At Progressive Property Management, we believe it’s important to keep the owners and investors we work with up to date on the new laws and regulations that impact their investments. Today, we are speaking about a new local requirement; a tenant assistance policy. If you aren’t already familiar with this policy and what it requires, you’ll need to get up to speed quickly so that you understand how you’ll need to handle moving tenants out of your rental home.
At Progressive Property Management, we expertly manage properties in the city of Tustin and the surrounding areas. Landlords often ask us about security deposits, and there are a couple of best practices that we’d like to share with you.
The security deposit law in California has a lot of details that landlords and property owners need to follow. There are limits to the amount you can collect, and there are deep penalties if you violate the timeframe that’s in place for returning the security deposit. Before you withhold any money from that deposit, you need to conclusively determine whether your property has been damaged by the tenant or is simply experiencing normal wear and tear.
One of the biggest concerns that the owners we work with have is the threat of eviction. They worry about the time, the expense, and the potential for a messy battle with a tenant who isn’t paying the rent of following the lease terms. This is an understandable concern; you’re worried about the damage that could be done to your property and the money you could potentially lose.
At Progressive Property Management, we provide full-service management in Orange, California to landlords and investors with rental homes in the area.
Today, we are talking about a subject that is on the minds of every property owner in California. That subject is the upcoming renter’s state. We know you have questions and we know there will be some implications for your rental property, and we want to know that we’re happy to be a resource for you as new laws and regulations go into effect.
Priority Owner Program
We have some owners who need the current month’s rent to pay that month’s bills. We also have owners who don’t want to wait for the rent to become available to them. Even if the tenant pays on the first of the month, our owner may not be able to access these funds for a week or two. Let me explain. Let’s say the first of the month falls on a Friday and the tenant pays rent with a check.
- Friday the 1st: Banks require a five business day hold on this type of payment.
- Friday the 8th: The funds would be considered “good” on the 8th of the month (Friday).
- Monday the 11th: If it takes us another business day to process the payment, we would send out the rent proceeds.
- Thursday the 14th: The bank puts a two day hold on electronic funds transfer, so this owner would finally be able to have access to these funds.
Tenant Assistance as Tenant Retention
The Long Beach City Council recently directed city staff to craft an ordinance that would force owners of properties with 4 units or more, to pay 2 month’s rent to a tenant. The tenant is considered displaced through “no fault of their own” or if the landlord increases the rent 10% or more in any 12-month period. This ordinance is a way to implement “no fault eviction” without calling it that.
Under current law, an owner only needs to give a tenant a 60-day notice to vacate. And does not have to provide any cause or payment to the tenant to have it vacated. It’s the owner’s property, and they can do with it as they see fit. The tenant is entitled to their security deposit at move out (less any damage caused by the tenant) and that is it. With this ordinance, if the rent were $2,000 a month, the landlord would need to pay the tenant $4,000 as a relocation fee and return the security deposit.
To most of the pundits’ surprise, Donald Trump won the presidential election and at least some of the policies and promises of his campaign will come to fruition. More importantly for California, the democrats have won a super majority in both the Assembly and Senate (along with holding the Governorship) and can pass any tax or ballot proposition without a single republican vote. What does this election mean for real estate and property management?
Over 80 percent of the clients at Progressive Property Management came to us after managing on their own for a while. We call them SMIPOS – Self Managing Investment Property Owners.
You have a rental property and have decided it is time to sell. Whom do you call? If you have a trusted Realtor who is a local expert, that might be the right call.