A CAA-supported program to help address substandard housing issues in Fresno is up and running with an online rental registry.
Beginning next week, the city of Fresno will mail letters to all rental properties within the city limits asking that they register their properties within 30 days. This can be done online at fresno.gov/rentalhousing or via a form included with the letter.
The registry is part of the Rental Housing Improvement Act, or RHIA. Mayor Lee Brand wrote the ordinance, taking into account the concerns of the California Apartment Association.
FRESNO MAYOR LEE BRAND
“I made a promise to the people of Fresno to dramatically improve our housing stock and substantially reduce substandard housing,” Brand said in this Fresno Bee article about the program launch. “I’m especially proud of the finished product because it’s one of the most ambitious things the city has ever done.”
In addition to a free rental registry, the ordinance includes a percentage-based sample interior inspection program to ensure compliance with state housing law. Properties that pass inspection would then be allowed to self-certify.
The city has a dedicated help line for any questions: (559) 621-RENT. (7368). Rental owners are urged to take a moment to register their property or properties; the process is free and user-friendly.
The city will also be holding a workshop on the RHIA from 10 a.m. to noon on Tuesday, Jan. 23, at City Hall, 2600 Fresno St. The workshop will be held in council chambers and include a discussion and question-and-answer session.

Please contact Franklin Spees with Neighborhood Property Management for additional information or questions.

As we are quickly approaching the close of 2017 here is a good glimpse of some new laws (some effective immediately and others in 2017) that impact property owners and real estate professionals in a variety of ways. This list was compiled by the California Association of Realtors. Please let me know if you have any questions or if I can assist in any way.
​​
2017 CALIFORNIA NEW LAWS AFFECTING REALTORS®

Laws Effective Immediately
Team Name Advertising,  Broker’s License Number is Optional: As of August 30, 2016, on team name and agent-owned DBA advertising, only the responsible broker’s name must be displayed alongside the team name or agent-owned DBA. Under this new law the display of the responsible broker’s license number is optional. (SB 710, B&P Code §10159.7.)
Commercial Leasing Disclosure re CASp may be Required: Beginning September 17, 2016, if a commercial property has been issued an inspection report by a Certified Access Specialist (CASp), indicating that it meets applicable construction-related accessibility standards, the commercial property owner or lessor shall provide a copywithin seven days of execution of the lease. If no such report has been issued, then a specific disclosure statement on the lease form would be required. Prior to signing the lease, the prospective lessee has the right to review an inspection report issued by a CASp, if one exists, and may cancel the lease within 72 hours after signing based on the report. (AB 2093, Civil Code §1938.)
Death of Occupant Law Clarified: Effective September 25, 2016, the existing law concerning disclosure of the death of an occupant on the property is clarified to provide that the death of an occupant, or the manner of death, occuring more than three years prior to an offer to purchase or rent is not a material fact which requires disclosure. Previously, the law only stated that no cause of action could arise for failing to disclose such deaths. (AB 73, Civil Code § 1710.2.)
Laws Pertaining to Licensees
Advertising Uniform Standards Effective 2018: This law reduces the complexity of the current system by implementing a relatively simple set of rules as to what information must be placed on an advertisement. Beginning 2018, a sales-agent or broker-associate will be required to include three items in their solicitation materials: name, license number, and their responsible broker’s name (the broker’s license number is optional).
This law applies to any solicitation materials intended to be the first point of contact with a consumer and includes business cards; stationery; advertising flyers; advertisements on television, in print or electronic media; and “for sale,” “open house,” rent, lease and directional signs when any sales agent or broker-associate identifying information is included.
There are exceptions for “for sale,” “open house,” rent, lease and directional signs when 1) no sales agent or broker-associate identifying information is included, or when 2) only the broker’s name is included. For example, under this exception you could have a completely generic directional sign or even one that includes only the broker’s name.
In an effort to provide some lead time to allow agents to adjust their advertisements to this C.A.R. sponsored law, it does not go into effect until January 1, 2018. (AB 1650, B&P Code § 10140.6.)
Broker Associates Searchable Information Effective 2018: Right now, the public can, on CalBRE’s website, determine who the responsible broker is for any particular salesperson. However, there is no way for the public to search for and view similar information pertaining to broker-associates. Beginning January 1, 2018, the public licensee information on CalBRE’s website will indicate whether a licensee is an “associate licensee” and, if the associate licensee is a broker, will identify each responsible broker with whom the licensee is contractually associated. Additionally, this law requires the responsible broker to immediately notify CalBRE in writing whenever a broker-associate is hired or terminated. (AB 2330, B&P Code §§ 10083.2 and 10161.8.)
Petition Process to Remove Disciplinary Action Record from Public Profile after 10 Years Effective 2018: Beginning January 1, 2018, this C.A.R. sponsored legislation creates a process by which a licensee may petition CalBRE for removal of a disciplinary action from his or her online profile. After the passage of at least 10 years of the posting of the violation, and upon evidence of rehabilitation, CalBRE can consider and grant on a case-by-case basis the removal of the violation from their online database. All violations would continue to be maintained offline on the licensee’s permanent record. (AB 1807, B&P Code §10083.2.)
Licensing -- Eliminates References to “Salesmen”; Restriction on Issuance of License for Person Previously Cited: The Real Estate Law includes outdated terminology that does not reflect both genders. Effective January 1, 2017, this C.A.R. sponsored law makes some necessary technical corrections, which include eliminating references to “salesman” and “salesmen” and instead replacing those with “salesperson” and “salespersons,” respectively.
This law also prohibits issuance of a real estate license to a person who was cited for the illegal practice of real estate and either the terms of the citation have not been complied with or an unpaid fine remains outstanding. (AB 685.)
Licensing - Retired Status: Beginning January 1, 2017, this law authorizes any of the boards within the Department of Consumer Affairs, including CalBRE, to establish by regulation a system for a retired category of license for persons who are not actively engaged in the practice of their profession or vocation. This law does not require boards to offer a retired license. (AB 2859, B&P Code § 464.)
Laws Affecting Property Managers
Unlawful Detainer Masking Law: Under this law there is generally no public access to unlawful detainer records permitted unless the plaintiff/landlord prevails within 60 days of filing. This reverses the previous rule where it was the defendant/tenant who had to prevail within 60 days of filing to bar such access. Landlord/Tenant attorneys believe that the practical effect of this law will be to compromise the ability of property managers to know which prospective tenants have been sued for unlawful detainer. (AB 2819, Code of Civil Procedure §§ 1161.2 and 1167.1. Effective January 1, 2017.)
Bed Bugs New Disclosure Requirement Beginning July 1, 2017 for New Tenants and 2018 for Existing Tenants: This law creates a disclosure requirement regarding bed bugs beginning July 1, 2017 for new tenants, and beginning 2018 for existing tenants. Additionally, this law requires Landlords to provide copies of pest control reports to tenants whose units have been inspected and other tenants if infestation in a common area is confirmed. A landlord is prohibited from showing or renting vacant units if the landlord “knows” it has a current bed bug infestation. However, there is no duty on a landlord to inspect a dwelling unit or the common areas of the premises for bed bugs if the landlord has no notice of a suspected or actual bed bug infestation. (AB 551, Civil Code §§ 1942.5, 1954.1 and 1954.600 et seq.)
Water Submetering Effective 2018: This law requires any new construction multi-unit property built after January 1, 2018 to have submeters. For such properties, the landlord is required to bill incrementally for water usage with a fairly detailed set of rules governing how a landlord goes about that.
This law also impacts multi-unit residential properties built prior to January 1, 2018 where the property has a submeter, and the landlord bills separately for water using the submeter. If so, then the landlord will be required to follow that same detailed set of rules, commencing 2018. (SB 7, Civil Code §§ 1954.201 et seq., Health and Safety §17922.14, and Water Code §§ 517 and 537 et seq.)
Disclosures Liability Protections of the Environmental Hazards Booklet Extended to Landlords: BeginningJanuary 1, 2017, this C.A.R. sponsored bill extends liability protections for delivery of the Residential Environmental Hazards booklet to include leases of more than one year. The delivery of this booklet is deemed legally adequate to inform the lessee regarding common environmental hazards such as asbestos, formaldehyde, hazardous waste, household hazardous waste, lead, mold and radon, and additional general information on these issues is not required (unless the broker or landlord has actual knowledge). The delivery of this booklet remains optional. (AB 1750, Civil Code § 2079.13.)
Other New California Laws Affecting Real Property - Effective January 1, 2017
PACE Liens Detailed Financial Disclosure and 3-Day Rescission Right: This consumer protection law requires delivery of a detailed financial disclosure document to a property owner participating in a Property Assessed Clean Energy (PACE) lien program. The disclosure document contains a variety of notices and warnings including a notice that the property owner may not be able to refinance or sell without paying off the PACE obligation. The property owner also retains a 3-day rescission right detailed in a statutory form. Statements as to increased value of the property cannot be made unless based on an appraisal, a broker price opinion or an “automated valuation model.” (AB 2693, Government Code § 53328.1 and Streets and Highways Code §§5898.15, 5898.16 and 5898.17.)
Housing Second Units Eases Barriers to Development and Clarifies Standards: These two laws rename “Second Units” as “Accessory Dwelling Units” (ADUs). They reorganize existing law to apply a clear standard for the ADU permit review process regardless of whether a local government has adopted an ordinance or not. Additionally, they ease some of the barriers to the development of ADUs including utility hook-up fees and parking standards. Requires “ministerial” approval of an application for a building permit to create one ADU within the existing space of a single-family residence or accessory structure. (AB 2299, Government Code 65852.2. SB 1069, Government Code §§ 65582.1, 65583.1, 65589.4, 65852.150, 65852.2 and 66412.2.)
Water Use Fines may be Imposed for “Excessive Water Use”: SB 814 requires each public/private urban retail water supplier to define “excessive water use” by a residential customer. The law permits these water suppliers to fine residential customers up to $500 per 748 gallons (100 cubic feet) of water used above the defined local standard for excessive water use during a drought emergency. (Water Code §§ 365, 366 and 367.)
Mobile Homes -- Three Year Temporary Waiver Program for Taxes and HCD Charges: AB 587 requires waiver of all vehicle license registration fees (VLF) by the Department of Housing and Community Development (HCD) against a person who is not currently the registered owner of a manufactured home or mobilehome prior to transfer of title. If the manufactured home or mobile home is subject to local property taxation then HCD must issue a conditional transfer of title and a county tax collector would be required to issue a tax liability certificate for payment of the taxes owed from the date of sale only. This window for waiver of charges and taxes expires at the end of 2019. (Civil Code § 798.15, Health and Safety Code §§ 18092.7, 181161.1, 18550 and 18550.1 and Revenue and Taxation Code § 5832.)

Despite strong landlord and association opposition, on September 13, 2016, Governor Jerry Brown signed California Assembly Bill (AB) 2819. This bill, amending California Code of Civil Procedure §1161.2, and adding new California Code of Civil Procedure §1167.1, will dramatically interfere with a Landlord’s ability to speedily and effectively conclude an unlawful detainer proceeding and additionally impact a landlord’s ability to obtain an applicant’s prior unlawful detainer (UD) history.

Under previous law, UD filings were automatically sealed from public view for the first 60 days following the initial court filing. After the 60 day period, the record would be made available to the public and only remained sealed (A) if the defendant prevailed at trial within the 60 day period, (B) the court permanently sealed the record, or (C) the record was sealed by a stipulation between the parties. (UD files were accessible to (1) the parties and their attorneys, (2) people who provided the court clerk with the names of at least one plaintiff and one defendant and the address of the premises, (3) to a resident of the premises who provides the clerk with the name of one of the parties or the case number and shows proof of residency, (4) to a person with a court order).

Pursuant to AB 2819, the law as amended has changed the availability of the record 60 days after the case is filed. AB 2819 amends California Code of Civil Procedure §1161.2 to automatically and permanently seal all UD actions, unless (1) the plaintiff (landlord) prevails within 60 days of filing (unless a default or default judgment is set aside) or (2) after 60 days only if judgment against all defendants has been entered for the plaintiff after a trial and the court issues an order allowing public access to the record or (3) one of the situations (numbered 1-3 above) exists. The new law also allows a court to issue an order barring access to the court record if the parties stipulate to. As a result, during settlement negotiations, more tenants will request that access to the court record be barred. Additionally, under this same bill, new California Code of Civil Procedure 1167.1 will allow a court to dismiss a UD action without prejudice (allowing the landlord to re-file the case if desired), if a proof of service of the summons has not been filed within 60 days of the complaint’s filing. While we continue to see an increase in the number of contested cases statewide, the majority of UD cases (approximately 65% - 75% depending on the county) do not go to trial. Of these cases, many are currently taking more than 60 days to obtain even a default judgment. This may be due to a variety of factors, including but not limited to tenants avoiding service attempts, a rise in predefault/pre-trial motions such as demurrers and motions to quash, and court consolidations and staff reductions resulting in case processing delays. Moreover, unlawful detainers (unlike other civil cases) often do not result in a judgment. In many instances, the defendants vacate prior to the entering of a default judgment. As possession is no longer at issue, many landlords choose not to move forward with obtaining a judgment. Under this new law, these types of cases will no longer be made available to the public.  

This is problematic for owners and landlords for several reasons, including but not limited to: 1. By keeping more UD records sealed, landlords will not be able to obtain an accurate rental/eviction history of their applicants. This will negatively impact landlords as it will make them more susceptible to “vexatious litigants” or “career tenants”. 2. Defendants will no longer have incentive to settle their cases expediently (as in the past settling a case within 60 days could keep the matter sealed). 3. Further, the new law may encourage defendants to elongate the UD process (through meritless motions or other means) due to the fact that, if they can delay the entry of a default judgment for at least 60 days from the initial UD filing, they can prevent the lawsuit from becoming a public record. This law is slated to go into effect as of January 1, 2017.  (legal summary and article produced by Kimball, Tirey and St. John LLP).

The average vacancy rate for Multi-Family Apartment Properties in Fresno County is down 34% from 3rd Quarter of 2010 to 3rdQuarter of 2015. ​

Does Your Apartment Building Have the Right Insurance? Written by Landlord Property Management Magazine on June 3, 2015. Posted in Blog

When you’re a landlord and in charge of an apartment building, one of the things you really need to do is protect your investment. There are a lot of different ways to do that, and one of the best and most important is to have good insurance. Do you have the right insurance for your apartment building? If you’re a new landlord, and managing (or just owning) an apartment building is new to you, it’s possible that you don’t have enough coverage. It’s also possible that an insurance agent sold you too much coverage, and you’re paying for something you don’t really need to be paying for.

You also have to consider what, exactly, your insurance policy covers. It’s got to handle everything that can realistically happen, or you could end up being sued and/or owing a lot of money to tenants or others who are hurt on your property. Having enough liability coverage is very important, and a good insurance agent can help you determine whether you have what you need or whether you’re putting yourself at risk by not having a policy that is high enough in coverage or comprehensive enough in scope to protect you.

The requirements for insurance will likely be different depending on your state and your specific situation, but that doesn’t mean you should just leave everything to your agent. Ask questions, and make sure you get some real answers. Actually read your policy, and understand what you’re covered for. The more you know about your actual coverage, and the laws when someone tries to sue you, the better off you’ll be and the safer you’ll feel. Owning an apartment complex is a serious business, and it’s vital that you treat it that way to protect yourself and your tenants.

Insurance is a big part of that, and it’s very different from standard homeowner’s insurance. Landlord insurance typically covers property damage, liability, and loss of income. There are some companies that provide landlord coverage that does not include tenant damage. These policies only handle things like break-ins and natural disasters. While that can be enough coverage for a single-family home rental in many cases, it’s often not acceptable for an apartment building, where damage from tenants could easily run into the thousands of dollars. That could far exceed any security deposits, and leave you on the hook for the rest of the repairs. Be sure to ask whether your policy covers damage done by tenants.

It’s also a good idea to ask your insurance agent what you can do to keep your costs down. Some landlords, for example, put in sprinkler systems, security systems, and other protective measures, so they can get a discount on their insurance. Since these systems can be expensive – and sometimes difficult to install in a large apartment building – it’s always a good idea to weigh the costs carefully and find out how much you’ll actually be saving before choosing to add something like that to your property.

Found this to be a useful article for property owners when considering whether to accept Section 8 at your properties.

Advantages and Disadvantages of Section 8 Real Estate Investments May 19, 2015 By Homes4Income.com.

Photo Credit: David Sawyer/Flickr. Section 8 housing is a controversial topic among real estate investors. The program comes from a housing law passed in the 1930s during the Great Depression. At that time, the government was focused on providing high-quality public housing for low-income tenants. Over time, the program has changed, and its main purpose is to provide subsidized housing to low-income Americans.

The controversy is whether Section 8 housing is a good real estate investment. If you ask different investors, you are bound to find several conflicting views.

In the end, Section 8 housing has advantages and disadvantages. Depending on your specific situation, the details of your property, and the type of investment you are interested in, Section 8 housing may or may not be the best choice for you.

Advantages of Section 8 Real Estate Investments #1 Stable and Guaranteed Rent Payments: One of the biggest advantages of Section 8 property investments is receipt of stable and guaranteed rent payments from the government. In most cases, after someone applies for Section 8 housing and passes the screening process, the government gives them a voucher for 70% – 100% of their monthly rent.

Once you have a Section 8 tenant, you will begin receiving monthly payments from the government after a delay of 30-60 days for processing. And you’ll also receive rent from the tenant in most cases.

Though there may be an occasional glitch receiving government payments, these payments are more reliable than payments from some private pay tenants.

#2 Higher Rents: Section 8 allows landlords to annually reassess the rent charged to tenants, and increase the rent by as much as 8%. Over time, this means you could charge more rent with Section 8 tenants than private pay tenants.

• Example: If you rent your property for $800 per month, over 5 years you could raise the rent to $1,175.

 #3 Incentives to Maintain the Property: Another advantage of the Section 8 program is that it requires tenants to take care of the rental property. This incentive can help protect your investment.

• Tip: If the property is in excellent condition before a tenant moves in, the tenant does not have an excuse for excessive wear and tear. Also, the Section 8 program requires the tenant to maintain the property.

#4 Large Pool of Prospective Tenants: Section 8 gives you a large pool of prospective tenants (about 2 million in the U.S.), as a result of the government subsidizing rent payments. This is extremely helpful, especially in geographic areas where there is a smaller pool of private pay tenants and with properties that are difficult to rent.

#5 Longer-Term Renters: Section 8 tenants are likely to stay for a longer time than private pay tenants, especially if they like the property and the management. As a result, the vacancy rate can be lower resulting in higher profits.

Disadvantages of Section 8 Real Estate Investments It’s great that people who need subsidized housing have the benefit of Section 8 housing. But the reality is that landlords have to deal with buying, rehabbing, renting, and maintaining these properties while working with the Section 8 bureaucracy.

Despite the advantages of Section investment property, there are some disadvantages. You should, therefore, consider all the potential problems before deciding to qualify a property for Section 8 housing.

Below are some of the challenges of Section 8 housing, which present an opportunity for some of the best real estate investors who can profit from the resulting higher comparable rents.

#1 Government Bureaucracy: One of the biggest disadvantages of Section 8 is dealing with government regulations and red tape. It’s costly to qualify and maintain a property for Section 8 housing, partially because of the government bureaucracy.

Making things worse, offices of the Department of Housing and Urban Development are often understaffed, resulting in slow and unreliable service that inevitably reduces the landlord’s profits.

#2 Delayed Payments: The Section 8 process can be slow and laborious, which in the end results in a delay in getting a tenant in the property. Then after a tenant moves in, the first government rent payment is not received for 30-60 days.

Though Section 8 housing can be very profitable for savvy landlords, investors must be prepared for dealing with inherent delays.

#3 Accounting Delays: Part of dealing with a government bureaucracy is dealing with accounting delays. Even when accounting issues are in your favor, the time and energy to deal with a Section 8 office to straighten out their error can be costly.

#4 Strict and Costly Inspections: Properties qualifying for Section 8 housing must pass strict inspections, often making it easier to rent properties to private pay tenants.

The rehab of Section 8 properties can be more expensive because of the strict standards, with the best rehabbers often failing the 1st inspection of a Section 8 property, which again makes the Section 8 program unappealing to investors.

• For example, a minor oversight by a rehabber to repair the smallest pinhole hidden in an obscure location can cause the property to fail a Section 8 inspection.

See the Section 8 Inspection Form and Checklist.

#5 Increased Wear and Tear: In some cases, Section 8 tenants cause more wear and tear to a property than a private pay tenant. Because their rent is subsidized and possibly completely free, a tenant may feel less invested in the property, which can result in irresponsible and careless behavior that increases wear, tear, and damage.

Section 8 properties can therefore be more costly to maintain than private pay properties, which must be built into the monthly rent.

#6 Little Recourse for Damages: Once a tenant damages a Section 8 investment property, the landlord has little effective recourse to recoup costs for damages.

Ultimately, this raises overall maintenance costs, and landlords must charge higher rent to recoup their costs.

#7 Delinquent Tenants: Though the majority of the Section 8 rent is paid by the government, the tenant is usually responsible for paying a portion of the monthly rent.

If the tenant doesn’t pay his portion of the rent, the landlord is forced to go through the Section 8 eviction process, settle for less profit, or possible even lose money after all maintenance and repair costs.

Sometimes, landlords are reluctant to report a tenant who is late on their rent payments. Reporting the tenant could lead to a long bureaucratic process to have the tenant removed. Then once the tenant is evicted, the landlord has to go through the Section 8 process of getting a new tenant.

Although landlords deal with both private pay and Section 8 delinquent tenants, Section 8 delinquencies are more costly due to bureaucratic regulations. Therefore, landlords should anticipate the non-payment of Section 8 tenants, and adjust the rent accordingly.

Well Rehabbed Properties in a Good Location Rent More Quickly to Private Pay Tenants If a rental property is in a good location and well rehabbed, you can generally rent it out to a private pay tenant more quickly than you can obtain a Section 8 voucher.

It’s often more profitable, therefore, to be more selective choosing investment properties and do a better job with the rehab, so you can more quickly rent to a private pay tenant.

Take Away: Is Section 8 Worth It? There are significant advantages to Section 8 housing that all real estate investors should consider. However, there are disadvantages and risks inherent in Section 8 investment properties.

If your property is in a good location and you do a great job with the rehab, you’ll probably make more money renting it to private individuals. But some of the best real estate investors take the negatives of Section 8 housing that warrant higher rents, and turn them into higher profits.

If you decide to invest in Section 8 housing, make sure you understand the advantages and disadvantages, and have a solid plan to make a profit.

Here is a quick summary of many laws that may potentially affect you and me in the rental industry.  I have grabbed this information from a variety of website and will likely continue to add to this post as I locate more info.

Assembly Bill No. 60 – After January 1, 2015, the Department of Motor Vehicles will issue driver licenses to individuals who do not provide a social security number on their application, but provide satisfactory proof that their presence in the U.S. is authorized under federal law. It is a violation of the law to discriminate against an individual because they hold or present the license. The bill also prohibits using the license to consider citizenship or immigration status on the basis of criminal investigation, arrest, or detention. Click here for more information about AB 60.

Senate Bill No. 745 – All smoke alarms sold in California after July 1, 2014 will have a non-replaceable, non-removable battery capable of powering the smoke alarm for at least 10 years. The amendment does not apply to smoke alarms that have been ordered by, or are in the inventory of an owner, managing agent, contractor, wholesaler, or retailer on or before July 1, 2014, until July 1, 2015.  Beginning January 1, 2015, all smoke alarms must display the date of manufacture on the device, provide a place on the device where the date of installation can be written and incorporate a hush feature to be approved and listed by the State Fire Marshal. Click here for more information about SB 745.

Senate Bill No. 612 – A tenant may notify landlords that he or she, or a household member, was a victim of domestic violence, sexual assault, stalking, human trafficking, or abuse of an elder or dependent adult, and intends to terminate the tenancy. To terminate the lease, the notification must be written and include one of the following attached to the notice:  A copy of the restraining order, emergency protective order or protective order from the courts; a copy of the police report; or documentation from a qualified third party, such as a doctor. Click here for more information about SB 612.

Assembly Bill No. 227 – This bill limits penalties to $500 for businesses that correct specified Proposition 65 violations, within 14 days of a notice of violation. These violations include exposure to chemicals known to the state to cause cancer or reproductive toxicity, such as engine exhaust and exposure to secondhand tobacco smoke on premises. Click here for more information about AB 227.

Senate Bill No. 254 – Establishes the Used Mattress Recovery and Recycling Act and requires the mattress recycling organization to develop a state plan for recycling used mattresses by January 1, 2015. Retailers by July 1, 2014 are required to give customers the option of having a used mattress picked up, at no additional cost, at the time the new mattress is delivered or at least give the option for free drop-off of the used mattress. Click here for more information about SB 254.

Assembly Bill No. 1092 – The Building Standards Commission is required to adopt building standards for the installation of future electric vehicle charging infrastructure for parking spaces in multifamily dwellings and nonresidential development. Click here for more information about AB 1092.

Assembly Bill No. 10 – Minimum wage will increase to $9 per hour on July 1, 2014 and $10 per hour on January 1, 2016. Click here for more information about AB 10.

Several of our property owning clients have come to us with previous negative experiences having been confronted with issues related to the compensation of the on-site manager, which is required for properties with 16 or more units in California.  This is commonly overlooked by property owners who are not using a professional or competent management company and/or are looking to take the short cut in order to maximize their bottom line.  Therefore, here is an overview summarized by a recent training provided by the CA Association of Realtors of the current law in California in this regard:

The resident manager is entitled to receive compensation no less than the California’s minimum wage, presently $8.00 per hour but increases to $9.00 per hour on July 1, 2014 and to $10.00 per hour on January 1, 2016.  Additional laws regarding compensating the resident manager include:

§  Over-time pay. California law requires employers to pay over-time rates at one-and-one-half (1 ½) times the basic minimum wage as follows::

o   Time worked exceeding 8 hours in any one day.

o   Time worked exceeding 40 hours in one week.

o   All time worked during a 7th day of consecutive employment

§  Free or partial rent. Rent credit may be applied toward the minimum wages due the resident manager under specific conditions in accordance with California wage law. In determining how much credit toward rent may be given is helpful in performing the investment analysis process:

o   The maximum amount of rental credit allowed toward compensation is to be no more than two-thirds (2/3) of the “ordinary rental value” of an apartment unit, but not to exceed a monthly amount of

o   451.89 for a single person, or

o   $668.46 for a couple.

b.     Resident manager’s employer: Payroll expenses, such as income taxes, disability insurance and worker’s compensation, must be considered when establishing property operating expenses. If the licensee is going to perform property management services on behalf of the buyer following the close of escrow it is important to establish who will be considered the “employer” of the resident manager.


Please let Neighborhood Property Management know if we can answer any of your questions as it relates to assuring you conform to the legal requirements for your on-site manager employee.  Contact us today at 559-270-6776 or info@neighborhoodpm.com.

As anticipated, there are several changes to the CA Apartment Association Forms.  The CAA Compliance Committee has created three new rental forms and revised more than a dozen existing forms and related instruction sheets. Amendments to forms followed changes in the law, members’ requests or both.

A complete list of changes appears in the Forms Change Chart.

What’s next
Forms 1.2 and 1.2-LA, as well as, the Instruction Sheets for Forms 2.0 and 2.1, will be available by Dec. 1. The remainder of the forms and instruction sheets will be available by Jan. 1. All will be accessible throughour rental forms page.
Summaries of the three new forms: 

• Form 20.0 Notice of New Owner/Agent. This form is designed to provide notice of where to pay rent and who the agent is for service of process when the property is sold or changes management. Failure to provide this information promptly can limit the owner’s ability to evict for non-payment of rent.

• Form 19.1 48 Hour Notice of Entry – Initial Inspection. This form provides the required 48-hour notice of entry prior to conducting the pre-move-out inspection requested by the tenant. This type of notice was previously included in the general notice of entry form (Form 19.0), which is now limited to 24-hour notices.

• Form 19.2 Notice that Property is For Sale and Will be shown. This form notifies the resident that during the next 120 days the property may be shown to prospective purchasers on 24 hours oral notice. The instructions provide information about the recent court decision holding that Sunday is a “business day” for the purpose of real estate open houses.

Details
A complete list of changes appears in the Forms Change Chart.
CAA has also made significant revisions toForm 21.2 Resident’s Thirty Day Notice of Termination – Domestic Violence and other Special Circumstances. The protections originally placed in the law have been extended by the Legislature in recent years to victims of elder abuse and abused dependent adults.

Effective 2014, the protections also apply to victims of human trafficking. The form, including the form name, has been revised to reflect this change. In addition, effective 2014, a tenant may provide documentation from certain qualified third parties to support the notice of termination, instead of a police report or restraining order.


For additional questions regarding forms or other property management related issues, please contact Neighborhood Property Management for all our management and investment real estate services in Fresno & Clovis.  559-270-6776 or info@neighborhoodpm.com.

Couple pieces of information that may be useful perspective as we enter the Holiday Season at the end of 2013.  

1) Zillow is reporting 207 single family rental listings currently in Fresno.  This is not meant to be an exact number but with so many of the advertising methods online being syndicated across multiple websites it is certainly becoming more accurate.

2) As we are all looking forward to 2014 and hypothesizing about where the market is going across the nation and within California, The Urban Land Institute (ULI) has just released on November 12, 2013, their Emerging Trends Report for 2014.  You can read more at this LINK and feel free to contact me should you want to discuss any impacts to your existing investments or should you be considering on making additional investments in the coming year.  Happy Holidays!  Neighborhood Property Management and Real Estate Investments is a full service property management and investment firm dedicated to assisting investors to maximize, preserve, and reposition their assets.  If you are interested in learning more please contact Franklin at 559-270-6776 or info@neighborhoodpm.com.