2020 may be remembered as the year many of the freedoms we had, or thought we had, died or were mortally wounded. It was the year we became subject to arbitrary government decree without recourse.

Time magazine missed the mark by not naming The Government Bureaucrat, Person of the Year.

Naturally, property rights are the subject of primary interest to the readers of this publication. Tenants without any showing of hardship have been allowed to remain in their units with little to no payment of rent.

By Dwight Kay, Founder & CEO; Betty Friant, Senior Vice President and The Kay Properties Team

“Is that your final answer?” You may recognize the question made famous by the popular TV game show Who Wants to Be a Millionaire? Choosing the right answer in this game gives you a shot at winning big money, while the wrong answer leaves you with nothing. Investors conducting a 1031 Exchange face a similar make or break decision when it comes to identifying suitable replacement properties.

The right choices can help streamline a smooth and successful execution of a 1031 Exchange. Choosing wrong with properties that may not be viable or deals that are unable to close within the 180-day time period can derail the entire 1031 Exchange. The good news is that investors do get to identify more than one replacement property. However, just like the gameshow, once that 45-day deadline hits for identifying replacement options, those answers are final. Making the most of that short list is one reason that the 200% Rule is a popular choice for many investors. The 200% Rule allows an investor to identify the largest number of replacement options with four or more properties or Delaware Statutory Trust (DST) replacement investments.

By Christopher Miller, MBA

What Net Leased Properties Are

Net leased properties get their names from how expenses are treated; rent is paid to the landlord “net” (tenant pays) certain expenses.  In any kind of net lease, the tenant will generally pay all operating expenses, such as electricity, gas, and water.  Property taxes and insurance are also the tenant’s responsibility in a “double net,” or NN, lease.  A “triple net,” or NNN, lease will pass all responsibilities and expenses to the tenant – even maintenance of the building.  The net leased properties that I come across – with long-term leases and credit tenants – will typically have either double net or triple net leases, so that’s what this article will focus on.

Ever hear the one about the emotional support peacock that wasn’t allowed on a plane? If it sounds like a setup to a bad joke, it’s actually a real story that made national news.

You’ve probably heard of emotional support animals (ESAs), but you might not know that they aren’t just dogs and cats. They can be ferrets, fish, pigs, peacocks — almost anything a qualifying owner wants.

So, what are they really? Who qualifies for one, and what are the owner’s rights? The answers to these questions are important. If the animal is why you turn away a rental applicant, you could be charged with housing discrimination. Here’s what landlords need to know about emotional support animals. 

By Paul Bergeron

After Moderna and Pfizer announced results from a large-scale clinical test showing as high as a 94% success rate for a COVID-19 vaccine, experts in the multifamily industry have begun to consider what property management will look like when the pandemic threat eventually subsides.

What’s clear is that the virtual leasing technology that was developed and implemented to help the apartment industry withstand 2020’s toughest challenges will continue to play a critical role as the country comes out on the other side — and new research supports this.

By Harold Greenberg, Esq.

Many years ago, a self-appointed group calling itself the Blue-Ribbon Committee on Slum Housing surfaced in the City of Los Angeles calling for major changes to the City’s rental housing inspection system. The City’s Building and Safety Department was to be replaced by Housing Department inspectors who would be more responsive to tenant activist concerns. Every apartment in the City of Los Angeles would be inspected, not just those where tenants had filed complaints about habitability violations. Radio, television, and newspaper articles exploded on the scene, triggered by Blue Ribbon claims that 107,900 rental units were rat-infested, and another 131,700 units had non-operating toilets. University of California at Los Angeles (UCLA) law students under the direction of tenant activist retired professor Gary Blasi used numbers from the 1995 joint U.S. Housing and Urban Development Department and U.S. Census Bureau “American Housing Study” to substantiate their claim that almost half the rental units in the City were uninhabitable.

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.