All Forum Posts by: Nik Moushon

I didnt realize you got to do that much renovation on it before COVID decided to take a dump on everyones plans (my duplex included). Sorry to see your original plan get snuffed out. It would've been a great add to the community. 

@Jack Everett McMichael

Glad to see you trying to get a jump start on your career but you need to be very careful on how you start your "business". You need to do do some hard research on what it actually takes to run a business and also the requirements by law. You can't treat this as a little side job like mowing someones lawn. You are make decisions that are worth tens of thousands of dollars and if you draw something wrong or miss something that costs the owner or contractor extra they will come looking to you to pay for it. What most architecture school dont teach you is how to be a business owner. Some make sure you are truly covered and understand how to run a business. Also make sure you are not using your student versions of Autodesk. You are a business now. You will need to use the full licensed software because if you get caught profiting off student version this could hurt your ability to register with NCARB and take the AREs. Take it seriously. 

Also something to keep in mind is that most firms do NOT let their staff moonlight on the side. They have you sign a non-compete when you get hired. 

I wish you the best of luck though. Really do. Just make sure to cover your back and understand what you and your friends are really getting into. No one tells you how much liability us architects actually take on in our careers. We are that far behind doctors. 

First off, regardless of what the code says the plumber should not be holding up his work for something that is "against code" but has nothing to do with the water heater. He should do his work and move on. Its very nice of him to mention that he sees something he thinks is out of code but its not his problem, its yours. The inspector could come and not even see the door at all and you just replaced a door for the cost of probably close to $1000 for nothing. 

Secondly, I'm an architect (not your architect) and I am not aware of any code in the IRC that requires Laundry rooms to be fire rated rooms. Or any room that has the water heater in it for that matter. WH are put in closets ALL THE TIME. I have never been tagged in any of my designs for my closets not having fire rated doors. The only code that start requiring fire rating for Mechanical Rooms are when the mech units are located under a stair case. Or, as mentioned before, the door is in the fire rated wall that separates the garage from the main house. But both of those codes have nothing to do with a WH specifically or even that its a laundry room. From what you have mentioned it sounds like this plumber is saying that because its a laundry room that it needs a fire rated door and not that the WH is in this specific room....and that is a load of crap. 

Thirdly, the only thing that can override the IRC is a more strict city code. and this could be possible but in all the cities I have worked and designed in I have never seen this before. So ask your plumber to cite you a specific code that requiring you to install a fire door. Because a fire door is COMPETENTLY USELESS if the rest of the room isnt fire rated as well. If he cant then tell him to continue the install and you will deal with the inspector and if he still refuses then find someone else. 

 Theres nothing there that Brian or I havent said already. Here is the piece you can hang your hat on and show the renter:

• "Prohibits landlords from treating unpaid rent and charges as an enforceable debt, unless the landlord demonstrates by a preponderance of the evidence to a court that the resident was offered, and refused or failed to comply with, a reasonable repayment plan that was reasonable based on the individual financial, health, and other circumstances of that resident.

Note: All rent payments delayed through this moratorium will still be owed but a landlord must offer a tenant a reasonable repayment plan to enforce any collection of that debt."

The last bit of the first paragraph will back you up in court on a 3 month repayment plan. If what you day is true, and you have evidence of it (though if you go to court you'll have time to get that evidence), that he has had his full time job this entire time or even most of the time but just refused to pay because he was taking advantage of the law and not leaning on it because he was hurt by this virus will tell the judge that you were in the right...not him. 

Just make sure to be extra nice in any communications, you can be firm but nice, and keep track of everything. You'll be fine in the long run. 

@Charles D.

@Brian Hughes gave you a good brake down of what to do. But I will point out a couple specifics that you can pass along to your tenant to help "clarify things" for him...

There is a moratorium on collecting rent atm NOT a forgiving of rents. Rent is still due to the landlord and is to be paid back, in full, through a payment plan that is over several months (i forget if the law say exactly how many or not). Tell him you will take the rent he has missed out of his security deposit first and anything not covered by that will be due. No state has the constitutional right to wave rent for anyone....unless the state says they will pay the rent. 

You cannot charge him late fees or fines when they start repaying through your payment schedule. Though you can't evict him NOW you can start the process NOW. Start by collecting information on what he is doing. The emails and text messages are gold. Hoard that gold. You can't actually do the filing for eviction right now but you can issue the warnings and gathering proof of them breaking the contract. 

I would suggest reading the law yourself as a refresher. Write up a very nice email explaining that it could be easy to misunderstand the law and then explain how the rent that is due is just postponed not erased. Use exact quotes from the law to prove this to him and attach a copy of it in the email. Suggest a repayment plan or a reduction in rent instead of not paying it at all. Be nice about the whole thing because it will help you in court later on (if it goes there...hopefully not). Do not threaten eviction or fines or anything for that matter. Dont even bring up that you know he isnt effected by the virus or the economy. If you have proof of that, keep it, but keep that as a card to play at a later date. Unfortunately a side effect of this law (that most WA state politicians dont even care about) is there are people out there that are going to take advantage of this and not pay....but do know its very very rare. And from what I've heard, once the tenants actually realize that rent isnt forgiving or wave and that it is still due they end up paying. Because they dont want to be paying 1.5x or 2x rent for the next several months after this. 

 Will, sorry to see you move man. Good luck in your new location!

As for the house, I would have to agree @Steve Vaughan and go with selling the house, there is potential for too much trouble and too much CapEx hit you really soon to be able to keep the cash flow constant. No sprinklers, high maintenance lawn that unless you higher lawn care company to maintain it will turn to **** real quick, quirky vents and a roof thats on its last leg scream of constant maintenance calls. So by the time you are sick of dealing with this from afar you will be forced to replace the roof before you sell it.

The reality is right now the the housing market is slow right now. If you can hang on for another month I think you will be fine selling. The governor should be making an announcement either today or this weekend about how long he will be extending the lockdown. This should give you a better time frame on how long you would have to hold this. Also taking into consideration that there will be the reopening of the economy in phases. So things will get back to some what normal housing market in a month or two. Because of the brief description of your house I would think under a normal market your $270k range sounds about right for that house and location. So for two months rent is it worth putting it on the market for $250k and loose out on ~$20k? Plus you dont wanting it sitting on the market too long....but you dont want to wait till EVERYONE is out of this lockdown either. Prices havent dropped here on houses, so the demand is still there, its just that everyone is scared to go out and do their normal house hunting. So they are sitting at home drooling at all the pictures on Zillow. So as soon as the restrictions lighten up the housing market should pick back up really quick. So getting your house on the market a week or two before everyone can get back out will be good for selling. See what the gov has to say about the lockdown and then make a decision. 

Of course if you HAVE TO HAVE to cash now in order to move then thats something different and you have to do what you have to do. You might not get ahead with this sale but at least you wont loose ground. Breaking even is the best worst case scenario to be in. 

If I made 25% profit then sure I wouldnt mind helping out in these tough times. But I dont make anywhere near that. 

Oh and its very unconstitutional. Thats why states have only postponed rents and not forced owner to forgive rents. 

Here is what I have seen and heard of happening in this kind of situation in my nearly 10 years of practicing architecture. 

Will you go to jail? - For a first time offense, absolutely not. You would need to be a habitual repeat offender and/or not follow the cities orders to end up going to jail. This is one of those things where you REALLY have to piss off the judge to go to jail. 

So if you don't go to jail..what happens? - Well first, most cities will try to work with you to find some way to meet the current code. You have several options to look into: a variance, becoming legal non-conforming (vs just non-conforming), zoning change, and other unique/drastic measures such as huge changes to the house to make to a true two property duplex/townhouse (this would require a lot of research and very site specific). If at the end of all of this you still cant find a way to come to an agreement with the city they can, and do have the right, to force you to convert the duplex back to a SFR. If you don't they can issue huge fines (usually by the day) and if those rack up and dont get paid they can put liens on the property, which after a time of non-payment they can foreclose on your property and take it from you. I've seen this done on un-permitted SFR additions or renovations.

Oh and be careful of legal non-confirming properties. There is a very small list of improvements you can do to the property and still stay legal non-confirming. Once you do either X amount of work (usually based on a percentage of the building being worked on) or the type of work the city can then force you to meet all current codes and remove your legal non-conforming status. If you are trying to fly under the radar on your work (which I dont advise) you have to be mindful of what work requires permits and what do not. This is where the city will catch a lot of illegal duplexs. 

As for the "dont ask, dont tell" policy....I've seen it done a lot. Usually the city will kind of look away as long as there is no health, life safety or building code violations that put people in danger. Now if they get a complaint or tip about an illegal duplex they do have an obligation to investigate and at that point they usually do bring down the hammer...again every city is different. 

I've seen banks back out of financing once they found out the duplex was an illegal duplex. So theres that to consider if anyone is thinking of buying one. 

If you have any other questions let me know. I literally deal with zoning and building codes on a daily basis. 

Sounds like you need to keep praying and your problem will be gone. 

Back to Plan A!!

Seriously though, dont worry about it. You only have to worry about it if you believe in that stuff. 

@Cliff C.

Cashing out to just spend it (even on rentals) is risky in my opinion because you have now excepted the losses your 401k has taken because of the market crash. You are removing a safety net for your retirement as well. Putting all your eggs in one basket in risky. Plus you still have to pay taxes on it...you just dont have to pay the 10% penalty.

With that said though, I'm not against it. I am GOING to completely remove the money in my previous employers 401K but not my current one. I just have to figure out when I'm going to do it. The reason I'm doing it though is not to put it into my rentals or my construction. I am going to switch it over to a Roth IRA. That way it is still in a "retirement" account but it is now in an easily accessible account that has no restrictions or penalties for removing it in the future. I will still only do that in an emergency but I now how that option. Now I might also take some of that and put it in individual stocks that I choose but its still a buy for the long haul and not a day trading type of scenario.

And further detail as to why I'm taking it out of my previous employers 401k is that I only get to keep 60% of their employee match because I wasnt with them for over 5 years...so ist not like its making me more money or get to keep it when I retire and start pulling. But the reason I am currently waiting is that there were rumors that Trump was thinking of waiving income tax (of partially) as part of a stimulus bill. So if that happens then the taxes I would pay on pulling the 401K would go down. If that doesnt happen then I'm still back to where I was. But not paying the 10% penalty is still big enough for me to move it before the CARES Act expires.