All Forum Posts by: Adam A.

I was also invited to the Lead Coalition but declined.  I was supposed to be managing my properties from in the Dominican Republic starting this Summer but now it's delayed until Dr. Fauci says the vaccine is safe.  

Toledo lead ordinance is back with the same format BUT ALL RENTALS TO BE INSPECTED AND NOT ONLY 4 UNIT BUILDING OR LESS!!  

City officials submitted to Toledo City Council a proposal for a new lead ordinance, with new requirements and new deadlines, to replace the current law that was passed almost a year ago.

The new lead ordinance, titled “Residential Rental Properties and Lead Safety Compliance,” is based on the language of the 2016 ordinance and created in partnership with community stakeholders.

The proposal discards the current rule that all rental properties built prior to 1978 must obtain lead-safe certificates and instead reverts back to only requiring certificates for, if built before 1978, rental properties with four units or less, family child-care homes, and single-family homes.

The city’s first lead ordinance, which passed in 2016, was the center of a lawsuit filed by a local landlord and the Property Investors Network, and in June, 2018, Lucas County Common Pleas Judge Linda Jennings ruled that ordinance was unconstitutional. Ohio’s 6th District Court of Appeals overturned the decision and the Ohio Supreme Court declined the hear the case, which means the appeals court’s decision stands.

In November, 2019, city council approved a lead ordinance that required all residential rental properties — not just those with four units or less — and family child-care homes built before 1978 to obtain lead-safe certificates in order to prevent lead paint poisoning in children.

Mayor Wade Kapszukiewicz announced in June that implementing the 2019 law would be delayed, at least partially because complying with the existing law was unrealistic for property owners and tenants because of the coronavirus pandemic.

If passed, the new proposal would be a repeal-and-replace of the current law.

It includes a five-year compliance schedule, with the first properties required to be compliant by June 30, 2022, and the final properties to reach compliance by Dec. 31, 2026. After that date, all applicable units would be required to be in compliance.

The certificates would be issued by the local health commissioner, and any local lead inspectors must be licensed and registered with the health department, per the proposal.

Toledo Lead Ordinance Update

Ohio’s Sixth District Court of Appeals on Tuesday overturned a lower court’s permanent injunction, in part, on the city’s controversial lead-safe rental ordinance.

It’s a decision both city officials and property owners have been waiting on for months, and one that comes after Toledo City Council passed a new lead-safe housing ordinance to replace the 2016 law in question.

The higher court found that Lucas County Common Pleas Judge Linda Jennings erred in June, 2018, when she ruled the Toledo-Lucas County Health Department did not have the authority to enforce the lead law. It found she also erred in her ruling that the law discriminated against owners of smaller rentals because it only required properties with one to four units — and home child-care centers — built before 1978 to be tested for lead hazards.

“The classifications are rationally related to the ordinance’s goal, which is to help prevent lead poisoning in the city,” the court’s decision states.

A lead hazard sticker is seen at 540 Collins Street in Toledo.
Sarah Elms
City, health officials propose educational campaign on lead
The court did find Judge Jennings correctly ruled that the definition of “owner” in the city’s ordinance violates equal protection because it is too broad.

Because the decision is only partially in favor of the city, the case will be sent back to Lucas County Common Pleas Court for a judge to decide whether any attorney fees should be awarded.

“We always expected the Court of Appeals would side with the City of Toledo, and we are obviously glad it did so today,” city spokesman Ignazio Messina said in a written statement Tuesday. “Now we can take the important steps necessary to implement our law and make sure our citizens are safe from the dangers of lead poisoning.”

Andrew Mayle, the lawyer for landlord Cheryl Mack and the Property Investors Network who originally sued over the city’s 2016 ordinance, said the appeals court decision is wrong. He plans to appeal to the state supreme court.

“Judge Jennings was right when she ruled that nothing permits city council to give an outside health department power to enforce ordinances,” Mr. Mayle said in a written statement. “We believe the Supreme Court of Ohio will accept this case and reverse this dangerous precedent that would inexplicably allow local politicians to delegate executive power to unelected — and thus unaccountable — bureaucrats.”

While city officials awaited the appeals court decision, community leaders urged them to enact a new lead-safe housing ordinance to protect children from lead paint poisoning. City leaders for months delayed any action, and the Kapszukiewicz administration said repeatedly it did not want to move forward with a new law until the appeal regarding the first law was resolved.

Councilman Larry Sykes, who said he was tired of waiting on an appeals court decision, brought a new lead law to a vote Nov. 12. It passed 8 to 4, and requires all residential rental properties — not just those with four units or less — and family child-care homes built before 1978 to obtain lead-safe certificates.

Toledo officials encourage property owners to apply for lead abatement grant
Sarah Elms
Toledo officials encourage property owners to apply for lead abatement grant
The ordinance outlined compliance deadlines phased in by census tract, with the first group to be certified by June 30, 2020, the second by June 30, 2021, and the third by June 30, 2022. It also places enforcement in the hands of the city, not the health department.

Mr. Sykes on Tuesday said the appeals court ruling leaves room to amend the new ordinance to give enforcement powers to the health department, just as the city’s original lead ordinance had proposed. He also said he is open to being flexible with the certification timeline.

The city needs to hire someone to coordinate the lead-safe program, finalize a budget for the program, and determine how much responsibility to give the health department before the new law can realistically be enforced, he said.

“This was just a bump in the road,” he said of the lawsuit. “Unfortunately this set us back some, but I thank God that we prevailed and we can move on with our purpose in protecting children and expectant mothers.”

@Todd Goedeke I thought about it. However, If I do convert, I've to hire a property management company and I like to be involved in the operation.

@Darrell Wyatt Toledo Real Estate Investor Associate (REIA) is a great place to start. They've won national recognition several times and you'll learn a ton as they have 3 monthly meetings. PM for details.

Adam Atassi 

@Zubin Lalani $35K for that area is high considering that it's a bad and high crime area.  I've seen good and remodeled houses in tha lst year for $18,000 - $$25,000. 

If you need a good management company in Toledo, I recommend the house stop.

Good Luck

Adam Atassi

@Dmitriy Fomichenko  In your blog you stated  "Here are some examples of legitimate business activity: Property Manager".  I thought managing properties is considered passive and not "earned" income to have as a sponsor for the solo 401K. 

@Dmitriy Fomichenko Thank you for your response. The link above for the in-kind distribution doesn't follow the correct blog.

1. Do I pay taxes on the full amount of the appraised transferred properties or the appreciated amount. For example, I bought the properties for $10,000 and after remodeling the cost is $15,000 and at the appraisal is $26,000 after 4 years at the time of transfer. Are the taxes paid on the $11,000 or the entire $26,000? 

2. Is the money left in the solo trust has to be rolled to an self directed IRA or similar since the sponsored plan no longer exist?

@Emma Powell  I use my personal FB account to list my rentals in the Marketplace all the time. I get PMs which helps a lot in pre-screening potential tenants. 

Adam Atassi

Greetings tax experts,

I've had my Solo 401k Trust for about 4 years now which grew very fast buying rental properties. I also have other properties not in this trust. Now, I'm at a crossroad of selling my sponsored LLC and retire at 59 1/2 living on passive rental income the properties in both the trust and non-trust.

I'm thinking about in kind distribution at 59 1/2 due to the fact that the properties in the Solo 401K will be appraised a lot lower than when I'm 70 1/2.

• My question, when I take the in kind distribution and transfer the properties from the solo trust to myself, do I pay taxes on ALL the combined: 1)the rental income of the transferred properties from the trust. AND 2) the difference in appreciation of the properties when I bought them in the trust. AND 3) Rental income from the non-trust properties? 

Is there a method to reduce paying the tax burden all in 1 year at 59 1/2?

 Thank you in advance.

Adam Atassi