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Advice about Being a Landlord

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Making in-law a legal rental unit

Nov 2013

We just bought a home in Berkeley with an in-law unit. I am wondering if anyone has experience going through the City of Berkeley to get an in-law made into a legal permitted rental unit and if you'd be willing to share your experience and any advice? Thanks! Wondering about making our in-law unit a legal rental unit


Hi, I'm pretty sure that if you are living in the house, the rental unit does not come under the Rent Board. It's the same, I think, as if you are living in your home and renting out a room. Good luck. Owner-occupied doesn't count?
I believe the previous answer to your question is incorrect. If the dwelling is in Berkeley, your in-law unit would be subject to rent control, including 'just cause for eviction' regulations, paying interest on your tenant's deposit annually, etc. I did not see the original question, but if this unit has a separate entrance and there is no co-mingling of the interior with your part of the house (sharing a bathroom or a kitchen, for example), then it is not like renting a room in your house. There are a few quirky exemptions from rent control: one is if you are making a previously uninhabitable space into a rental unit (such as converting a garage or an attic into an apartment), another is the so-called 'golden duplex' rule. A golden duplex in Berkeley is when the owner of a two-unit property has lived in one unit as a principal residence and it has been owner-occupied since 12/31/1979 (it need not be the same owner), then the other unit is exempt from rent control. Single family dwellings are also exempt from rent control (but still subject to interest on deposits and just cause for eviction regulations), unless it has 4 or more bedrooms and each bedroom is rented out under separate contracts, like a rooming house. I find the Berkeley Rent Board website to be very helpful, especially their FAQ section: http://www.ci.berkeley.ca.us/DepartmentHome.aspx?id=9546. Becky
I didn't see the original post, only the one reply which said that rent control may not apply. I would be VERY cautious about this. Again, not seeing the post, I don't know where the home is, but Oakland, Berkeley, and San Francisco have very strict tenant friendly laws. I know in SF if the unit has a separate entrance, even if it is in your home, it is considered a rental unit subject to SF rent control ordinance. You should definitely check with a seasoned landlord-tenant attorney OR scour the applicable local ordinance thoroughly before making any kind of conversion or taking ANY money or other kind of consideration for renting out the unit. Once you have done so, you are subject to laws regarding rent control, eviction, health and safety etc, regardless of whatever kind of agreement (written or otherwise)you have with the tenant. It can be very expensive and frustrating trying to evict a tenant for anything other than non-payment of rent, and landlords have very strict standards of habitability with which they must comply. I'd be cautious.

Renting our house for a short term

May 2013

We are contemplating renting our house while we are away for my husband's work this summer and fall. If we decide to rent it, we are considering two options: renting the house on airbnb (and pay a friend to check in/out the guests, check for damage, schedule the cleaner, etc) or rent to one family for the entire time.

I would love advice from people with experience owning rentals (where to get rental agreements, how much deposit to require, special clauses for a short term lease), from anyone who has experience renting on airbnb, vbro, etc. and from anyone who has rented out their entire home for a few months (if we rent to one family for the entire time, do we pack up our dishes and pots and pans, etc.?)

Our plan is to remove valuables from the house to a safety deposit box and store clothes and personal items in one of the bedrooms. Thank you!


We rented out our house for 7 months and had a positive experience. We rented it furnished but removed our most special/breakable things. The thing that made it most do-able was finding a family that needed it for the right length of time that were home-owners and who knew someone we knew..so there was some personal reference ( through my husband's work). Both of us had young children so they LIKED all the toys and kid gear, so that was also great.Because it was clear to us that we wouldn't worry about them as renters, we dropped the price by, maybe, $200 a month. We also paid for our maid and gardener to keep coming 2 times a month..and they kept us informed of how the house was doing. This was a winning experience. We got the rental agreement at a business store. Oh, and they didn't smoke. They were moving from the East Coast so they/we knew their dates. By contrast the( local) prospective renters who were looking for a short term rental because of a big remodel were harder to work with because they kept trying to change the dates and kept trying to make their dates provisionally based on where the contractor was..which didn't work with our firm dates for being away. Good luck. J
Airbnb or vbro rentals are a lot of work! People usually use those for terms of a week or less. That is too much work for a friend! If you are going to be gone six months, then I would suggest you do a sublet through craigslist. Sublets are generally fully furnished, including sheets, towels, dishes, etc. You may want to check with Berkeley Property Owners Association for information about leases. Make sure your ad has all the details and good pictures. Anon
It is a LOT less work, not to mention wear and tear on your house, to have one tenant or family, rather than a hotel type situation. Be sure to go through all the formalities, such as complete application, credit check or credit report, and check references before the tenants move in. Be sure to have a lease. See the Nolo Book on Landlord Law, (it is at the Library). It has a CD with forms. You will still want your friend on standby to handle tenant issues and answer questions, since you will be far away. Lynn

Renting out our home while on sabbatical

May 2013

We have a lovely 3-bedroom home in Berkeley and might be taking a sabbatical for a year or possibly, even 2. Rather than moving our furniture & things, we are thinking of renting out our place furnished. Does this lower the possible rent that we could get? What kinds of things should we consider while we rent out our place furnished? Also, I've heard that tenants rights are very strong in Berkeley -- when we want our home back in a year (or two) is it possible for the tenant to refuse to move? Wondering what the best thing to do is... anon


My husband and I rent properties, some in Berkeley. Financially you can do very well with it if you understand the work involved. The nice thing about a single family home is that Berkeley does treat that differently than a larger complex in terms of rent issues. That said, I would still try to rent to someone who you are very clear with that you will be moving back at a set time. I would put that in the lease. Start by getting the NOLO press landlord/tennant book. Also - you have to be prepared for if they move out early, or don't pay rent, or have a problem with the house and you aren't in the area. You will need a relative or friend, or a property manager to deal with anything that happens while you are gone. Often something that does not act up when you are in the house (like your plumbing) all the sudden starts to clog when renters are there. You need to be OK with real wear and tear. The first time we rented our Berkeley home and had just redone the floors, I almost cried when I saw how scratched they were after a year and a half. It would have been different if we ourselves had slowly caused the scratches, you know? If you leave it furnished, you would need to be prepared for that with your furniture as well as the home. I haven't seen much difference in price for furnished or not, but it will affect who applies to be your tenant - maybe in a good way, maybe in a bad way. So I would think about that more then the impact on the rent. Because who is in your home is the most important thing. Enjoy your sabbatical!
Check with the faculty housing office. Another family on sabbatical would be ideal for your home. If you make the lease term less than 12 months, most tenant protections will not go into effect. If you work with the university, the family that takes your home will be better vetted than if you random-access through Craigslist. Amelia the Realtor
Yes, tenants are well-protected in Berkeley, as landlords must have ''good cause'' to evict. But if you are leaving your home temporarily and it is understood you will return, you have good cause to evict your tenants if they do not leave as agreed. From the Berkeley Rent Board website, here is the provision (one of the good causes in Berk. Municipal Code sec. 13.76.130 A.):

''10. A landlord or lessor seeks in good faith to recover possession of the rental unit for his/her occupancy as a principal residence, where the landlord or lessor has previously occupied the rental unit as his/her principal residence and has the right to recover possession of the unit for his/her occupancy as a principal residence under an existing rental agreement with the current tenants.'' anon


Look at sabbaticalhomes.com. It costs a small amount to advertise, but potential renters can view for free (the opposite of the Ca housing office, which reduces the number of potential tenants who will see your ad!).

It's intended primarily for those associated in some way with academic institutions, so tends to be people on sabbatical, most of them looking for furnished places to spend the year. You can also look for a home exchange there, which might also suit your needs. R.K.


About MAYBE renting-out a large home in Berkeley?

March 2013

We own a unique property near the University of California that we might / maybe / if-we-feel-secure-about-it rent, but we can't figure-out how to avoid get entangled in Berkeley's punitive 'rent control.' And we will not be willing to rent to a student-type group to avoid possibility of an 'animal-house' developing. Our property is a large 100%-new building (structure meets-or-exceeds current seismic requirements). There are large, well-appointed public spaces (living room, dining room, kitchen, ... ), nice gardens, and several bedrooms; each bedroom has a bath. We're trying to think of a way to rent our very nice property, rather than just leaving it empty (locked-up tight, with alarms), that will not turn into a dreadfully stressful situation! So, because we're stumped, we're hoping someone has suggestions ...


You have options! Some ideas:

- Rent rooms via AirBnB or Vacation Rentals by Owner. I know three people in Berkeley who do this quite profitably. This is running a business and might be more maintenance than you want but if you put some systems into place, it should run smoothly. You could have someone live there and run the business for you. I can recommend a couple reliable, trustworthy and enthusiastic people.

- Contact a few organizations and schools in our area that have regular coferences and meetings to be one of the 'go to' accommodations. I can suggest a couple.

- Rent it the traditional way. I don't think your single family home rental falls under the rent control laws. (I will have to confirm.) Landlording also is a business and requires some work but if you choose your tenants carefully, it should go well.

I am a Realtor, my partner is a Realtor, and we have property management experience.


Dear Stumped, As a Realtor with 25 years experience in Berkeley, I can tell you that no matter what anyone says, there is no safe way around Berkeley Rent Control. If you rent out your home and avoid registering it with the rent board, you will end up in even more hot water. I have no affiliation with the rent board -- I am speaking strictly from my experience in representing the Sellers of homes that have been rented. However, I can also tell you that I have seen many, many Berkeley home owners rent their homes with very good results. There are a lot of wonderful people out there looking to lease homes, and if you are careful in your selection, it can work out well all around. Consider posting it with the Cal housing office -- their listings are only accessed by affiliates or alumnae, not by the general public. You might also consider renting to shorter-term VRBO visitors. If you call the rent board and ask to speak with a counselor, they are very personable and will help explain your options. Ask about the sabbatical exemption. Finally, if you have not been there yet, the City has great info about their rent control policies here: http://www.ci.berkeley.ca.us/rent/. Best of luck! Holly
We are in a similar situation renting our home. I had a lot of concerns and anxieties. I can recommend David Eckert at Coldwell Banker. He is honest, patient and will get the right renter for you. 510-339-4720 david@eastbayhills.com www.eastbayhills.com license #r01239021 Apprehensive Homeowner
Contact a property management company and ask these questions. Our landlord has managed to be selective and explicitly avoid rent control by using one. Doesn't feel great as a renter to not have any rent control. But she is very fair and has been able to keep long term non 'animal house' tenants in her properties. (all nice North Berkeley homes). Good luck. I'm sure there is a family who would be thrilled to find a nice home to rent. Renter without rent control
Try sabbatical.com to find really nice tenants. You won't regret it suzymc
Berkeley Rent Control does not apply to single family homes. From their website:

Single-family homes rented after 1/1/96 are exempt from rent control; therefore, the landlord may increase your rent once your lease expires. However, if the rent increase is more than 10%, CA Civil Code section 827 requires that he give you a 60-day notice before the increase can go into effect (30 days' notice is required for increases of 10% or less).

http://www.ci.berkeley.ca.us/Rent_Stabilization_Board/Home/FAQs_Exemptions.aspx

Eviction controls do apply; you cannot evict without good cause. However, with 60 days notice you can raise the rent to exorbitant levels, thus forcing the tenants out.

As far as getting good tenants, I would recommend a couple of things. Make sure the home is in tip top shape. Clean up. Put all your personal stuff in storage. Make repairs. Paint and spruce up anything that needs it. Have someone with a critical eye and disposition come in and make suggestions. You may have to hire someone, friends and family to not like to be so negative.

Then, if you set the rent a bit low, you will have many people applying and you can choose who you like. In order to figure out the rent, looks at ads on craigslist for your area (within just a few blocks if possible). It is even better if you can actually go look at the places to rent and compare them to yours. Premium Properties may be able to help. I used them years ago. http://www.premiumpd.com/

Good luck! Make sure that you do a credit check and get a good lease. Anon


It's very possible your house will not be covered by rent control. Post-1980 construction (if it didn't replace existing residential housing) is exempt. Single-family homes with new tenants are mostly exempt. The only way to find out for sure is to contact the Rent Board. I have friends who work there. You might be surprised at the level and quality of service.

Whether or not you're exempt from rent control, you will want to protect yourself (your property) with careful tenant screening, a good lease and on-the- ball management. Anon


I am not sure that you thought carefully about the question or the audience before you posted your question. I am also surprised that this listserve even let you post the question and would consider posting answers. Perhaps you don't live in Berkeley which is why I want to give you the benefit of the doubt. What it looks like to me is that you are asking for advise about how to circumvent a municipal Law, which constitutes a crime. I am sorry that you find Berkeley's rent control laws so onerous. If you don't like the law either work to refine it or consider owning property elsewhere. annonymous
I conducted research into legal cases arising out of the Berkeley Rent Control Law many years ago. I am not up-to-date now, but suggest looking on the website of the Berkeley Property Owners Association and/or contacting Michael St. John (an economist who studies that law extensively) Not to scare you, but there were cases in the nineties where owners rented out their home to go on sabbatical, and the 'just cause for eviction' law did not permit them to return without a legal fight. Lynn
UC Berkeley has a rental listing service for faculty, staff, and visiting scholars (e.g., on sabbatical) only. You might consider listing it there. https://calrentals.housing.berkeley.edu/landlord_services.asp Katy
You can also try listing at sabbaticalhomes.com (different from sabbatical.com). I'm no expert, but I believe rules may be different if the property is actually your primary residence, which you will be moving back into, as opposed to being held as a rental property. going on sabbatical
I would like to respond to annonymous, who said:

What it looks like to me is that you are asking for advise about how to circumvent a municipal Law, which constitutes a crime. I am sorry that you find Berkeley's rent control laws so onerous. If you don't like the law either work to refine it or consider owning property elsewhere. annonymous

'Circumventing' a law is not necessarily a crime. Most laws are extremely complicated and there are often ways around them. For instance, what if I wanted to teach my ten year-old to drive? I cannot do that legally on city streets, but I can do that legally on private property. So while circumventing the law, I am doing nothing illegal.

And in regards to the law being onerous. It is indeed onerous. For instance, it is very difficult to get rid of criminals due to rent control. Somehow, current tenants are more important than anybody else. They are protected no matter what they do. Both neighbors and landlords have their hands tied.

The law also favors sitting tenants. Many people could benefit from low-cost housing, but those who have it are somehow more important than those who don't. This makes no sense to me.

And last, why is the landlord's responsibility to subsidize tenants no matter how rich or poor they may be? Grocery stores are not required to provide food for the hungry. Why should property owners be required to provide housing for the rich?

If the people of Berkeley feel the need to help poor people with housing, then it seems to me that everyone should be taxed and tenants should have to document a lack of funds. The system we have now is nuts, and there is little anyone can do to fix it. People have tried over and over.

Some of the hardest hit people are students. While long-term tenants commute to San Jose or use their apartment for a pied-a-terre after they have moved away, students have a difficult time finding reasonably priced housing near campus. And since a vacant apartment rents at market rate, students pay full price.

In short, I think rent control causes more problems than it solves. Perhaps you love the protection it provides for you. But I wonder why you deserve it more than someone else. Anon


Short term rentals of duplex in Berkeley

Oct 2012

Hello, My wife and I will soon have a vacant lower unit in a 2-unit house that we would like to rent out. We will be living in the upper unit. We are interested in doing some sort of short term rental arrangement for a variety of reasons. Most importantly being that our plan is to some day convert the home into a single-family and we don't want to have to deal with getting long term tenants out when we want to do this. I've seen many listing online for short term rentals in Berkeley. I'm wondering if anyone has any experience doing this, and the easiest way to manage such a unit. I'm curious to know if such units are governed by the Berkeley Rent Board in any way. Any advice or insight is greatly appreciated. anon


Disclaimer: I am not an attorney! However, I have had a lot of experience with the Berkeley rental market, I have held workshops with speakers from the Rent Board & I do my best to stay on top of Berkeley-only regulations when it comes to rentals. That being said, the answer to your question about whether your duplex unit is exempt from rent control is a big 'maybe'. Only certain 'golden' duplexes are exempt, and the rule is too lengthy to go into here. Check the FAQs on exemptions on the Rent Board website, and scroll about half- way down the page for your answer: http://www.ci.berkeley.ca.us/Rent_Stabilization_Board/Home/F AQs_Exemptions.aspx

Since you have been renting out the downstairs for some time already, I assume you are aware that the rent you collect is income and therefore taxable to you, but you get certain deductions because a rental is treated differently from your own home. (It's surprising how many people who rent to tenants are unaware of this.) And, whether or not the unit is exempt from basic Rent Control, I am fairly certain that you are still subject to the 'just cause for eviction' regulation and you still must pay your tenant annual interest on the deposit monies you are holding. Becky


For whatever it's worth . . . in the last 2 years, my wife and I have used airbnb.com six times as short-term renters . . . everything from one night in New York to two months in Portland, and we have been very satisfied each time . . . as renters. If we had a unit to rent (and we will next June), we would seriously consider either them, or their well-reviewed competitor, vrbo.com (vacation rental by owner). (I just checked, and there were 178 listings on airbnb in and around Berkeley, ranging from $30 a day to $700 a day.) John
I rent out a couple of furnished spaces in my house on a short term basis and have had the best luck in doing so using airbnb.com. They coordinate the bookings and handle the money, which makes it all very easy, and I've had wonderful guests from all over the world. I provide everything the guest needs, including linens, but providing breakfast is not required. Cece
you might want to consider a rental to a visiting prof. at UC Berkeley. I think they have housing lists only open to visiting faculty here on sabbatical. that would be a potentially easy way to limit a renter's stay. You can track down the housing office for faculty on line. anonymous

Renting to tenant who is undocumented

April 2012

What are the legal ramifications, both theoretically and practically, of renting to a tenant who is undocumented? We are renting our downstairs granny flat in El Cerrito to our ex-nanny who is undocumented, and who has a 10 yr daughter who lives with her every other week and who is a US citizen. She pays her rent partly by babysitting, and partly monetarily. Should we reconsider? Realistically, how likely are we to get into trouble, if at all? renter


I'm not a lawyer, but I am very familiar with immigration issues and immigration law. In California, renting to an undocumented person carries no liabilities or legal ramifications for the landlord. Things are a bit different in the case of employers. You don't ask about this, but here you actually could ''get in trouble.'' Under federal law, employers break the law by ''knowingly'' hiring an undocumented worker. So, you could face legal issues to the extent that you are 'employing' your tenant when you have them babysit, even if you are 'paying' with reduced rent.

In reality, however, the chances of anyone going after you for knowingly hiring an undocumented migrant are miniscule. The federal government has very few workplace inspectors (relative to border control agents) and the inspectors go after large employers, not individuals who hire nannies, landscapers or day laborers.

If you are very concerned about this, your tenant could set up a legal entity (incorporate or establish a limited liability company) and you could contract for services through the company. This is a legal slight-of-hand to get around hiring an ''employee.'' But that seems like legal and bureaucratic overkill for your situation. immigration researcher


You ask about the legal ramifications of renting to your ex- nanny, who is undocumented, who pays you partly in cash, and partly through babysitting. This response is not legal advice but an overview of the legal landscape. As you may know, various cities (Escondido, Farmers Branch TX, Hazleton PA,) and states (Alabama, South Carolina) have tried to prohibit landlords from renting to undocumented immigrants as part of a strategy referred to as ''attrition through self-deportation,'' namely making life so difficult that people who are undocumented will leave. None of the city- created provisions have been allowed to stand and both of the state provisions are currently enjoined from being enforced. There are thus no legal ramifications of renting to someone who is undocumented - and, in fact, there are potential issues for landlords who in seeking to avoid undocumented tenants may be engaging in prohibited discrimination on the basis of race, etc. On the other hand, there *can* be, in theory, ramifications to employing someone who is undocumented because of the 1986 law Congress created called employer sanctions, although the practical likelihood of an individual getting in legal trouble for hiring a babysitter would be nil. The only issue is if a person plans to someday run for public office or is selected for some high government post (think Zoe Baird, Kimba Wood, Tim Geithner) and if accepting babysitting in exchange for rent is construed as employment (I note she is also described as your ''ex-nanny'' so you were also in a more clear employer/employee relationship with her in the past). Of course, Tim Geithner still got confirmed. Note also that if, like me, you understand the condition of being undocumented as not an individual moral failing but a symptom of a broken system, as well as a status that can be made and unmade by shifting legal regimes, you will respond with compassion. For many people who are currently undocumented it is impossible to do anything about their status, despite the claim that they should ''get in line'' with everyone else. They are here, often in mixed status families with U.S. citizen members, like your nanny, and in my book, we accept people who are undocumented as part of our community, push for future legalization programs, and in the interim, allow them to live with the kinds of rights and protections we would want to give to fellow human beings. immprof
We are landlords and as far as I know there is no requirement or even paperwork that is gathered that require citizenship or proof of legal residencey. Some landlords do a credit check or proof of income which implies these things but again that is not a legal requirement, just a choice. You can rent to whomever you want as long as you don't discriminate in selection. Anon

Landlord facing mold issues

Nov 2011

any advice or referrals for an experienced, landlord attorney? I have always been a responsible berkeley landlord caring for my home and the people living in it. Now dealing with tenant not paying rent due to mold? I have happily rented to this tenant for almost 3 years, have always agreeably adddressed the 2-3 issues that have come up during this time and now very stressed by unreasonable behavior. sincere


Habitability questions related to mold are difficult to quantify and even harder to prove and/or disprove. Join Berkeley Property Owners Association bpoa@bpoa.org because there is a lot of good advice available from other property owners about mold and other issues. Property owner

Tips on being a Landlord in Oakland

Sept 2010

We are planning to rent out our 2 bedroom house in Oakland at the end of the year and could really use some advise. We would like to rent it out ourselves to save some money. But if you think there is a compelling reason to get the help of a rental agency/property management co., please do let me know! These are just some of the questions that I can think of. I am sure there are more in the days to come: Are there certain must-dos we should be aware of? Where do you find the most comprehensive lease forms? Any pitfalls we should be aware of? Do you do credit checks? How? Any book/website recommendations? Where do you post your ad that yields high traffic? Craigslist? How did you determine your rent? thank you!


There are many, many ways to get yourself into trouble as a landlord in Oakland. You will be liable for any (made- up) violations of rental protocol, even if you didn't know about them. Part of your decision on whether to do it yourself or go w/rental agency is how much time & energy you are willing to commit to being a landlord--it takes a lot more than you probably realize.

As the owner of a owner-occupied duplex, if you are going to do it all yourself, I highly recommend joining RHANAC, which is the landlord association for Oakland & surrounding areas. They have the best leases & also can help with screening & alert you to the bevy of legal issues about being a landlord. http://www.rhanac.org/.

Or, if you don't want to be as directly involved with the headaches, go w/a leasing company! This is what I would recommend in your case, since you have only one property & the amount of time you will likely spend on reviewing laws, listing the rental, taking calls, prepping leases, fixing problems, etc. outweighs the payback of doing it yourself. once bitten twice shy


A lot depends on how much you can tolerate certain risk factors that may or may not arise. Can you easily fix things when they break, respond to tenant complaints, and handle problems such as late payments or non-payment of rent? What if one of the neighbors complains about excessive noise or the yard not being kept up? To me, a property manager's fee is well worth the peace of mind: the tenant selection, the assurance that rent is collected on time and any problems or repairs will be taken care of promptly. Plus, all your expenses pertaining to the rental are tax deductible, so while it is true you will get a bit more rent if you do everything yourself, it is really nice to have those polished property management records to turn over to your accountant come tax time!

The City of Oakland does have rent control and also eviction controls, but I forget whether they apply to single family dwellings. You can check with the City's website.

It wouldn't hurt to talk to two or three property management companies and see what they would do for you and how much they charge.

If you're convinced you can do it yourself, Nolo Press has books that can help: http://www.nolo.com/legal-encyclopedia/landlords/. Becky


Maybe a property owners association would be helpful: http://www.rhanac.org/

aoausa does credit checks: http://www.aoausa.com/

Craigslist is good for listings. Be sure to include photos. You can also use UC Berkeley.

Determine rent level by visiting rentals in the area to see what they are asking and what they are renting for. Compare square footage, number of bedrooms and bathrooms, amenities such as fireplaces and outdoor space, etc.

You can probably do a better job than a rental agency, because you care more about your property. anon


We rented our studio cottage in lower Rockridge for 6 years or so...

I would say definitely craiglist is what worked best for us. We tried the UCB services but the response rate was a lot more slow than craiglist and the UCB students also responded to craiglist, so we ended up not doing UCB anymore.

To us there was no need to rent an agency but we did consult once in a while with friends who were real state agents, tax attorneys, etc.

RESPONSES TO YOUR QUESTIONS IN CAPS BELOW Are there certain must-dos we should be aware of? DO GET A SECURITY DEPOSIT EQUIVALENT TO ONE MONTH SUGGESTED TO GET A LAST MONTH DEPOSIT TOO (NEED TO PAY INTEREST BACK ON BOTH DEPOSITS, SO KEEP TRACK)

Where do you find the most comprehensive lease forms? WE JUST FOUND SOME FORM ONLINE AND THEN ADDED INFO AS NEEDED.

Any pitfalls we should be aware of? IT'S A LITTLE NERVE-BREAKING EVERY TIME YOU HAVE TO RENT THE PROPERTY. WE DID IMPROVEMENTS PRETTY MUCH EVERY TIME SOMEONE LEFT AND SPENT LOTS OF TIME AND ENERGY CLEANING THE PLACE. BECAUSE IT WAS IMMACULATE AND EVERYTHING WORKED, WE USUALLY RENTED OUR PLACE IN 2-3 DAYS.

Do you do credit checks? How? WE DID NOT DO CREDIT CHECKS, BUT WE DID CALL PRETTY MUCH EVERYBODY IN THE REFERENCE LIST. IF EVEN ONE PERSON DIDN'T FEEL 100% GENUINE OR SUPPORTIVE OF THE APPLICANT, WE USUALLY LET THAT APPLICANT GO. WE FOUND THAT GOING WITH YOUR INSTINCTS DOES WORK. (INCIDENTALLY, THE SECOND RENTAL i GOT AT BERKELEY AS A STUDENT WAS ALSO AN INFORMAL AGREEMENT)

Any book/website recommendations? DO BECOME FAMILIAR WITH THE OAKLAND RENTING LAWS, THEY ARE VERY SPECIFIC AND USUALLY TEND TO BE PROTECTIVE OF RENTERS.

Where do you post your ad that yields high traffic? Craigslist? YES

How did you determine your rent? LOOKED AT CRAIGLIST AND COMPARED BASED ON SPECIFIC CRITERIA: LOCATION, SQ FOOTAGE, PRIVACY, PARKING, AND OVERALL STATE OF THE PROPERTY. OFFERED ALL UTILITIES AND WIRELESS (EASIER THAN SPLITTING THE BILL WITH JUST ONE METER-RENTAL WAS LEGAL BUT A GRANDFATHERED CONSTRUCTION WITH ONLY 1 METER IN THE WHOLE PROPERTY).

HOPE YOU HAVE A GOOD EXPERIENCE AS A LANDORD, WE WERE LUCKY AND HAD GREAT TENANTS THAT PAID ON TIME, WERE QUIET, RESPECTFUL AND VERY FRIENDLY, SO IT WAS A GREAT EXPERIENCE (HAVE SOLD THE PROPERTY SINCE!). Anon


absolutely under no circumstances rent to anyone without doing a credit check on the applicant yourself. do not accept a printed credit check from the applicant, run it yourself. the nicest people can have a long history of not paying everyone with whom they have ever done business. decide if you are in the rental business or social services and rent your property accordingly. Some tenants have no problem with lying, expect that they are entitled to never pay rent and then filing housing discrimination claims against the landlord for invented discrimination. oh, and on this last point, the default assumption is that you the landlord are at fault, regardless of what proof you have that you didn't know about whatever supposed discrimination the tenant claims. after two tenants from hell that have so far cost me well over $20K, i now run credit checks religiously and do not consider anyone with a history of defaults. check on line to find out how to run a credit check. check references too, but don't let a reference override a bad credit report. you don't really know who is giving the reference. do not allow any tenant to fall behind on rent, begin eviction proceedings with a lawyer promptly. our experience is they begin to feel entitled to pay less than agreed upon rent or to not pay at all. we list our rentals on craigslist. get a lawyer who specializes in this area to review your rental agreements. been burned, i'm a harda$$ landlord now. there are plenty of great tenants out there who will pay rent on time, will not trash your rental, and have a decent credit report. tired of tenants from hell, not doing social work

Notifying other applicants after you've chosen a renter

July 2010

A question about rental protocol. After applications have been submitted and a renter has been chosen, how do you inform those who have not been chosen? Do you contact them by phone, letter or email, or do you tell them up front ''If you don't hear from me by Thursday keep looking.'' Looking to streamline the process.


Since you have no contractual obligation before the lease is signed, you can handle applicants you do not want to rent to an any way you like. It gets into legalities if you give a reason, so it is best to say you have chosen another application and leave it at that. I would like to suggest that if you are getting multiple applications, you may be able to get more rent for the space. anon
Page 174 of the book ''The Unofficial Guide to Managing Rental Properties'' says to keep the application for 3 years and to keep *detailed* notes on the application as to why you did not rent to them or why they decided not to rent your property. I always contact them by phone to keep the discussion positive and also clear. Another book I found useful for these basic landlord housekeeping issues is ''Managing Rental Properties for Maximum Profit''. Its an older book now but is one of the better books on being a landlord. anon
I call mine back and hope for voicemail. Calling is quicker than writing a note and doesn't create paper trails. anon
When showing your apartment state how the applicants will hear from you while they are there, or when they turn in their application. I have always contacted each applicant personally, whether through email or phone. They have taken the time to fill out the application and turn it in. I think it is only right for the landlord to take 60 seconds to personally reply back. As an applicant, having that question floating out there in space without a reply can be very hard. Think about when you waited to hear back from your first job application. Having a concrete answer, whether yes or no, helps everyone sleep better at night. Claire
Basically a simple matter. Keep applications for at least three years. Do NOT write applicants back with reasons why you made your decision - it is too easy to say something that could be taken wrongly. I simply tell all applicants when I will make my decision, and make no effort at all to contact those I did not select. I have only occasionally been called by people rechecking. In that case, keep it very simple, simply saying you selected another applicant. Again, do not offer any reasons or explanations. They really aren't necessary, and can only complicate matters. low

2007 - 2009 Recommendations


Renting while being a landlord

July 2008

hello, we are looking for advice/information about the following situation... we own a nice but cozy 1 bedroom in the hills near campus. when we bought a few years ago, we thought we would sell this place when we had a baby (which happened 7 months ago) to ''trade up,'' but alas, we have flat or possibly negative equity in the house due to the current market.

so we are considering renting it out, as we can likely get close to our mortgage payment. meanwhile, we are interested in then renting a bigger place for us, a little further out (and therefore cheaper) for pretty much the same monthly rent as what our tenants would pay us. we'll still likely lose $ overall, at least on property taxes (which i consider a loss anyway), but perhaps it will be more gradual than trying to sell our house now at such a bad time. and perhaps in the meanwhile, the market might recover, who knows.

does anyone have experience in renting a house to live while being a landlord? the tax implications? the positives/negatives? it seems like a temporary solution to our problem of no longer having enough space while seeing if the market somewhat recovers, but i'm not sure. advice or financial referrals would be appreciated. thank you.


Being a landlord no matter what the reason is a MAJOR commitment. You are providing someone with a home and you are responsible for its upkeep. In today's economy, it is tempting to rent out your home so you can rent a bigger one. Understandable. But that doesn't change the fact that you have to be responsible for your tenants and all the problems and headaches that come with them. Think hard before making this choice. It's a lot more than money you're dealing with here. Anon

2004 - 2006 Recommendations


Legal responsibilities for an Oakland landlord

Sept 2006

My very independent aunt, who is approaching 80 years old, is the owner of some rental units in Oakland. Although there are no present problems with her properties (that we are aware of), we want to be sure that the maintenance of the properties is up to the standard in terms of what landlords are supposed to do, i.e., strapping the water heater, assessing earthquake safety, doing routine inspections, etc. I'm hoping to get some advice for her about what the legal responsibilities are of a landlord along these lines, as well information and resources to guide her, in the form of inspectors and consultants who could look at the property, as well as books, etc. The impetus is both to be sure the tenants are safe and to protect the assets she has/needs as she grows older from any liability. Thanks in advance for any help!


Please take a look at the California Landlord's Law Book from local publisher Nolo Press (nolo.com). It will be well worth the investment. Also, Oakland has rent control and eviction controls and it would be good if you know about these ordinances: check out the city website for information: www.ci.oakland.ca.us.

Good for you for wanting to be conscientious landlords!
Becky


Nolo has several excellent guides for landlords. You can get them on their website or just go to their store in Berkeley (where they're available at a discount). You can also find a lot of free articles on their website: http://www.nolo.com/resource.cfm/catID/5944A0DA-71B3-49EA-BF5D300558FB66A9/213/178/
Anne
Contact Alameda Apartment Owners' Association, in Oakland. They should be listed in the book----I don't think they have a website. They can probably steer you in the right direction. Also, Nolo Press used to have some good books on landlording----you should check out their offerings. Good luck
Income Property Owner

Investing in rental housing

Sept 2006

I am in debt (manageable debt) with great limits on my ability to earn - mainly because of the profession I have chosen. I am beginning to work on switching gears to something that pays more, but in the meantime, I have equity in my home, experience in managing rental property and fixing it up for resale, and want to invest. My credit rating is good and I have been told that I will be able to qualify for loans. I would be looking for property that I would hold onto for a fairly short time period - 1 to 3 years. Is there anyone out there who has done this on a small scale and can offer advice? I don't want to post my email but if you prefer to have me contact you, I would appreciate that


I'm a mortgage broker who has 11 years of experience- here is my advice...

It is very hard to make money or break even on investment properties in this area unless you have a very large down payment (without having to take it out of the equity of your primary residence). What I would suggest if you want to expand your portfolio and invest in real estate is this:

1. invest in a REIT (contact a financial planner for info)

2. invest in rental property out of state where it has a better cash flow and is more affordable. consider investing in an area that you like to visit- so you may gain the tax benefits when you travel.

3. invest with companies that specialize in real estate and do the leg work for you- try SIFF investments (they specialize in Oregon investment properties and are based here in SF) or Open Door Properties- (they gather pools of investors for short term investing on real estate)

Last, you could invest in property in the Bay Area and be cash flow positive if you took a negative amortization loan. Your loan balance would go up instead of down so you'd be relying completely on the real estate market appreciating to make money in the long run. If you are looking for 1-3 years as your investment period- you are taking a big risk. Many experts believe the real estate market may flatten or decline during this period and are advising clients to invest for longer terms.


Our tenant is not paying rent and won't move out!

June 2005

We have a property in Oakland and we're relatively new to the rental game. We've gone to workshops, read up about being a landlord, we're part of the rental association, have books and cd's, etc. but it's still so hard especially because it is not profitable at all and we've been burned a couple times now and again we have a tenant who is not paying rent and is acting like a complete jerk. At this point we are borrowing money from family and friends so that we can pay for this jerk to live in our home and we're getting behind on our bills. How can we get him out quick? We've started the eviction process but we really can't afford an expensive process and he has made it clear that he's going to make stuff difficult even though he doesn't even have a contract with us. At this point, I am not above doing something illegal/unethical so that my own family doesn't end up in a shelter with no credit over him.
frustrated landlady


Have you thought about just selling the property? It's difficult to be a landlord if you don't have the capital to weather this kind of situation. I own other rental property in Oakland and might be interested in your building, even with the horrible renter, depending on the number of units, neighborhood, etc. landlady
Dear landlord,

I've been a landlord for a long time and have many wonderful experiences and one truly horrible one. My initial advice: Calm down, resist the urge to do something ''illegal/unethical,'' and strongly consider getting yourself a lawyer. A few observations:

(1) Landlords should never be in a situation where their own financial well-being is affected by a few months of vacancy. Being a landlord brings with it financial risk, including not only the loss of rental income but the very real possibility that you will be sued or have to provide a cash settlement of some kind to a tenant to get rid of him. (This is sometimes cheaper in the long run.) From your e-mail it sounds as if you may have counted a bit too much on the income from your rental. Maybe there's a way you can address that (refinance?). But it sounds to me like you need to consider seriously whether owning rental property makes sense for you financially.

(2) Nonpayment of rent is grounds for eviction. Period. But the law provides many protections for tenants at risk of eviction. You need to read your landlord books carefully and follow their advice to the letter regarding eviction. Be absolutely sure that your observe all deadlines and do all of the paperwork correctly (including getting a witness to your posting of various notices to him, etc.). Any mistakes you make will certainly lengthen the time the eviction takes and may also provide grounds for your tenant to sue you. I also recommend keeping a detailed written chronology of all of your communications with the tenant--phone calls, letters, encounters, etc. What, when, who.

(3) You don't specify what you mean by the tenant ''making things difficult,'' but his options are limited. He can refuse to move, in which case you can have his belongings removed at his expense (you will never collect on that, however--works better as a threat). In my case, what the tenant did was create an elaborate set of false accusations of harrassment and non-habitable premises, get an attorney and threaten to sue me unless I provided a $20,000 settlement (for an apt. that rented for $800!!!). So as bad as your situation is, remember it could get worse. In our case, the tentant eventually backed down and agreed to move out, then immediately sued us in small claims court (and lost, appealed, lost again). Despite our complete innocence (which was stated clearly by the judge, who was aghast at the insanity of the ''case'' against us), this cost us a fair amount of money (attorney's fees, court fees, process servers, inspectors to prove habitability, lost income, etc.) and a lot more anxiety and stress. What saved us was the help of a calm, reasonable, and expert lawyer who told us the facts (most landlord tenant law is designed to protect tenants) and helped us use the law to obtain a just outcome. Without his help, we would not have made good decisions or obtained the result we did. Our lawyer was R.C. Wong, who has an office in Berkeley. I recommend him highly. He is normally a tenants' lawyer, which was helpful to us because he understood the tenant perspective.

(4) Next time (if you do continue renting), be sure to check every reference (don't rely on letters alone and consider doing additional research like googling the tenant to verify employment, etc.--we later found out our tenant-from-hell had had disputes with previous landlords and that a ''clean'' recommendation was part of the settlement terms when he left his previous residence), get a good-sized deposit, and make absolutely clear that you will scrupulously observe legal deadlines with respect to payment of rent.

Good luck!! Been there


If you have no lease with this guy, simply call the police and tell them he has not paid rent in however many months, does not have a lease, is not welcome and is therefore a trespasser. Then ask them to remove him. Go change your locks and get a restraining order (much simpler than eviction). I'd do all this while you proceed with the eviction process. By not paying rent, he is in breach of even an implied contract (i.e., one not in writing) and so you no longer have any obligations to him. I really feel for you. Good luck Anon
I've just been through this! FYI-You don't need a lawyer but you do need to proceed with caution! Email me and we'll chat.

tia, fellow Measure EE landlord


First, when you choose a tenant in the future, make sure it's a good one. Check everything: their credit, references, make sure all their addresses on their license and current utility bill and current address all match as they should, and so on. Anything amiss is a red flag and is not someone worth renting to. As you are learning, sometimes it is better to have no tenant than a bad one.

Second, sometimes, rather than resorting to the eviction process, you can just pay someone to move out. Offer to pay them ''moving expenses'' if they get out by a certain date. Everyone has their price. I've had friends use this method to get rid of tenants.

Third, it's unclear whether your are renting a room or unit in your house, or if you have an apartment building or what. With Oakland and its Measure EE Just Cause Eviction law, getting tenants evicted can be difficult. I have a friend who highly recommends a company called ''The Evictors'' for evicting tenants. With all the rules and regs, he felt is was just easier to use a service like this. If you are renting a room or unit in your house, it may actually be easier to get rid of the person (single family homes are often exempt from various laws).


Buying a second home, thinking about renting out the old one

June 2004

We are considering renting out our house and I am interested in any advice for or against becoming a landlord. We own a house in Oakland (Crocker Highlands area), but have an opportunity to rent a house in Moraga -- we had been considering selling our house and buying in Moraga/Orinda for school reasons, but with this opporutnity to rent there, we thought it would be a good chance to test things out out there before we take the plunge and buy. This would mean renting out our Oakland house temporarily (maybe a year or two). My questions: How hard is it to be a landlord (e.g., finding and maintaining good tenants, taking care of their complaints, worrying about your house being kept in good shape by them, getting them to move out when it's time to sell, and anything else I haven't thought of)? Does anyone have any advice on how this will work out financially for us? What are the tax consequences of renting out what was previously your residence (in terms of deducting interest on the mortgage, depreciation, etc.)? Should we be looking to get rental payments that equal our mortgage payment? Would less still let us cut even financially? Any words of wisdom on this subject would be greatly appreciated. Thanks. sharon


My advice, based on my own experience and being in the rental field for over 20 years, is to get a property manager. A property manager will screen your tenants, handle any rent defaults, take care of maintenance problems and keep excellent records for you to hand over to the tax man at the end of the year. In addition, the laws for landlords are getting more and more complicated every year, and a good property manager makes it his or her business to stay abreast of all the stuff ya gotta do. In addition, since your house is in Oakland, I would take the time to read the Rent Adjustment Ordinance and Measure EE, which voters passed in Nov. '02: http://www.ci.oakland.ca.us/government/hcd/rentboard/ordinance.html. I also highly recommend the Nolo Press book on Landlord's Law, just to get a sense of the basics. Becky
Nolo Press has a great book on Landlord Law and best practices for being a landlord. They also have all the forms - rental applications, credit check authorizations, etc. We have a similar situation to yours. And while it is not without its challenges, it has been worth it for us. Here's what we aim for:
- Positive cash flow (include mortgage, taxes, insurance, gardener, water/ trash, maintenance in your calculations).
- You will need to purchase commercial insurance since the property won't be owner occupied. It is significantly more expensive than homeowners insurance.
- Good, stable tenants. We set the rent a notch higher than the standard market rate. We've had two tenants in 6 years, both from Craigs List.
- We try to break even every year since any money we make on the property is taxed. If we are ''ahead'' at the end of the year, we make an additional payment to our mortgage company so we show $0 losses/gains for the year.

The biggest thing you should consider though is capital gains taxes, which you will be subject to after 2 years of not living in the property. The good news is that you only have to pay the tax on any gains the property makes when you sell it. The bad news is that it can really eat into property appreciation. I'm sure there is much more to consider but this is a start. I look forward to reading the responses. Good luck with you decision! Anon, please


it's not as simple as you think, and much depends on your tenants. my parents have been landlords for years. Generally speaking, you'll have to do some significant cleanup work, if not repairs after a few years. You can only charge what the market will bear, which may be more or less than your mortgage, and the higher the rent, the less choice you'll have in tenants. Check w/ your tax person about those implications. If you end up moving w/in a certain time frame (3 yrs? I can't remember) you can transfer the basis of the home to any new home you buy. The rental income is income, and any improvements/repairs you make is deductible, so save receipts. And of course you can evict to sell the property, but some tenants are easier than others, and you should plan on either evicting them early to get the house ready (which means lost rent), or potentially earning less on the sale (tenants don't have any interest in making the house look good.) And read up on all the relevant laws. anon
I recommend you read the Nolo Press book on being a landlord as well as the book on a tenant's rights. These will provide you with a good idea on what to expect. As a former landlord, the part I was more concerned with was educating myself so that I did not discriminate against potential tenants as this is against the law. I also recommend you sign up with a service that will check the credit history of potential tenants. I used the Tenant Screening Center located in Santa Rosa. I paid for the garbage because I wanted to make sure my house was kept clean and not littered with trash. The tenants paid for all the other utilities. If you are concerned about having your yard or plants watered you might consider paying for water usage or at least paying for half of it. I initially went with a 6 month lease as this gave me sufficient time to get to know the tenants. Once happy with them, it turned into a month to month rental agreement which they wanted. As for how a rental will impact your finances, I recommend you read up on IRS publications about what you can/cannot deduct. There's just too much information to cover in this newsletter. Been there.

Thinking about renting out our home while we're away

Feb. 2004

We're considering moving to China with our 9-month-old daughter for at least a year but don't want to give up our Bay Area home. What are the pros & cons of renting our home in this market? Some say we should sell and invest the money rather than put up with the landlord headaches from thousands of miles away. We do have some relatives here, but we can't expect them to keep a constant eye on things. How much work would an agent do on our behalf? Thanks! Sean


I strongly urge you to get someone to manage your rental. A property manager will advertise the house, screen potential tenants and run credit checks, select a tenant, collect the rent, handle any problems with either rent collection or household maintenance and, if necessary, evict the tenant. You will get a monthly check minus a certain percentage and beautiful records at the end of the year for your taxes. If your house is in Berkeley a good property manager will know to pay interest on your deposit each December to your tenants, among other things. If your house isn't in Berkeley, it is still good to have someone who is knowledgeable about state laws, because laws are changing all the time.

Plus, should your tenant leave while you are still out of the country, there is now a law that they are entitled to a walk-though prior to vacating in order to give them a chance to mitigate any deductions from their deposit. It therefore is a great idea to have a specialist who can handle doing this so you don't have to come back to do it.

Also, you should be aware that you will pay a significant tax to the State of California should you decide not to return and you sell your rental house. Talk with a tax specialist about this. Been there, done that


1. You can register with eHousing.com, Metrorent and Homefinders. They all allow property owners to list properties for free. The Montclarion and East Bay Express also work. Try the UC Berkeley housing office. They have listings that are viewable only to faculty (e.g. professors teaching at Berkeley for just a year).

2. The two most important things to check with renters are their credit rating and their references (i.e. current landlord). If their application is incomplete or information is inconsistant, that is a bad sign.

3. The NOLO books are pretty good. Also consider joining the Rental Housing Association of Northern Alameda County. Then you have access to lease forms, information and advice from the California Apartment Association, and credit reports.


How to find a long-term tenant for our house

Jan 2004

Greetings, We are considering renting our 4 bedroom, 2 bath North Oakland home for a long-term period. As we are close to Cal, this would be perfect for a family here on sabbatical. We'd really love advice as to how to advertise this to the academic community and other responsible, long-term renters and/or leasers. Are there special websites for academics who are heading here on sabbatical? Any advice would be greatly appreciated. Thanks in advance, Deborah


Cal Rentals, UC Berkeley's counseling and listings service for students, faculty and staff, operates a special program for sabbatical visitors to UCB. Academic visitors appreciate a furnished place, relatively near to campus. They typically stay in our area for an academic year or a semester, and rarely stay more than two years.

There is no charge to list a home (or apartment or room) at Cal Rentals. If you would like more information about offering your home as a rental, please call 642-3644. Or, you can send an email to: homeinfo[at]uclink.berkeley.edu. Nancy


I have rented my home and in-law unit a couple times now with very good results. I have listed with the UC Housing office where you can specify Faculty only or Students. They also helped me with competitive pricing. I listed on the Parents Network and Craig's List. Another possibility is the classifieds in your alma mater's magazine, i.e. I see ads for home rentals in Harvard Magazine for all over the world. My in-law unit renters came from Household Digest. My home renters, UC faculty moving to the area, came from Craig's List. Screen applicants over the phone and then arrange for a meeting and walk through. kl

2003 & Earlier


Siblings inherited the family home - rent it out?

June 2003

My mother's modest estate has been probated and us sibs (6) are considering whether to simply sell the house and go our separate ways, or retain joint ownership of the property and turn it into a rental. The house is 45 years old, a modest but large ranch style, 4 bed, 1 1/2 bath, with original kitchen and baths, and has received so-so upkeep throughout the years. However, it is in a community that has become very upscale, with high home prices, few if any single family rentals even exist, has great schools, is on a picturesque .9 acres of woodsy Conecticut, complete with babbling brook, and is communter distance to NYC. One of my sibs lives nearby and could help hire / oversee a rental maintaince company.

Has anyone done anything similar to this before who could provide insight into how to get this kind of thing set up, do's and don'ts, how you get a group of sibs to agree on a course of action, legal steps, etc.?

My feeling is that we could probably be a little in the black right away, and then in twenty years the house might provide a nice supplementery retirement income for all of us. Thanks in advance.


Your goal of an investment that will spin off income for all the siblings is a good one. However, co-owning a rental property is a risky way to achieve it. Remember that, if you sell the house now, you can each invest your share of the proceeds in an income-producing investment that each of you will control independently. Your goal will have been met without co-owning a rental. (I can't resist adding here that most economists think houses are significantly overvalued right now, and that prospects for continued rapid appreciation are poor. In other words, this may be a great time to sell.)

My advice about turning a family home into a rental is an emphatic: don't! Both in my extended family and in my husband's, we've seen siblings turned from tight and loyal families into implacable enemies by co-ownership of indivisible assets (ironically, one was Great Granny's beautiful farm in Connecticut, like your land, replete with babbling brook.) Managing a rental involves plenty of headaches all by itself, but the constant decisionmaking over big expenditures, chores, etc. becomes a real hazard to family harmony once a large number of co-owners are involved. What are the odds that all six of you will agree about how much risk to take, how much money to spend maintaining or upgrading your investment, or when to sell? What are the odds that your tax situations are all identical? Rentals are not too profitable if you have to pay people to do all the work for you, but I can tell you from personal experience that sharing these tasks among you will be difficult. The tendency is for those who are doing the tasks to have a different assessment of their value and difficulty than the siblings who don't do them: everyone feels burdened. Also, you want to be able to make demands on the person who does each task, and to ask tough questions and make sure things are done wisely and well. However, it isn't easy to call a sibling to account, or to ask him or her to justify decisions and actions, even if you are paying him or her for the work. Things only get more difficult once your spouses, (or, god forbid, ex-spouses) get dragged in. These folks rightly have a say over a couple's assets, but aren't always bound by the same generous sentiments as the siblings themselves. And then, of course, your children serially inherit the mess. Protecting their stakes in the house pits the first-orphaned nieces and nephews against their aunts and uncles, instead of keeping their relationship one of mutual aid and support. After that, the vast diaspora of cousins has to make joint decisions. Hopeless.

Political Science tells us that requiring unanimity results in paralysis. (And paralysis in managing an asset means financial losses.) Our experience of family life tells us that forgoing unanimity, and overruling some siblings, brings ill will and grudges. Your responsibility to your siblings begs you to accept financial losses to keep harmony among you; your responsibility to your spouse and children obligates you to do what is best for them economically. Co-owning a rental creates an inevitable conflict between these two responsibilities. Out of love for both groups, better to avoid it.

Capital gains taxes, and the tendency of property values to fluctuate, mean that it is a complex transaction for individual siblings to divest themselves of their stakes at different times, and zero-sum games are inevitable. Divestiture involves facing decisions that pit one sibling's interest against the others' and where there are no clear cut rules to guide one.

Worst of all is seeing what happens to one's family nest egg when the siblings can't agree, as happened in my spouse's family. Lawyers ate roughly a third of the total assets, and considerably more than the portion that was in dispute.

Now two families are scarred, and we are left with sad reminders like sparsely attended weddings, and birth and graduation announcements that fall on deaf ears. Gone for good are those happy sharings of rented beach houses and woodsy cabins, where, in a wild army cousins, each of us always found a soulmate. The more you love your family, the worse the heartbreak.

If you decide, as many do, to attempt co-ownership, please at least read up first on the management of family owned businesses.

It has always amazed me that, as a family-owned concern, the Mafia manages to make money. That they are driven to slaughter each other is no surprise at all.

Anonymous out of tattered respect for my disgraced lineage


I've been renting our former home for almost 10 years. A few thoughts: 1) it could be quite a bit of work so the sibling who becomes the manager ought to be paid. 2) Definitely do credit checks and check references on applicants. 3) If you rent it, you will get a small tax break on your income taxes (divided amongst several siblings it will be small and might be rather complicated, in terms of paperwork). however, when you eventually sell the after it's been a rental you will owe extra taxes (because it was a business.) I don't know how those taxes will compare to whatever taxes you might pay if you just sell now... talk to an accountant. mary
Not all of this will be relevant to your situation, but here's a few things I've learned from turning my own house into a rental:

1) You have to detach yourself from an emotional connection to the house, and see it as an investment. If this is the house you grew up in, and you would be sad to see it repainted or the old cherry tree cut down or whatever--or if any of your siblings would--you should sell it. Because eventually you will have these decisions to make, and monetary concerns will butt up against emotional attachments, and may cause problems for you.

2) Property managers can take an enormous cut of your profit--typically a monthly fee from you, plus the first month's rent (or 1/2 that sum) every time a new renter moves in, and then virtually anything else you have them do (e.g., fix pipes), paid at their rates. You pay them for their office time, if you ask them to fax stuff, etc. etc. Maybe this is not typical out in Connecticut, but it seems to be here. Also--and this is important--because they profit most when there's a new tenant, they have no incentive to choose people who will stay long-term. I rented a house myself recently and twice saw property managers give rentals to the first people to walk in the door with the deposit in hand. They didn't even check references.

3) Property managers and tenants don't do maintenance like you would do maintenance. They don't worry about that drip in the eaves that's going to rot the foundation mudsill in 5 years--the one that could be fixed in 10 minutes, if only you were notified about it. They worry about crisis situations, and whether the carpet and paint are new. Also, with few exceptions, tenants don't garden or do landscaping. So if you expect to make a tidy sum 20 years from now when the house is paid off, you need to make sure it doesn't look like it's been rented for 20 years, or need 20 years' worth of work. Your sib who is close by should maybe get an extra cut of the profits for keeping an eye on the maintenance.

4) Get Nolo Press's guide to being a landlord--it's invaluable.

The curmudgeonly landlady


We rented to a family with an option to buy and now they won't move out

Feb 2002

A couple of years or so ago we ended up renting out a house which we'd been trying to sell in Vallejo to a family who had a credit situation that needed to be cleared. The agreement was that they would rent for a 6 to 12 month period while they cleared their credit record, then purchase the house. We, being trusting and wanting to be kind landlords, have let this arrangement drag on, and have been extremely patient and lenient about rent payments which have been late for reasons which may or may not be beyond the family's control. Thousands of dollars later, we are finally coming to our senses and would like to cut our losses by getting rid of these tenants and trying again to sell the house. We've considered and rejected the idea of trying to handle this ourselves. We've had some interest from a real estate broker who offered to evict the tenants then sell the house for us. Someone else has suggested going to Small Claims Court to try to recoup our losses. We're pretty! naive about what to do at this point, so any advice from others who have dealt with a similar situation would be really appreciated. What sort of professional(s) should we consider helping us out, how much should we expect to pay for someone to take care of this for us, etc. - Anonymous please


We've got burned - to the tune of $5,000 - for being ''nice.'' When we finally got fed up, evicting our tennant took 5 months because she knew how to work the system. My father-in-law, Fred Duman, is a real estate lawyer (510-537-3388 ). I suggest contacting him or another real estate lawyer asap. Helena
I highly recommend you purchase The Landlord's Law Book, published by Nolo Press. You can get it either from the Nolo bookstore at the corner of Parker and 9th Street in Berkeley, or probably from any good bookstore locally. Read up on the subject of evicting tenants before you decide to hire someone for this purpose. That way, if you do hire someone, you will be educated about what they are supposed to do and you can ask intelligent questions to determine if the person will do a good job for you. Or, you may decide you can do it yourself after you've read the book. Becky

Sellers renting back from the Buyers

1999

We just bought a house and are wondering about others experience with the sellers renting back from the buyers. The sellers were renting back from us for 3 weeks after we had closed escrow. They were reluctant to give us a key and we had to wait over 2 weeks to get one. According to our agent, it is normal for the sellers to give the buyers a key after closing, even during the rent back period, afterall the buyer has just purchased the house. However, according to their agent, in all the 15 (?) years of their experience, they have never heard of the sellers giving the buyers a key during the rentback period after closing. What is the proper procedure? We never signed forms that state anything regarding when we would get a key. As the buyer/landlord now, we know we are bound by certain rules to give notice if we need to enter the property with a legitimate reason, and we have no problems with that. We would like to know what to expect with the key if we are ever in this situation again.


YOU now OWN the home and should have a key to YOUR home, even if they are renting back. We had a similar situation when we bought our home 10 years ago and there was never a question as to whether we would have a key. Their realtor is either lying to you or is incompetent. MK
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