From KTS Legal
1. Question: Are email communications between tenant and landlord admissible in court? Answer: Yes, emails can be admitted into evidence (if all rules of evidence are met), but email should not be used to serve notices (other than as specifically allowed by law). Email is not recognized as a valid form of service generally speaking. 2. Question: When a month-to-month resident decides to vacate without any notice, do the owners have the right to charge for thirty days after the move-out to comply with their month-to-month agreement? Answer: Yes, you can charge up to the time the premises are relet or thirty days from the date of their departure, whichever occurs first, so long as you make diligent attempts to relet the property. 3. Question: Our tenant gave a Thirty Day Notice of Termination, intending to move out on the 10th of next month. Since the rent was due on the first of the month, can we require the tenant to have given thirty days’ notice on the first of the month? Answer: Once you are on a month-to-month tenancy, either party can terminate it by serving a Thirty Day Notice at any time. They are, however, responsible for the rent up to the date the Thirty Day Notice expires, so they would owe pro rata rent for the following month. This would mean you could only accept 10 days of rent from next month. 4. Question: I had to go through an eviction to regain possession of one of my rentals. I also received a judgment for the rent, court costs and my attorneys’ fees. How can I collect on this judgment? Do I have to go back to court? Answer: The law provides for a variety of ways to collect the judgment. Recording an abstract of judgment, wage garnishments, bank levies, attachment of personal property and judgment debtor examinations are formal ways to collect monetary judgments. Receiving accurate information on the rental application allows optimal opportunity to collect. 5. Question: One of my tenants vacated the property and left his roommate behind. Both signed the rental agreement and now the tenant who vacated is demanding his share of the security deposit be returned to him. Is he right? What should I do? Answer: You are not required to return or account for the use of the security deposit until you regain possession of the property after all of the tenants have vacated. California requires the deposit be accounted for in writing and sent to the last known address of the tenants no later than 21 days following the return of possession unless the lease requires an earlier time frame. The tenant who vacated early should work out an arrangement with his former roommate. You are under no obligation to account for the deposit. 6. Question: A tenant has left a lot of personal property after vacating. How do I know the value of the items left behind? Answer: You can call a third-party appraiser. Alternatively, you can research what comparable items sell for in the community. Research the replacement value, not the cost of purchasing a new item. Remember if the total value is over $700, the property should be sold at auction. 7. Question: My company policy is to have the computer system print notices to pay rent or quit that just state who is to receive payment, but there is no blue ink signature. Does this make them invalid? Answer: California law requires that a person be named as agent for receiving payment in person on the notice, the address, telephone number, and hours/days of availability of this person be provided, but there is no requirement that this person sign the notice. However, it is a good idea that the notice be signed to give it the personal touch and show the tenant that the information has been reviewed and is accurate. 8. Question: I have a resident that has not been paying for their parking space. I sent them several notices and letters. Finally, I had the vehicle towed. I feel that I gave them ample warning. Should it have been handled differently? Answer: It would depend on what the lease stated and what their rights were. If it was made clear that the vehicle was no longer authorized to be on the property due to non-payment, you could utilize California Vehicle Code § 22658 which authorizes property owners and managers to remove unauthorized or abandoned vehicles from private property provided that specific conditions exist, and certain procedures are followed. 9. Question: Can we insist that a tenant produce insurance showing that an ESA animal is covered on their policy if the animal happens to bite? Can this be a requirement for pets and ESA animals? Answer: Generally, you can ask assistance animals to meet the same standards that you require for all animals on your properties, except you cannot require or demand they obtain insurance. If the animal’s behavior becomes problematic (e.g., biting), the owner may be held liable to cover repair and damage costs. You might seek an agreement for insurance or other mitigating assurances, but this should be done with the guidance of a fair housing attorney.
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This law limits the amount of a security deposit you can collect for residential property in the State of California.
1. Until July 1, 2024, the limit is two times the monthly rent (or, for furnished units, three times the rent). 2. After July 1, 2024, the limit is one month’s rent. 3. Exception: For landlords who own no more than two residential rental properties, that collectively include no more than four total units for rent, the limit is two times the monthly rent. This applies only if the landlord is a natural person or a limited liability company in which all members are natural persons. 4. Stradegy: Assuming you have multiple buildings, all containing 4 units or less, consider putting each building in a separate Limited Liability Company (LLC). In this way, you will still be able to collect a security deposit equal to 2 month's rent. Rental properties in affluent areas of Los Angeles can be cash flowing tremendously- so it's important to have property bookkeeping and tracking of expenses, and understand the tax advantages compared to other types of investments. One of the biggest benefits of owning rental property come tax time are the special opportunities to deduct expenses related to your rental property and rental income. When you rent a property to others as a landlord or real estate investor, you must report the collected rental income as taxable income. The following article provides tax tips from the IRS for landlords reporting rental income and list of acceptable tax deductions offered to rental property owners. WHAT IS CONSIDERED RENTAL INCOME? Rental income includes all amounts you receive as rent from residential occupancy of your properties. You must include all income collected as rent from all your properties. Advanced rent received during the year, even if it is meant to cover rent in a future year, must be reported on the current year’s return. For example, if you have a 12-month lease that began in June 2016, and your tenant paid you first and last month’s rent up front, you would report the rent for June 2016 (first month’s rent) and May 2017 (last month’s rent) as rental income earned in 2016. Security deposit funds are not included in your tax return when you first receive them from a renter. Only if you keep all or a portion of the security deposit funds during the year as part of the lease terms, you must include the amount of the deposit you kept in your reported income that year. Fees collected from a tenant for things like late rent payments, pet fees, parking spaces, or early lease cancellation fees must be included in your total rental income for that year. Services received, instead of money, as rent, must be included as the fair market value of the services in your rental income. For example, your tenant is a painter and offers to paint your rental property instead of paying rent for two months. If you accept the offer, include in your rental income the amount the tenant would have paid for two months worth of rent. RENTAL PROPERTY TAX DEDUCTIONS FOR LANDLORDS The following list of landlord deductions is provided by the IRS to help investors at tax time minimize their tax burden. As you begin a new year, or prepare your taxes from the preceding year, make sure to keep excellent records of the following tax deductions available to landlords come tax time. The only way to make sure you are maximizing your tax deductions is to maintain proper records of all your expenses.
Make sure to speak with your tax professional if you have any questions or concerns about the tax opportunities available to rental property owners. Based on Rentec Direct Blog post. The decision to sell or rent a home involves considering various factors, and both options have their own set of pros and cons. Here's an overview of the advantages and disadvantages of selling versus renting a home:
Selling Your Home: Pros:
Pros:
LANDLORD 1099 REQUIREMENTS Landlords are required to send out 1099s when paying out $600 or more to certain individuals and businesses. If you fail to meet the 1099 requirements you may face severe fines and penalties. This is one reason to hire a professional property manager who handles this for you! Landlords should require all non-employees such as contractors, businesses, vendors, professionals, etc to return to them a completed W9 to keep on file. You can find a current W9 form available here: IRS | About Form W-9, Request for Taxpayer Identification Number and Certification Landlords must meet the filing and mailing deadlines to avoid penalties. Deadlines change yearly but often are due to be filed by or before the end of January following the year payments were made. You do not need to file a specific 1099 if a) That business is a corporation, b) An LLC is taxed as a C or S corporation, or c) The total payment for the year is less than $600. If at any time you are uncertain about your obligations and requirements, seek out a tax professional for assistance. WHAT IS A 1099? Independent contractors, vendors, and some small businesses need to receive 1099s showing the income received for the services they offer so they can complete their personal and business tax returns. There are around 20 different types of 1099s but for landlords the ones you’ll need to use most often are: 1099 MISC form You’ll need to send a 1099-MISC to document attorney fees and rent (such as office or commercial space) paid in total of $600 or more in the year. There are specific boxes on the 1099 MISC form for the type of payment (for example box 1 is to document total rent paid). General 1099 Misc information can be found here: IRS | About Form 1099-MISC, Miscellaneous Income Specific information regarding attorney fees, rents, vendors, etc can be found here: IRS | Instructions for Forms 1099-MISC and 1099-NEC 1099 NEC form NEC stands for Non-Employee Compensation, which means you’ll be sending out a completed 1099-NEC form to persons or businesses that you paid at least $600 to in that year for services performed by non-employees such as vendors. More information can be found here: IRS | About Form 1099-NEC, Nonemployee Compensation WHO NEEDS TO RECEIVE A 1099First, understand what is meant by Payee on the 1099 form. As a landlord, the Payee is someone you’ve paid for services such as:
Did you know that some businesses are exempt from receiving 1099s based on their business status and other criteria? How do you know if a business, vendor, professional, or independent contractor is or isn’t exempt from receiving a 1099? Great question! The answer can be found by requesting each to provide you with a completed W9. WHAT IS A W9 The W9 fillable form is something they (the vendor, independent contractor, professional, etc) complete. It allows them to check a box to indicate if they are, or are not, exempt for receiving a 1099.
When you require W9s you can be confident you have accurate information, have something on file for audits, and streamline your 1099 process. HOW DO YOU FILL OUT A 1099 TAX FORMSpecifically, you can use any of the three links to the IRS above to find information on how to fill out a 1099 tax form. But what gets tricky, as my relative found out, is the stand-alone 1099 form software needed to complete the forms — find out too late that the software isn’t intuitive and unfortunately non-refundable once opened. If you find yourself in that situation, the best piece of advice is to have the IRS links above open, have those W9s handy, and a list of the people you’ve paid at least $600 to for that year (and the total amount paid to each). Then, go slowly and confirm those details. Not only can those stand-alone 1099 software products be complicated, they can also be very expensive when you add up the cost of the specialized forms, envelopes, and the software itself. Because of the complexity, some choose to hire an accountant or bookkeeper to process your 1099s but again, that can become very costly. But as I shared with my relative, there is good news! There is a simpler way to meet your 1099 requirements as a landlord. Whether you rent out rooms in your home, have one or a few rental properties, or a large portfolio, you can take advantage of the 1099 integration within most landlord software programs. A good landlord software not only has very inexpensive integrated 1099 form services (mailing, IRS electronic submissions, 1099 State filing, etc) but you’ll also have records handy for your other tax needs such as rental income received, Schedule E expense list, depreciation reports, etc. Not only that, many programs allow you to provide an accountant or bookkeeper access to those reports or you can create and email them directly from the software to your tax preparer. Even if you do your own tax preparation, having those reports handy will make that process much smoother — not to mention, you’ll have tenant screening, leasing, and communication tools at your fingertips to simplify tenant turnover. It’s not too late to invest in landlord software to help you for this upcoming tax season and for the many to come. Information based on Rentec Direct Blog ABOUT THE AUTHOR Heather Peake Heather, a writer in the rental and property management industry, applied her skills as an onsite property manager and landlord for many years before lending her talents to Rentec Direct. She now focuses on sharing her research and insider insights with landlords and property managers in the trenches. To learn more about Heather and find valuable tips visit www.rentecdirect.com Renting out a single-family home in an affluent neighborhood such as Brentwood, Santa Monica, Westwood, Malibu, Beverly Hills, Pacific Palisades, and by the beach, comes with both advantages and specific considerations due to the upscale nature of the area. Here are some essential steps and considerations for renting out a property in an affluent neighborhood:
Legal Alert from KTS Law
Under SB 329 and SB 222, all landlords in California will be required to accept Section 8 and VASH vouchers and other forms of rental assistance and to consider them as part of an applicant’s income. Both will go into effect on January 1, 2020. SB 329redefines source of income as “lawful, verifiable income paid directly to a tenant or to a representative of a tenant, or paid to a housing owner or landlord on behalf of a tenant, including federal, state or local public assistance, and federal, state, or local housing subsidies, including, but not limited to, federal housing assistance vouchers issues under Section 8 of the United States Housing Act of 1937.” SB 222 adds to the definition of source of income HUD Veterans Affairs Supportive Housing (VASH) vouchers and clarifies that a landlord is not considered a representative of a tenant unless the source of income is a VASH voucher. SB 222 also adds military and veteran status as new protected classes under the FEHA. Many local jurisdictions, such as Alameda, Berkeley, Corte Madera, East Palo Alto, Fremont, Foster City, Hayward, Los Angeles (City and unincorporated areas), Marin County (unincorporated areas), Santa Clara County (unincorporated areas), City of San Diego, City of San Francisco, City of San Jose, Santa Monica, and Woodland have existing ordinances that include Section 8 and other rental assistance in their definition of source of income. The passage of SB 329 and SB 222 means that California residential landlords throughout the state will no longer be able to say they don’t participate in the Section 8, VASH or other rental assistance programs. It is anticipated that tenant’s rights groups will be conducting testing to see whether landlords are aware of and are complying with the law. Although the changes do not go into effect until January 1, 2020, landlords who don’t currently participate in rental assistance programs are advised to respond to inquiries about whether they accept Section 8, VASH or other rental assistance that although they do not currently participate, they will be participating effective January 1, 2020. The FEHA states that it is unlawful to make, print or publish or cause to made, printed or published, any notice, statement or advertisement with respect to the sale or rental of a housing accommodation that indicates any preference, limitation, or discrimination based on any enumerated protected class, including source of income. Accordingly, it is important that all advertising (including ads posted on third party websites such as Craigslist) be revised to remove any references such as “No Section 8” or “We do not participate in Section 8” before January 1, 2020. The FEHA retains language that in instances where there is a government subsidy, it is unlawful to use a financial or income standard in assessing eligibility for the rental housing is that is not based on the portion of the rent to be paid by the tenant. The net effect of this language, when combined with then new definitions of source of income, is that the voucher amount must be considered as part of the tenant’s income and any income standard applied by the landlord must be based on the portion of the rent which would be paid by the tenant, rather than the total contract rent. Nothing in either SB 329 or SB 222 prevents a landlord from requiring a tenant with a Section 8 or VASH voucher or other rental assistance to meet the landlord’s other criteria, such as credit and rental history. Landlords with questions about the Section 8 program should contact the local Housing Authority in the area where their property is located. From https://www.kts-law.com/section-8-and-source-of-income-protections-sb-329-and-sb-222/ This article is for general information purposes only. Our courtesy notifications are not meant to be exhaustive and do not take the place of legislative services or membership in trade associations. Laws may have changed since this article was published. In California, the laws regarding the requirement for on-site property managers can vary based on the number of units in a building or property. Generally, for buildings with 16 or more residential units, having an on-site manager is often mandatory by law.
California's Department of Real Estate (DRE) mandates certain regulations and standards for property management, particularly for larger residential complexes. These regulations often include the requirement for an on-site manager to be present during specific hours and perform various duties related to tenant management, maintenance, leasing, and ensuring compliance with state and local laws. While it's true that property managers in California might commonly specialize in managing larger properties, such as apartment complexes or multifamily residences, it doesn't necessarily mean that property managers exclusively focus on these types of properties. Many property management companies or individual property managers handle a variety of property types, including single-family homes, condominiums, townhouses, and smaller residential units. However, the specialization and focus of property managers can vary based on their expertise, resources, and business models. Managing single-family homes might be less common for larger property management firms that primarily concentrate on multifamily complexes due to differences in scale and operational requirements. Property owners of single-family homes in California in affluent areas such as Brentwood, Santa Monica, West Los Angeles, Pacific Palisades, Malibu, Marina del Rey, Venice, Westwood, and Sherman Oaks might opt to work with smaller, boutique property management companies or individual property managers who specifically cater to individual residential properties. These managers often provide more personalized services and may have expertise in handling the unique needs of single-family rentals, including maintenance, tenant placement, and compliance with landlord-tenant laws applicable to single-family residences. While it might be less common to find property managers exclusively dedicated to single-family homes, there are certainly property management professionals in California who can effectively manage and oversee these types of residential properties, ensuring compliance with relevant regulations and providing quality services to property owners. Legal Alert from KTS Law
On June 29, 2023, the California State Legislature filed SB 564 with the Secretary of State, which increases statutorily determined fees for serving, executing, and processing certain court documents by Sheriffs’ and Marshals’ offices. California law requires the Legislature to provide for an elected county Sheriff, provide for the duties of the Sheriff, and prescribe fees for serving, executing, and processing required court notices, writs, orders, and other services provided by Sheriffs and Marshals. Sheriffs’ offices are required to serve civil process, including summons, warrants, evictions, wage garnishments, small claims documents, levies on property, writs, and other court orders. As part of this process, they are permitted to collect statutorily set fees to cover the cost of providing these services. The passage of SB 564 has increased those fees for services provided by Sheriffs and Marshals, which is the first fee increase since 2015. Each fee increase is specified in the below chart. Due to these increases in the hard costs of your cases, you will see that the fees advanced and charged to your cases will be increased on your billing statements. These new increased fees will be effective and assessed beginning January 1, 2024. In support of the passage of SB 564, the Legislature has noted that the overall cost of business has, along with the cost of living and inflation, skyrocketed in recent months. The Sheriffs’ and Marshals’ offices have stated that they have had a steady increase in personnel and resource costs since 2014 (when the last fee increase was approved), creating revenue deficits within their civil units. They state that this has compounded the need to increase the fees for the services they provide. Additionally, the bill’s proponents argued that recently enacted legislation, namely AB 2791 (Bloom), Chapter 417, Statutes 2022, which requires officers to accept electronic submission of requests for service of process beginning in 2024, will further increase their costs of business. SB 564 increases the statutorily capped fees Sheriffs’ and Marshals’ Offices can collect to fulfill their legal process services, due to inflation and the increase of costs to provide these services. This bill retains the existing fee waiver process to ensure low-income individuals are not disproportionately impacted by the fee increase. The full text of SB 564 can be viewed here. From KTS This article is for general information purposes only. Our courtesy notifications are not meant to be exhaustive and do not take the place of legislative services or membership in trade associations. Laws may have changed since this article was published. You have a beautiful house in Santa Monica, you're moving, not ready to sell, and it would be great if you could find a wonderful person to rent it... but you're afraid of a nightmare renter, damaging the property, squatting and refusing to pay while you cover all the expenses... You need the best leasing agent and property manager in Santa Monica to help you mitigate the risks! Renting out your home in Santa Monica, like in any city, comes with various considerations and legal responsibilities for property owners. Santa Monica has specific laws and regulations that landlords must adhere to when renting out their property. Here are some key caveats and considerations:
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