Hello Jeff: Thank you so much for taking my call recently when I spoke to you about some suggestions for
your terrific AOA magazine. Overall, and I think I’m speaking for your membership, I would
love to see periodic articles that are germane to protecting ourselves from those who take
advantage of us.
In our conversation, I told you about the situation of state-mandated balcony inspections where
the industry standard price for companies doing the inspections is $6,000.00 or more. FYI, this
law only requires a “visual” inspection. The entire process of the inspection itself takes less than
30 minutes for properties under 16 units.
Afterward, the time spent putting together the resulting report is literally minutes. Other than a
few paragraphs pertaining to the inspection of the property in question, the bulk of the report is
standard “boiler plate” verbiage, probably put together by their attorneys. In other words,
$6,000.00 for less than 90 minutes of work.
The other current rip-off situation is insurance companies mandating that our electrical breaker
panels be replaced. On a 16-unit property that I have, the estimates ranged between $4,000.00
and $61,000.00! It should not surprise any of us that a large percentage of apartment owners pay
the higher prices without realizing how much they were getting overcharged.
Anyway, again I want to thank you so much for all you and your dad have done and are still
doing. I have always considered my membership in AOA to be very important in the running of
my real estate investments. – David G. (AOA member since 2006)
Greetings, Jeff!
FinCen is dead! On Friday night, March 21st , the Treasury Department issued an interim final
rule that removes the requirement for U.S. companies and U.S. persons to report beneficial
ownership information (BOI) to FinCEN under the Corporate Transparency Act. Trump killed
it!! FinCEN did nothing more than give the Feds the power to take out any small business they
wanted to go after.
The new ruling reads:
Thus, through this interim final rule, all entities created in the United States — including those
previously known as “domestic reporting companies” — and their beneficial owners will be
exempt from the requirement to report BOI to FinCEN. Foreign entities that meet the new
definition of a “reporting company” and do not qualify for an exemption from the reporting
requirements must report their BOI to FinCEN under new deadlines, detailed below. These
foreign entities, however, will not be required to report any U.S. persons as beneficial owners,
and U.S. persons will not be required to report BOI with respect to any such entity for which
they are a beneficial owner.
I think we played the FinCEN game right by waiting until the bitter end to register. Most of you
probably didn’t register, so you won the game. As a US citizen, you don’t have to worry about
FinCEN and the registration anymore — at least until the next administration. If you did register,
don’t worry about it, they already have your information. Lee Phillips, LegaLees, LLC
Open Letter to Councilwoman Monica Rodriguez
Subject: As a rental housing provider the penalties to me are BECAUSE I kept the rents
low. And more.
Dear Council Member Rodriguez:
The somewhat new law is that if I want to file for an eviction for unpaid rent, I have to
wait until the accumulated past due is a minimum of $4,000. Which means that applying
this to all my units, before filing in court – the shortest I’d have to wait is 2.5 months, the
longest is 4.08 months and an average 3.19 months. Plus … however many months until
the court date.
As a practical matter when $4K isn’t reached in exactly a full month, the wait time
becomes rounded up. Thus 2.5 becomes essentially three, and 4.08 becomes essentially
five. Thus, the average wait time becomes 3.71 months which is essentially four.
And that’s before anything starts.
Plus, I have to tell the city I am going to file in court so the city can provide the tenant with
an attorney for free. I have to pay for my attorney even though it's the tenant that didn’t’
pay the rent. I am being punished by the city because I kept the rents low.
With the new Just Cause Ordinance, if I want to sell my single-family home rental,
I have to pay the tenant thousands of dollars for relocation. They changed the law after I
bought the property.
Unlike an apartment building, there are few to no buyers for a single-family home when
the buyer will be keeping it for a rental. There is already a shortage of SFH for rent.
And as one of the few providers, I’m being punished. Which means that providing a SFH
for rent in the future is being essentially shut out. There are people that want and need a
SFH with enough cash flow to afford it, but going forward, will be hard-put to find one.
All this surely makes a rental housing provider want and need to be very cautious when
filling a vacancy.
I was a Mom & Pop provider, but my wife passed away in September and now I’m an
alone provider of 84 years of age – AND considered the enemy. Surely hoping here for
your re-evaluation.
Sincerely, Your Constituent, Gerald Sherman