, damages to the property can still happen.

So, when you’re thinking about what questions to ask rental property management companies when hiring a property manager, make sure that the detailed compensation plan is near the top of the list.

No. 11: How Are You Going to Deal with Late Payments or Evictions?

The most difficult side of property management usually entails dealing with late payments by tenants or having to evict them for some reason. The property managers you end up hiring should be responsible and tactful enough to deal with such issues without incurring much damage. Such tasks can be complex, especially if the tenant is part of an HOA or some other influential group.

Nevertheless, you need to ensure that any manager under you should be getting those payments and evicting when necessary. In either case, they should also stay respectful and within legal limits.

The Takeaway

If you’re hiring a property manager to handle your condo, apartment complex, or any other form of real estate, there are probably many choices out there. Several new property-management companies will be glad to get the chance of serving you in exchange for a reasonable fee.

Once you know what questions to ask the property manager, the way forward will be a bit clearer. There are still several steps to take. But you’ll be able to make the important decision of hiring a company without any worries. Start searching for a reputable potential property-management company now. You’ll hopefully have the best one for your needs soon.

About the author:

Justin Becker is a property owner in the state of Michigan and has a passion for managing communities. He owns apartment complexes and mobile home communities, and has been writing his own blogs for his properties for several years.

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Ask Brad: Tenants Want to Know Why There’s a Dog in No-Pet Building?

By
Brad Kraus
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Ask Brad: Tenants Want to Know Why There’s a Dog in No-Pet Building?

Ask attorney Brad is a feature with attorney Bradley S. Kraus and this week the question is about tenants wanting to know why there is a dog in a no-pet building. If you have a question for Brad, please feel out the form below.

Dear Attorney Brad:

First, thanks for an avenue to ask questions.

The situation is having a no-pet policy and a no-pet building, yet having to allow/accept tenants to acquire or move in with a support/care animal. My question, how do I respond to another tenant’s asking/telling me there is a pet in the building? My understanding is that this comes under the medical privacy law.

–Deb

Hello Deb,

Thank you for your question. Your understanding is on point.

As a landlord, you cannot discuss another tenant’s accommodation requests or medical circumstances with other tenants. That would include the reasons why one tenant is allowed to have a dog (which wouldn’t be a pet, as assistance animals are not “pets”), even if the property doesn’t allow pets.

If other tenants begin asking questions, an appropriate answer is simply state that you appreciate them bringing this issue to your attention and that you will handle any issues in accordance with the law https://levivard.com.

If they press further, you can state that you are not allowed to discuss other tenants’ circumstances. There is no need to go any further into the details because (a) you should not, and (b) you cannot.

Thanks,

Brad

Bradley S. Kraus is an attorney at Warren Allen LLP. His primary practice area is landlord/tenant law, but he also assists clients with various litigation matters, probate matters, real estate disputes, and family law matters. You can reach him at [email protected] or at 503-255-8795.

Ask Attorney Brad: Tenants Want to Know Why There’s a Dog in No-Pet Building?
Bradley Kraus, Portland attorney

Ask Attorney Brad

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Ask Attorney Brad: How Do I Prove a Tenant Smoking Inside My Rental?

Is Incomplete Data Driving Eviction Policies?

By
John Triplett
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Is Incomplete Data Driving Eviction Policies

The data driving eviction policies may not be complete, and in some cases may not be available, due to the  way court records and eviction reporting are broken down differently in multiple states and jurisdictions, according to the National Multifamily Housing Council (NMHC).

The council says they have done research and “complete data on evictions is severely lacking,” they said in a release.

The release comes on the heels of a decision by the D.C. Circuit Court of Appeals in early June turning down a request by landlords to resume evictions, arguing that the Centers for Disease Control and Prevention (CDC) overstepped its authority in issuing an eviction ban. The ban is set to expire June 30. The landlords have asked the U.S. Supreme Court to look at the case and block enforcement of the CDC order.

The appeals court decision follows U.S. District Judge Dabney Friedrich’s decision last month striking down the CDC eviction moratorium after finding the agency had overstepped its authority. But Friedrich, a Trump appointee, agreed to block the ruling from taking immediate effect to allow time for the Biden administration to appeal.

The NMHC said inadequate data “speaks to the hazard of one-size-fits-all federal-policy solutions.”

“The highly individualized nature of eviction proceedings and laws, along with locality-specific conditions that exacerbate housing instability like affordability and housing supply, calls for state and local solutions.”

Summary of data issues driving eviction policies

  • Existing evictions data is incomplete and, as a result, misleading;
  • Public-policy decisions and legal rulings are being made with flawed information;
  • Often, “mom-and-pop” property owners are at greater risk from eviction moratoriums;
  • Long-term solutions exist to support renters affected by the economic ramifications of COVID-19.

The NMHC argues that this incomplete data is finding its way into government policy and into the media and “causing some degree of confusion about the issue.” The council acknowledges it is difficult to get the data and information surrounding evictions and eviction practices.

More accurate information would help such as:

  • The number of eviction filings versus physical removals;
  • The reasons for eviction filings;
  • The amount of rent due when eviction filings were initiated;
  • An estimate of how much back rent was owed when eviction filings were initiated.

Other questions about the data the NMHC says might be helpful:

  • How have eviction practices and policies changed during the COVID-19 crisis?
  • Are evictions still being filed for monetary or non-monetary lease violations?
  • How is notice provided to residents?
  • Are written late notices given?
  • Are rental-assistance funds being used?

“While some of these may seem relatively basic, there is currently no way to collect accurate evictions data aggregated at a national level,” the council said.

Eviction moratoriums are unsustainable

The council said, “While well-intentioned, eviction moratoriums to address COVID-related hardships are unsustainable and ultimately do not address a renter’s underlying financial distress.

“Moreover, the severe lack of quality eviction data suggests there are few ways to target and measure the efficacy of such policies. The best eviction protection is ensuring that renters have access to resources to meet their financial obligations.”

The NMHC pointed out in the release that rental housing is dominated by mom-and-pop property owners and not big corporate owners.

“When eviction moratoria policies are treated as “rental holidays,” these individual property owners tend to suffer disproportionately – as do renters, who end up with fewer options.

“These ‘mom-and-pop’ property owners hold mortgages and are responsible for property taxes, insurance and payrolls. However, they also tend to offer more affordable rental options and are tightly linked with local community vendors who rely on them for work.”

The council said if these landlords decide to sell their rental housing and leave the market, this “directly reduces the availability of affordable housing.”

So instead of eviction moratoriums, the NMHC urged policymakers to “focus on effective ways to improve housing affordability and assist low-income renters. These include things like policies and programs that can greatly increase the supply of housing, increase funding for housing support programs, and deploy broad emergency financial assistance funds through simple and easy-to-access programs.”

 Will You Be Ready When the Eviction Moratorium Ends?

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Senate Bill 282 – Further Discussion of Landlord Rights under the New Law

By
Brad Kraus
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unauthorized guest and tenant guests Senate Bill 282 – Further Discussion of Landlord Rights under the New Law Brad Kraus

SB 282 adds a new layer to unauthorized guest rules so attorney Brad Kraus explains landlord and tenant rights under this new law.

Bradley S. Kraus
Attorney at Law, Warren Allen, LLP

Last month, this column featured a brief discussion of Senate Bill 282’s newest wrinkle for landlords to consider, the new prohibition on enforcement of unauthorized guest provisions.

As many landlords have (or will) come across unauthorized guest scenarios, it is important to further discuss what rights and remedies landlords have remaining after the passage of SB 282.

The Non-Tenant Guest rules are found within Section 14 of the bill.

It begins with a prohibition against enforcement of maximum occupancy guidelines lower than that required by law. It follows by prohibiting landlords from enforcement of any prohibition on the maximum duration of a guest’s stay. Landlords with solid rental agreement forms have provisions discussing the maximum guest stay, and this provision effectively replaces those with a “15 days in any 12-month period” rule.

The above rule is the first item to focus on. Unauthorized occupant situations are notoriously difficult to prove, as it is impossible to police the inside of your tenants’ dwelling unit. However, to trigger your rights and remedies, landlords will still have to be able to prove this threshold issue; that their tenant had a guest staying in the unit for longer than 15 days in a 12-month period. If you cannot prove that issue, there are no rights to trigger.

If landlords can prove the above, SB 282 states the landlord may then require that (a) the tenant’s guest satisfy the screening or admissions criteria used by the landlord for non-fiscal matters, and (b) the tenant and the guest enter into a temporary occupancy agreement as provided in ORS 90.275. As you can imagine, it is unlikely that many tenants and their (un)authorized guests will initiate this discussion. There is usually a reason these guests do not jump at the opportunity to apply.

So how can you protect yourself and other tenants using SB 282?

If you can prove the 15-day rule, it may help to send a warning notice pursuant to ORS 90.412 as a start. This notice will serve multiple purposes. First, it will preserve the issue, as a properly served ORS 90.412 notice will allow you to accept rent without worrying about a waiver issue.

Second, it will assist in rebutting the tenant’s inevitable contention that they did not know what they were to do before they received a For Cause Notice for violating SB 282.

If you have provided your tenant’s guest the opportunity to be screened, and they decline or fail screening, or if the tenant and guest refuse to enter into a temporary occupancy agreement, landlords have the same rights/remedies as they did before. A well-tailored For Cause Notice directed at these failures/refusals will require that individual to vacate the unit. If they do not, the landlord may be able to file an eviction, based upon that Notice.

The law continues to evolve, as new issues arise every day. It is important for landlords to continue to focus on their rights and, even more importantly, how landlords can use those rights to protect their other tenants.

While SB 282 adds a new layer to unauthorized guests, the threshold issues are the same. If the guests fail screening, refuse to enter into temporary occupancy agreements allowed by law, or cause issues during their stay in the premises, landlords should act to remove those individuals using the tools with which they are familiar.

Senate Bill 282 – Unauthorized Guests and Further Discussion of Landlord Rights under the New Law
Bradley Kraus, Portland attorney

Brad Kraus is a partner at Warren Allen LLP. His primary practice area is landlord/tenant law, but he also assists clients with various litigation matters, probate matters, real estate disputes, and family-law matters. A native of New Ulm, Minnesota, he continues to root for Minnesota sports teams in his free time. You can reach him via email [email protected] or 503-255-8795.

Fair Housing Matters – Landlord Liability for Tenant-on-Tenant Discrimination

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Pandemic Pricing is Over, As Rents Rise Rapidly In Most Areas

By
By The Editors
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Pandemic Pricing is Over, As Rents Rise Rapidly In Most Areas

Pandemic pricing is officially over, as rent growth has now been outpacing prior-year averages for several months, according to the latest report from Apartment List.

“The national median rent has now officially surpassed the level where we expect it would have been if the pandemic had never happened,” wrote housing economists Chris Salviati, Igor Popov, and Rob Warnock of Apartment List in the report.

While rents in some key markets are still below pre-pandemic levels, rent prices in these cities, such as Seattle and San Francisco, are rising rapidly.

Record month in rent increase wipes out pandemic pricing

Up by 2.3 percent in May, the national rent index by Apartment List is showing the largest monthly gain since the company began doing estimates in 2017.

This is the third straight month for record-setting rent increases, the company said.

Prices rebounded in March almost to pre-pandemic levels, and “this month, we hit a new milestone — our national index is now above the level where we project it would have been if the pandemic-related price declines of 2020 had never occurred at all,” the housing economists said in the report.

Rents in hard-hit markets continue their rebound

In many hard-hit cities however, rents are still below pre-pandemic levels. But these cities are now showing strong rent increases.

San Francisco made headlines during the pandemic due to dramatic rent declines, showing as much as 26 percent.

However, the city is now showing a rent rebound. Since January, rents have risen 13.4 percent. While it looks like the pandemic pricing is being left behind in San Francisco, it is still good to remember rents there are 16.8 percent below pre-pandemic levels.

“Beyond San Francisco, we’re seeing a similar trend play out in all of the cities where rents had been falling fastest. Nine of the 10 cities with the sharpest year-over-year rent declines have now experienced positive rent growth for four consecutive months. Four of these cities – San Jose, Washington, D.C., Boston, and Minneapolis – have seen rents increase for five consecutive months, the report says.

Pandemic Pricing is Over, As Rents Rise Rapidly In Most Areas

Shortage of rental housing

As rents increase rapidly in many markets, there is still a shortage of rental inventory across the country; and it’s still unknown as to how many renters will be moving soon.

“As vaccine-distribution continues to gain momentum, we may be seeing the release of pent-up demand from renters who had been delaying moves due to the pandemic. Whereas last year’s peak moving season was halted by the pandemic, this year’s seasonal spike appears to be making up for lost time,” Apartment List said in the report.

Multifamily Markets Continue To Show Rent Growth

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6 Reasons To Sell The Income Property You Love And How To Avoid Taxes When You Do

By
By The Editors
-
6 Reasons To Sell The Income Property You Love And How To Avoid Taxes When You Do 1031 exchange and Kay Properties

By Jason Salmon
Senior Vice President and the Kay Properties & Investments Team

Many investors recoil at the thought of selling a piece of investment property. And they usually have a good reason, whether it’s missing out on future appreciation, having to pay a massive tax bill or some other factor.

Yet it can often make good sense to sell your property, thanks to a real estate investment alternative that simplifies your life and lets you defer the taxes via a 1031 exchange.

Let’s take a look at six reasons you might want to consider selling and reinvesting in this alternative…

Reason #1: You’re sick and tired of having to actively manage your real estate

Let’s face it, managing your real estate is often a real hassle. You have to keep your eye on the ball 24 hours a day, seven days a week. And dealing with tenants, toilets and trash just gets old after a while.

Sometimes even the sound of a ringing phone can fill you with dread.

Sure, you can use a property management company to handle many of the details, but they come with their own set of hassles and can cost you a big chunk of your rental income.

But imagine if you could continue investing in real estate while eliminating all those hassles and costs.

The good news, you can. How? By investing fractionally in a carefully selected portfolio of income-producing investment real estate that you don’t have to manage or have someone else manage.

Instead, you can just relax and enjoy your life while somebody else does all the worrying and deals with all the hassles.

I’ll tell you more about the alternative that lets you do that in a moment, but first let’s look at…

Reason #2: You can take advantage of passive real estate investing for continued income with no management responsibilities

When you invest in real estate the way I’m going to show you, you’ll be a true passive investor.

You quite literally won’t have a single responsibility when it comes to managing your property, nor will you have to worry about any of the day-to-day hassles. They’re now somebody else’s problem.

And that means you’ll have more time and more energy for your family, your friends and your hobbies. Better yet, you’ll feel better thanks to the reduced stress and you’ll be more fun to be around.

Reason #3: You can realize the value of your real estate now instead of later

Many investors I talk to like the idea of selling their investment property and realizing its value.

However, they don’t want to pay the taxes, nor do they want to spend the time and effort needed to find a new piece of property to roll their money into.

Those are two of the things that make fractional investing in a portfolio of real estate so attractive. You don’t have to spend a lot of time searching for a new property — it’s all done for you.

Better yet, by reinvesting your money with a tax-deferred 1031 exchange, you can move on with your life.

Reason #4: You can quickly and easily become more diversified

Imagine if you could easily spread your real estate investments into different types and sizes of property in variety of geographical areas.

You’d have instant diversification which many investors value, especially in these uncertain times.

That’s the nice thing about the fractional real estate investments I’m going to tell you about in a moment. They’re stand-alone real estate investments in a variety of places. And we’ll help you choose the properties that works best for you.

Reason #5: You get the opportunity to invest in larger real estate deals

One of the nicest things about fractional ownership of real estate is that you can, if you wish, get pieces of larger real estate deals than you do now.

Maybe you like the prospects for a certain type of real estate — but thought it was out of reach because of the size of the required investment.

But now, with fractional ownership, you can get a piece of just about any type of real estate investment you like, no matter how big.

And I’ll show you how in just a moment.

Reason #6: You can use a 1031 exchange to defer the taxes when you sell your property

Occasionally, the tax code actually makes sense. And one of those occasions is with 1031 exchanges, which allows you to sell a property at a hefty profit and defer the taxes when you move your money into a “like-kind” property.

Most investors consider “like-kind” to be an imposing limitation, but the fact is, the rules are less rigid than you might think. For example, moving from an apartment building into a piece of raw land might not seem a “like-kind” exchange, but the rules allow it.

However, there are time limitations that must be followed to the letter. For example, you have to identify a replacement property within 45 days of the day you sell your property. And you have to close on a new real estate investment within 180 days of selling your property.

It generally makes sense to work with a specialist in 1031 exchanges to make sure you stay within the IRS’s rules, and that your transaction is completed on time.

Find the properties that fit your investment objectives

Kay Properties & Investments specializes in 1031 exchanges. And we’ll work with you to find the property or properties that fit your objectives as an investor.

We also offer you the opportunity to make fractional investments in these properties.

This real estate allows you to invest passively without any of the responsibilities of active management. It also lets you diversify your real estate portfolio far beyond what you’re doing now. And you can defer the taxes on any properties you sell.

Please contact Kay Properties to get a better understanding of how you can utilize the 1031 exchange to get all these benefits and more.

6 Reasons To Sell The Income Property You Love And How To Avoid Taxes When You Do 1031 exchange and Kay Properties

For more information on how 1031 exchanges work and your available investment options, please visit www.kpi1031.com. When you register, you’ll receive a free book on 1031 exchanges and DST properties. You’ll also find valuable information as you decide what the right strategy is for your specific 1031 exchange.

About Kay Properties and www.kpi1031.com 

Kay Properties is a national Delaware Statutory Trust (DST) investment firm. The www.kpi1031.com platform provides access to the marketplace of DSTs from over 25 different sponsor companies, custom DSTs only available to Kay clients, independent advice on DST sponsor companies, full due diligence and vetting on each DST (typically 20-40 DSTs) and a DST secondary market.  Kay Properties team members collectively have over 115 years of real estate experience, are licensed in all 50 states, and have participated in over 15 Billion of DST 1031 investments.

This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the confidential Private Placement Memorandum (the “Memorandum”). Please read the entire Memorandum paying special attention to the risk section prior investing.  IRC Section 1031, IRC Section 1033 and IRC Section 721 are complex tax codes therefore you should consult your tax or legal professional for details regarding your situation.  There are material risks associated with investing in real estate securities including illiquidity, vacancies, general market conditions and competition, lack of operating history, interest rate risks, general risks of owning/operating commercial and multifamily properties, financing risks, potential adverse tax consequences, general economic risks, development risks and long hold periods. There is a risk of loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, potential returns and potential appreciation are not guaranteed. Securities offered through Growth Capital Services, member FINRA, SIPC, Office of Supervisory Jurisdiction located at 582 Market Street, Suite 300, San Francisco, CA 94104.

The Case Study of a 1031 DST Specialist

What Eviction Reporting Codes To STOP Using Now and a New CDC Eviction Moratorium

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By The Editors
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Datalinx credit reporting and What Eviction Reporting Codes To STOP Using Now and a New CDC Eviction Moratorium

The COVID-19 pandemic has thrown everything out of whack including credit reporting.

Creditors have made unprecedented accommodations to help struggling debtors. As a result, you’ve had to shift the way you reported credit to ensure your clients and tenants aren’t adversely impacted. Datalinx has tried to keep you abreast of all the latest changes in credit reporting to ensure you have the most up-to-date reporting guidance.

Changes in eviction reporting

If you are a property owner or manager who reports evictions, you’ll want to pay attention to this latest advice from TransUnion:

Based on various state regulations and executive orders related to COVID-19, TransUnion is advising that you discontinue reporting Special Comment Codes QQ‐Eviction (non‐legal action) and RR‐Eviction until further notice. TransUnion has made the decision to remove accounts reported with these Special Comment Codes from our database.  We will advise once you can resume reporting Special Comment Codes QQ‐Eviction (non‐legal action) & RR‐ Eviction.

 As previously communicated, if a resident is confirmed to be affected by a natural or declared disaster and is not able to make payments, you should report the resident as Current (Rental/Lease Status = 11) with a Current Balance of $0 and Payment Amount Confirmed of $0. Subsequently, for any month that was impacted, you should report a “D” in the Rental History Profile to indicate that no Payment History was available for those months.

More eviction guidance

On September 4, 2020, the Centers for Disease Control and Prevention (CDC) issued a temporary eviction moratorium which extends through December 31, 2020. (You may remember that the CARES Act included an eviction moratorium which expired on July 24, 2020.)The CDC’s goal is to prevent further spread of COVID-19 by evicted individuals and families, but nonetheless has a direct impact on creditors.

The CDC’s moratorium temporarily halts certain residential evictions for nonpayment of rent for those who qualify. Renters must declare (under penalty of perjury) that they:

  • Have tried to obtain all available government assistance,
  • Expect to meet certain maximum earnings guidelines,
  • Are unable to pay full rent,
  • Are trying to make partial payments,
  • Would become homeless or need to move into a shared residence if evicted, and
  • Still have to comply with other rental obligations.

Renters seeking protection under this moratorium are required to submit the declaration to their property owners/managers. After the moratorium expires on December 31, 2020, property owners may require payment in full. Failure to pay at that time could result in a legal eviction.

Questions?

If you have questions about reporting evictions to the credit bureaus, reach out to Datalinx. Our experts can help you navigate the complicated waters of COVID-19 credit reporting!

Lasting Damage: Reporting Tenants to Credit Bureaus is a Powerful, Effective Option

Oregon Supreme Court Hears Landlords’ Appeal of Relocation Ordinance

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By The Editors
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Oregon Supreme Court Hears Landlords’ Appeal of Relocation Ordinance

The Oregon Supreme Court last month heard arguments from landlords who lost appeals in lower court rulings that upheld the Portland Relocation Ordinance, according to attorney John DiLorenzo.

The landlords hope they will win with the Oregon Supreme Court.

“I think the argument went quite well.  There was quite a bit of banter back and forth among counsel and the justices,” said DiLorenzo, who represents the landlords appealing earlier court decisions.

The landlords, who lost in lower court rulings, argue the city ordinance is in conflict with state laws that ban rent control. On March 7, 2018, the Portland City Council made the ordinance permanent and extended its application to landlords who own as few as one rental unit. The ordinance requires landlords to pay tenant moving costs if they want to increase rent by 10 percent or do no-cause evictions to move tenants out to rehab old apartment buildings to upgrade them.

During arguments one judge offered some thoughts that were encouraging to the landlords’ case.

“It doesn’t seem unreasonable to me to say that is indirectly the means of controlling the rent,” asked Justice Thomas Balmer. “And certainly the City Council meeting suggests that’s the way they viewed it,” according to Oregon Public Broadcasting.

Deputy city attorney Denis Vannier argued that it does not matter what council members said about the ordinance in the past — it’s how the ordinance functions that is important.

While it is not the kind of official rent-control policy seen in New York or San Francisco, DiLorenzo argued the rule discourages rent increases — and, therefore, is barred by state statute.

“The big question is, ‘What falls within that scope?’ And we believe that ordinances that control the rent do,” DiLorenzo said. “The court of appeals got hung up on the difference between a noun and a verb,” he told Oregon Public Broadcasting.

“The legislature has determined that rent control is a matter of statewide concern and proclaimed that no local government may enact any ordinance that either ‘controls the rent that may be charged for the rental of any dwelling unit,’ ORS 91.225(2), or that is inconsistent with that prohibition, ORS 91.225(7).,” DiLorenzo said when the trial court’s decision was appealed to the Court of Appeals.

The Oregon Court of Appeals ruled last year that the ordinance was not a form of rent control, as it did not put a hard cap on the amount a landlord could charge a tenant.

There was no indication when the Oregon Supreme Court might issue a ruling.

Oregon Supreme Court Will Review Portland Relocation Ordinance

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Will You Be Ready When the Eviction Moratorium Ends?

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By The Editors
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Will You Be Ready When the Eviction Moratorium Ends?

The national eviction moratorium will end in about a month and as a landlord do you have a plan? Which of three buckets will you be in? That is this month’s article by veteran real estate investor and property manager David Pickron.

By David Pickron

Recently I was at a birthday party where young children were participating in some old-fashioned games.  One that struck me particularly was musical chairs.  As an adult, I now realize the anxiety that was generated by that game; will I be left out or will I be the last one standing?   As each round progressed and more players and chairs were removed, I could see that unique mixture of fear and fun fill the faces of these children as they competed to be the last person with a chair to call home.

Over the past year in meeting with landlords across the country, I have come to know that look all to well as we have tried to navigate the eviction moratorium that has affected our industry.  You may have even seen that face in your mirror this morning.

As March 2021 ended, once again the eviction moratorium was continued to June 30.  For most of us I don’t think this came as any great surprise.  Even though the legislature approved rental relief for affected landlords, there just wasn’t enough time to get that money out to landlords (these are the same people who were able to get PPP business loans out and funded within weeks).  I predict that this will be the last extension and I’m already prepared for many of you to let me have it if I am wrong.  I hope and pray I am right.   Let’s assume that I am right, and that the eviction moratorium completes its run at the end of June.  The rental-housing market will immediately be thrust into an unforgiving version of adult musical chairs.

Whether you have been paid every month, getting partial payments here and there, or absolutely have no communication with your tenant, there are things you should plan for now to protect your investments.  I believe it is easiest to break down the grouping of landlords into three buckets as follows.

Bucket 1: Retain

You are in bucket 1 if you have received all your rent and the pandemic did not hurt you personally. Congratulations, many of us are jealous. Your tenants weathered the storm and made you a priority.  I would caution you to not take them for granted.  A lot of things can change over the course of a year (new job, new child, new pet) and those changes may prompt a move by this valuable tenant.  These tenants know their value and will have the power to move wherever they want because their credit and residential history is perfect.  Whether looking for a bigger home or a shorter commute, when this game of musical chairs starts, they may be tempted to vacate your property.  These are “dream” renters, and you cannot afford to let them go.  I suggest a couple of ideas to help them recommit and sign a new lease with you:

  1. Give them a discount in rent this year. $100 a month is cheaper than a turn. Do you really want to play “renter roulette” with an up-and-coming rental pool filled with bucket-3 type applicants after the eviction moratorium ends?
  2. Offer to upgrade your home. I am putting new flooring in one of my homes.  It’s a win-win, as my property value will increase and the tenants will love it.  Consider new countertops, appliances, or landscaping as an incentive for them to stay.
  3. Giving them a monthly gift card or buying them an annual pass to the local zoo or theme park might be a better option depending on the renter.

By helping this group, you only help yourself.  They helped keep you afloat for a year…it’s time to say thank you!

Bucket 2: Manage

If you have been working with your tenants and have gotten partial payments here and there, then you are in bucket 2, the “manage” bucket.  I don’t need to tell you, but you have been working hard, performing a high level of management just trying to get paid.  The only reason you are managing like this is because the government forced you into it.  If this moratorium ends in June, I suggest these as your next steps:

  1. Sit down (face-to-face if possible) with your tenants and lay out your future expectations.
  2. Let them know that the behaviors they have shown in the last year will not be acceptable in the future.
  3. Contact your local government to see if there is any stimulus money to offset past-due rent.
  4. Negotiate any past-due rent and then renew the lease with a new mindset. Get creative and say you will waive the past due if they sign a new lease with a small increase in rent.  This will allow you to recoup your past-due rent over time and take the burden off your tenant.
As a landlord do you have a plan for when the eviction moratorium ends and which of 3 buckets will you be in?
As a landlord do you have a plan for when the eviction moratorium ends? Which of the three buckets are you in?

Bucket 3: Replace

If your tenant ignores you, won’t take your calls and refuses to pay rent because of a COVID-related reason, you, my friend, are drowning in bucket 3.  We feel for you, as covering someone’s rent when they are not cooperating or communicating is not fun or easy.  Cutting the cord and cutting it quickly may be your best decision.  If you are in bucket 3, please consider these suggestions:

  1. If you fail to receive any rental-assistance money, you should contact an attorney immediately. Some states have lengthy eviction processes and by starting the process today, you might be in a better situation come the end of June.  Establishing and maintaining that relationship with legal counsel is well worth the money.
  2. You could offer the tenant money to move if your property is given back to you in great shape. Once they are out and the property is inspected and meets your standards, you can send them their money.

As the world prepares to get back to normal, let’s make a commitment and not just return to our normal way of managing.  This pandemic has afforded us the perfect opportunity to review and update our processes, policies, criteria, applications, and onboarding process.  The key to your success in this world is finding and retaining the right tenants.  In a time where It will only be harder and harder to find the right tenants, it is paramount to be ready to hold on to or grab the best of the best when the music finally stops.

About the author

David Pickron is president of Rent Perfect, a private investigator, and a fellow landlord who manages several short- and long-term rentals.  Subscribe to his weekly Rent Perfect Podcast (available on YouTube, Spotify, and Apple Podcasts) to stay up to date on the latest industry news and for expert tips on how to manage your properties.

Will you be ready when the eviction moratorium ends and as a landlord which of three buckets will you be in?
David Pickron

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