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Wait On That Dumpster for Your Minneapolis Duplex!

November 21st, 2008 categories: Legal Stuff

Imagine this. You go to pick up a rent check from your tenants and after repeated attempts, discover they’ve abandoned the unit, leaving what appears to be a mound of trash and personal property behind. Or, you were successful in an eviction action, and the same scenario unfolds. What do you do?

Call for a dumpster, right? Aw c’mon. We know nothing could be that easy.

When law enforcement performs the eviction, the stuff the tenant leaves behind must either be stored on the property or at a storage facility. If the landlord is planning on storing the items on the property, she must prepare an inventory listing the items and their condition. This list must be signed and dated in the presence of a law enforcement officer acting on a court order, include the name and telephone number of the person authorized to release the property, as well as the officer’s name and badge number.

The landlord must remove and store the property. If it’s damaged or lost, guess what? She’s responsible for it. And if she’s moving the stuff out? She needs to try to contact the tenant by first class mail and telephone.

While on the surface it may seem more cost and labor efficient to store the personal belongings on the property, there’s a catch. If the tenant’s stuff is stored on the property, he can simply demand, in writing that it be returned. And the landlord has to return it; without repayment of rent. By law, she doesn’t have a lien on the items.

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Spoken by Kari Lundin | Discussion: No Comments »

Get ‘Em Out! The How To of a Twin Cities Duplex Eviction

October 6th, 2008 categories: Legal Stuff

Last week, we talked about the reasons a landlord can file an eviction action; nonpayment of rent, lease violations, illegal activities or a holdover tenant.

Once that’s established, what comes next? If the property is in Hennepin County, the property owner, his or her attorney, representative or designated agency with Power-of-Attorney may file the complaint at the Public Service Level of the Hennepin County Government Center.

The property owner should be sure to bring all appropriate paperwork to the Center, including a copy of the original lease. It’s also helpful to have the tenant’s full name and date of birth. The plaintiff must also provide the full address of the property involved, and the facts which authorize filing the complaint. The court will also charge a filing fee, which in Hennepin County is presently $252.

If only it were that easy, right? The landlord also needs to show that he disclosed in writing to the tenant and posted in a conspicuous place somewhere in the building the name and address of those people authorized to collect rent, as well as receive notices and demands.

This language is usually included in the standard MHA lease. And a sign in the lobby of the building bearing the name and address of the management company usually resolves these issues. As the law requires the tenant know this information at least 30 days prior to eviction, it is paramount to share it with tenants upon move in.

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Spoken by Kari Lundin | Discussion: No Comments »

Four Reasons to Evict Your Minneapolis Duplex Tenant

September 25th, 2008 categories: Legal Stuff

The single biggest concern I hear when someone is considering whether or not to purchase their first income property is, “Yeah but, what if I get a bad tenant?”

Granted, “bad tenant” means different things to different people. To most, however, it is someone who either doesn’t pay rent, or is damaging a property.

Now, we all fantasize about the easy ways of getting someone out. In Minnesota, there are rules against acting out those fantasies. In other words, a landlord may not change the locks, keep the tenant entry into the building, forcibly remove the tenant or cut off utilities.

So, what do you do? You begin an Eviction Action procedure. You may begin this process for several reasons.

1. Non-Payment of Rent - The first and most obvious reason to evict a tenant is non-payment of rent. It is important to note, however, that once you’ve begun the eviction process, the tenant may cure their default at any time prior to your regaining possession of the unit by paying all of the past due costs, including your court costs. After they have done so, they are legally entitled to continue living on the premises.

2. Lease Violations.

As a property owner, it is of paramount importance that your lease have a “right of re-entry clause”. This gives you the ability to evict a tenant for damaging the property, disturbing other residents, or having unauthorized roommates or pets.

3. Illegal Activities in Minnesota

Again, examples of this are obvious, but they include prostitution, criminal gang activity, the manufacturing or possession of controlled substances, the unlawful use/possession of a firearm and of course, having stolen property on the premises.

4. Holdover Tenant

This is a someone who has either given proper notice they were moving out, or their lease has expired and you gave them notice, but for whatever reason, the tenant stays.

Next time, I’ll talk about the process.

Spoken by Kari Lundin | Discussion: No Comments »

First Time Landlord of A Twin Cities Duplex? Don’t Forget the Paperwork

August 21st, 2008 categories: Legal Stuff

With the change in the current housing market, many would-be sellers are turning to renting their homes in lieu of a sale. And, they often forget one thing that many first-time landlords do: the government.

No, I don’t mean the IRS. Rather, the city government; places like Minneapolis and St Paul. Both require landlords to have either a valid rental license or a certificate of occupancy before a property can be leased.

In Minneapolis, whenever a property is converted to rental usage, it must be inspected for compliance with the city’s minimum housing standards. Of course, this is not free. The city charges property owners $1000 for the initial inspection. This is in addition to the annual license fee, which is $61 for the first unit and $19 for each unit under the same ownership in the same building.

St Paul does things differently. They require a certificate of occupancy, which is issued after an inspection by the fire marshall. Every rental property, from single family homes to large apartment complexes that are not owner occupied are required to comply. The fee for this is $50 per unit.

So, who’s going to notice? Well, if you get caught, Minneapolis is going to charge you an additional $250 for the first unit, and $20 more for each additional unit. Failing an inspection in St Paul, on the other hand, results in bigger fees for each additional time the inspector has to visit until non-compliant problems are solved.

Still think you can get away with it? Tenants often know this rule. Experience says, the minute you have to enforce a noise rule, or ask for delinquent rent, they’ll call city. So much for that idea…

Spoken by Kari Lundin | Discussion: No Comments »

Summer’s A Great Time to Think About Carbon Monoxide in Your Twin Cities Duplex

June 26th, 2008 categories: Legal Stuff

It’s easy to forget about carbon monoxide (CO) After all, who thinks about turning on the furnace in the heat of summer?

Well, the state of Minnesota does. With good reason.

Between 2002 -2006, 89 people died from carbon monoxide poisoning. That translates to an average of 18 a year.

Carbon monoxide is produced when fuels such as gas, oil, kerosene, wood or charcoal are burned. Dangerous amounts of the gas can build up when fuel is not burned properly, or when heaters aren’t vented correctly.

Carbon monoxide has no odor or color. As a result, by the time people realize they’re suffering from carbon monoxide poisoning, they’re no longer able to move.

So why worry about it now? Read the rest of this entry »

Spoken by Kari Lundin | Discussion: No Comments »

Is A Third Floor Fire Escape Required in a Twin Cities Duplex?

June 23rd, 2008 categories: Legal Stuff

I showed a three story duplex in southwest Minneapolis featuring a deck on every floor. There were stairs leading from the second story deck to the ground, but none from the third to the second or the ground for that matter.

And the question came up: would the owner be required to add stairs to comply with the fire code?

According the the Minneapolis Fire Marshall, no.

No matter what story a unit is on, there must be one window in each sleeping room that is easily openable from the inside. It is required to have a net glazed area of 5.7 square feet. The minimum openable height of the window is 24 inches, while the minimum openable width is 20 inches.

Of course, the window can’t be more than 48 inches above the floor either. And area wells must meet minimum size requirements.

The same criteria holds true for St Paul. However, the city may require the property owner to install another escape on the third story. According to the Fire Marshall, while a secondary stairway isn’t required on the second story, the third floor is judged on a case by case basis. The fire marshall determines whether or not it is necessary by considering the square footage of the third floor as well as the layout of the property.

Spoken by Kari Lundin | Discussion: 1 Comment »

It’s Easy to Accidentally Commit Mortgage Fraud

June 13th, 2008 categories: Buying A Duplex, Financing, Legal Stuff, Twin Cities Real Est

We’ve all read the headlines about real estate scams in the recent boom years resulting in many of the foreclosures in the marketplace today.

And, we’ve all heard about mortgage fraud.

The extent of the problem has become so vast that, according to Bloomberg News, the FBI has ordered many field offices to stop investigating other financial crimes so agents can spend their energies on the sub prime mortgage crisis.

The FBI considers 12 markets rife with fraud: Arizona, California, Florida, Georgia, Illinois, Indiana, Michigan, Minnesota, Nevada, New York, and Ohio.

We’ve all heard the big stories about this; how the woman who earned $24,000 got a stated income loan where she qualified for a house she could never afford. How buyers and appraisers artificially inflated prices to receive kickbacks at closing, then never made a payment…

But I have to say, sometimes even something that seems like an innocent and logical solution to a problem is considered mortgage fraud.

What do I mean?

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Protect Your Twin Cities Duplex Through An LLC

June 8th, 2008 categories: Buying A Duplex, Legal Stuff, Multi-Family Property Investing

One of the concerns multi-family property investors often have is how to protect themselves in the event a tenant suffers an injury on one of their properties. Namely, how can he or she protect their real estate portfolio?

A relatively easy way to do this is to form a Limited Liability Company or LLC, and either take title or, via a quit claim deed, change the ownership of the property to the LLC.

An LLC is often suitable for single owner or smaller companies. It is a hybrid between a partnership and a corporation, except that it is often more flexible. One of the advantages of an LLC, is the owners have limited liability for the actions and debts of the company.

The process of establishing an LLC is relatively easy and inexpensive. It is created by filing the Articles of Organization with the Secretary of State, for which the state charges a filing fee. This is something you can do yourself, or if you’d rather, you can enlist the help of a real estate attorney.

If you create a unique LLC for each property in your portfolio, then each is owned by a separate company. Each should have its own checking account and bookkeeping. This helps establish a record of it truly being a separate entity.

That way, in the event someone is injured on one property, and they are successful in litigation, the only property in play is the one owned by that LLC.

Spoken by Kari Lundin | Discussion: No Comments »

Find Me A Deal on a Twin Cities Duplex!

June 4th, 2008 categories: Buying A Duplex, Legal Stuff

People always ask me to call if I find a good deal on a property.

During the peak of the market (which was the valley for investors who stopped to a the numbers), they’d hear from me once every 4-6 months. And, that property was usually gone within a day.

Now it seems I get to contact people once every couple of weeks. And the property I call about is usually gone in a day or, every now and then, a week.

I found one this morning, with a huge positive cash flow. And I sent it to the people working with me.

Contrary to popular belief, Realtors don’t always save the “best deals” for themselves. Especially now. I do, however, save them for the people who have commited to working only with me by signing a buyer’s exclusive representation agreement.

What’s that? Well, in the simplest terms, an exclusive representation agreement states that you’ll work only with me in the process of locating and purchasing a property. It runs a specific length of time and can be cancelled, in writing.

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Trade Your Way Out of Capital Gains Tax

June 1st, 2008 categories: Buying A Duplex, Legal Stuff, Multi-Family Property Investing, Selling A Duplex

You may have heard of a 1031 Exchange. Sometimes it’s called a Starker or a Like Kind Exchange. And, you may also have heard a lot of things about it that aren’t true.

Let me explain what it is as simply as I can. Pretend you purchased an income property in 2000 for $100,000. Even in today’s market, it’s now worth $175,000, and you have a full price offer. After the expenses of selling it and the cost of improving it over the last eight years, you are set to realize a profit of $50,000. If you choose to pocket this money at closing, you will pay capital gains taxes on it.

But wait, there’s more. Remember all of that wonderful depreciation that helped so much on your taxes? If you’re going to cash out, the government would like it back (called depreciation recapture). Unless…instead of pocketing the money, you choose to reinvest. This can help you avoid not only the capital gains tax, but the depreciation recapture as well.

A 1031 Exchange allows you, at closing, to assign the proceeds of the sale to someone called a qualified intermediary. For a small fee, this company or entity holds the money until you pick out a replacement property. When you close on that property, you tell the intermediary to send your $50,000 to the closing as your down payment.

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Spoken by Kari Lundin | Discussion: 1 Comment »

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