All Forum Posts by: Greg M.

This is the exact reason why you never collect just one month rent as a security deposit. Before the Communist State of California outlawed it, I used to collect around 125% of monthly rent. That way I have extra funds to deduct for damage and late fees for that last month of missed rent. 

Quote from @M Edouard:

What is the best way to raise it and to how much?

There are so many bad suggestions in this thread. 

The "step-up" move for rent increases is for suckers. You raise rent a little each time to not shock the tenant, but you're only prolonging your losses. The tenant either can or can't pay market rent. You're either going to eventually step-up the rent to a level they can't afford and they are going to leave, or you are going to reach market rent and they are going to pay it. All you ended up doing is losing all that additional rent while stepping-up to the inevitable outcome. 

You don't provide comps to the tenant to justify an increase. They can research the area if they want. Besides, the tenant isn't an idiot, they know what rent is in the area and they know what a deal they are getting. 

You never ask them to pick a price/increase. WTF is this, a TV game show? Higher, higher, lower, higher, higher, that's it, you win the lease renewal!!!!

Your costs are of no business to the tenants. The rent is based on the market, not on your costs. 

No other business justifies their costs to the customer. This item is for sale for $X. Take it or leave it. 

Quote from @Carlos Lez:

The unit is in a far better condition than when it was seen. The parents never bothered to come see it and whatever they imagined the place to be etc. the place is fully compliant and habitable. An old Victorian cannot be compared to a 2022 built apartment. There used to be no mold, it is alleged that there is. 

I surely want them out at the speed of light.

Since there is a lease signed, you need to get them to cancel it. Tell them the unit is perfectly habitable and you won't be making any changes to it and they can have 24 hours to sign cancellation paperwork if they choose. After that, the lease will be legally enforced. You will have to give back their security deposit.

Personally, since they looked at the unit before signing and you confirmed it does not have the issues you mentioned, I'd document the unit condition with provable date stamps and give them 24 hours to cancel the lease without further penalty, but inform them that you will be keeping the security deposit since you had to take the unit off the market and lost rent and listing expenses. See what they say. 

What do YOU want to do? Are you still interested in having them as tenants or do you just want to minimize your losses and move on?

Assuming their complaints are not accurate, I'd let them know that that the unit is habitable and in the same condition as when originally viewed. They can take the unit as is or break the lease and be liable for all lost rent until you can re-rent the unit.

Let them know:

Rent is due on 8/16 and a late fee will be added on 8/21. Rent is owed regardless of whether they choose to move in or leave the unit empty. They are not legally allowed to withhold the entire rent. The most they can withhold is based on the severity of the issue in relation to the entire unit. Sounds like the only issue they may have to withhold any is the mold.  

Eviction proceedings will be started the first day allowed by law. It will be filed against all 3 students and will greatly prevent their ability to find another landlord willing to rent to them.

Lost rent (up to when you are able to re-rent the unit), late fees, and legal costs will be billed to the 3 students and their parent guarantors. If left unpaid, all will be listed in the lawsuit. If judgement unpaid, all including parent guarantors will be sent to collections and have their credit destroyed. 

Quote from @Stuart Udis:

@Greg M. This likely isn't the case. Someone would have to review the HOA declaration but I would anticipate the interior of the unit finishes are not a common element. This is where the unit owners policy should come into play. A roof more commonly would be a common element and covered by the HOA unless there's private access such as a roof deck in which case that's often reserved as a limited common element. Rarely will this be the case for the interior of a unit but HOA Declaration control. What if one unit owner spends $500k on a renovation of their unit decking it out with high end finishes whereas no other unit owner improves their unit for more than $100k. Why would the HOA be responsible for covering the unit owners interior unit renovation? This is why interiors are rarely common elements.

 Proper procedure in this case would have been to file a claim under the unit owners policy assuming it’s not a common element. Depending on whether the unit was insured with replacement or actual cash value would dictate whether the insurance would cover the depreciated value of finishes or replacement of like kind but new. The carrier would then likely seek reimbursement from the responsible party through subrogation. 

We're missing lots of info and just speculating. However, since the HOA insurance paid out and is covering part of the interior damage, it is likely to say that either the HOA insurance covered (partial) interiors or most likely the HOA had some liability in the water leak (i.e. not properly insulating the pipe). If not, and the HOA just had excess funds after common area repairs, the HOA would not have been able to disburse those funds to the affected owners as those funds would belong to all owners, not just affected ones.

I own a unit where in case of destruction, the HOA is required to replace the cabinets and a few other items. Extremely rare in new HOAs, but not unheard of in older HOAs.

This is not your problem. If the HOA is liable and the insurance isn't enough to cover the costs, the HOA (AKA 88 individual owners) need to step in and cover the cost. This is no different than an unexpected roof expense where the HOA doesn't have reserves. They do an assessment to cover it.

I'd approach them about this and if they balk, consult a lawyer about it. 

My head is spinning reading this. I honestly can't figure it or your (in)actions out. 

You let the unit sit vacant for 30 months? With a rehab of 70K-100K (which sounds way too high for such a small unit), you could have had the place rented out for $2200-$2400 a month. Based on the mortgage and HOA dues payments you listed, you'd be netting $700-$900 a month. What did you leave out here?

You had an HO6 policy, but say "I don't believe the coverage I had will be sufficient to rebuild it." WTF does that mean? You know your policy limits. Is it or isn't it enough to cover the repairs. If not, how much will it cover? Why have you not had them pay out to the policy limits and let them go after the other insurance company?

Was the HOA legally responsible for the repairs? If so, force the HOA to do an assessment to all the units to cover the cost of repairs.

Quote from @Gp G.:

Is it good idea to just attach at top of chain link fence and leave bottom part of the tart loose that way when storm comes it does not tear down or damage the tart? Please advise

As mentioned, that is an awful idea. 

They sell tarps with reinforced pre-cut slots in them for this very reason. They also have mesh coverings that allow air through them, but unless you get up close to it, you can't really see thru them. 

The statement that "I'm still working a W2 job so extra income was not good for me on my taxes." is scary. The only time additional income is bad is if you're poor and it's going to cause you to lose government benefits that are move valuable the the extra income. 

This is a business. Treat it like a business. Stop screwing around and picking a tenant here and there to raise or raising a little now and a little later. Figure out the market for a unit in your area in the same condition and raise the rent accordingly.

You can't be scared of vacancies in this business. If a tenant leaves because they can't afford a rent increase, it's fine. Keeping the rent low only prolongs the situation while costing you money. At some point the rent goes higher and they will leave. Would you prefer it now or in a couple of years when you've lost out on hundreds of dollars a month you could have received from another tenant?

They should be looking at the property as a whole. Technically, the owner living there full times means it is not a rental as far as banks/insurance consider, so it should not affect them. 

However, many HOA's have rules about not allowing owners to rent out part of their property. It prevents a homeowner with a large house from renting rooms to multiple unrelated people.

Have you contested this with the HOA at a formal meeting? Assuming they don't have any rules against partial rentals, I'd argue that renting out a room/ADU does not qualify under the spirit of the rule. If they disagree, your next step would be to have an attorney send a letter / threaten to take the HOA to court.