New rules on asking for rent Money??

Question

Hello BP nation...I recently went to a "free seminar" on wholesaling. The speaker said there are new laws...particularly in NC where any communication to a tenant about rent monies must be prefaced with an indication that the contact is in regards to collecting monies.

Has anyone heard this?

I couldn't find any information through web searches.

Has anyone heard this?

I couldn't find any information through web searches.

Erik Garland · Answer

Hehe...thanks for the prompt response Jeff... I agree with everything you said.

Jeff Copeland · Answer

Seems kind of redundant: "The following communication is an attempt to collect your rent"..."Hey Erik, I need to collect your rent"!

While it's possible there may be some quirky laws in NC, it sounds like this might be more applicable to third parties, such as property managers, who are trying to collect money on the landlord's behalf. There can be a blurry line between trying to collect late rent as a property manager, and acting as a de facto collection agency.

Collection agencies have their own distinct state laws and regulations (we've all seen and heard examples of what they're required to say, i.e. "The following is an attempt to collect a debt..."), so it's important for your paperwork (such as your leases) to make it very clear who is responsible for what when you have property management in place.

For example, say you had a rental property and the initial lease was directly between you and the tenant (with no property manager in place). Six months later, you hire a property manager, but never update the lease. Now, when the property manager is hounding a tenant for late rent - is he/she operating as a property manager (not according to the lease, the judge might say), or an unlicensed/unauthorized/unregulated collection agency?

I can't imagine this being an issue most of the time. I'm just speculating about what they might have been referring to. It may very well have been a potential "scare tactic" they were encouraging you to use on unwitting landlords with difficult tenants, to coax them into selling to you at a discount.

You are wise to doublecheck and verify anything and everything you learned at a "free seminar on wholesaling".