All Forum Posts by: Robin Evans

Dear BP friends, we would like to seek your advice on business LOC. We found a local credit union that says our numbers on the application look good but most of our equity is in rentals (we have 4 rentals under the business name). They can use our equity in the rentals to approve LOC if we agree for them to put second lien on the properties. They use 80% of the appraisal value of properties minus loan balance to decide on the limit for the line. $ 50 for each appraisal and 1% origination fee based on the limit. No annual fee or specific term. Variable rate based on prime rate+1%. If we draw it, we can just pay interest only for the minimum payment. Sounds good to us. LOC will be good for our short-term rehab to get things going. The question is second lien. We are brand new to this and have never had second lien on our properties. Is that something quite common? What is you guys' input on this? Thanks so much!

Well, of course, the tenant insists they didn't cause the problem and would not pay for plumbing cost. And quote this from Lease: 

Landlord’s Maintenance of the Premises. Landlord shall maintain the structure, roof and foundation of the Premises, and the heating, plumbing and electrical systems of the Premises unless the repairs required are a result of any act or omission of Tenant (excluding normal wear and tear). If any such damage is a result of the act or omission of Tenant, Tenant shall be responsible for all costs to repair such damage. Landlord shall carry out all required repairs in as reasonable time as possible in accordance to applicable laws, but shall not be liable to Tenant for any disruptions or inconvenience to Tenant as a result of damages or repairs or any claim that the Premises is uninhabitable (except to the extent of any non-waivable warranty of habitability provided by applicable laws).

And he keeps arguing back and forth that they didn't cause the issue and contradicting himself by they don't do dishes v.s.  they do dishes but in a bucket and throw scrap food outside. We just have to tell him after plumber evaluates and determines what caused the problem, we will make a decision about who is responsible to pay. It is pointless to argue who caused the clog at this point. Hope you understand and just wait till tomorrow.

Wow, that really makes my day and helps make our decision to get rid of him pretty quick!

@Bill B. Thank you for the advice! We manage our own properties and used this clause from another landlord's lease sample. We were not thinking too much about the clause and thought that was how it should be. Now we know.

@James Mc Ree Thank you for your input! 

@Nathan Gesner Thank you for the advice! He is wearing us down! There is some update on the duct cleaning issue that I will mention below. 

@Teddy Binette Totally. We can learn so much from BP forum! Thank you!

@Oscar Martins Thank you for the smart idea! Nobody wants a rent raise. But when we met them yesterday, they even asked us if there is any chance of rent decrease next year, oh my goodness! 

@Bud Gaffney Indeed, especially this one. 

@Judy Parker Just learned something new "happy clause".  Thank you! 

Awesome BP forum! We feel the power of Biggerpockets community and are very appreciative for all your feedback! 

New update after we inspected the house yesterday: 

1. The air duct is under the floor (guessing it is a trend in the 70's for a slab house?) and looks like made from clay? There are some installation debris (small pieces of rocks) at the bottom of the space where one duct sits. We cleaned it due to the fact it might have been there before they moved in. It took 3 minutes. No big deal. 

2. The bathroom exhaust fan looks very dirty and they claim other fans are fine but just this one is so dirty. He wanted to borrow our vacuum to do some cleaning and we refused to lend tools. We cleaned the fan that took 2 minutes and told him going forward he needs to do his own house cleaning regularly. He said okay and didn't mention duct cleaning any more. 

3. The bigger issue is kitchen sink. One side is leaking and needs plumber putty to stop the leaking. There is a clog somewhere down below. They claim they wash dishes in a bucket (we see the bucket) and don't throw any food scrap or other trash down the drain. There is nothing in the p-trap. This is a duplex that shares one septic tank. The other side doesn't have any clogging issues. And the drain is fine when this tenant moved in. There is a clause in our lease that says:

"Tenant shall be responsible for all costs related to any repair or maintenance of any plumbing stoppage or slow-down caused by Tenant, whether accidental or purposeful. Tenant shall not place into any drain lines of the Premises any non-approved substances, such as cooking grease, sanitary napkins, diapers, children’s toys or other similar objects that may cause a stoppage. Tenant shall notify Landlord of any plumbing leak or slow drainage within 24 hours. Landlord shall use reasonable efforts to remedy the plumbing problem. Tenant shall only use a plunger to attempt to fix a slow or stopped drain, and shall not pour chemical or other drain cleaners into any stopped or slow drains. Tenant shall also be responsible for any plumbing system freeze-ups occasioned by Tenant’s negligence."

With a clause like that, here is our thought on dealing with this issue: We can fix the leaking by putting the plumber putty on because it looks like natural wear and tear. For the clog, either notify the tenant to find a plumber to fix it or we find one fix it and charge tenants for it. The plumber can also let us know what caused the clog. Any input on this one, dear BP friends? Thank you so much!

 Thank you for sharing your input with us! We also have a store rental and need to learn how to handle with the commercial tenants. 

 Thanks for the directness! 

 Thank you for your input! We changed the filter in July and about to change again this Sunday. 

 Thank you for your input on the vacancy! It could be an issue to find a new tenant right away in wintertime. A friend of mine who is also a landlord doesn't usually give out rent increase notice in wintertime out of the same concern.