Many term leases run from September to August. For these leases, today is the last day for Landlords to take care of their Tenant’s security deposit. Landlords must return deposits within 30 days after the Tenant vacates for a tenant at will or the 30 days after the expiration of a term lease.
For the most part, a Landlord may deduct unpaid rent in certain circumstances and the cost of damage to the premises, reasonable wear and tear excepted. Landlords must follow the law precisely or risk triple damages (three times the security deposit) and attorneys fees. The Landlord must provide an itemized list of damages, itemizing in detail the damage and the repair necessitated. The Landlord must provide written evidence, indicating the actual or estimated repair cost. Landlords must sign the itemized list under the pains and penalties of perjury. Be careful, what constitutes a repair as opposed to maintenance or some other cost is a tricky proposition.
Keeping part or all of a security deposit, without strictly adhering to the law is costlier than the damages. The good news for Landlords is they can still seek their damages, but need to file a separate lawsuit. The bad news is that many Tenants are judgment proof and the Landlord will never recover.
I advise all my Landlord clients to not collect a security deposit. It is too complex for the casual Landlord and even some professionals. If a Landlord violates the law, the only cure is to return the security deposit immediately upon demand.
I don’t know. I have not assessed those products and would imagine they can work in the right situation.
When clients ask me to prepare a will, I focus on the client’s needs and I call it an estate plan. There are many factors in preparing each client’s estate plan.
Typically, a basic plan will include a will, durable power of attorney, health care proxy, HIPAA release form and advance directive which is also a living will. Depending on one’s assets, family and estate tax situation, the plan might also include revocable or irrevocable trusts, emergency guardianship designations, homestead declaration, life insurance trusts or pet trusts.
Estate planning not only involves the creation of the proper documents, but also involves how one holds the title to their assets such as real estate and financial accounts. The proper beneficiary designations on your retirement accounts and your financial products, such as life, property and casualty insurance, are crucial to the effective implementation of an estate plan.
Wills and these other documents affect real legal rights and interests. For some, an online service could be equally effective. For most, they need a legal professional to determine the most effective plan.
This starts a series in which I will discuss topics that small businesses should be aware of when signing a commercial lease.
The Lease: The lease is both a Contract and a Leasehold, or interest in property. Simple contract analysis is not enough. The commercial tenant needs to be aware of traps that go along with a leasehold interest. Many of these issues will NOT be addressed in the lease proposed by the Landlord. It takes knowledge and experience to make sure you are protected against unknown or unforeseen risks.
1. Simple Budget: You need a budget. This is important to plan for the expenses of the condo and make sure funds are available. Pay as you go is a risky proposition. Just add the recurring expenses: master insurance, utilities, maintenance, etc., and divide by 12. This monthly condo fee should then be assessed on each unit based on the condominium documents. Some condos assess by percentage interest, while other condos pay equally. Whatever you do, follow the condo documents.
2. Condo Reserve: Condominium documents may vary, but underwriting guidelines at most lenders will require a 10% reserve. Every time a unit owner purchases with a mortgage or refinances their current loan, the bank will need the condo to keep up the reserve. This means 10% of the actual budget. Open a bank account in the name of the condominium for your reserve. Use this account to collect the monthly condo fee and payout expenses.
3. Sixty Days Late: When the monthly condo fee is due, an automatic lien on each unit arises in favor of the condo association. If the condo fees are not paid within sixty days, to the tremendous advantage of the condo association, this lien can take priority over the first mortgage on the unit. The association should involve an attorney every time a unit owner is sixty days late. The Unit Owner would be responsible for attorney’s fees and costs. All the condo fees and collection costs will be an enforceable lien on the unit and some of these fees and costs might enjoy priority of the first mortgage on the unit.
Whether your association has two units or six, follow these simple rules and you will take a major step toward a healthy condo.