All Forum Posts by: Eric G.

@James Thomas

First thing is that, yes, you would have to evict her to get her to leave against her will. Unfortunately there is a moratorium that doesn’t expire until end of June. That date has been consistently pushed back, so I wouldn’t bank on it actually expiring end of June. But if it did, you could start an eviction then. With the back log of eviction cases, what is normally a 3 month process will take much longer I’m sure.

I’m not shocked that this person sounds crazy. Any person willing to sell a $600k asset for $350k is clearly not of sound mind. In today’s market, she could get multiple financed offers at $600k if that is really market value. Even cash investors would be lining up.

So I don’t know anything about equity skimming, as was mentioned above, but I could certainly imagine a world where you end up in litigation. The owner could sue you. If the owner has any family members, I’m sure they would sue. A contract is only valid if both parties are of sound mind. This seller sure seems like they’ve got a case on that ground.

This is a tough situation you’re in.

@James Thomas

What did you pay for the property? If I understood your post you paid off what she owed ($250k) plus another $100k for a total of $350k. Is that correct?

@Sang Yi

Of course it would be nice to refinance, but with the mortgage amount so low, we’re not talking about a major savings every month. If they currently have $350k in loans at 4.5%, refinancing down to 3% only saves $300/month. It’s a nice saving, but shouldn’t be the driver for any major decision like selling.

@Orlando Perez @Will Barnard and others...thank you for the replies. What I neglected to mention in my original post is that the main house is already over 1200 sqft. Otherwise, I have heard of people reclassifying the main home as the ADU. By the letter of the law, don't think this one is possible. I was just throwing it out there in case there was a magic pill I wasn't aware of.

I know that new ADU legislation just passed, and will take effect January 1st, 2020. It makes ADU construction as easy as it's ever been. But I have a quandary that perhaps someone has insight on...

LA regulations mandate that new construction detached ADUs be located behind the rear property line of the primary residence. The property in question is on a sizable lot, but the residence is located at the back of the lot. There is plenty of room in front to build an ADU and stay within front yard setback requirements. But the snag remains...the ADU would be in front of the primary structure, which isn't allowed.

Any workarounds? Thoughts? etc

@Ty Thomas

Unfortunately it looks like your money is stuck in the property. I believe you can only cash out refi up to 80% ltv on your primary (likely lower on a 2 unit). So at a valuation of $230k, there’s no cash to be pulled out. And if you sold it, after closing costs you’d probably be losing money as well.

But if you bought well and it’s a good house hack, you should be able to save a good amount of money while your tenants pay your mortgage.

@Josh Buchan

Not a lawyer, but as a former property manager, I went to court a handful of times on behalf of clients.

As for the big claim of rent abatement, the judge will likely disregard it. I had a tenant claim back rent like that as well. Here’s how it went:

Judge: did you pay rent each month?

Tenant: yes, but the home was in shambles, I’d like my rent back due to inhabitability.

Judge: denied. you paid rent, and in exchange you lived in a home. That’s all in the past now. Let’s move on...

Now, where you will probably lose is in regard to the security deposit. You mentioned the deposit went out to the tenant a day late. If that’s true, and the deposit went out later than the required 21 days post move out, then you’ll be giving the full deposit back. The real question is will you get penalized further? I had a deposit dispute, and when the tenant won, not only did she get back her $1000 deposit, but she was also awarded punitive damages equal to 3 times the deposit, if I recall correctly. I believe 3x is the max on punitive damages.

This is small claims court, so you can’t even utilize a lawyer. I’d make an attempt to settle ahead of court. But sometimes people are rash and stubborn.

@Isaac Curiel

I don’t use any of those services. I use Cozy. The reason I don’t use those services is that I’m not aware of any way to block or prevent a tenant from making a payment to you. That only becomes an issue during an eviction scenario. In California, once you serve a tenant a 3 day notice to pay rent, any acceptance of rent starts the process over.

So here’s a nightmare scenario: you serve a 3 day notice, then on day 3 the tenant makes a $1 Venmo payment to you. The clock starts over and you have to re-serve a new 3 day notice.

If you can’t turn off a payment source, I wouldn’t use it.

@Joe Splitrock

The Realtor Association was fighting this down to the last minute. But somehow the California Builders and the Apartment Association decided to roll over on this. I’m pretty sure these groups put a lot of money and effort into opposing the rent control proposition on the last ballot. So I’m not sure why they rolled over months later.