I think in these uncertain times, it is best to repeat the motto “stay calm and carry on”.  We, in property management, are in a service industry and so must do our best to carry on by supporting our residents in the safest way possible for everyone.

What should I do to prepare employees and residents for the Corona Virus? As Steve Core, CPM, summarized in the recent NAA Webinar, “We must educate, equip and support”.   Occupancy Solutions has reviewed several up to date resources and compiled the following summary of best practices for your edification:

1. Question: My tenant has some damage to the outside window to the house I rent to them.  The tenant claims the damage was done by a burglary attempt but I suspect they locked themselves out and damaged the window when trying to get back in.  Who is responsible for the repair?

Answer: Unless proved otherwise, damage to the premises caused by unknown third parties, acts of nature, or unexplainable are the responsibility of the landlord.

2. Question: In a co-signer situation what forms do you recommend that the co-signer sign along with the tenant?

Answer: They should sign a separate guarantee agreement that has been reviewed by competent counsel. 

The good Proposition 13 — the one from 1978, not the $15 billion school bond currently on electoral life support — was the beginning of the modern tax revolt movement.

That movement spread across the United States and even into Europe in addition to spawning several additional initiatives here in California. But it’s the bad Prop. 13 on last week’s ballot that is currently generating a statewide buzz because it appears to be headed for failure. Could this be the beginning of Tax Revolt 2.0?

To assist residential renters who have been economically impacted by the Coronavirus, the Mayor issued an Eviction Moratorium Emergency Order

On March 11, 2020, the World Health Organization declared the Coronavirus (COVID-19) as a pandemic. On March 15th, Los Angeles Mayor Garcetti issued an Emergency Order which implemented a number of measures designed to protect the public and contain the risk of contracting the COVID-19 virus. Additionally, the Mayor issued a temporary moratorium on evictions for non-payment of rent for tenants who are unable to pay rent due to circumstances related to the COVID-19 pandemic. These circumstances may include:

1. Loss of income due to work place closure or reduced hours due to COVID-19
2. Loss of income or child care expenditures due to school closures
3. Health care expenditures stemming from COVID-19 infection of the tenant or a member of the tenant’s household who is ill with COVID-19
4. Reasonable expenditures stemming from government ordered emergency measures.

The Mayor’s Order emphasizes that tenants are still obligated to pay lawfully charged rent. However, during the emergency period, tenants may not be evicted for failure to pay rent due to the financial impacts related to COVID-19. Tenants will have up to six (6) months following the expiration of the local emergency to repay any back rent due. Please note that the City Council may extend the repayment period as necessary in response to the emergency.

Subsequently, California Governor Newsom issued a similar Executive Order to Protect Renters and Homeowners during the pandemic. The Governor’s order is in effect through May 31, 2020.

By Contemporary Information Corporation (CIC)

While owning rental property is a terrific way to generate consistent passive income, preparing your personal and/or business tax returns can get complicated. To offset some of your additional income, as a landlord, you can take advantage of several tax deductions. Specifically, you must have a system in place to maintain all receipts, bills, and statements with ease during the year. Alternatively, you can use rental property software to assist with the process. The key is to be organized throughout the year so you can recognize and take advantage of every deduction you are entitled to receive. Whatever method you use, if you are audited, the IRS wants to see proper back up for every deduction that you take. 

Expenses for tax purposes are broken down into two categories, “current expenses” and “capital expenses.” Current expenses are those that are used to maintain the rental property, and/or help you operate your rental company. For an expense to qualify as a current expense, it must meet the following criteria: 

• Ordinary and Necessary Expense. These are expenses that are common in real estate, such as interest, taxes, advertising, maintenance, utilities, and insurance).
• Current Expenses related to your rental property, company, or activity. The expense must be something of short-term value and not a long-term improvement, which must be depreciated over many years. 
• Reasonable expense. The expense must be in line with the current market rate. 

By Elizabeth Chou echou@scng.com @reporterliz on Twitter

In a protest that appeared to be a convergence of California crises, a group of housing activists on Saturday aimed to “reclaim” vacant homes owned by Caltrans in El Sereno.

One by one, activists filed up a set of front steps in an act of civil disobedience, carrying a small writing desk, dining chair, an ornate glass coffee table and other furniture into a twobedroom house on Sheffield Avenue.

Rely on the People Who Know Science.

When coronavirus has been detected in a rental unit, the first and most compelling course of action is to call local public health officials to seek guidance in how to handle it.

Ask the infected tenant to voluntarily place themselves in a hospital facility, or at a bare minimum, self-isolate themselves.  For someone who exhibited symptoms or has tested positive, the most prudent course of action is to admit themselves into a medical facility. We still do not yet know, though, if the health care system can accommodate an influx of patients. In last Sunday’s press conference, New York Governor Andrew Cuomo says a serious concern for his state (and, by extension, California) is that the number of infected people can severely tax the resources of hospitals.  Alternatively, a resident who tests positive for the virus can ideally self-isolate themselves in the rental unit.  Asking someone to sever ties with the rest of the world, of course, is a request that is hard to swallow, but hopefully heeded.  Tenants who are infected should be told that in the interest of transparency, other residents will be notified that someone in the building has tested positive; however, the name of the inflicted tenant shall remain anonymous.

Los Angeles Mayor Eric Garcetti tonight issued a moratorium on evictions and wide bans on dine-in restaurants and entertainment facilities in the city. The order came just minutes after L.A. County officials announced they were shutting down all offices starting tomorrow.The city has endured challenges like wildfires and earthquakes before, Garcetti said. But unlike natural disasters, the mayor said that to tackle an infectious disease, “we are all first responders.”“This isn’t just someone else’s responsibility, but it is the responsibility of each one of us.”Here are some key points from Garcetti’s order:

• In addition to preventing residential evictions, he’s asking the city attorney “if we can legally prevent commercial evictions” to help businesses.
• Bars and nightclubs will close. So will movie theaters, arcades, gyms and fitness centers.
• There’ll be a prohibition on eating-in at restaurants but delivery, takeout and drive-through options are allowed.
• Groceries, pharmacies and food banks are exempt from closures.
• The mayor is urging churches and places of worship to close

The City of Santa Monica (the “City”) issued a supplement to the local emergency proclamation that places a temporary moratorium on evictions for non-payment of rent by residential tenants impacted by the novel coronavirus (COVID-19). The order, signed by City Manager and Director of Emergency Services Rick Cole, is effective immediately. During the period of local emergency declared in response to COVID-19, a landlord cannot evict a tenant for nonpayment of rent if the tenant is unable to pay rent due to financial impacts related to COVID-19, including (1) being sick with COVID-19, or caring for a household or family member who is sick with COVID-19; (2) lay-off, loss of hours, or other income reduction resulting from business closure or other economic or employer impacts of COVID-19; (3) compliance with a recommendation from a government health authority to stay home, self-quarantine, or avoid congregating with others during the state of emergency; (4) extraordinary out-of-pocket medical expenses; or (5) child care needs arising from school closures related to COVID-19.  A landlord also cannot pursue a no-fault eviction unless necessary for the health and safety of tenants, neighbors, or the landlord.   

The order also suspends the discontinuation or shut off of water service for residents and businesses in the City for non-payment of water and sewer bills; the imposition of late payment penalties or fees for delinquent water and/or sewer bills; and the imposition of late payment penalties or fees for parking violations for the next 60 days.  

“As the COVID-19 pandemic continues to evolve, Santa Monica will continue to enact policy changes that will ensure that our residents can weather this crisis”, said City Manager and Director of Emergency Services Rick Cole. “Our community is over 70% renters and this order provides our them the security of housing during this difficult time.  We recognize that the vast majority of landlords will act responsibly, but this order serves to ensure no renter loses their home due to a crisis beyond their control.  Everyone needs to feel safe to stay home if they are sick, care for sick loved ones, and have access to essential services.”   

These local orders follow President Trump’s national emergency declaration earlier today where it was announced that $50 billion in emergency funding would be made available to assist state and local governments in preventing the spread of and addressing the effects of COVID-19.  

Local emergencies can be declared by the City Manager, with ratification by the City Council within seven days. The local emergency is now in effect and will be confirmed by the City Council before March 20, 2020.  

In a prior article, I explained how rent default insurance helps residential property owners and property managers mitigate the significant and continual risk of tenants defaulting through non-payment of rent.

Here are three risks shouldered by property owners and managers that do not get the attention they warrant: