TheREALTYgram Blogger

Louisiana Legislators Receive Subsidized Housing;Expenses Equal Twice The Income

"For rent: Spacious apartments in historic buildings overlooking river. Close to Capitol. 1 to 3 bedrooms. Utilities included. $300-$565 a month." Only "favored legislators" and the lieutenant governor need apply. Baton Rouge's 2theadvoate reports that state-owned Pentagon Barracks is home to 40 legislators. State senate president Don Hines and speaker of the house Joe Salter approve all tenants.

"From July 1, 2004, to June 30, the state collected about $182,000 in rent. The cost for utilities, security, pest control and maintenance was $313,507.06.

"In a quarter of a century, the minimum rent has gone from $75 to $300. The most recent increase was in 1992, when the state raised the rent by $150 a month to appease the Internal Revenue Service.

"The tax agency raised a red flag about the apartments being leased for less than their fair market value. The agency considered the cheap rent a form of indirect income and wanted lawmakers to pay taxes on that income."

Lawmakers receive a per diem of $113 when they are in session.

Colorado Governor Axes Renter Protection Bill;State REALTOR® Association Backs Landlords

  Colorado Gov. Bill Owens has vetoed a renter protection bill that was designed to bring Colorado up to speed with the rest of the country regarding landlord-tenant law. The veto followed an aggressive lobbying campaign against the bill by the Colorado Assn. of REALTORS®. Many of the issues addressed are critical problems for low-income and fixed-income tenants. Owens disagreed, contending that the measure “is unfair to property owners and would result in unintended, negative consequences.”

Supporters assert the bill (H.B. 1061) was needed to protect tenants from unscrupulous landlords. The measure was designed to prohibit landlords from charging excessive late penalty fees. It also aimed to expedite the return of security deposits after a tenant has moved.

Colorado doesn’t restrict how much a landlord can charge in late fees for delinquent rents. The General Assembly bill set a ceiling of 2 percent per day, up to a maximum penalty of 15 percent of the monthly rent.

Owens noted that a tenant with a $400 monthly rent would pay a maximum $75 in late fees. But he said the lower penalty could prove to be a “disincentive” for tenants to pay their rent on time. “Tenants with financial difficulties would be more likely to pay their delinquent credit card bill before paying rent, precisely because this bill significantly diminishes the economic incentive to have tenants pay back rent,” Owens said.

Bill sponsor State Rep. Michael Merrifield said that the bill would protect tenants against negligent landlords and put Colorado on par with landlord-tenant laws around the country.

“This is a very modest bill that will give tenants a bit more leverage in dealing with their landlords,” Merrifield said. “This bill is really aimed at the minority of landlords who one might call unscrupulous. Landlords who treat their tenants with respect and humanity will not be affected.”

HB 1061 includes five provisions: It would require landlords to return security deposits or a notice of reasons for retention within 30 days; require landlords to provide a copy of a lease to their tenants; prohibit landlords from levying excessive charges on late fees; require landlords to provide basic information about eviction proceedings and provide tenants common law protections such as the right to notice, right to trial by jury, etc.    

Reverend Peter Morales, a minister at the Jefferson Unitarian Church in Golden, is currently having a dispute with his former landlord over late charges. He has been hit hard financially by a system with no caps on fees.

“The lack of a cap allows landlords with deep pockets to intimidate tenants,” Morales said. “Most people don’t have the type of resources to defend themselves in court. Someone needs to stand up to these bullies on the playground.” 

The legislation also called for landlords to return security deposits within 45 days, instead of the current 60 days. The Colorado Association of REALTORS said the 45-day period wouldn’t allow adequate time to insure that the tenant had paid all utility bills.

Tenant's Rights To Property UpheldIn Massachusetts Bankruptcy Court

A federal bankruptcy court in Massachusetts has derailed a debtor's attempt to extinguish a tenant's lease. In 2000, the Debtor obtained mortgage financing on the property in order to make certain improvements. As part of the loan process, the lenders entered into a nondisturbance agreement with the Tenant. The agreement stated that while the mortgage would take precedence over the lease and the other options held by the Tenant, the lenders agreed that the Tenant’s rights would not be affected by a foreclosure or other sale of the property.

In 2004, the Debtor filed a Chapter 11 bankruptcy petition and  filed a motion seeking approval of the bankruptcy court to auction the property on which the Tenant was located free and clear of all interests. The Tenant opposed this motion. The court ruled in favor of the tenant.

PA Landlord Sentenced For ForgingTenant Sigs On Lead Paint Disclosure Forms

A York (PA) landlord was sentenced to probation and home confinement on Friday for forging signatures on Environmental Protection Agency lead-notification forms, according to legal attorney/blogger Joseph Gothie in his Gothie Law Firm LLC blog. Says Gothie:

"I have repeatedly warned landlords about their obligations to comply with lead-based paint disclosures. One of the services that I provide to landlords is a review of their lead paint exposure as well as sharing ways to comply with the law and to ensure that their records reflect that they complied with the law." (Gothie offers these links for landlord study.)

Under a 1992 law, sellers and landlords of residential housing built before 1978 must disclose to purchasers and tenants the presence of known lead-based paint hazards or the lack of knowledge of such hazards. They also must provide a lead hazard information pamphlet and a standard warning statement in the lease on the dangers of lead-based paint.

Pennsylvania Attorney Pens Blog;Offers Sage Advice To Landlords

  Landlords with multi-unit properties and prospective residential investors must consider the consequences of "shared" utilities. I've run into this scenario several times over the years, and York (PA) attorney/blogger  Joseph N. Gothie puts the matter in perspective in Utility service, foreign loads, and tenants:

"the tenant called the gas company because he was concerned about...the gas furnace malfunctioning. The gas company inspected everything and noted that the furnace was fine, but that one of the radiators was located in the other half of the duplex. The tenant then demanded that the gas service be switched over to the landlord. The gas company... had no choice but to do this.

"[PA] statute provides that from the date of notice to the utility, the landlord is obligated to pay the utility bill and that the service cannot be thereafter metered in the name of any tenant until the foreign load is removed. ..the statute suggests that the utility may only pursue the landlord for the arrears on the utility, not the tenant. Therefore, the landlord was placed on the hook for not only for future gas bills under a yearly lease (preventing him from raising the rent to cover the extra costs at least for a year) but also the tenant's profligate use of the gas in the past. No remedy existed for the landlord against the tenant.

"As described above, this scenario is generally known as a "foreign load" problem. Tenants hear about this from time to time, and they will look for areas where, if they turn off their fuses/circuit breakers, common area lights (for instance) turn off. Then, they spring it on the landlord."

Other recent articles include: Why lead paint disclosure compliance matters and Some ideas for handling abandoned property.

FTC Rules That Reduce Consumer FraudAnd Identity Theft Boon To Shredding Industry

Businesses that handle sensitive consumer credit information will be required to destroy that information before it is discarded to comply with the "Fair and Accurate Credit Transaction Act" (FACTA) that goes into effect in June, 2005. Those businesses include credit reporting agencies, real estate agencies, mortgage lenders, landlords, and government agencies. The Federal Trade Commission says that the Act covers all data, including paper, CDs, computer discs and hard drives. Companies must ascertain that no information can be retrieved from these media after they have been discarded.

Landlords And Apartment DwellersShare Connectedness In Blogosphere

Web developer NetImpaxx LLC (Washington, D.C.)  has launched BuildingBlogz, designed to let apartment owners offer weblog service to their tenants. The web site cite a design charge of $1,400 and $49/month hosting fee. Optional discussion categories include Pet Talk, Politics, Trash or Treasure, and From The Management (required). Sample blog here.

Consumer Soapbox Derby Sees Mold AdvanceTo Lead As Major Consumer Activist Platform

"Toxic mold" produces shortness of breath, rashes, and hair loss. "Black mold" is linked to multiple sclerosis, rheumatoid arthritis, seizures, and cancer. Consumers are now aware. Consumers are educated. Consumers want answers and action.

The EPA has issued "A Brief Guide to Mold, Moisture and Your Home" with comprehensive  information in English and Spanish and offers cleanup guidelines, prevention measures, and control tips. Mold Help is a great consumer site that covers it all.

Secondary to health consequences are the ramifications of mold as it relates to real estate. A Michigan bill would have imposed civil liability on landlords who neglected to disclose health hazards on leased premises:

"A person who knowingly rents, leases, or sells improved real property that contains lead-based paint, toxic mold, or asbestos without disclosing its presence is liable in a civil action for damages and costs and fees...The court shall award 3 times the amount of damages sustained by the plaintiff as well as costs and fees..."

States from one end of the country to the other are gearing for action. Virginia mandates that landlords disclose the presence of mold as part of a move-in inspection. California defeated a similar initiative last year,  and proposed Utah, and Washington legislation would require new environmental disclosures to tenants.

HUD recently issued a Mold Disclosure that prospective purchasers are required to sign before purchasing HUD homes. Banks and state real estate associations have amended agreements of sale to include mold disclosures. Stay tuned. This issue is getting hotter every month!

Bravo! PRBC Helps Renters Build CreditAnd Qualify For Favorable Loan Rates

"I don't have bad credit, I just don't have any credit."  How does someone establish credit? Conventional wisdom says, "Borrow some money and pay it back." People are putting themselves into debt to establish a credit score that did not recognize the payments that they were already making. Pay Rent, Build Credit, Inc. (PRBC) is a web-based self-help service that enables consumers and small business owners to build their credit scores through timely rent, mortgage, and other recurring bill payments. 

"The PRBC Data Network enables users to build an historical credit file using multiple payment accounts such as rent, mortgage, mobile home, utilities, student loan, auto, insurance, phone, self-storage, etc... Users can build an accurate credit file with rent and other bill payments in real time when made online, by phone, credit or debit card, ACH (automated clearing house), or by other means that can send a date-stamped electronic "receipt" to PRBC.

"PRBC users can build historical credit files based on up to three years of prior payment records that can be manually verified by independent sources, like banks, REALTORS^®, accountants, and credit counselors. But most importantly, for future payments, the PRBC Data Network enables consumers and small business owners to build an accurate credit file automatically.

"The results for consumers can be staggering. Without going into debt, a renter can prove they are ready, willing, and able to handle a big financial obligation, like repaying a mortgage. The PRBC Data Network will provide a greater number of loan applicants with an equal opportunity to access prime rate mortgages, auto loans, and other financial products...This is a significant development for borrowers and lenders alike because until now, credit reporting and scoring technologies have not been able to account for the timeliness of most rental, sub-prime loan, utilities, and other household or business-related bill payments as a measure of credit worthiness.

"The PRBC Data Network will accept...rental and other bill payment input from landlords, mortgage lenders, and other creditors who want to use the PRBC Data Network to report timely, as well as late payments, to reward their customers who pay on time, not just penalizing those who are late."

Pennsylvania Landlord Library and Toolkit

Many buyers have turned to residential real estate investment after suffering losses in the stock market. Real estate investment has shown excellent results over the long term. I  have collected some forms and materials that are specific to the Pennsylvania market; copy of The Landlord Tenant Act (MUST reading for landlords and tenants alike), Application for Lease,  Lease, Pet Addendum, and Advance Payment Addendum. (These forms are under constant review and are changed periodically.)