All Forum Posts by: Daryl Luc

Each property in my portfolio is owned by a separate LLC which are derivatives of a master, ie: LLC1, LLC2, and so on.  This isolates anything outside of LLC1 if it's being sued.  LLC2. LLC3 etc are unavailable as settlement assets.  In addition, money accounts for each, while separate, make administrative payments to the master LLC regularly so those accounts are fairly thin at any one point in time.  They are not necessarily in the same banking institutions as well.  There are other steps you can take, but the idea is simple, similar to protecting your house from a burglary.  You institute steps that make someone see that getting a brass ring for their effort is harder than they want to go through.  Lawyers quite simply aren't keen on suing empty pockets and the more obstacles you place, the more empty your pockets look.  Piercing the veil of a corporate entity isn't that easy if set up correctly.  Two things make it very easy...do something criminal and failure to make certain your documents aren't identifying your entity correctly and in all the right places. 

Run.  Think about it, no job and willing to part with a fairly high stack of cash for the same thing he'd get by making monthly payments.  Not to mention, you, by law, can't claim the full amount as income upon rcpt, you have to claim it one month at a time.  Which means legally you can't spend it except one month at a time.  Talk to your accountant about that little problem.

This may sound weird to many, but I would talk to a couple of Family/eldercare attorneys and get their recommendation of who if it's not something in their wheelhouse.    The 'contract' between members of an LLC or LLP is fairly straight forward, what isn't the one size fits all part are the nuances for eventual outcomes over time and the family dynamics.  And that's what the question/answer part determines, and then that becomes incorporated into the final.

I was a president of a condo association for 15 years...my advice...put your money someplace else.  Condo boards are run by people with little to no experience with construction, contracts, money management or dealing with things they don't like.  Think high school student council.  This will only cost you because the board makeup changes frequently and the results never change unless there's a dictator (that was me).  Contact the president directly to gain an understanding of how rentals are viewed.
A quick note on what made up the condo......Condo Assoc Declarations and Bylaws were crafted by the developer before one person bought a unit. This is to protect the developer's interests (money) until the last unit is sold by including at least one clause that establishes a min sale price by any member).  They are by that nature, very restrictive!  At the point the last unit of the entire development is sold, the whole shebang is turned over to the residents and they are put in charge.
If I haven't stopped you, then the next thing you need to do...get a copy of the Declarations and Bylaws.  Read them thoroughly and know every word.  Some prevent rental, occupancy in excess of x people per unit, per bedroom, no at home work or business is allowed and so on.  All of these restrictions have to be incorporated into your lease and acknowledged by tenant's signature.  A condo deed is a personal contract that is agreed to by you upon purchase without any opportunity to make changes to its content.  And it is binding!  As anyone who has tried to sue their condo association or board found out...you can't.  As a member of the association, you would be suing yourself, not a single jurisdiction would ever permit this.  Board members get sued for their idiotic decisions(see above lack of skills)....and those tend to go nowhere because they are indemnified from any causes as a result of their performance, except illegal acts.

Most condo fails are due to expense control.  The financials are the place to look, specifically at the reserve account.  Nothing like getting a letter that state a new whatever is needed and the assessment equals thousands which is due within 60 days.

They probably did you a favor.  Get moving on renting it out.  By all means, keep the deposit, it's yours now. 
My advice, unless the damages you find run into the thousands, move on and do a better job of vetting your prospects going forward. If you go into court without an attorney, yeah it's cheap, but now you have to collect. That costs extra. If you're an LLC, you have to take an attorney, even in small claims....that costs a lot extra, and you still have to go through collections to get anything on a judgement.

I'm in Ohio and not your attorney, but....this is the law  FHAct, 42 U.S.C.A. 3601 et seq. governing these animals. It's not hard to read and you would be wise to take a look.
Recently I had this situation to deal with and here's some ideas for you to follow up in no particular order.  
1.  Begin eviction upon the next late pay with your 3 day or 14 day quit, whatever is you jurisdiction's practice.
2.  Let your homeowner's association spend their time and money on this animal issue...with your permission.
3.  Do you have the letter?  It has to be from a mental health professional and indicate the diagnosis of the individual.  Letters certifying dogs/cats etc. as support animals are a dime a dozen on the web, but aren't suitable for legal proof of need.  BTW, actual support and service dogs are trained.  Different certifications, but neither are allowed to be nuisances.  A good indication of a pet, not a trained animal for a purpose.
4.  Where is the animal when the tenant is not at home?  You have every legal right to demand, insist and state in writing that you recognize the animal is not a pet, and therefore when the tenant is unaccompanied with the animal it must be removed from the premises or in a kennel crate when left behind.  Another way to get around this is to require doggy day care as another option.  From now on, that should be a clause in every lease.  Once signed, even if a 'support animal' as opposed to a service animal (they are different classes) is brought on board after taking possession, you have considerably more enforcement leverage due to signature acceptance on the lease.
5. Contact the employer and see what they are doing about the dog.  They may not know it exists, which would indicate it's a pet, not what it is being represented to be.
6.  Do not get caught up in something that could be seen as retaliatory, but at the time your lease allows, you can option to not renew (in writing). Leave the property vacant for a month or two while you take your time painting, replacing the bathroom mirror, switch plates, or allowing a trial AirBnB use. NOTE: you do not have to give a reason (99% certain on this, again I'm in Ohio) for non-renewal. Remove month to month from your lease! If you want more on this, connect with me and we'll DM or phone to discuss further. Also, once you choose this path...let your HOA president know so they can stop any actions.

Never hand a signed lease to a prospect for them to complete with their signature.  Furthermore, it's prudent to have a process in place that starts with your standardized questions as a form.  The prospect's answers are then penciled in as you ask these questions, preferably over the phone before you even commit to show.  Next...an application should be filled out, returned with the fee for background and credit check.  More on that later.  Next, a lease can be offered once you feel you have the right tenant candidate and when you give them the lease as a PDF, in your email you should state clearly that you want them to review in detail and have their attorney also review it. Specify an adequate time to review.  24 hours is not adequate. Not doing this can be determined as 'signing under duress' by some magistrates if your lease and tenant and you end up in a court over some matter.  

Do give the background check time to complete.  I always do, but in a recent instance, I had a gut on an applicant and ordered reports for several jurisdictions not anywhere near where he said he had been in the past couple of years and nothing on the application was offered re: arrests and such.  I went back 7.  Lo and behold, five years ago,, two states away there were three drug arrests for meth, a domestic and a couple of DUI under a suspended license ...all with some jail time.  The available house was next to a school.  He didn't rent from me. 

The moral of the story, don't shortcut getting the best you can get for a tenant.  Don't panic just because it's vacant.  A vacancy costs far less than a bad tenant.

It's really a marketing and business plan decision and then there's the law.  I rent single family 3/2 in ring communities with at least 30% rental occupancy in the market....ie: single parents or just starting young couples with average or better scores.  I supply washer, dryer, stove, refrigerator, microwave and dishwasher.  I will not ever supply a garbage disposal!  Tenants sometimes have their own appliances and in those cases I remove what they want to replace with their own.  Seems quite a few single moms get appliances in the divorce.
Now to the law bit, and your jurisdiction takes precedence, not mine, since this sort of disclaimer could be illegal if contested where you are.  The following is the exact language used in my lease addendum regarding tenant care and feeding of the property, also known as Schedule A, a five page addendum made part of the lease signed by the tenant with sections initialed as required to show proof of reading and understanding.

The following checked items are furnished by Management as a courtesy to Tenant and are not to be construed in any manner as a part of the rental paid by the Tenant:[X]Stainless Kenmore Refrigerator[X]Stainless Kenmore Stove/oven[X]Whirlpool Dish Washer [X]White Kenmore HD Top Loading Washing Machine[X]White Whirlpool Gas Dryer[X]Wood Extension Ladder 24' [X]Black Garden Hose 25' [X]Wood Workbench x 2 [X]Microwave[X]Ceiling Fan x 2 [X]Window Coverings,10 mini-blinds and one four panel drapery.
This/these items are personal property which have been left at the Premises for your convenience. Should one or more of these items need repair or any maintenance due to tenant misuse or negligence, Landlord will not be responsible for the cost of such repairs/maintenance. The Tenant may have the appliance(s) repaired at cost by an approved appliance repair company. All items must be left in the same clean, working condition as supplied on move in when the Tenant vacates the property. The Tenant will assume the cost of maintenance and/or repairing the items if it/they are non-working or needing repair/maintenance upon vacating the property.  In the event of a failure of an appliance during tenancy, it may be that the appliance would not be repaired or replaced by Landlord and just discarded due to the cost to restore. In such a case, the tenant would be given the opportunity to accept or reject owning the repair or a replacement with their own appliance as long as it complied with safety etc.

I source my appliances from Habitat for Humanity Restore at reasonable prices and tested working.  When I have a property turnover, all the appliances are tested after the cleaners finish their job, but before the security deposit is trued up.  If there's a quart of ice cream melted in the bottom of the freezer that goes on the tenant side of the ledger.

The account name and the name on the rent check have to be the same. I have LLC properties, but the check is made out to me or another named person within the lease, even tho the LLC is identified on every page of the lease as the property owner. The named individuals would be outlined as 'agent for the owner'. Just like identifying a property management firm within the lease.
As long as your shoe box of back up rcpts and income show no hanky panky if pulled into an audit you'll be fine.  At some point, if you grow, then a consolidation of your business reporting will become necessary and you may end up with multiple accounts to cover segments of your business.

I'm not in DC, but after looking into Section 8 some time ago, I walked away because: The inspection to be approved as an available property PRECEEDED having any tenant from the program.  This inspection wasn't free, was annual afterwards and was a H.U.D program.  All of that equaled extra cost and implied vacancy during the approval period.  If re-inspection turned up a deficiency, then cash flow suffered until the remedy was approved.  I get calls all the time from people who are in the program and I've never shown a property to any of them.  I don't have to since I'm not in the program.  There were other reasons for me to walk...all involved me getting the return on time and money I require, but, and this should be stressed, it's a Federal program and could have been modified to your benefit since I examined it.  I seriously doubt that, but it is possible since there are clearly a lot of investors making a good go of it.  I so know one landlord who finds buying trailers in trailer home parks and renting those out makes him more money than he ever saw from "8" tenants. Consider your alternatives.