By Gina Gaudio-Grace, Platinum Trust Group

In November 2020, Californian voters passed Proposition 19, a State Constitutional Amendment, with 51.1% of the voters approving it. The new law goes into effect on February 16, 2021. This means that you have a short window of time to act under the existing law.

The Way We Were: How It Works Today

To understand the impact Proposition 19 will have on apartment owners, it is helpful to recognize that it modifies Proposition 13 (originally passed in 1978).  Under Proposition 13, parents are permitted to transfer: (i) their primary residence, and (ii) up to $1 million in assessed value of other properties, to their children without triggering a reassessment for property tax purposes. This means that children can keep the low property tax assessment from their parents following a transfer of a primary residence or the first one million dollars of assessed value (which is usually substantially less than fair market value) of investment properties.

By Charles Scott, Esq.

Proposition 19 was passed at the recent election, amending Article XIII (A) of the California Constitution. As part of the measure, children who inherit their parents’ houses will no longer receive a property tax break if they intend to keep it as a second home or rent it out. The measure will have a very serious effect on the traditional parent-child exemption from reassessment under Prop 13. Previously, transfers of the principal residence of a parent, and up to $1 million of assessed valuation of other property, passed to children without being reassessed for local County property tax purposes, thereby preserving the benefits of Prop 13 for heirs and trust beneficiaries.

By Nicole Seidner

It wasn’t all that long ago that a landlord went viral after nabbing her tenants’ packages, claiming them as the ‘rent’ that they owed her. Naturally, she backtracked that statement pretty quickly as she realized no one really found the idea as funny as she did. TikTok’s banishment aside, her video is one great big sign that bragging about how ‘petty’ you are as a landlord is a big no-no.  What other warnings have can a landlord overlooked?

Don’t Steal From Your Tenants

This one should be pretty obvious. According to Abbe Awosanya, the landlord who danced for our enjoyment, she wasn’t ‘actually stealing’ and those were her own boxes she was using as props! Good for her if that’s true, but let’s just put it out there. A lot of tenants haven’t paid their rent right now, that much is true, but do not steal from them. Even if its packages left out on the street, messing with mail is still a federal offense and a jury wouldn’t not look well on you if it went to court – theft or evictions court.

By Patrick Carroll

There’s a saying – “You don’t fix the roof when it rains” – that offers a lesson for businesses. It is a lesson many businesses across industries had to learn when the Covid-19 pandemic hit. The sudden changes threatened the business-as-usual mentality they had become accustomed to. In multifamily, this lesson presented itself in the form of delinquent rent payments. The industry as a whole braced for a sharp decline in rent collection as unemployment soared, leaving many properties scrambling to put contingency plans in place.

However, during the first shutdowns, some owners and operators found that being well-prepared kept their multifamily boat above water. Despite the increase in delinquent rent payments across the board, many properties are still collecting rent at rates similar to last year (paywall). The key is – and has been – working with residents and building trust.

Move Seeks Emergency Relief From the City’s Eviction Ban and Rent Freeze Moratoria

Following the U.S. District Court’s denial of injunctive relief in the Apartment Association of Greater Los Angeles’ (AAGLA) Preliminary Injunction Motion against the City of Los Angeles, a Notice of Appeal has been filed by AAGLA in the U.S. Ninth Circuit Court of Appeals.  In addition, AAGLA is seeking to expedite  a hearing date no later than Mid-January 2021.  AAGLA had previously filed its lawsuit against the City of Los Angeles in Federal Court this past June challenging the City’s eviction ban, prohibitions on late fees and interest on unpaid rent, and moratorium on annual rent increases.

By Kerry Jackson

Did someone say that suspending the responsibilities for renters to make their payments due to the pandemic on time would create problems? Of course they did. And of course it has.

By the end of the year, Californians will owe as much as $1.7 billion in back rent, says a Federal Reserve Bank report. That’s nearly a fourth of every dollar of back rent owed rent nationwide.

That’s quite a sum, but the difficulties it creates for renters is only part of the story. What about the California property owners who are owed $1.7 billion. Will they ever get what’s rightfully theirs?

Package Theft is a Major Issue: 1 in 5 Americans Reported Being a Victim of Porch Pirates During the Pandemic 

Even with thousands of people working from home due to the pandemic, package theft is still a major issue. According to a recent survey from ValuePenguin.com by LendingTree, 1 in 5 Americans reported being a victim of porch pirates during the pandemic. This expands on previous reporting from The New York Times, which revealed that an estimated 90,000 packages disappear daily in NYC without explanation, up roughly 20 percent from four years ago. 

A quote from the article summarizes the dire situation: 

“I can’t have my medications delivered here or anything that is essential,’’ she said. “I don’t know what the solution is, but I do know that it’s getting worse.” 

How Cost Segregation Can Benefit Property Owners and Managers

By David Crown, Chief Executive Officer, Los Angeles Property Management

Class is now in session!

Today you’ll learn how cost segregation can lead to accelerated depreciation of an income property. Now, before we begin, I want to clarify that I am neither an attorney nor an accountant, so please don’t take the advice of this article without first consulting your licensed attorney and accountant. But this month’s article is as much about investment as it is about property management, because at I believe understanding investment strategies can help managers see the income properties they manage from an owner’s perspective, and offering this benefit to clients can set managers apart in the field. While some of the terminology may sound complicated, the end result of this combination is simple: it’ll save rental property owners money.

I can remember a time when I was fully ready to send a check to the IRS for an $80,000 tax payment on a property I owned. I had already stamped the envelope when I received a last-minute call from a colleague advising me to look into cost segregation. With one call to my accountant, I saved all that money. Consider this your last-minute call.

Rent Control – A Cautionary Tale of the City of Santa Monica

By Dean Sherry, President, Duke Property Management

Introduction and Update.  As I look back at this article that I wrote approximately  two-years ago about rent control, the same sad story is only getting worse for the mid-market “mom and pop” small owners.  However, one thing is strikingly different. Thanks to COVID-19, there is a natural market correction happening that, for some reason, state legislators are over-looking.

In my “little” world of property management, notices to vacate have just shot up and more units are becoming available which is driving down the price of rentals. Most of these renters who are abandoning their apartments are millennials who either are moving back with their parents, moving into smaller apartments or roommate situations, or are moving out the “big” City. 

The City of Los Angeles Wants YOUR Participation in the Emergency Renter Assistance Subsidy Program

The City of Los Angeles put into place an Emergency Renter Assistance Subsidy (ERAS) program that will directly pay landlords on behalf of their qualified tenants up to $2,000 per month.  Recently, the Los Angeles City Council modified the payment aspect of the program to pay the rental subsidy directly to the tenant IN THE EVENT their landlords opt-out or fail to timely reply to program notifications. 

The City of Los Angeles reports there are landlords that have not responded and have been in “pending” status since as far back as August 2020.  In these instances where a landlord is “pending,” the City of Los Angeles has now been authorized to begin remitting the rental subsidies directly to qualified tenants instead of directly to landlords.  The City suggests that any landlords that have been notified that their tenant has been approved for the program and that they are eligible, should complete the enrollment process as soon as possible. Any landlords that have questions may contact the City of Los Angeles via email at: hcidla.eras@lacity.org.