Archive for the 'Legal Stuff' Category

How to Charge Application Fees For Your Minneapolis Duplex

said on April 9th, 2009 categorized under: Legal Stuff

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rental applicationOne of the best ways for a landlord to reduce the risk of having non-paying tenants is to run a credit report through a company like ASP Screening when they fill out the rental application.

Screening companies usually charge a fee in the $20-25 range for this service. So can the landlord pass this fee along to the applicant? Yes.

The city of Minneapolis does require the landlord to follow some guidelines before charging an application fee, however.

First, the landlord can only screen one tenant at a time.  If she has multiple applicants, she must complete the screening process for one, and accept or decline that person before moving on to the next. She may not take a fee from all applicants, running all of their credit histories, then select the “best”.

Second, the landlord’s application must include a place for the prospective tenant to provide an address where the fee may be returned. It must also disclose the name of the screening company the landlord intends to use.

Of course, applicants would likely appreciate knowing the necessary criteria before applying to rent a Minneapolis duplex. The city thinks so too, and requires landlords to provide it, in writing, before taking the application fee.

Should the landlord choose to reject an applicant, she must provide a written explanation within 14 days, naming the afore-mentioned criteria that were not met. She must also provide the name and contact information of the screening company she used in the process.

So what if she turns down the applicant for a reason not detailed in the credit report? The application fee must be refunded.

As always, any violation of this protocol can result in the revocation of the landlord’s rental license.

Minneapolis Duplex Ownership Requires Fair Play

said on March 6th, 2009 categorized under: Legal Stuff

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Baby and Mother Hands TogetherWith the passage of the first time home buyer tax credit, there will be many new Minneapolis and St Paul duplex owners learning to become landlords.

One of the most important first lessons is the importance of following Federal, State and local fair housing laws when selecting and advertising for tenants.

On a federal level, there are two laws you must follow when selecting tenants: the Civil Rights Act, which prohibits discrimination based on race and the Fair Housing Act, which prohibits landlords from discriminating because of race, color, sex, national origin, family status (including families with children), disabilities, religion or background.

In the state of Minnesota, it is also illegal for landlords to discriminate due to sexual or affectional orientation, marital status, or receipt of public assistance (such as Section 8).

The city of Minneapolis’ Civil Rights Act prohibits discrimination for all of the afore-mentioned categories, while the St Paul Human Rights Act also includes age. For a comparison, check the HUD web site.

When advertising a vacancy, it is important to realize you can’t make any statement in an ad that indicates a preference, limitations or discrimination based on the named criteria.  So phrases like, “suitable for single woman” are not acceptable.

The ad should focus on desirable features of the duplex, amount of rent and availability.

It is important to note, that landlords who rent one, two or three units in properties that double as their own homes may be exempt from some provisions in the Fair Housing Act.

Comments Off on The Simple Version of the $8000 First Time Home Buyer Tax Credit

pencil isolated on whiteDean Schifflerof Burnet Home Loans sent out a handy chart to the agents in our company today. It really helped clear up the mud around the first time home buyer tax credit offered in the economic stimulus package.

Here, in essence, is the tax credit defined:

  • Amount of credit: Lesser of 10 percent of cost of property or $8000.
  • Eligible Property: All principal residences.
  • Income Limit: Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Credit phases out above those caps.
  • First-time Home Buyer Only: Defined as someone who has not owned a principal residence in the last three years.
  • Repayment: No repayment for purchases on or after January 1, 2009 and before December 1, 2009.
  • Recapture: If the home is sold within three years of purchase, the entire amount of credit is recaptured on the sale. This applies only to homes purchased in 2009.
  • Termination: December 1, 20009. In other words, you have to have closed on the property by this date.
  • Effective Date: All revisions are effective as of January 1, 2009.

I hope that helps.

Minneapolis Duplex Evictions Are Weatherproof

said on January 8th, 2009 categorized under: Legal Stuff

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The other day I was reminded of one of my favorite Minnesota eviction myths. This one in particular always makes me laugh.
Many tenants believe if they fail to pay rent over the winter months, the landlord can’t begin or execute an eviction. Why? Because it’s cold outside.
In other words, the property owner is simply supposed to continue to pay all the bills associated with the property, and let the tenant stay simply because it’s cold.
Perhaps tenants have heard about the cold weather rule, which if properly applied for, prevents the heat in a home or rental unit from being terminated for non-payment during winter’s brutal months.
Landlords needn’t be quite as merciful. Rent must be paid, regardless of the season. Period.

Wait On That Dumpster for Your Minneapolis Duplex!

said on November 21st, 2008 categorized under: Legal Stuff

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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.

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

said on October 6th, 2008 categorized under: Legal Stuff

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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.

Four Reasons to Evict Your Minneapolis Duplex Tenant

said on September 25th, 2008 categorized under: Legal Stuff

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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.

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

InspectionWith 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…

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

Carbon Monoxide DetectorIt’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 »

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Fire EscapeI 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.