New Year's Resolution - STOP GIVING BAD ADVICE!

[Charlie MacPherson]

BP is a great place and for the most part, the forums are filled with good advice from people who are genuinely trying to help each other.  But time after time I've seen people who are well meaning giving out some really bad advice.

Here are a few examples (paraphrased):

Q: I bought a 3-plex with lead paint. What's the best solution?
A: Just paint over it - that encapsulates the lead paint.
Problem - that is a complete violation of lead paint laws in the state where the subject property is.  By law, that work must be done by a state-licensed de-leader - and there's a lot more to it than just painting over the old lead paint.

Q: I have a vacant rental, but am concerned about renting to low income people, especially Section 8.
A: Just say you don't rent to Section 8 tenants.
Problem - in at least some states, the renters source of income, including housing vouchers, is a protected class.  Fair Housing will drop the hammer on you - especially when one of their "testers" entraps you.

Some bad advice isn't specific to local laws.  It's more general in nature.

Q: Should I just buy directly through the listing agent to get a better deal?
A: Of course.  They're more motivated to get the deal done, plus, you'll save half the commission since there's no buyer's agent.
Problem: The seller's agent is a fiduciary for the seller and is required by law to negotiate AGAINST you.  That and the total commission is agreed to in the listing contract in advance, so there are no savings to be had - you'll just buy without representation.  And take this to the bank - buyer's agents are every bit as motivated to make a living as are seller's agents.

Q: I want to buy a house with an FHA loan. I'm not going to live there, but what if I just change my mailing address and pick up my mail there?
A: Sure - just run some lights on timers and nobody will know the difference.
Problem: Occupancy fraud is not just a little bit illegal.  It's a felony with fines and imprisonment up to 10 years. (But, hey - you got a better interest rate, right?)

Q: I want to buy a FSBO with neither side having agents. Should I just get a contract at Staples?
A: Sure.  Good idea.  Just think of all that commission you'll be saving.
Problem: Real estate laws vary by state and Staples won't have any idea what they are. Nor will they know what must be affirmatively disclosed and what will only be disclosed when asked.  That $4.99 contract will assuredly leave out the contingencies you need to get out when you need to and it won't know that the meaning of legal terms like "time is of the essence", "as-is", or include terms like "vacant and broom clean", no new construction, property insurance is to be maintained through closing, force majure, final walk-through, etc.

Q: My tenant stopped paying rent.  What do I do?
A: Change the locks, shut off the utilities.  They'll get the message and leave.
Problem: In many (probably most) jurisdictions, that's illegal and when they sue you with their no-cost tenant advocates, the housing court will eat you alive.

Here's my suggestion for a New Year's resolution - if you're going to offer advice on the forums, either be sure that you know what you're talking about, or disclaim it like I often do by stating something like "the law may be different in your state, but here in Maine, you can/can't do XYZ.  Please look at your local laws to be sure."

There are too many new investors here that just may rely on your bad advice and find themselves in a world of hurt.  And to the vast majority offering good advice with the best of intentions, THANK YOU - and keep it up!