How to have tenant just know your property manager not owner

Question

Hello,

My dad owns a sfh rental unit we in the process of renting it. We want to rent unit this time as him and myself showing in the rental agreement to tenant that we are property managers and his not the owner. I have fictitious business name but it's only my wife and myself also we my dad has trust but the name of the trust has our last names which the tenant might figure out his the owner. Any ideas how we can put my dad and myself to show as property managers and not owners. We dont want the tenants to know we are the owners. What master leasing to my fictitious name but how will my dad still be part of rental agreement without tenant his the owner?

Bob B. · Answer

@Keith

@Keith Jourdan Why is it a mistake to lie to the tenant? As landlords we expect the tenant to be honest with us. What happens when they find out we've lied to them? What's the purpose of the lie? It's never been an issue for me to tell the truth and I've never heard of it being an issue with anyone else either.

Joe Splitrock · Answer

Lying to tenants is a bad practice because it wrecks your credibility and undermines trust. I would never accept lies from a tenant, so why would I lie to them?

The main reason people do this is because they want a "bad guy" to blame when they say no. This is really just lack of assertiveness. People in that position are better off hiring a property manager.

The other reason people lie is the belief it protects them from liability, which it doesn't. It is fairly easy to search property records and find out who owns the property. Then the landlord makes the problem worse. Not only is there a liability concern, but they look more guilty because they lied to the tenant. The tenant is less likely to work through a problem if they don't trust you.

Of course there is a difference between lying and just not volunteering information. You can tell people you are the property manager and that is true. If they ask you if you are the owner, you can say "I am one of the owners". That is also true if you have partners. If they never ask who owns it, there is no reason to volunteer the information.

Marcia Maynard · Answer

If you value open and honest communication from your tenants, extend them the courtesy of being open and honest with them too.

Also, understand and abide by the landlord-tenant laws for your jurisdiction. In some jurisdictions what you are trying to do would be illegal.

There's no need to hide who the owner is (dad) and that you are his designee, acting as manager of the property. Be proud of who you are and your role. The rental agreement should be between the tenant and the owner of the property. If the property is owned in the name of a Trust or LLC, then that should be noted in the rental agreement. You can list yourself as the contact person and representative of the owner, but the signature on the rental agreement needs to be that of the legal owner or his legal representative. Run a legitimate business and you'll have nothing to hide.

In the unlikely event that a tenant needs to file a legal suit against the owner and/or manager of the property, they or their attorney will be able to find your names and legal addresses. Don't try to set up a shell game, it will only make matters worse.

Instead, run your business in a professional manner, be polite-firm-fair, abide by the law, mitigate your risk, maintain proper insurance coverage, establish a sound rental agreement, enforce the terms of the rental agreement, courteously attend to tenant requests as they arise, understand the difference between tenant needs/wants and landlord needs/wants, set boundaries, maintain the property, and attend to issues in a timely manner.

Steve Rozenberg · Answer

@Horacio Gutierrez I would say that could be the worse idea I have heard all month.. but its only half way over so you may get beat :-)

In all seriousness I would say that is not the way to run your business. If you were doing business with someone and you found out they were not being transparent and as @Nathan G. stated possibly being fraudulent. Would you continue to do business with that company? Always remember that you are running a business when you have a rental property, and there are many laws around that business that can and will get you in trouble if you do not adhere to laws.

Again I would advise against this strategy and create policies and procedures to run your business correctly and you will be much better off

Weston Couch · Answer

@Horacio Gutierrez Hi Horracia, I work with an asset protection group and we often deal with this concern. Generally, we use trusts which are non-public but owned by the LLC's themselves to get rid of any direct public link(such as transferring it to an LLC you or a relative created). To deal with the name on the trust issue, we have one trustee unrelated to you serving as the nominal trustee when you transfer property to it, then trusteeship transfers back to you in the non-public doc. Then we set up a wholly new LLC that doesn't own any property or trusts to serve as a property manager/contractor with the property managers. If you'd like to get into more detail, feel free to connect withe me.

Zachary H. · Answer

@Horacio Gutierrez

I agree with being 100% honest. With that an option is saying that you are the property manager for the company, but if asked if you are the owner we always say, "yes, we have to have partial ownership of the company to manage the rental properties our business owns".

1. We are honest because management is our role within our partnerships

2. We do have only partial ownership in all our properties

3. Tenant knows that we are being 100% honest with them.

I agree with what is said above. Always be 100% honest with tenants. Anything less and you cant expect them to be honest with you.

Best,

Zac

Lynnette E. · Answer

As the Trustee, it first depends if the Trustor is still managing the Trust or if the management has been transferred to the Trustee. You will know this only by reading the Trust. Also the Trust will have a section that lists the authorities the Trustor/Trustee has. Some Trusts do not allow someone to take on debt (refinance, get a loan). Some Trusts identify a law firm for litigation (such as an eviction) and some leave that act up to the Trustor/Trustee to decide as needed. You can not find out answers to what a specific Trust allows on the INTERNET. You have to read the Trust because each Trust has different 'rules' and authorities and benefits and requirements.

As a side note, before you change the ownership record on the official deed, you may want to make sure the Title Insurance will not need to be redone. And that the Trust has the same ownership/beneficiaries, etc. that the current title has. For example does the Trust give 20% of the assets to charity upon the death of the Trustor or the sell of the asset? Some Trusts do not allow the sale of assets with out a specific distribution of the proceeds. You need to read the Trust or have an attorney read it with you.

Horacio Gutierrez · Answer

@Weston Couch

In revocable trust If my dad has trust that has him, mom and myself as trustees if I put the rental agreement contract as the landlord been the trust name instead of only my dads name. Can I be able to help him manage his properties such as renting out the unit, collecting rent and going to court if there is an eviction?

Nathan Gesner · Answer

First, you may be in violation of the law if you set up a fake business name.

Second, the only thing you will accomplish is the ability to make your fake owner the bad guy. Tenant asks for a break in rent or new carpet and you can say, "I'm sorry but the owner is slowly dying of cancer and can't afford it right now."

I don't see the point.

Horacio Gutierrez · Answer

For Privacy. Bob my dad has trust that has him, mom and myself as trusted if I put rental agreement as the lanlord been the trust name instead of only his. Can I be able to help manage his properties such as renting the unit, collecting rent and going to court if there is an eviction?

How to have tenant just know your property manager not owner

How to have tenant just know your property manager not owner

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