By Becky Bower

From new laws that will affect California’s tenant background check to Seattle, Washington’s “first come, first served” renter law, 2017 has brought an onslaught of new rental housing legislation. Here are some passed and pending bills you should look out for this year.

NATIONWIDE LEGISLATION

PENDING: HUD’s Smoke-Free Public Housing (view rule)

The department of Housing and Urban Development (HUD) has proposed a rule that requires each public housing authority (PHA) to implement a smoke-free policy. This smoke-free policy applies to all public housing living units, indoor common areas, PHA administrative buildings, and in outdoor areas extending up to 25 feet from both the public housing and office buildings. This rule is currently up for comment until January 19th, 2017. Once this rule is published with the Federal Register and the effective date is established, all PHAs must implement the smoke-free policy within 18 months.

The National Consumer Assistance Plan (read our full article)

Announced in September of 2016, the three major credit bureaus will be enacting the National Consumer Assistance Plan to new and existing public record data on July 1, 2017. Experian® anticipates that the new standards will likely affect about 96% of civil judgement data, making getting a tenant screening service that includes eviction data even more imperative.

CALIFORNIA

Landlord/Tenant Unlawful Detainer Proceedings (AB 2819)

There will be no public access to unlawful detainer (eviction) records, unless the plaintiff/landlord prevails within 60 days of filing. The previous law had the defendant/tenant required to prevail within 60 days to bar public access. This goes into effect, January 1, 2017.

Pesticide Application in Common Interest Developments (AB 2362)

Homeowner associations in common interest developments must now provide tenants advance written notice when over-the-counter pesticides are applied to separate interest dwellings or common areas. Notice must be provided at least 48 hours before application, however, if the pests pose a high and immediate threat, notification can be posted one hour before pesticides are applied.

Landlord/Tenant Bedbugs Disclosure (AB 551)

This amendment requires landlords to give information about bed bugs (as specified) to new tenants starting July 1, 2017 and for existing tenants starting January 1, 2018. Notice must also be given to tenants of units inspected by a pest control operator and provide the findings within 2 business days. This bill also prohibits landlords from showing, renting, or leasing a vacancy that the landlord knows has a bed bug infestation. By law, tenants must cooperate with bed bug inspections, permitting entry into the unit by the pest control operator.

Landlord/Tenant Commercial Leasing Disclosure (AB 2093)

Requires property owner(s) or lessor to state on every lease form on or after January 1, 2017 whether or not the premises have been inspected by a Certified Access Specialist (CASp). The landlord must provide tenants with a current disability access inspection certificate or report, or a copy of the CASp inspection report if the report indicates that they meet applicable disability standards. If the property does not have a disability access inspection certificate, then the lease form or rental agreement must state that, on the request of the tenant, a CASp inspection may be performed (as specified). Landlords are responsible for making repairs or modifications to correct violations of construction-related accessibility standards.

Amendments on Accessory (Second) Dwellings (AB 2299 and SB 1069)

Effective as of January 1, 2017, these two bills revise the zoning restrictions on second dwellings, allowing the creation of 2nd units in single-family and multifamily residential zones (with specified provisions regarding where the 2nd unit may be located, standards, etc.).  In addition to changing the term from “second unit” to “accessory dwelling units”, AB 2299, in particular, revises parking requirements for accessory dwellings. The previous law requires second units to not exceed one parking space per unit or bedroom, with additional authorization for more than one parking space. The amendment removes the need for additional authorization for accessory dwelling parking.

Junior Accessory Dwellings (AB 2406)

Local governments can now establish laws for the creation of junior accessory dwellings in single-family residential zones. Local governments are prohibited from requiring additional parking as a condition of granting a permit.

Removes Certain Disclosures for Transfer of Residential Property (AB 73)

This bill revises the requirements of certain disclosures that are to be made when transferring residential property. Now, the property owner, their agent, or the agent of the transferee of the property are no longer required to disclose the occurrence or manner of death of an occupant (as specified). The bill also no longer requires the disclosure that an occupant of the property was living with human immunodeficiency virus (HIV) or died from AIDS related complications.

Landscape Irrigation Equipment (AB 1928)

This bill requires new performance standards and labeling requirements for landscape irrigation equipment and would postpone the date by which the commission is to adopt the performance standards and labeling requirements to January 1, 2019, and would prohibit the sale or the offer for sale of that equipment manufactured on or after the effective date.

Water Conservation in Landscaping Act (AB 2515)

On or before January 1, 2020, and every 3 years thereafter, the Department of Water Resources are required to update the model water-efficient landscaping ordinance or find another means to improve water efficiency. This means landscaping requirements might change in the future, and continue to change every 3 years.

Becky Bower is a writer for the ApplyConnect® Blog and the communications executive at ApplyConnect®, a consumer initiated tenant screening company.  She has also spent several years in compliance and auditing.  Becky holds a degree in English with a focus in creative writing from CSU Channel Islands and is a published writer.

By Dwight Kay | www.kpi1031.com

Dwight Kay

CEO and Founder

Dwight Kay is the Founder and CEO of Kay Properties and Investments, LLC (Kay Properties). Kay Properties is a provider of DST brokerage and advisory services headquartered in Los Angeles, CA with an office in New York, NY. Registered Representatives at Kay Properties and Investments specialize in helping 1031 exchange clients throughout the country purchase DST properties and are securities licensed in all 50 states, Washington D.C. and the U.S. Virgin Islands. Mr. Kay has personally been involved in over $200,000,000 of client purchases of DST properties and other securitized real estate products.

Dwight is a published author with multiple published white papers and articles on 1031 exchanges, Delaware Statutory Trust (DST) properties and real estate securities. He has been interviewed on local and nationally syndicated radio stations on the matters of 1031 exchanges and replacement properties. He also is the author of the published book “Delaware Statutory Trust (DST) Properties: An Introduction to DST Properties for 1031 Exchange Investors.”

Dwight began his career in commercial real estate working for a national commercial real estate brokerage firm focusing on multifamily and commercial real estate. Mr. Kay received his Bachelors in Business Administration from Point Loma Nazarene University in San Diego, California, and successfully obtained his Series 7, 22, and 63 securities licenses as well as a real estate broker’s license.

Risks & Disclosures

By Becky Bower | ApplyConnect.com

As the year comes to a close, take the time to prepare for tax season early. With just a little extra prep work, you’ll avoid a huge headache next year. Here are 4 tax resources to get you started on organizing your office, getting all the deductibles you can get, and achieving a stress free tax season.

1. Organize Your Home Office in 4 Easy Steps

When it comes to taxes, before you can do anything, you need to be organized. In this article, we break down the organizational process into 4 easy steps. Your office never looked so clean. Read More!

2. Use Apps to Deduct from 2016’s Business Tax Return

You want to get as many deductibles as you can get, but compiling the mileage, paperwork, and receipts behind those hefty tax deductibles can be stressful. By utilizing apps, you can cut down on the physical paperwork and access everything from your phone or laptop. Easy. Read More!

3. Cash in on Tax Deductions for Your Rental Properties

When you have a rental property, utilizing every tax deduction you can is very important. Take advantage of our common deductible checklist and organizational list now. This can help you make sure no stone goes unturned. Read More!

4. Tips to Having a Stress Free Tax-Season

There’s no denying that tax season can be pretty stressful. While utilizing handy apps and utilizing deductibles are certainly important, it’s also important to maintain good communication with your tenants during this time, and setting goals for 2017. Read More!

While tax season might be far from your mind as Thanksgiving comes close, by taking some time to start going through your documents and receipts, and utilizing our tax resources above, your workload next year won’t be as hefty. Once it’s all said and done, and you have that big tax refund check in hand, you’ll be happy you started your taxes early.

Shared post by: Julie Littman, Bay Area, Bisnow

Property owners could soon be flushing money down the toilet if they don’t comply with San Francisco’s 2009 conservation ordinance requiring water-efficient fixtures. Violations could mean a fine of $48/month, reports the San Francisco Chronicle. Owners will also be on the hook for hearing costs to resolve the matter. To show compliance, owners must submit an affidavit to the city.

Effective Jan. 1, commercial toilets must have a maximum of 1.6 gallons of water per flush. Almost 30% of the 160,000 commercial toilets in San Francisco are not in compliance with a city law requiring water-efficient toilets and faucets by year’s end.

Urinals can use no more than one gallon of water per flush while showerheads can’t use more than 2.5 gallons per minute. Faucets must also use no more than 2.2 gallons per minute. About 86% of urinals and 20% of showerheads don’t meet this requirement.

To help property owners, the Public Utilities Commission has been handing out rebates of up to $125 for a tank toilet, up to $500 for a high-pressure commercial flushometer toilet, and up to $500 per urinal. The PUC is also giving out water-efficient showerheads and offers free installation at commercial properties for a 1.2-gallon basic toilet.

The San Francisco Public Utilities Commission’s Julie Ortiz told the Chronicle upgraded fixtures can use up to 50% less water and are one of the biggest ways for the city to lower its water usage. [SFC]

Shared Post by: CATI O’KEEFE | Code Watcher

A documentary segment on the Earthquake Retrofit Ordinance of the City of Los Angeles from Dilip Khatri of Khatri International

Shared Post from Multifamily Executive | By Kayla Devon

California once again dominates the list of rent-growth leaders for the coming year, with more than half of the top markets, but it may come as a slight surprise to some.

Oakland tops the list, with San Francisco and San Jose still in the top 10. Oakland’s rent-growth pace has slowed significantly recently, and San Francisco and San Jose are both experiencing rent cuts. There’s been a lot of fear about oversupply in these markets, which could be contributing to the current situation. The Bay Area economy has experienced a notable decline recently, but its job-addition volumes are substantial.

“[Apartment operators] will pretty quickly realize that the [Bay Area] market hasn’t gone off the edge of the cliff, regaining some confidence on pricing power,” says Greg Willett of MPF Research.

The continued above-average growth in these California markets is good news for business, but it’s squeezing renters more than ever. A one-bedroom unit in San Francisco in October rented for $3,373, on average, which is slightly more than half the area median income monthly paycheck after taxes, according to real estate listing site Rent Jungle.

Las Vegas is the second rent-growth leader for next year, at 6.1%, just behind Oakland. The metro was hit hard by the recession but has experienced improved growth in the past 18 months that makes it a great market going forward. Seattle; Dallas; Nashville, Tenn.; and West Palm Beach, Fla., are the other markets defined as rent-growth leaders for the coming year.

Absent from 2016 are Portland, Ore.; Fort Worth, Texas; Atlanta; and Phoenix, which all are expected to come in just under the cutoff of 4%.

Forecast Rent Growth Leaders in 2017

Rank (MetroForecast Rent Growth)

Oakland                                                     1 (6.5%)

Las Vegas                                                  2 (6.1%)

San Francisco                                           3 (5.7%)

Sacramento                                               4 (5.6%)

Seattle                                                         5 (5.4%)

San Jose                                                     6 (4.9%)

Riverside – San Bernardino                      7 (4.5%)

Dallas                                                          8 (4.4%)

Nashville                                                    8 (4.4%)

West Palm Beach                                       8 (4.4%)

Los Angeles                                              11 (4.3%)

San Diego                                                  11 (4.3%)

Fort Lauderdale                                       13 (4.2%)

Kayla Devon is an associate editor for Hanley Wood’s residential construction group. She covers business, products, and technology for both Builder and Multifamily Executive magazines. Find her on Twitter: @KaylaDevon_HW

Shared post from IREM | Saraf Ahmed, Bisnow

As 2016 rapidly comes to a close, Bisnow takes a look at the concerns and priorities for real estate firms in the year ahead. Bisnow sought out IREM president Michael T. Lanning, whose background includes SVP and market leader at Cushman & Wakefield in Kansas City, MO. The following are his four biggest challenges for the industry to tackle in 2017.

Talent Growth

To keep up the momentum, management teams must focus on hiring and securing new young talent to the field—particularly with those seeking to establish their careers in the real estate industry over the long term. Brokerages and real estate businesses can do their part by supporting young professionals and mentoring them through internships and in the early stages of their careers. One surefire way to ensure the nurturing of young talent is to reach out to students who may not have considered real estate as a possible career path; IREM’s university outreach program, for instance, seeks out students before they graduate college. Planting the seed early is key; real estate is a tough industry, and those hoping to enter it must come prepared.

Sustainability

As we slowly begin preparing for the challenges and rewards of 2017, more scrutiny is being placed on the reporting and results stemming from each real estate project. Helping project owners and developers outline and reach their sustainability goals may play an important role for a multitude of real estate firms, but should begin to take precedence.

Keeping Up With Tech Advancements

Most people rely on some form of smart tool as their primary form of communication, whether that’s a smartphone, tablet or laptop. Email, instant messaging, video conferencing and social media are now the primary avenues of immediate contact, and real estate firms need to recognize that—and readily adapt to it. “Real estate managers today have to be adaptable to changes in the workplace and in the properties they manage,” Michael says. “And that includes adopting new technologies, software and apps.” Whether it’s lease renewals, remote meeting capabilities, virtual building tours or online banking, real estate managers need to pay attention and adapt as more professionals begin incorporating these tools into their careers.

Economic Uncertainty

Although real estate is cyclical, every player in the industry from the small-town broker to the CEO of Cushman & Wakefield must be prepared to weather every storm. While it is impossible to predict and micromanage every aspect of the market and its effect on one’s business, it is essential to develop evolving tactics and strategies to protect it. This necessitates a wide range of skills, particularly in effectively managing. The only thing real estate brokers and managers can be inflexible on is flexibility, and they should expect to adjust their management focus on a yearly, monthly and even daily basis to satisfy clients, developers and owners.

Read more at: https://www.bisnow.com

Shared post by Appfolio

What property manager doesn’t prefer to rent to tenants with excellent credit scores? These types of people have already demonstrated that they pay their bills on time, reducing the risk of future headaches when rent comes due. But the reality is that not all renters have near-perfect credit; according to recent reports, the average credit score in the U.S. falls in the 675-699 range and the fact that this is an average means that many Americans have credit scores below this number. Some property managers can’t afford to only accept applicants with fantastic credit if they want to keep their properties full, but there are things you can do to reduce the risk associated with renting to people with less than ideal credit scores.

Tips to Minimize Risk when Renting to Tenants with Low Credit

There are some ways to protect your business and still approve renters who may not have great credit scores or even any credit history at all.

Require a guarantor or cosigner: A cosigner is a third party who will agree to pay the rent if the tenant doesn’t. Very often, rental properties that house a lot of young people, especially students, ask for a cosigner. Young adults may be fine tenants, but they haven’t had a chance to establish their own credit history yet. A parent or other family member may be happy to guarantee that the rent will get paid on time. This helps transfer the risk to a third party and allows people who have not established credit yet to get a good start.

Ask for a larger deposit: State laws may limit the amount of deposit that landlords can require, but there is usually some flexibility. If a tenant has good credit, a property manager may only ask for a one-month deposit, but if possible, it might be fair to ask for a larger deposit from a tenant who has poor credit. This extra deposit helps cover the risk that the tenant won’t make timely payments or even be able to pay at all.

Ask for rent in advance: Some people with poor credit may have access to funds to pay their rent. If it’s legal and possible, the property manager may ask poor-credit applicants if they can pay their rent a few months in advance. For example, instead of just requiring a deposit and the first month’s rent, the property manager might ask for the deposit and two month’s rent. In this case, the applicant would actually be paying ahead one month on each due date.

Require automatic payments: Rental managers might give tenants different options to pay their rent. But requiring automatic, online payments from tenants can help ensure timely payments.

Communicate early and often: It makes sense to have renters make online payments. It might also help to send online text or email messages to remind renters to pay the rent before rent day. It’s also sensible to follow up quickly if a rent due date has been missed because younger renters without established credit may require a bit more guidance.

These compromises may make it possible to approve more rental applications, but always remember to stay within the law and follow fair housing guidelines.  In order to offer a bit more flexibility, it’s important to come up with ways to transfer the risk and in some cases, provide a bit of guidance as the renter pool gets younger. Property managers are human too; some may be motivated to give certain applicants a second chance to rent a home and improve their credit.