New For 2017 – LA’s Rent Registry

Due to a recent amendment to Chapter XV of the Los Angeles Municipal Code, beginning in January 2017, the City will collect rent rates for all units subject to the Rent Stabilization Ordinance (RSO). Previously, landlords were only required to pay the annual registration fee and provide an emergency contact. The Los Angeles City Council enacted the City’s Rent Registry Program (Ordinance #184529) effective October 4, 2016. This ordinance provides that, in addition to paying the annual registration fee, landlords must also provide the rent amount for every rental unit subject to the RSO by the last day of February of each year. Registration is complete only when all outstanding registration fees have been paid and all required rental amount and tenancy information, including emergency contact information, is provided.

All necessary information and will be included in the materials mailed by HCIDLA with the annual RSO/SCEP bill. The 2017 annual RSO/SCEP bill will now include a two-page double-sided Rent Registry form. An online Rent Registry Portal has also been created at registerLArent.org to provide Landlords a more effective and efficient means to ensure accuracy and avoid any mailing delays. The Rent Registry Portal includes an online downloadable excel template, which will be especially helpful for owners and managers of larger properties. This template can be downloaded and, once information has been entered, the information entered on the template can be uploaded automatically to the online rent registry portal. Landlords who pay their annual registration and submit their completed Rent Registry form online will receive their Annual Statement of Registration (Certificate) within minutes of online submission. Much of the information entered in 2017 will be automatically saved for registration in future years.

The RSO allows a landlord to pass-through 50% of the registration fee to the tenant as a lump sum surcharge. Beginning in 2017, this fee will be eligible to be collected in the month of August due to the recent amendment in the RSO (in prior years, surcharge could only be collected in the month of June). Registration Statements (Certificates) issued in 2017 will be valid from May 1, 2017 to July 31, 2018. Subsequently, the Registration Statements will be effective from July 1st to June 30th of each year, reflecting a fiscal calendar year.

The Rent Registry Program will build a historical data of rent trends for the City’s rent-stabilized housing stock and deter unlawful rent increases while simultaneously assisting new or prospective landlords who may inherit or buy property through foreclosure or from property owners who fail to provide rent records or tenant estoppels upon the sale of occupied rent-stabilized properties.

The Los Angeles Housing + Community Investment Department (HCIDLA) is working to make this new program as easy as possible for landlords. Workshops will be offered throughout the month of January to assist landlords in understanding and complying with this new requirement. Additionally, a “Drop-In” session is available on the first Tuesday of the month from 2:00 to 4:00 by calling (213) 928-9075 to request an appointment. To learn more about the new Rent Registry Program, please visit registerLArent.Org or call (866) 557-(7368).

Reprinted with permission of AAGLA (Apartment Association of Greater Los Angeles)

AAGLA EXPO APRIL 19, 2017, FREE REGISTRATION AAGLAexpo.com

Legal Analysis of Quiet Title Claims for Apartment Owners and Deed of Trust Holders – By Nate Bernstein, Esq.

Often times we get calls from clients or colleagues who ask us to explain what a “quiet title” action is.  There is no need to be quiet and hush hush about quiet title actions – pun intended!   In fact a quiet title claim is very common claim and cause of action asserted under California real estate law.      This article is an overview of the quiet title claim process for property owners and real estate deed of trust lenders who may have a perceived or real problem with their right, title, and interest to real property in California. 

Everyone should get a “title check up.”  It is in the best interest of all investment property owners and deed of trust lenders to periodically obtain a copy of a preliminary title report from a reputable title company-  you may find items in the title profile for the subject property that are objectionable, fraudulent, or mistakes- these matters should be cleared up.  It is healthy to get a title check up- it leads to good title karma!!

If you are in the real estate investment ownership or real estate lending business, you know that having clear, marketable title to real property is an important component to valuable real estate ownership.   If your title is not clear, or has chain gaps- you cannot sell, refinance, or otherwise leverage your asset.

Clouds on title may impact an owner’s ability to sell or refinance property, and can impact a lender’s rights for title priority and to foreclose on real property.    Clouds on title or mistakes on title can also impact an owner’s ability to evict a tenant – the tenant may claim invalid title as an affirmative defense to an unlawful detainer lawsuit – that is the last thing you want when you are trying to evict a tenant!!

The law provides a remedy for fixing title problems.  Quiet title lawsuits are an important vehicle for deciding real estate title disputes and deed of trust priority disputes under California law.

Legal Procedures for Quiet Title Claims

When you have a dispute as to the state of the title for a residential real property or commercial real property, or an unfriendly person or entity is making a legal or equitable claim against the title, you can file a “quiet title” lawsuit in the Superior Court where the property is located to resolve the claim.   This may be done directly by the party or by the party’s title insurance carrier after a claim is made with the title insurance carrier.   Title insurance companies often times get involved in prosecuting, defending, and settling quiet title actions on behalf of property owners and lenders.   Title insurance companies sell title insurance products to purchasers and lenders.      When a title insured client makes a claim, filing a quiet title action is often times the method to fix a title problem on real property short of paying off the client’s claim or investment.  The goal is to obtain title “as insured” under the title insurance policy.

The quiet title claim can also be brought in conjunction with other claims, such as fraud, a claim for cancellation of an instrument, declaratory relief, injunctive relief, or even equitable subrogation.    Each case is fact sensitive.   In a declaratory relief action, for example, the court has the power to determine the ownership rights of the parties as to an interest in real property as of a certain date.  An opponent can also file a countersuit, also called a “cross-complaint.”   Today you are the plaintiff, but tomorrow you may be the defendant!

As another example, in a quiet title lawsuit, you can also litigate a claim relating to a fraudulently executed or fraudulently recorded deed of trust mortgage document.  That is why it is a good idea to get a title check up to see what is in your title profile.

An action to quiet title is a lawsuit filed to establish ownership of real property (land and buildings affixed to land). The plaintiff in a quiet title action seeks a court order or judgment that prevents the defendant from making any subsequent or conflicting claim to the property.    Quiet title actions are necessary because real estate may change hands often, or there may be a conveyance of a partial interest, and it is not always easy to determine who has title to the property.

In the arena of quiet title litigation, the Court will determine the state of the title as of a particular date, and has the power to “clear title,” remove “the cloud on title,” or make an equitable decision, and, hopefully, resolve the dispute.   Title disputes can be adjudicated in an orderly manner without infighting between neighbors or shouting matches.   By law, in California, juries do not decide quiet title actions- these actions are decided by judges in bench trials.   Thus, there is no right to a jury trial for a quiet title action under California law.  Do you really want 12 jurors with no legal training deciding who owns your apartment building?

Applicable Laws

Under the laws of the most states in the United States, the law of quiet title is governed by state statutes and the case law authorities that interpret the state statutes.    Generally speaking, the law of quiet title in California is governed by California Code of Civil Procedure 760.010-760.060, and the case law interpreting these sections.      Also, underlying substantive laws, may apply as well- such as fraud, or breach of contract, the laws of recording and conveyances,  or the laws of probate.

When quiet title lawsuit is filed, the plaintiff is required to record a lis pendens at the County recorder’s office.    The term “lis pendens” is a Latin term for “action pending.”  The lis pendens provides notice in the title profile of a particular property that a lawsuit is pending, and that any subsequent grantee, subsequent purchaser, assignee, or lender, takes title subject to the claim.   Generally, a lender will not make a loan secured by a title that is subject to a “lis pendens” recording.  For the basic statutory procedural requirements for handling a lis pendens, please review California Code of Civil Procedure 405-405.24.

The quiet title action is important, if an owner or secured lender wants to determine that he or she has superior rights to the title of a particular parcel of real property in comparison to other claimants or potential claimants.  Secured real estate lenders often seek to establish title profile priority for its deed of trust by filing a quiet title action and adding a claim for declaratory relief.    Establishing a clear and marketable title is also crucial for receiving future financing, or for making a marketable future transfer by deed, trust, or will.     It is also an important foundation to have clear title if you start an eviction lawsuit- also known as an unlawful detainer action.   If title is not clear, how can the person complete an eviction with confidence?     Possession follows rights to clear title!

Quiet Title Actions are “Fact Specific” –  

Most Actions Settle But Some Proceed to Trial 

In reality, most quiet title lawsuits and related claims are settled after the case is filed and prior to trial.   Cases sometimes settle in mediation, at a settlement conference, or through professional communication and compromise between the parties and their attorneys.   If quiet title cases don’t settle “out of court,” these claims are decided by judges in bench trials every day.  So you need to be prepared to try your case if the case does not settle.

Other times, when the defendant fails to defend the action, a default is filed and the plaintiff has to prove up the default with live testimony in Court.   Because of the intricacies of the court process, parties should retain experienced counsel to represent their interests in a quiet title action.

This article is a capsule overview, and each quiet title claim should be treated specifically to address the specific facts and circumstances of the situation.   Questions should be directed to Los Angeles Real Estate Law Group at (818) 383-5759.  

Nate Bernstein, Esq., is the Managing Counsel of LA Real Estate Law Group, and a member of the State Bar of California and his practice concentrates in the areas of complex real estate litigation, commercial litigation, employment law, and bankruptcy matters.  He is a 22 year veteran Los Angeles real estate and business attorney and trial lawyer.   Mr. Bernstein also has expertise on bankruptcy law, the federal bankruptcy court system, creditor’s rights and debtor’s bankruptcy options and created www.laquiettitleattorney.com a leading educational resource on quiet title real estate litigation.   For more information, call (818) 383-5759, or email natebernstein44@gmail.com

Reprinted with permission of AOA (Apartment Owners Association, Inc.) and the author.

 

Service Dogs and Support Animals: Here is What You Need to Know! – By Dale Alberstone, Esq.

Reprinted with permission of AOA (Apartment Owners Association, Inc.) and the author.

Flying home on American Airlines this past July on a six hour leg from Boston to Los Angeles, the woman seated next to me placed her small Poodle on the airplane’s cabin floor just in front of her feet.  After I made a few comments to her about how cute her puppy was (although it could have used a good bath), she volunteered that “Foxy” was a “service dog.”  While the lawyer in me tended not to believe that, I refrained from inquiring, “Oh really?!  What type of service does your dog perform?”

Instead, I asked her what the airline’s policy was relative to a service dog.  She replied that that if Foxy is a service dog, he could fly for free.  I then asked if American required her to show any documentation establishing that Foxy was, indeed, a service animal.  She replied, “No,” and then presented a subtle grin.

That incident has inspired me to write this month’s column so as to brief landlords and management companies as to when they must allow a dog or other animal to reside in an apartment unit.  Stated in a slightly different manner, my discussion this month addresses the circumstances by which a housing provider may enforce a “no pets” policy in a lease so as to bar the tenant or applicant from bringing in a dog, cat, pig or other four-legged creature.

That law is complex and is separately legislated by both the State of California and the Federal government, but I will clarify it as best I can.

In general, there are three types of animals in issue, namely: service animals, support animals and pets.  True service animals and true support animals are not pets.

A service animal is a dog that is trained to perform services for a person with a disability, such as guiding a blind person, alerting a deaf person to an imminent hazard, fetching dropped items, opening doors, ringing doorbells, pulling a wheelchair, activating elevator buttons, steadying a person while walking, helping a person up after a fall, and assisting someone who is having a seizure.

As defined in the federal American with Disabilities Act (“ADA”), a service animal in the context of public accommodations is defined as “Dogs individually trained to do work or perform tasks for people with disabilities.”  Common examples are guide dogs and signal dogs, which assist with sight or hearing impairments.

Under the ADA and California law, in addition to dogs, a miniature horse (which typically weighs under 100 pounds) may also qualify as a service animal for an individual with a disability if the equine has been specifically trained to perform tasks or work for the benefit of the individual’s disability.  But AOA members typically do not encounter horses, so I will not further discuss them.

A support animal (sometimes referred to as a social animal, therapy animal, companion animal, emotional support animal, and assistant animal) is an animal used to assist with therapy goals, such as animals which help alleviate emotional or social symptoms of anxiety, depression, stress and difficulties regarding social interactions.  Support animals are not specially trained.  Their presence merely improves a tenant’s inability to otherwise live independently and fully use their living environment.

In either case, the service dog or support animal must accommodate a person with a disability.  That means that the tenant (or rental applicant) must have a physical or mental impairment that limits (or in some cases “substantially” limits) one or more major life activities, or has a record of such an impairment, or is regarded as having an impairment.

Pets are domesticated animals which are kept for pleasure rather than utility.

Notwithstanding a “no pet” provision in a lease or rental agreement, a tenant with a disability who has a physical or mental impairment that limits (or in some cases “substantially” limits) one or more major life activities or has a record of an impairment, is allowed to have a service dog or support animal live in that resident’s apartment unit.  Both Federal and State law trump and nullify any lease provision to the contrary.

1. Is your dog a service animal?  If so, is your dog required because of a disability you have?  If so, what work or tasks has your animal been trained to perform?
2. Is your dog (or other animal) a support animal? If so, do you have a disability that limits one or more of your major life activities?  If so, does the disability create a need for you to have your dog (or other animal) live with you?

Bear in mind, however, the housing provider may not inquire of the tenant or applicant about the nature of the disability.  The theory is that the disability is confidential and such an inquiry might impermissibly embarrass the resident.

If the tenant or applicant who does not have an obvious disability (or a disability already known to the housing provider), requests that an animal be allowed to live in the apartment unit either as a service or support animal, the lessor may require the resident to provide documentation from a physician, psychologist or other qualified health provider that he/she has a disability and that the disability creates a need for him/her to have a service dog or support animal.

Both California law and federal law independently govern the right of a tenant to have a service dog or support animal in rental housing accommodations.  While there are differing nuances between the laws of the state and federal governments, one significant difference is that California’s definition of a disability is broader than federal law because the disability in California need only “limit a major life activity.”  It need not “substantially” limit a major life activity.  A “major life activity” includes a person’s physical, mental or social activities.

On the other hand, the Federal Housing Amendments Act of 1988 requires that the disability “substantially” limit one or more major life activities.

With respect to rental housing units in California that AOA members own or manage, they should follow the more restrictive California law which prevents them, as the landlord or management company, from excluding such an animal if the tenant’s disability merely limits (without consideration of whether it “substantially” limits) one or more of the resident’s major life activities.

If the tenant or rental applicant does not have any type of disability (as I have explained it above), then a “no animal” provision in a lease would prevent the tenant or applicant from bringing his/her dog or other animal into her unit.

Similarly, if the animal is a pet (because it does not fall within the definition of either a service dog or a support animal), then the “no animal” provision in the rental agreement may be enforced.

Finally, a housing provider may prevent a service dog or support animal from living in an apartment if (1) the animal will damage the property or is a danger to other tenants, and (2) no reasonable accommodation can be made for the tenant which would avoid those problems.

Concluding Remarks

When authoring this article, I telephoned a customer service representative of American Airlines to inquire about its policy of allowing a dog to accompany a passenger during flight.

The spokeswoman advised that if the passenger notified the airline in advance of the flight that he/she would be bringing on board a service dog, American would allow it if either (1) the passenger provided American with a written note from a healthcare professional that the dog is a service dog for the individual, or (2) the dog wears a harness and the harness is appropriately marked with a tag or placard saying “Service Dog.”

On the other hand, the representative informed me that if the dog was for emotional support, the passenger would be required to provide a letter from a healthcare provider that the comfort animal was necessary for the mental or emotional stability of the passenger.

Fortunately, in the context of service dogs, landlords and management companies are not compelled to allow canines to live in a unit merely because the tenant outfits the animal with a harness and a “Service Dog” placard.

Perhaps some of the disparate treatment of service dogs versus support animals has to do with criminal penalties.  In California, it is a misdemeanor (and thereby theoretically self-policing), punishable by 6 months of incarceration or a $1,000 fine, for an owner to tag and represent that a dog is a service dog when knowing it is not.  No such similar criminal act is committed by falsely claiming an animal is a support animal.

Finally, bear in mind that only certain limited questions can be asked of the tenant, as discussed above, and a written memorandum or letter signed by an appropriate healthcare professional can be required if the person’s disability is not apparent or otherwise known to the lessor or management company.

Dale Alberstone is a prominent litigation and transactional real estate attorney who has specialized in real property law for the past 39 years.  He has been appointed to periodically serve as a judge pro tem of the Los Angeles Superior Court and is a former arbitrator for the American Arbitration Association.  He also testifies as an expert witness for and against other attorneys who have been accused of legal malpractice.

Mr. Alberstone has been awarded an AV rating from Martindale-Hubbell.  An AV rating reflects an attorney who has reached the heights of professional excellence and is recognized for the highest levels of skill and integrity. You may Google “Dale S. Alberstone” for further background.          

The foregoing article was authored on August 1, 2016.  It is intended as a general overview of the law and may not apply to the reader’s particular case.  Readers are cautioned to consult an advisor of their own selection with respect to any particular situation.

Questions of a general nature are warmly invited.  Address correspondence to Dale S. Alberstone, Esq., ALBERSTONE & ALBERSTONE, 1900 Avenue of the Stars, Suite 650, Los Angeles, California 90067.  Phone:  (310) 277-7300.

Seismic Retrofits Now Mandated For Apartment Owners!

By Ali Vahdani, P.E.  Reprinted with permission from the author via  Apartment Association of Greater Los Angeles (AAGLA)

Twenty-two years ago this January, Southern California suffered one of its deadliest and most destructive earthquakes: a 6.7 magnitude jolt that killed more than 60, injured more than 9,000 and caused as much as $25 billion in widespread damage.

Freeway overpasses crumbled.

Gas and water lines snapped, creating an apocalyptic release of both fire and flood in the streets. Blackouts were widespread. Even the U.S. Postal Service halted delivery for days.

But perhaps the most stunning example of the Northridge Quake’s destructive power was the collapse of the Northridge Meadows Apartment building, which crushed 16 residents and flattened cars in the ground-level parking of the soft-story structure.

The disaster prompted a sweeping call for stricter building codes throughout California: a mandate for seismic retrofitting of non-ductile concrete frame buildings and wood structures with soft-story conditions.

Many years and several large-scale earthquakes later – and after decades of controversy – the Los Angeles City Council late last year approved the nation’s most sweeping seismic regulations, affecting some 15,000 buildings in the city.

Building owners have seven years to retrofit their wood buildings with soft-story conditions, and 25 years for nonductile concrete frame structures.

Beginning soon, the Los Angeles Department of Building and Safety will begin issuing courtesy letters to the owners of these buildings, advising them of the required upgrades per the ordinance:

• The orders will come on a rolling basis, with the city’s largest apartment buildings – those with 16 or more units – getting the first wave of orders.
• Structures with three or more floors but less than 16 units will come next, followed by all others.

Owners of soft-story buildings will have one year from the date they receive their order to either submit proof that the building doesn’t need retrofitting, or plans for retrofit or demolitions.

Within two years, they must obtain permits to get the work done.

All work on soft-story structures must be completed within seven years of receiving an order, the ordinance states.

A Shared Financial Burden

This January, the Los Angeles City Council agreed that renters and apartment owners may equally share the costs of earthquake retrofitting, a decision that put an end to contentious debate over one of the most far-reaching mandatory retrofit laws in the nation. Similar ordinances in other cities are expected to come.

The Structural Engineers Association of California estimates there may be as many as 100,000 buildings in Southern California facing comparable mandates as other cities and counties consider adopting retrofit laws of their own. Already, L.A. County, West Hollywood, Santa Monica and many others to the north are in the process of considering similar laws of their own.

The law in the City of Los Angeles allows apartment owners to split the costs of seismic retrofit work with their tenants with rent increases of up to $38 per month to cover half the costs of a retrofit.

“Today’s actions will save lives,” Los Angeles Mayor Eric Garcetti told the Los Angeles Times when the vote was passed. “I’m not interested in making history or having the toughest laws. I’m interested in preserving our city’s ability to survive and thrive after an earthquake.”

Many are reluctant to get the work started, but here are some reasons why it’s best to act promptly:

Retrofits Protect Your Assets

Earthquakes are a certain occurrence in California.

It’s not a matter of if a major quake will come, but when.

Geophysicists at NASA’s Jet Propulsion Lab recently determined that there is a 99 percent probability that a major quake will rock California in the next 2 ½ years, and that Southern California is extremely likely to experience a magnitude 5.0 quake or higher during that time.

Yes, soft-story property owners have seven years to get the work done, but no one is advising anyone to wait until the last minute.

“Everyone knows that major earthquakes are inevitable,” said Earle Vaughan, a longtime apartment owner who for the past 15 years has served AAGLA as a director. “I have already completed a retrofit on my property because I know it will not only be needed down the road, but it protects my tenants and investment from anything that may happen in the near future.”

Indeed, seismic retrofits are the best option an apartment owner can take to protect his or her investment.

The University of California at San Diego, home to the world’s largest outdoor shake table, has done repeated tests replicating the effects of a quake on a variety of structures.

They recently conducted experiments on the performance of soft-story structures – buildings constructed over ground level parking – and found that retrofits are quite effective in helping to control or even prevent damage.

Other studies show that retrofits can be cost-effective, too.

Researchers at Caltech recently determined that for every dollar spent in retrofitting soft-story structures, property owners could expect to save up to 7 dollars, and that study didn’t include loss to contents, alternate living expenses or deaths and injuries – all of which would have significantly increased the cost-to-benefit ratios.

Retrofits Can Save Lives, Reduce Liability

This should be everyone’s No. 1 reason for completing a retrofit, but the reality is that we all gamble with life and limb when it comes to forking out money for things that are uncertain.

Case law has now set a precedent that puts the responsibility for death, injury or property damage in the hands of the property owner.

Owners of the Northridge Meadows Apartment complex – the structure that collapsed during the 1994 Northridge quake, settled multiple claims filed by the families of the victims.

Similarly, the 1989 Loma Prieta quake resulted in building owners paying out millions in damages to the families of people injured or killed from failure of their buildings to withstand the earthquake.

A more recent case out of Paso Robles found property owners liable for the deaths of two people during the San Simeon earthquake of 2003. A jury awarded the families of the victims $2 million, concluding that the property owners were negligent for not making the building safer. A state appeals court upheld the verdict in 2010.

Even though the earthquake itself was an “Act of God,” the courts found the property owners negligent because the structure had been identified by the city as requiring seismic retrofits and that even though the deadline to do the work had not yet passed, the owners should have taken prompter action for safety’s sake.

Legal experts found the decision profoundly significant, comparing it to the hypothetical case of a building without sprinklers or fire extinguishers being struck by lightning and catching fire.

If you have a building that is susceptible to collapse and you’re aware that it requires retrofitting to withstand an earthquake, you may be liable.

“As a property management company, we are very concerned with limiting liability issues for our clients,” said Irma Vargas, of RST and Associates. “We have started early on seismic retrofits because we wanted to be proactive in addressing this issue for the safety and protection of both the owners and the residents of our properties.”

Early Action Reduces Haste and Waste

Optimum Seismic is the L.A. area’s leading retrofit company and AAGLA’s Preferred Supplier. We participated in the development of the city’s retrofit policies – bearing in mind that structural engineering, cost analysis and risk management were all important pieces of the solution.

We have completed more than 1,600 retrofits on various types of buildings in the state of California, and demand is increasing.

There is too much work to be done by any one company, but the reality is that heightened demand will drive up price and spark an influx of startup companies who may not have the professional expertise and experience necessary to get the job done right.

Give yourself the time necessary to go through the retrofit process carefully.

Optimum Seismic is teaming up with AAGLA to host 15 public workshops on the subject in various districts throughout the city to inform people about the law, various options available, and recommended steps.

We will also be reaching out to you, the readers of Apartment Age magazine, with regular updates providing step-by-step instructions on everything from start to finish.

Ali Vahdani, a State of California Licensed Professional Engineer, has more than 35 years of experience in building and structural retrofits. His is president and founder of Optimum Seismic, a leading seismic engineering and construction firm serving all of California.

UNDERSTANDING SUPPLEMENTAL PROPERTY TAXES

By  Patrick McGurk and Lawyers Title. Your support is important to me.  If you would like more information please call me 310 901 5380

SUPPLEMENTAL PROPERTY TAX DEFINED

The supplemental real property tax law came into effect in 1983 and  is part of an ambitious drive to aid California’s public school system. If you plan on purchasing or building a new home, this law will affect you. Supplemental property tax is a one-time tax which dates from the time you take ownership of your property or complete construction until the end of the tax year on June 30.

HOW WILL THE AMOUNT OF MY BILL BE DETERMINED?

There is a formula used to determine your tax bill. Supplemental property tax is based on the difference in assessed value of a home when purchased by the prior owner and the newly assessed value when purchased by you. If you are building a home, the supplemental property tax is based on the difference in value of the land before a home was constructed and the new property value after a home is built. The total supplemental assessment will be prorated, based on the number of months remaining until the end of the tax year, June 30.

WHEN AND HOW WILL I BE BILLED?

You will be advised of your supplemental assessment amount when your property is appraised during the lending process. You will then have an opportunity to discuss your valuation, apply for a Homeowner’s Exemption and possibly file an Assessment Appeal. Your County Controller/Tax Collector will then calculate your supplemental tax and mail a bill. The bill will be sent anywhere from 3 weeks to 6 months after close of escrow. A lien is put on the property for the supplemental taxes, so be sure to pay the taxes by the date noted on the supplemental tax bill.

WILL MY SUPPLEMENTAL TAXES BE PRORATED IN
ESCROW?

No, the supplemental tax is a one-time tax and is in effect from the actual date you take ownership of property, it will be billed to you by your County Controller/Tax Collector.

CAN I PAY MY SUPPLEMENTAL TAX BILL IN
INSTALLMENTS?

All supplemental taxes on the secured roll are payable in two equal installments. The taxes are due on the date the bill is mailed and are delinquent on specified dates, depending on the month the bill is mailed, as follows:

1) If the bill is mailed within the months of July through October, the first installment will become delinquent on December 10 of the same year. The second installment will become delinquent on April 10 of the next year.

2) If the bill is mailed within the months of November through June, the first installment will become delinquent on the last day of the month following the month in which the bill is mailed. The second installment will become delinquent on the last day of the fourth calendar month following the date the first installment is delinquent.

WILL MY SUPPLEMENTAL TAX BE PRORATED?

The supplemental tax becomes effective on the first day of the month following the month in which the change of ownership or completion of new construction actually occurred. The table of proration factors shown in the chart below is used to compute the supplemental
assessment on the current tax roll.

EXAMPLE:

The County Auditor finds the supplemental property taxes on your new home would be $1,000 for a full year. The change of ownership took place on September 15 with the effective date being October 1. The supplemental property taxes would be subject to a proration factor of .75 and the supplemental tax would be $750.

 

 

 

Preparing Your Properties for El Niño – by Mary Girsch-Bock in Articles

While preparing for winter weather is a common occurrence for property managers throughout the country, the preparation for this year’s winter may be slightly different. The National Oceanic and Atmospheric Administration (NOAA) has predicted the return of El Niño this winter; one of the strongest on record. The return of El Niño means a shifting weather pattern, increasing the likelihood of increased moisture across a wide swath of the U.S.

With El Niño expected to impact Southern California, as well as Nevada, Arizona, New Mexico, through Texas to Florida, the chance for inclement weather in these areas increases dramatically. And while this changing weather pattern can create havoc for most of us, property managers face a more daunting task; preparing their property for the possibility of increased inclement weather. And while none of us can accurately predict what the weather will be in the coming months, it’s important for property managers to be ready for the possibility of increased wet weather and intense storms. So what are some of the steps property managers can take today to be better prepared for the possibility of El Niño affecting their properties?

• Make sure that property insurance policies are current with adequate coverage. One of the things that you don’t want to happen is for a catastrophic weather event to occur and you’re your current policy is inadequate or lapsed.
• Make a point of checking windows and entryways, repairing or replacing loose panes, bent storm windows, or inadequate weather stripping.
• Check roofs for any loose shingles or potential leaks and repair them promptly.
• Walk the grounds and check for loose branches, damaged or dead trees, or other landscaping that could pose a hazard during a brutal winter storm.
• If your properties are in a low-lying area, be prepared for the possibility of extensive flooding from extended periods of rainfall. This can include everything from having sandbags ready to be deployed, to having an escape route planned out for residents in case of catastrophic flooding.
• Be prepared for other events such as loss of power for extended periods of time – which can mean no heat in some areas. Again, having an emergency plan can help.
• Stock up on flashlights, blankets, and non-perishable food items, and advise your residents to do the same.
• Be sure to convey this information on a timely basis to your residents; perhaps holding a special information day, or distributing emergency and evacuation plans with monthly rental receipts.

While no one can tell if severe weather will make a beeline for your properties, being prepared will help both your tenants, and your staff handle just about any situation they may be faced with this coming winter.

Bring Your Estate Plan “Up to Code” for the Holidays – by Kenneth Ziskin, Attorney

Reprinted with permission of the Apartment Owners Association of California, Inc. (AOA) 

All of our thoughts turn to family during the Holiday season even more than the rest of the year.  That makes this a great time to consider whether the Estate Plan you have for your family is still “up to code.”

No “inspector” will drop by unannounced to see if your Estate Plan remains up to date.  So, each apartment owner must take responsibility for him/her self to keep your Estate Plan current.

In this article, I will give you a few tips to help you know when you should have your Estate Plan reviewed and/or revised.  And, this kind of “code” checkup will probably not hurt near as much as having a visit from the building code inspector.

The reasons owners update or review their Estate Plans usually fall within one or more of the following five categories:

1. Get a refresher to better understand how your Estate Plan Works
2. Changes in the law, particularly tax law
3. Changes in your family situation
4. Changes in your wealth
5. Changes in your goals for how your wealth should pass and be used

The remainder of this article will expand a little on each of these categories which might motivate a review and/or update of your Estate Plan.

REASON #1 – Get a Refresher Course on How Your Plan Really Works

In our experience working with property owners, we find very few of them really understand how the elements of their Estate Plan actually work.

Sometimes we think that lack of understanding resulted from the failure of a prior lawyer to fully explain how the elements would work, or why they should work that way.  We frequently find clients whose prior lawyer never fully explained to them the choices they could make in their planning.  Other times, the Estate Plan may have been explained, but, with the passage of time, the property owner just does not remember how the plan works.

Either way, you and your heirs deserve a plan that is customized to meet your goals.  If you do not understand it, the odds are that it will not meet your goals well.

REASON # 2 – Changes in the Law Since You Last Revised Your Estate Plan

When “The American Taxpayer Relief Act of 2012” (“ATRA”) became effective in 2013, estate planning for most apartment owners turned upside down.

ATRA and California tax changes increased estate tax exemptions, made “portability” permanent so you could leave your exemption to your spouse, reduced estate tax rates and increased in income tax rates.  The result of these changes  made old A-B (or A-C-C) trust planning (which was implemented in most Estate Plans done before 2013) actuallyHAZARDOUS to the family wealth of most apartment owners by reducing the ability to get maximum step-ups in basis after death.

If your Estate Plan was not drafted with these changes in mind, you should review it with an attorney who understands the planning issues of apartment owners and the ways to maximize tax benefits under current law.

The fact remains that Estate Taxes, and to a large extent, income taxes, are “voluntary” under our legal system.  With good planning, they can often be reduced, or even eliminated.

REASON #3 – Changes in Your Family Situation

A well-drafted living trust adapts to most changes in your family situation. Still, if there has been a divorce, the birth or adoption of new children and grandchildren, a marriage or even a major change in the situation or maturity of your heirs, it pays to consider whether those changes would make you want to change your Estate Plan.

REASON #4 – Changes in Your Wealth

Appreciation in real estate has been a great thing for California apartment owners.  However, as a result, many now have much more wealth than they ever anticipated.  in some cases, that poses new tax problems that such owners may want to address in their Estate Plans.

In other cases, that newfound wealth presents planning opportunities never seriously considered before.

Either way, it suggests that owners reconsider whether or not their current Estate Plans remain suitable.

REASON #5 – Changes in Your Goals

As you get older and wiser, your goals for how your wealth should be used may change.

Perhaps you have realized that one or more of your children (or grandchildren) will have more, or less, need for a pro rata share of your wealth than the others.  Or, maybe one them has demonstrated a lack of skill or judgment in managing money that suggests you put some controls in place to protect the wealth you leave behind.

Maybe the combination of your children’s’ success and your desire to do good means you want to devote some of your wealth to philanthropy.   Perhaps you fear that this much wealth would infect them with “affluenza,” robbing your children of the motivation and satisfaction of making something of themselves.

And, in some cases, your income or estate tax burden has grown to the level that carefully planned philanthropy will enable you to pursue philanthropic goals at little or no cost to your heirs, while saving a lot of income taxes during your life.

Whenever your goals or your wealth change significantly, you should re-address your Estate Plan.  A good estate planning attorney will help you to articulate YOUR goals for your wealth, and then evaluate strategies that might help you achieve them.

“IF YOU FAIL TO PLAN WELL, PLAN TO FAIL”

Every family needs good Estate Planning.  And, as we age, our financial and family situation changes, along with our goals.

You should not view Estate Planning as a one-time event, but as a dynamic process.  Your wealth and your family are too important to let yourself be stuck with out of date planning that is no longer “UP TO CODE.”

The Holiday Season can be a great time to re-evaluate your planning, and maybe even get your adult children involved.  Some of the most satisfying planning we do often involves do planning sessions with parents and adult children (sometimes even adult grandchildren) to help our clients refine and meet family goals.

Kenneth Ziskin, an estate planning attorney, focuses on integrated planning for apartment owners.  He holds the coveted AV Preeminent peer reviewed rating for Ethical Standards and Legal Ability from Martindale-Hubbell.  Ken lectures frequently to AOA members and recently rewrote AOA’s Special Report “Holding Title to Your Property –A Matter of Life, Death and Taxes”. Ken’s website is www.Family-Wealth-Strategies.com   Ken offers free consultations for AOA members and can be reached at (818) 988-0949. 

This article is general in nature and not intended as advice for clients.  Please get advice from counsel you retain for your own planning.

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Fall Maintenance Prep For The Changing Seasons

With the beginning of October, fall has officially begun. Family vacations are over, the kids are back in school, football is back on TV and life returns to schedules and routine. Fall is a buildup to the holiday season and there is always so much fun to be had – it is a special time of year!

Traditionally, fall is also the busiest time of year in the home maintenance and home improvement business. After the lazy days of summer, fall is the perfect time to walk your property and make sure everything is in top shape before the weather changes and you get into the hustle and bustle of the holiday season.

Here’s a general list of ways you can get your property in tip-top shape.

Examine your roof/gutters/downspouts for debris:

The rooftop is often forgotten about because it is not at eye level to give you a subtle reminder every time you walk past it. Clear leaves, dirt, and pine needles from gutters and examine downspouts for damage or loose pieces. Check the flashing around your chimney and any openings in the roof, such as skylights for leaking problems.

Inspect the grounds of your property:

Before the season’s first heavy rainfall (fingers crossed), check walkways for cracks and loose paver material. Fix walkway and entryway areas before slippery weather can cause a tripping or falling accident.

Change the filters:

If you have a central air conditioning system, change the air filter regularly. If you have a window air conditioning unit, remove from the window or place a waterproof cover over it to prevent damage. Change filters in stove vents, clothes dryers and room fans if applicable. Clean air filters will keep your tenants healthier in the fall months.

Have leaky faucets? Repair them now:

Before the temperatures start to dip low, examine leaky faucets in the kitchen, bathrooms, and utility room locations. Most likely the time and money spent now to fix will be less than a broken pipe later.

Prepare your fireplace:

For some people they use their fireplace more than their central heater in the fall and winter months. Discard old ashes and ensure the damper is open to allow air to freely move through the chimney. If the air is becoming cold, close back the damper after cleaning. Check the damper handle and springs to ensure the flue is operating correctly. Hire a professional chimney sweep if needed.

Drain your hot water heater:

If your live in an area with hard water extra amounts of sediments could be building up in your tank. Now is a perfect time to drain and make sure rust is not developing in your tank as well. If your hot water heater is extremely old or is rusting considering a new one that will be more cost effective and energy efficient.

Check windows and doors for drafts:

The majority of conditioned air in your home is lost through the windows and doors. Go through your home and open windows to ensure the seal and caulking around the window frame is in good condition.

Take care of your irrigation/lawn needs:

Consider having an irrigation service professional fix broken heads before the cold weather sets in. If you want to prevent spring weeds and winter lawn damage, don’t forget to fertilize.

See original article here

Our Eviction Court System – the Wild, Wild West!

By Grayce Long, Attorney AOA of California, INC.

Over a year ago, I wrote an article about what changes were going to take place because the Los Angeles Superior Court system had implemented 60 million dollars in cutbacks and laid off over a quarter of the court employees since 2008. I projected what I thought would happen with the court system and how unlawful detainers would be affected. For the most part, I was correct but many new issues have arisen in the past year.

We have begun to call it the Wild, Wild West. Why? Because on a contested case, you never know what courtroom you will be sent to and you never know how the judge is going to decide your case. For every contested case in which I have similar fact scenarios, I can have different rulings from different judges. It really doesn’t matter what the law says to the contrary, judges have a lot of judicial discretion when deciding a case and many times they will bend over backwards to help the tenant.

The Court System

There are five courts in Los Angeles County that hear unlawful detainers – downtown L.A., Santa Monica, Long Beach, Pasadena and Lancaster. Downtown L.A. is the main hub court. When you file an unlawful detainer you will be in one of these five courts. However, if your case gets contested and the opposing side gives a trial estimate of more than 20 minutes, you will be assigned to Department One in downtown to get sent to a different courtroom to hear your trial. This is true for Long Beach, Santa Monica, L.A. and Pasadena. So when your case gets assigned to Department One you have no idea where you will end up. For example, when in Long Beach, I have been assigned to Santa Monica court. When in Santa Monica court, I have been assigned to Torrance, and when in downtown, I have been assigned to Van Nuys and even Pomona!

Legal Aid Delays

With the cutbacks you would think that it would have been the end to state funded legal aid organizations under the auspices of the Shriver project and BASTA. However, that is not the case. We still have many cases in which an attorney representing the tenant will file an answer and send out lots of discovery and request a jury trial. We have seen an increase in these cases in Santa Monica, Lancaster and Long Beach. However, downtown L.A. is still the main heartbeat for legal aid organizations and you can expect many delays when they represent the tenant. Sometimes you can have up to three court appearances before your case gets resolved.

What Every Landlord Should Do

What is the best way to combat all these delay tactics?

• Make sure that you inspect your unit at least twice a year.
• Inspect your unit before you put a tenant in eviction to make sure that he has no complaints and that the unit is in good condition.
• Take plenty of pictures of the unit before the tenant moves in so you have something to show to the judge when the tenant complains that the property was uninhabitable.
• Check your carbon monoxide and smoke detectors to make sure they are working properly.
• Above all keep good records of your tenant’s rental payments.

Another good tip is to make sure that your attorney fee provision is limited to $500 in your rental agreement. This can be a big detractor for the money-hungry defense attorneys who want to take the case to a jury trial.

See original article here: http://www.aoausa.com/magazine/?p=2361