webLOGfor.US

Being a landlord gives an initial aura of being different than other businesses.  I believe this is because your product is an intangible.  You’re not selling an item like a store.  You’re selling a service, but even that is different than most services.  It’s not like you are an electrician or plumber where you come in, perform a service and get paid.  As landlords the service we provide is a properly maintained housing unit. 

The service we provide forces us to have a different relationship with our customers than a plumber would have with their customers.  Our business relationship with our customers can last for multiple years.  We can see marriages happen, children being born, growing up, etc.  We have a view into intimate happenings.

On a personal note, I will say that I believe that if you are a good person, and treat people well, you will be treated well and have a good life.  You can call it living by the golden rule, karma, whatever you want.  My point is that it is how I live my life and it flows through to my business practices.

As a landlord, especially a new landlord, it can be hard to realize that there needs to be a line drawn between the tenant and you.  This is a business and it nes to be treated as such.  This isn’t charity, it isn’t a helping hand, it is a business.

When it comes to landlording it may seem that those two points conflict but I don’t believe so.  I give everyone a fair shake when i deal with them.  I don’t take advantage of anyone and I don’t expect to be taken advantage of.  If a tenant doesn’t pay me I see it as being taken advantage of.  I live up to my end of the deal by taking care of any issues that arise and providing good, sound housing.  They need to live up to their end by paying on time and taking care of the property.

What goes around comes around.

This article is a very good reason why you should not mix relationships.

Business is business.  Personal is personal.  Listen to the godfather on this one, “It’s nothing personal Sonny, it’s all business.”

Obviously this situation ended as poorly as it could have but there were so many chances taken here.  First, legally, if she was his tenant and he was giving her a rent reduction for a relationship I can smell harassment, prostitution, etc all over the place.  The landlord would have been in a pickle if she decided to take some type of legal action. 

Landlording is a business people.  We need to treat it as such.  Landlord, tenant and girlfriend/boyfriend should not be in the same sentence.

Woman held in stabbing death of boyfriend

Chicago police this morning were investigating a stabbing death on the Far Northwest Side that resulted from a dispute between a 54-year-old landlord and a tenant of his building who also was his girlfriend.

Officers were called to the apartment building in the 6400 block of West Touhy Avenue at about 12:30 a.m., police said.

Police arrived to find Fred Khoshaba, the owner of the building, dead on the floor of his girlfriend’s apartment there, bleeding from a stab wound to the neck. A 49-year-old woman was arrested and charges are pending, said Police Officer Laura Kubiak.

According to Kubiak, the woman pulled a knife during a possibly domestic-related argument in which she ordered her boyfriend to leave her residence. When he refused, a struggle ensued, with the victim reportedly grabbing the woman’s arms and shaking them, apparently causing the knife to plunge into Koshaba neck, according to Kubiak.
A cousin of the dead man said the woman called police and told them Khoshaba had stabbed himself in the neck as they argued.

"I will never believe that," Wissan Zala told WGN-TV Ch. 9. "He would never hurt himself."

Zala said his cousin had four children, was in the process of a divorce and was having financial problems due to the difficult real estate market.

     If you peruse the blog you know that from time to time I jump on to Yahoo! Answers to pass around some knowledge.  I’ll say that most of what gets posted there is a load of junk.  It’s a shame because for some people who don’t know how to use the Internet or search engines real well it is their only place online to find answers.

     I once got into a heated discussion with someone on the site who gave bad information.  This woman was touting herself as a real estate expert and was giving landlord/tenant advice in absolutes with no knowledge of the area of the questioner.  Personally I think everyone who gets into landlording or real estate investment learns early on that all real estate is locally driven.  This is true in prices and this is true in landlord/tenant law.  The only absolutes you can quote about landlord tenant law are federally mandated items such as the equal housing laws, lead paint disclosures, etc.  Items such as what rights a tenant has if the landlord goes into foreclosure are all locally driven at the state and municipal level.  You cannot speak in absolutes on this unless you know the location.

     OK, off my rant about the ignorant posting as experts.  There have been a lot of questions lately about what rights a tenant has when a landlord goes into foreclosure.  A lot of the questions have to do with can the tenant stop paying rent.  My general answer is that the tenant can do whatever they want.  It’s a free country.  What can they do legally is a whole different ball game.  In most jurisdictions the legal answer is that you must continue to pay rent.  You have a legal binding contract.  You never know what the outcome of a foreclosure filing is going to be.  There are three possible situations in this:

1. Property has a short sale completed.   
   • In this scenario a lack pf payment by the tenant could cause an eviction.  If the new owner is an investor they may not want a tenant who stops paying, for any reason.
2. Landlord makes arrangement with the bank to keep the property.     
   • Again, an eviction is likely here.  The landlord isn’t going to want you in the property when you stopped paying rent.
3. Bank takes the property back.     
   • Your lease used to be voided but the Protecting Tenants at Foreclosure Act of 2009 changed all that.  Some states have stricter laws than what the federally mandated minimums require.  There is a PDF at the end of this post listing each states laws.  If the state has stricter laws than the Protecting Tenants at Foreclosure Act of 2009 then they stay in effect.   

     One sure fire thing is that if a tenant does get an eviction on their record other landlords will treat then as a pariah.  No one will want to rent to them anymore.  Play it safe and know your rights. 

     I found a listing of tenant rights by state.  Check it out, it has a lot of good information on your rights if you are a tenant facing foreclosure.   Tenant Rights in Foreclosure

     I’ll be posting on the Protecting Tenants at Foreclosure Act of 2009 and my views on it shortly.

I read this article  in the Wall Street journal a couple days ago and it spurred me to a half post I have written that I have never finished.  I’ve had the inclination to post about why i feel that your home is not an investment for a long time.  I’ve procrastinated on it.  Who knows, I may still kick the dust off the half written article and post it at a later date.

I read the article then saw Shaun over at Shaun’s Real Estate Adventures  wrote about it.  I added my comment to it and am waiting for it to get moderated.  I am definitely in the minority in my thinking over there that you home is a bad investment.  Actually, I feel your home isn’t an investment at all.  Real Estate is a good investment.  Home, that’s where the heart it.  It has nothing to do with investments.  Anyway, the article quote is below.

There’s the usual talk about what the latest Case-Shiller house price data mean for the next short term move in the real estate market. Has housing bottomed? If not, has the rate of decline slowed? And when will we see an upturn?

Human nature likes the short term. Which is why so little attention is paid to something that is probably more important, if less urgent: What the latest data show about the long-term of the real estate market.

And it’s startling.

We have just been through the biggest boom in real estate in American history. The subsequent bust surely hasn’t finished.

Dropping home prices are only one of the factors that keep the annual returns on homes low.

Yet look at the numbers. Since 1987, when the Case-Shiller index of 10 major cities begins, it’s risen from an index value of 63 to 151. Annual return: Just 4.1% a year. During that period, according to the Bureau of Labor Statistics, consumer prices rose by 3% a year. Net result: Home prices produced a real return of just 1.15% a year over inflation over that time.

Critics may point out that the analysis is unfair — after all, it starts counting near the peak of the 1980s housing boom. Fair enough. Look at the performance since, say, early 1994, when home prices were near a historic trough. Surely someone who bought then has made a bundle.

Not necessarily. Since then the ten-city index has risen from a value of 76 to 151. Annual return: 4.7%. Inflation over that period: 2.5%. That’s still only a real return of 2.2% a year above inflation.

You can often do better on long-term inflation protected government bonds.

And real estate often costs 2% or more a year in property taxes, condo fees, maintenance, insurance and the like.

Conventional wisdom long held that home ownership was a route to wealth, and the imputed rent — in other words, the right to live in your home — was just part of the value you got from it. Under that widespread view, the recent housing bust was simply a temporary, though deep, pothole.

Yet for very many people, even over the past 15 or 20 years, the imputed rent may have been all, or nearly all, the real value they actually got from their home.

Yes, it’s only recent data. And it’s only ten cities. But there’s some reason to suspect these numbers may, if anything, flatter real estate performance. After all, it’s hard to look at the data and figure the bust is now over. And if they fall further, those long-term return figures will fall too.

Prices weren’t just down 19% over the past year. They fell 2% just between February and March. And it’s not the worst-hit markets that worry me the most — Phoenix is down 53% from its peak, Miami 47%. That smells of capitulation. It’s the other markets. New York and Boston are only down 20%. Denver’s only down 14%.

Overall the ten- and 20-city Case-Shiller indices are merely back to mid-2003 levels. After the biggest boom and bust on record, history suggests things don’t stop getting worse until they’ve gotten a lot worse than that.

Below you will see an interesting news article, along with a video about a tenant who died during his lease and the landlord’s response.

Fort Lauderdale Landlord Emulates Scrooge In Demanding Rent From Dead Man

Fort Lauderdale, FL (AHN) – Florida’s overbuilt and slow real estate market has left the state over loaded with a huge inventory of homes, condos and apartments that don’t sell or rent. That might explain why one South Florida landlord is seeking rent from a dead man, claiming that he is owed three months rent because the tenant failed to give 60 days notice before dropping dead of an unexpected heart attack.

Fort Lauderdale landlord Alan Statsky claims he is owed the money for the apartment at Sun Harbour Yearly Residences that Art Zissen left vacant after dying there of a heart attack on Sept. 22.

"Part of the contract says if you abandon your lease and you don’t pay on your lease that we have a right to collect your security deposit," property manager Alan Statsky was quoted as saying by Local 10 news.

But it’s not just the dead man’s security deposit. In a move that could have been a scene in novelist Charles Dickens’ "A Christmas Carol" by character Ebenezer Scrooge, Statsky wants rent for October, November and December for the vacant apartment too. And since Art Zissen is dead, Statsky sent his relatives a bill for three months of rent.

Although it’s up to a Broward County judge to interpret the lease in January, a lawyer says the lease died when Zissen did leaving Statsky without any contract to enforce.

"This landlord’s ability to collect rent came to an end when Mr. Zissen died," Russell White, an attorney for Zissen’s family, was quoted as saying by Local 10 news. He added, "That landlord, in my view, is trying to take advantage of the situation to extract money. It looks to me that it’s motivated on pure greed."

Zissen’s brother notified the apartment management company on Sept. 24 that his brother had died, then cleaned out the apartment and did a walk through with apartment managers on Oct. 5.

While I can understand the man’s estate being responsible for the remainder of the lease I would expect the death to remove the need for notice.  Is it really abandonment?  It seems like the bother was trying to do the right thing.  This just reminds me of something Bill Maher said when interviewing Elizabeth Warren.  They were discussing the recently passed Credit Card legislation and Bill said that it was needed because we just don’t treat each other very well.  This is another example of that.  I can see legislation being formed because one guy wants to rip off another one here.