All Forum Posts by: Derreck Wells

You're welcome Jesse. If you come across specific properties in MA and want me to run them through the database for you to see if they've been inspected, let me know. It's free and it could potentially save you thousands in purchase costs. Seems like a good ROI to me!

I don't know if anyone touched on this yet, but Section 8 will require lead certificates on all of the units before renting them. The state of MA also requires all rental units to be deleaded if you're going to rent to a family with a child under 6, plus, they have recently changed the law so that you have 90 days to start the deleading process in order to remove liability of the past tenants. If you start within 90 days, you're free and clear, if you don't, past tenants could still sue you for their child getting lead poisoned when they lived in the property even before you owned it. It doesn't seem fair, but they basically attached the liability to the property and it transfers from owner to owner until someone deleads and breaks the chain. It's their way of getting all the rental units in the state deleaded. 

This is okay, it just means you can use the fact that it has to be deleaded in your negotiations if the property doesn't already have lead certs on all the units. (I can check the database for you if you don't know if they've been inspected or not.) 

If not, assume $5k for each unit and count the exterior of a building as a unit, so each 3 family is 4 units = $20k for each one. I personally have never had a job go over that $5k per unit and most come in around half that. Some do come close to $5k though... if all the windows have to be replaced and the exterior doors all do too, it can get expensive quick. 

If they're not inspected yet and they were built before 1978, then there's probably lead in there and will need to be done.

Also, if they've been inspected but not deleaded, you can't renovate until you get them deleaded. Every property should be run through the database before you purchase it! It doesn't cost anything, so why not have that knowledge before you negotiate?

Good luck with your purchase!

Derreck

Hi @Mike Stevens,

First, what state are you in? Lead paint laws are very different from state to state. NEVER take advice about lead paint from someone in a different state! That advice could come with some huge fines and serious consequences. 

Massachusetts has very strict lead laws. You always need to be sure of the status of the house before you renovate.  If the property has been inspected for lead paint and some was found, you are not allowed to do any renovations until the lead paint has been taken care of and you have a lead certificate from the state. If you do any work before that that touches the lead paint, the property could get flagged for unauthorized deleading (UD) and you'll never be able to get a lead certificate, just a letter of environmental protection. 

You cannot rent to a family with a child under 6 unless you have a lead cert on file, ever. Even if you know there is lead paint and you don't want to put the child at risk... you are required by law to delead. If you refuse the family because of the child, you are violating the anti-discrimination laws. 

When you find property you're interested in, I can run them through the database for you to see if they have ever been inspected. If they haven't, you're free to renovate to your hearts content. If they have and have been issued a lead cert, same thing. Renovations are okay as long as you follow the RRP rules. If they've been inspected and not issued a lead cert, you need to hire a deleaded to get your cert, then renovate. 

MA has passed a law where you have 90 days to delead a rental unit after you buy it in order to remove liability. If you don't get a lead certificate in that time, you are responsible for PAST tenants that lived there before you bought the place. They have basically attached the liability to the house and it transfers from owner to owner until someone deleads.

This isn't a bad thing, it makes a great negotiation tool when buying property. Since it HAS to be done, you can often get a concession from the seller.  For negotiation purposes, assume $5,000 per unit and count the exterior as a unit. So a 3 family house equals 4 units to be deleaded = $20,000.  I've never seen a building over at the $5000, and most of them come in around half of that. So even if you get a 50/50 split from the seller, you could possibly get it all paid for. 

Good luck on your investments!!

Derreck

Wait... They told you there was no lease and the tenant was month to month. 

They told you there was no lease. 

Now you're saying they are lying because in fact there is no lease and the tenant is month to month? 

Seems to me they told you there was no lease and the tenant was month to month. What did they lie about?

Check local ordinances regarding Covid-19 and real estate. If there is nothing in your governor's orders, give her the required 2 day notice and show it. 🤷‍♂️

Hi @Melinda Ching, what state are you in? The laws are very different from state to state. If you're in MA I can talk you through the process, but I'm not licensed in other states. 

@Brennan Doherty One thing to watch out for is the lead paint laws in MA. They now only give you 90 days to delead when you buy a rental. If you don't delead within 90 days, you can be held liable for any lead poisonings that have ever happened at the building, even if it was before you owned it. They basically hold the building liable rather than the owner and that liability transfers from owner to owner until someone deleads it and breaks the chain.

460.100: Duty of Owner(s) of Residential Premises
(B) Whenever any residential premises containing dangerous levels of lead in paint, plaster or other accessible structural material undergoes a change of ownership and as a result a child younger than six years old will become or will continue to be a resident therein, the new owner shall have 90 days after becoming the owner to obtain a Letter of Full Compliance or a Letter of Interim Control, except that if a child younger than six years old who is lead poisoned resides therein, the owner shall not be eligible for interim control, unless the Director grants a waiver pursuant to 105 CMR 460.100(A)(3).

Note it says "a child younger than six years old will become ... a resident therein...". It is assumed by the state that any rental larger than a 1 bedroom will fall into this category at some point because of the anti-discrimination laws that prevent landlords from refusing a family because they have a child. Basically this is their way of getting all rentals lead safe.

When you find property you want to buy, you can send me the address and I'll run it through the database and let you know if it's ever been inspected, and if it was deleaded if it was inspected. If it hasn't been deleaded, that's a great negotiating point during the purchase since it basically HAS to be deleaded by law. Assume $5k per unit and count the exterior as a unit, so a 3 family is 4 units = $20k to delead. I have personally never had  a property cost more then $5k per unit, most are around half that, but if all the windows have to be replaced, that can really drive the cost up. 

Good luck on your real estate future!

Derreck

@Mindy Jensen I'm a single dad with sole custody of my daughter, so that leaves little free time, but I'm getting more and more as she gets older, she's 14 now. Some might say motorcycles are a hobby, but they're a bit more than that for me, I'm the Vice President of the NH Chapter of Bikers Against Child Abuse and spend a lot of my free time helping abused kids, so bikes are a bit more than a hobby. You can watch a video about what we do here, but have tissues handy. 

@Brendan Dwyer most people don't know it. The law used to be you just couldn't rent to a family with a child under 6 without getting the unit and exterior deleaded, but they recently changed it so that all of the liability actually stays with the building and transfers from owner to owner until it gets deleaded, including the liability of past tenants. 

Technically, any rental unit larger than 250 sq feet falls under this law and needs to be deleaded, but in reality, a one bedroom or studio likely never had a child living there and probably never will in the future, so if you get a building of all one bedroom units, you're probably good without getting it deleaded. 

Here's the actual law, note it says "a child younger than six years old will become ... a resident therein...". It is assumed by the state that any rental larger than a 1 bedroom will fall into this category at some point because of the anti-discrimination laws that prevent landlords from refusing a family because they have a child. Basically this is their way of getting all rentals lead safe. (Underline and bold added by me):

460.100: Duty of Owner(s) of Residential Premises
(B) Whenever any residential premises containing dangerous levels of lead in paint, plaster or other accessible structural material undergoes a change of ownership and as a result a child younger than six years old will become or will continue to be a resident therein, the new owner shall have 90 days after becoming the owner to obtain a Letter of Full Compliance or a Letter of Interim Control, except that if a child younger than six years old who is lead poisoned resides therein, the owner shall not be eligible for interim control, unless the Director grants a waiver pursuant to 105 CMR 460.100(A)(3).