Ted Kimball, Esq.

1.  Question:  Are email communications between tenant and landlord admissible in court?

Answer:  Yes, emails can be admitted into evidence (if all rules of evidence are met), but emails should not be used to serve notices (other than as specifically allowed by law).

2.  Question:  When a month-to-month resident decides to vacate without any notice, do the owners have the right to charge for thirty days after the move-out to comply with their month-to-month agreement?

Answer:  Yes, you can charge up to the time the premises are relet or thirty days from the date of their departure, whichever occurs first, so long as you make diligent attempts to relet the property.

By Steve Haskell, Vice President, Kay Properties and Investments

There are various strategies when using DSTs (Delaware Statutory Trusts) for a tax-free, 1031 exchange. Some investments are easy and can be as a simple exchange from one property into a single DST. Other times DSTs are used to invest leftover equity from an exchange so an investor is not taxed on leftover funds, called “boot.”  Investors may routinely use DSTs as a backup identified property just in case their target replacement property does not work out.  In addition, on occasion, investors may utilize all of these strategies in one sophisticated effort to mitigate risk and defer as much tax as possible.  This article covers one such example.

A real estate investor sold an investment property for approximately $2 Million.  Roughly 25% of his property was leveraged; therefore, $1.5 Million was sitting in his qualified 1031 Exchange intermediary account.  He then pursued a partial 1031 DST exchange.  The real estate investor / seller wanted to purchase a property on his own, but something smaller and easier to manage than the property he recently sold. He wanted to put part of his exchange funds into a completely passive DST option that would require no management on his part. The DST part was relatively easy. However, he was having a hard time finding a replacement property to own outright, and the 45-day period for identifying a replacement property was about to end.  With the help of Kay Properties and Investments, the real estate investor created a multifaceted strategy that supported him and met his goals from a variety of angles.

Late last year, the City of Long Beach once again set out on a warpath by attacking a small group of residents comprised of those of us in the City who willfully provide rental housing to the vast majority of residents of the City.  As “landlords,” we are too often portrayed in a negative light by our elected officials who are unstoppable in their efforts to pander to a voting bloc of a City’s renters.  For the mere audacity of providing roofs over the heads of the City’s renters, severe negativity is constantly directed toward us in the form of unbalanced ordinances that seemingly always favor those who are being pandered to, which in our case is always the tenants.  This is the situation in Long Beach with the City’s so-called “Tenant Anti-Harassment Ordinance” that was passed late last year.

More recently, and now moving its way through the “system” at the City of Los Angeles is a newer, far more draconian version of a tenant anti-harassment ordinance.  Having passed through the confines of the City’s Housing Committee (a/k/a, Anti-Landlord Committee), many controversial and potentially harmful amendments to the ordinance had been put forth by the Socialist and far left leaning Councilmember Nithya Raman.  While many of Ms. Raman’s amendments failed in Committee due to our advocacy efforts, those that remained may still put rental housing providers who have not engaged in harassment at risk of being subject to frivolous litigation and prosecution. 

Homelessness and affordable housing are major issues facing the City of Los Angeles

By Jack Humphreville, L.A. Watchdog for CityWatch

But this does not give the City the right to commandeer hotel and motel rooms for use as homeless housing or to seize an apartment complex through eminent domain at prices that are less than fair market value.  As part of the City’s effort to renew and expand “Project RoomKey,” Councilmembers Mike Bonin and Nithya Raman instructed the City Attorney to report on what steps need to be taken to “begin commandeering hotels and motels for use as homeless housing.”

In response, City Attorney Mike Feuer confirmed that the “Mayor’s emergency powers grant him the authority to commandeer private property for public use when needed for the protection of life, and to bind the City to pay fair market value to compensate the property owner.”  But City Attorney Feuer fails to define what is an emergency.  Nor does he discuss the potential financial liabilities, the potential legal fees, the moral hazards, and the impact on the City’s reputation associated with the commandeering of private property, all of which may be substantial.

To start something new is to accept that you will probably fail at first while figuring it out. You don’t know what you’re doing and while you can research and study up, some things must be learned the hard way. No one has perfect balance without falling a few times. No one can master a new language without accidentally saying something dumb. No one can start a new adventure without getting lost somewhere. Everyone must start somewhere, and that means that usually, everyone will make some pretty bad mistakes along the way.  If this is part of your research on getting started as a landlord, that’s wonderful! There are some big mistakes you could make, but you can avoid with just a bit of research.

No Screening

Here’s the thing, tenant screening can require time and money. Sure, it seems like a great corner to cut: faster acceptance time, more people applying, and your property may be vacant for a shorter period of time. The problem is that tenant screening exists for a reason. There are certain liabilities you do not want to risk on your property. People who are prone to property damage are a costly concern. If someone has been arrested and convicted for damaging property there is no promise they would have care and respect for your property.

“Ask Kari” – As it Was Just May, Mold is Surely Here to Stay

By Kari Negri, Chief Executive Officer, SKY Properties, Inc.

Seasonally, the month of February is usually our wettest month of the year, but here in sunny Southern California, one may never know what we are going to get. Spring is a season favorite of many people but as we go into the warmer weather, we will likely still see some rain showers followed by heat.   Do April showers bring May mold, or mold in June, July or August?  Maybe so, but it can be avoided if water intrusion is addressed quickly and correctly.

What we need to know, as building owners and managers, about heat and water is that together they are the perfect combination to grow mold.  As of January 1, 2016, mold is considered a substandard housing condition as defined in California Health and Safety Code Section 17920.3  Here is a general introduction, with some tips and recommended links that building owners might consider in regard to mold.

By Jerry L’Ecuyer & Frank Alvarez

Dear Maintenance Men:

Should I check smoke alarm batteries in my units or is that the resident’s job?  Also, how often should I clean out my water heaters, not to mention A/C filters and so on?

Linda

Dear Linda:

1-         Most rental agreements have a check box that says the resident is responsible for the operation of the smoke alarm. The newest rental agreements now have a check box for Carbon Monoxide alarms.   We lay awake at night thinking about that little check box. In order to sleep, we check the residents smoke and CO alarms every time we do maintenance on the unit. We keep a log of each time we check and what action was taken.  The smoke and Carbon Monoxide alarms should be “Officially” checked and logged, at least once a year.  Typically, January is a good month for the annual check.    

 2-        A typical 100-gallon water heater depending on the BTU rating will costs anywhere from $4,700 to over $6,500 installed. That cost alone should be incentive to clean out the heater regularly.   Normally, the clean out should be done at least once a year. If the water at your building has a high mineral content, then it should be cleaned out every nine months. Again keep a log of each clean out; it will help in remembering when to do the next cleaning.

3-         If your building has forced air & heating, the filter should be checked, cleaned or replaced each October or November and each May or June. This will help keep your systems working properly and reduce strain on the components. It will also ensure proper filtration before the winter and summer workloads.  

4-         Cleaning out the exhaust vent tubes of the laundry room dryer. Everyone knows about cleaning out the dryer lint basket and throwing it on the laundry room floor. We’re talking about cleaning out the lines leading out the back of the dryer. Keeping the exhaust vent tubes clean will help cut down on gas and electric usage, longer machine life and shorter drying time and lint in these tubes have been known to be a fire hazard. It should be done at least once a year and again, keep a log of each cleaning for reference. 

By Marc Frenkiel, Appfolio

What’s happening in the Los Angeles multifamily market is a microcosm of what’s happening in the broader US market. Rents in the city have fallen, vacancies are up, and with the lifting of COVID restrictions on June 15, owners, operators, and residents are now waiting in limbo as the statewide eviction moratorium is set to expire at the end of June. 

Apartment List’s June 2021 Rent Report quantifies this narrative. According to their data, Los Angeles is the only city in the metro that has seen rents fall, with a year-over-year decline of 2.2% (the median two-bedroom currently rents for $2,054, while one-bedrooms go for $1,566). It is important to note that this is a 2.2% decline from May 2020 to May 2021. Rents fell precipitously in the onset of the COVID-19 pandemic. According to Marcus & Millichap’s 1Q21 Los Angeles Multifamily Market Report, average effective rents fell 4.8% from 2019-2020.

One thing became very clear for many workers during the coronavirus pandemic, you no longer need to “go to work” to work, and that has implications for owners and managers of apartment buildings and other multifamily properties.

According to a recent Gallup Poll, 35% of all full-time employees say that, given the choice, they would continue working remotely as much as possible with some industries reporting a preference for remote work as high as 65%. Studies have also shown working from home makes many workers happier and more productive, motivating forward-thinking employers to accommodate the preference. This means today’s workforce will require more efficient and flexible living spaces. Here are four ways this shift in workstyle will translate to opportunities for your multifamily property.

1. Technology use continues to grow

As people consolidate their work and home life, efficiency becomes a necessity rather than a luxury. Renters continue to crave convenience through technologies – like keyless door entry and Wi-Fi adapter plugs – and the demand is fueling the implementation of a host of new technologies in apartment buildings and units. Installing smart technology that will facilitate work life – like smart thermostats, smart power strips and LED lighting with controls will help your property meet the expectations of the modern remote worker and can add significant value to residents through increased flexibility and reduced energy use.

By Christopher Miller, MBA

Specialized Wealth Management

Which investment is more desirable: one with a moderate projected return and moderate risk, or one with slightly higher income and slightly higher risk?  The answer to that question depends on the investor who is asking and on his individual financial situation.

As a real estate investment advisor, I am always working with my clients to find the right properties for them; the investments that will best fit their personal risk/reward objectives.

The Goal of Investing

As investors, we seek ventures that fit our goals and risk tolerances.  Real estate is my favorite investment vehicle since it offers the potential for income – with tax benefits – during the hold period and the opportunity for great appreciation; particularly when leverage is used.