All Forum Posts by: Jason Ross

I own a single family rental property in Ohio. The property is a townhouse in a building with twelve townhouses above a block of retail. (It is a former residence of mine, but I no longer live in the state of Ohio.)

I entrusted the management to a local real estate brokerage/property management firm run by another owner/resident of the townhouse community.

A few months back, the property manager told me an investor had expressed interest in purchasing units, and would buy mine for $250,000. I told him I was uninterested at that price (as I paid almost that much for the unit before it was finished). 

A few weeks back, the property manager told me my long-time tenant was moving out. Manager said the investor was still interested, and asked if I was interested in selling to him for $250k. I reminded him of my previous response, and told him I wanted him to find me a new renter.

Out of curiosity, I decided to look at what other units in the community were selling for. Two of them (out of twelve) have sold within the past six months, one for just over $280k and the other for just under $280k.

So my property manager, who is also a broker, who also lives in this townhouse community, has TWICE asked me to sell the property for what he knows to be $30k under its market value.

Then, I found out the investor is a licensed agent at this same brokerage.

My ideal situation is that they find me another renter and continue to manage the property. (They have done so cheaply and efficiently.)

But clearly I cannot trust that they have my interests first and foremost. I cannot even trust that they are making any effort at all to find me a new tenant. For all I know, they have no intention of finding me a new tenant, and they are trying to squeeze me out so I sell to their colleague at a discount to the market.

Does anybody know the Ohio law or Ohio Association of Realtor code of ethics here? I would be grateful for any insight about their legal obligations, my legal rights, and any remedies that might be available to me. Thanks.

John Thedford , no, my funds are not commingled with the tenant’s security deposit, but sadly it is a small community bank that is nickel-and-diming the savings account in which my tenant’s funds are segregated (and telling me they are obligated to do so by federal law). Thanks, Andrew Kerr for your suggestion. I was hoping to avoid that solution! But I guess no such luck.

I have a rental home. I have a mortgage, operating/checking account, and savings account all with the same bank. I have the tenant's security deposit segregated in the savings account, while rent, mortgage payment, and other bills go through the operating/checking account.

I recently noticed an "inactivity fee" on the savings account. I was told by the bank that there is a federal law which requires banks to ensure that all deposit accounts remain active, and that is why my bank imposes this "inactivity fee".

Is this accurate? And more broadly, how do other landlords ensure that their tenants' deposits are kept segregated without being eaten up by fees?

Thanks!

Awful. If the sellers are capable of doing something like this right in front of your face, you may be best off walking away and not looking back. There's no telling what else they might do.

John Thedford -- I appreciate the work some of you more experienced operators and BP posters do to keep this forum honest and above board. Thank you.

Good for the homeowner. Glad they got a better deal.

@Aimee Smith, I agree with @Todd Dexheimer. Develop a relationship with a broker.

This property on LoopNet could be a way to do it. Doing your own analysis on it can help you better articulate what you want, and what you don't want. Also, Todd is right that commercial is different... when you talk to brokers, be certain you're able to communicate that you are a serious buyer, with resources available to make a purchase.

Let's put it this way... LoopNet is not usually the first place a broker will put a commercial deal. On the other hand, if it's been on the market for 200 days, the broker will likely be happy to share financial information with you. Start with a financial analysis, and determine based on proven cash flow what ballpark you may be willing to play in on price. You can do that before doing inspections or walk-throughs.

Ned Carey , it does get tricky, doesn't it? And not being a lawyer or legislator myself, it seems that this could have been drafted in a much clearer way. I do agree with you that the statute could extinguish a mortgage interest. But the state will not allow this to happen if the mortgagor has not clearly enjoyed the due process right of having been informed of the sale according to the processes in the statute. It seems that the state of Oklahoma is telling banks, we are getting paid first. If you banks have a mortgage interest in a property that has unpaid taxes, you have every right to come buy it from auction and make the taxes current. Then you can do what you want with it. (Also, the statute's language from immediately after where I quoted in my previous post requires that any entity that regularly encumbrances property must clearly indicate its current contact information on all such encumbrances to be filed with any county/state clerk. In other words, banks and other mortgage organizations are on notice that OK could auction property that is mortgaged.) It is less clear what would happen if I showed up to auction and the bank didn't, or if the bank did show up and I outbid them. This is where an attorney with knowledge of the case law would be helpful. As a practical matter, the outstanding loan on this property is at least 12x the amount of taxes owed. And the property is in a desirable location. It would be surprising if the bank gave up their claim without a fight.

Thanks again, Ned Carey , for your comment. I've done some more research, and for the benefit of future readers, here is an article that is helpful, but not definitive: http://www.okbar.org/members/BarJournal/archive2015/NovArchive2015/OBJ8630WarshellMonks.aspx The key point they make is about the right of mortgagors to be notified of the tax deed, and to protect their interests. They cite the portion of OK state code (68:3127) that deals with notice to mortgagors: "Neither failure to send notice to any mortgagee of record of said real estate nor failure to receive notice as provided for by this section shall invalidate the resale, but the resale tax deed shall be ineffective to extinguish any mortgage on said real estate of a mortgagee to whom no notice was sent." I interpret this as meaning, in practice, that the state will not allow a tax deed to extinguish a bank mortgage.