Archive for the 'Legal Stuff' Category

Comments Off on What Stops You From Selling Your Minneapolis Duplex?

The dude 3D character x2 climbing Brick wall.

The dude 3D character x2 climbing Brick wall.

What’s the biggest obstacle to selling your Minneapolis duplex?

Tenants.

Having tenants is a good thing. But having tenants who refuse to allow Realtors to show the property because they haven’t been given 24 hour notice is a problem.

Why?

Two reasons.

First, because there is no such law requiring a landlord to give tenants 24 hour notice.

Second, duplex buyers typically want to go see several listings at a time. An opportunity to do that may open on their calendar 23 hours before they want to go. Their Realtor will typically schedule properties to see that are in the same geographic area.

The next time they go look at duplexes for sale, they will likely be looking in another neighborhood.

According to page 17 of the Minnesota Landlord and Tenants Handbook, a landlord may enter a tenant’s unit for “reasonable business purpose” after making a good faith effort to give the tenant reasonable notice.

No where in the handbook are “good faith effort” or “reasonable notice” defined.

What is defined, however, are examples of a reasonable business purpose. They include:

  1. Showing the unit to prospective tenants.
  2. Showing the unit to prospective buyers or an insurance agent.
  3. Performing maintenance work.
  4. Showing the unit to state, county or local officials (such as building inspectors).
  5. Checking on a tenant causing a disturbance within the unit.
  6. Checking on a tenant the landlord believes is violating the lease.
  7. Checking to see if a person is staying in the unit who is not on the lease.
  8. Checking the unit when a tenant moves out.
  9. Performing housekeeping work in a senior housing unit.

When signing a lease with a tenant, or before you put your Minneapolis duplex up for sale, it’s paramount you be clear with the tenant as to what their rights are…and are not.

Is Your Minneapolis Duplex A Rotten Tomato?

said on December 16th, 2015 categorized under: Legal Stuff

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Movie reviewAs many of you know, the city of Minneapolis (as well as many surrounding communities) require duplex owners to have a valid rental license.

This is true even if you or a family member live in the property.

But now, much like movie reviewers, the city is giving your a rating.

In 2015, Minneapolis instituted a rental property Tier system.

In an effort to improve the overall conditions, maintenance and management of rental properties city wide, they began rating and assigning properties to tiers based on their condition, management and maintenance.

Tier 1 is reserved for properties that are well maintained and use very little city services. Examples of city services may include police calls for noise, excessive nuisance conditions or housing code violations that require repeated visits from inspectors, police, and so forth.

Because these properties are in good order, the city will now require them to be reinspected for rental licenses every 8 years (unless ownership changes).

Tier 2 properties are those maintained to minimum standards. They tend to use some city services. As a result, they are now required to be inspected once every 5 years.

Finally, Tier 3 properties are considered poorly maintained and require excessive visits from city officials. These duplexes, triplexes and fourplexes will be subject to annual rental inspections.

Rental property owners may be able to get their properties Tier status changed. In order to do so, owners will need referrals from inspectors and other city departments, who use objective criteria to determine whether the property qualifies.

As this program becomes more commonplace, Minneapolis duplex buyers are sure to make investigating a property’s tier status part of their due diligence process.

In more ways than one, it pays to keep your duplex in good repair.

Are Minneapolis ADUs Really A Road To Riches?

said on March 9th, 2015 categorized under: Legal Stuff

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duplex adus The city of Minneapolis’ recent decision to allow the addition of Accessory Dwelling Units (ADUs) has a lot of people talking to me about finding a duplex that’s perfect for adding one.

After all, wouldn’t an additional unit maximize your cash flow?

Before getting too excited about the ability to add another unit to a property, it’s important to remember the city has rules about doing so.

Perhaps the most important city restriction to know is either the ADU or the main unit has to be owner occupied for the entire calendar year. This restriction is recorded on the deed. In other words, if you sell the property to someone who does not intend to live there, either you or the buyer have to agree to remove all of the improvements you made to have it installed in the first place.

This may result in you having a smaller pool of buyers for your property, as you may find investors unwilling to look at a property that may require that upfront expense and effort.

Only three types of ADUs are allowed: attached, internal and detached. Regardless of where it’s located, the property must be smaller than the principal residential structure. Specifically, the minimum floor area for all ADU’s must be at least 300 square feet. Internal and attached ADU’s may be no more than 800 square feet, while a detached ADU may not be more than 1000 square feet.

In addition to setback and height restrictions, the exterior materials of an attached ADU must match the existing principal structure. You can’t add another door to the front of the property, and any exterior stairway leading to the ADU has to be enclosed. There can be no rooftop decks and balconies can’t face an interior side yard.

If you’re still interested in pursuing adding an ADU to your current duplex or one you intend to buy, it’s important to know you must apply with the city, as well as pay a non-refundable $260 fee. The city will then review your plan for zoning and code compliance.

The passage of the ADU code was intended to be a means to help people age in place, as well as ease our current housing shortage.

While a great idea, it’s equally important to consider what the future consequences to modifying your property may be in the resale market as well. You may find that in the end, it’s not worth the effort or expense.

 

Can Your Friend Manage Your Minneapolis Duplex?

said on January 28th, 2015 categorized under: Legal Stuff

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Duplex Property ManagementSometimes, life’s circumstances require a duplex owner to move far from their property.

When that happens, owners are faced with a dilemma. Should they sell? Hire a management company? Or ask a friend or family member for a favor?

Over the last 8 years, many duplex owners have not been willing to consider the option of selling. There are many reasons. The market may have declined to the point where they would sell for less than they owe, triggering a short sale. Or, rents may have been so high that the duplex was suddenly a very good investment.

When the latter was the case, many duplex owners faced another choice. Should they hire a professional management company? After all, the radio ads promoting property managment services make it sound so easy. Sign with them and they’ll take care of everything while you just collect the cash.

Of course, those companies charge a fee. Locally, that runs around $80 per unit per month; a figure which can mean the difference between positive and negative cash flow for many duplex owners.

So that’s where the favor comes in. A friend or family member may be willing to take on the task of watching over the duplex on behalf of the owner.

But is that person required to have a real estate license?

After all, property management and leasing are considered real estate brokerage services under Minnesota real estate licensing law. Any property manager who is going to lease,list, procure prospective tenants, negotiate, assist or offer to perform any of those acts is required to have a real estate broker’s license.

There is an exception. Employees of the owner or manager of a residential property (like a duplex, triplex or fourplex) who lease units in the property are exempt from the license requirement.

While this may come as a relief to many duplex owners, it may be wise to encourage to ask the friend or family member to take classes offered either by the Minnesota Multi-Housing Association (MMHA) or the Minneapolis Police Department’s Rental Property Ownership Workshop to ensure compliance with all fair housing and rental property laws.

Comments Off on Minneapolis Passes Accessory Dwelling Unit Zoning Code Amendment

minneapolis allows accessory dwelling unitsThe Minneapolis City Council passed a zoning code amendment on December 5, 2014, which allows accessory dwelling units (ADUs) citywide on lots with single family homes or duplexes.

An ADU, which may also be called a “granny flat”, carriage house, or “mother-in-law apartment” is a self-contained living unit that can be located within the walls of an existing property, included in new construction, or put in an additional building on the property.

This should help provide seniors with a way to age in place, as well as gradually provide more housing units to the city over time.

 

Minnesota Rental Property Owners Face Deadline

said on January 27th, 2014 categorized under: Legal Stuff

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crp deadlineA quick reminder that if you’re a Minnesota rental property owner; by January 31, 2014,  you must provide a Certificate of Rent Paid (CRP) to each person who rented from you in 2013.

Married couples may receive a joint CRP. Unmarried adults each receive their own copy (even if they are roommates).

If you bought or sold a property in 2013, you are still required to provide a CRP for the period of time you owned the building.

If a tenant moved, you must send the CRP to their forwarding address. If you do not have that information, you should send it to their last known address. You must keep a record of this for the tenant until August 15, 2015.

Failure to provide a CRP by the specified deadline can result in a $100 fine per infraction, so it pays to beat the deadline.

Comments Off on How Minneapolis Duplex Owners Could Help Pay For Vikings Stadium

minneapolis duplex owners support vikingsI know how the city of Minneapolis could pay for the Vikings new stadium.

They could simply fine all of the duplex owners in the city who currently don’t have rental licenses. After all, there are a lot of them.

The fine for operating a rental without a license in the city of Minneapolis is $500. This is in addition to any costs the owner might incur in the process of obtaining one.

The fee for the initial inspection required on a duplex that either hasn’t had a valid rental license in the last 12 months, or on a property being converted to a rental property is $1000. However, this fee can be reduced by $250 if the owner can present proof of attendance at a fundamentals of rental property management class.

This class is conducted by the Minneapolis Police Department and costs $30 to attend.

After the initial inspection fee, duplex owners are required to keep their licenses current. The annual license fee is $69 for the first rental dwelling unit, and $19 for each unit after that.

All rental licenses in the city of Minneapolis must be renewed prior to August 31.

And if not?

More skyboxes for the Vikings.

Minneapolis Duplex Owners Face Deadline

said on January 25th, 2012 categorized under: Legal Stuff

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minnesota duplex certificate for rent paidIf you owned residential income property in the state of Minnesota in 2011, consider this a friendly reminder that your CRP (Certificate of Rent Paid) must be issued no later than January 31, 2012.

A CRP is a form that helps tenants get a tax refund because they essentially helped pay your property tax for the year.

A CRP must be completed even if you sold a duplex, or purchased one during 2011. Each owner must issue a separate CRP to tenants for the time they owned the property.

Roommate CRPs are to be divided according to the the amount each individual paid.

Remember, if you forget to issue a CRP, you may be assessed a $100 penalty for each instance. In other words, if you have four tenants in your duplex, all of whom are unmarried, you could face $400 in fines.

I’ve made it easy for you. To get the forms, just click here.

Minnesota Tenants Get More Rights

said on May 28th, 2010 categorized under: Legal Stuff

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pawlentyEarlier this month, Minnesota Gov. Tim Pawlenty (R) signed a bill into law which has commonly been called the “Tenant Bill of Rights”.

Highlights of the bill include:

Cap On Late Fees– As of January 1, 2011, late fees can not exceed 8 percent of rent.

Receipt For Rent – As of August 1, 2010, if tenants pay their rent with cash, they must be given a receipt. Tenants who use money orders may use those receipts as proof of rent paid unless the landlord can provide proof it wasn’t.

Screening Fees: Starting August 1, 2020, landlords must use a consistent process to screen prospective tenants and inform those applicants of the process they use.

A duplex owner must now tell the applicant what criteria they consider. She must also process applications in the order they were received, and if she rejects someone for reasons other than those they provided, return the application fee.

Security Deposits  – After August 1, 2010, a landlord who doesn’t return the right amount of a security deposit in bad faith can be penalized up to $500. The previous cap was $200.

Tenants Living In Foreclosures – In August, both state and federal law will allow for tenants living in foreclosed property to stay through the term of their lease, or 90 days after the redemption period ends, whichever is longer.

For a complete text of the bill and its changes, click here: HF2668.

Minneapolis Bedroom Requirements Come Out Of The Closet

said on May 10th, 2010 categorized under: Legal Stuff

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A row of colorful row t-shirts hanging on hangersIf I asked you to describe a bedroom to me, chances are that early on, you’d include the word “closet”.

For most of us, a closet is a necessity in a bedroom. After all, where would we hide the mess when company’s coming over if we didn’t have one.

So if you see a duplex or single family home with a room that doesn’t have one, it can’t be a bedroom. Right?

Not in the city of Minneapolis.

In fact, the word closet isn’t even mentioned in the city’s requirements for a bedroom.

Minneapolis bedrooms are required to have a door and at least one escape window. The window has to be at least 20″ wide and 24″ tall, with a net overall clear opening of 5.7 feet.  What’s more, the bottom sill can’t be more than 44 ” above the floor.

Of course, you can’t cover the window with anything that would keep someone from escaping during an emergency, like grilles or grates, unless they have approved release latches.

If the bedroom is below ground level, the window needs to have a window well. If the well is more than 44″ deep, it’s also  required to have a permanent ladder.

Bedrooms must also provide the equivalent of at least 8 percent of the floor area in window glass. For example, if you have a room that’s 200 square feet in size, you would need window glass totalling at least 16 square feet.

According to the city of Minneapolis, bedrooms must also have a minimum ceiling height of 7 feet, and be no less than 70 square feet in size.

Since this is Minnesota, it goes without saying that the city also demands a bedroom feature a heat source capable of keeping the room at a minimum temperature of 69 degrees.

The city clearly cares about the health and well-being of its residents.

But it could care less what they do with their clothes.