Happy New Year!!
It was a great 2010 and 2011 has all the ingredients for an outstanding year.
As an apartment broker and property manager, a big chunk of my business has to do with income property, Landlords/Investors, Tenants and how to help them to all get along. With that in mind, I just wanted to share 4 new laws that come into effect in 2011 and affect the Landlords/Tenants dance:
#1 AB 1263 Serving an Unlawful Detainer Action on a commercial tenant. This law changes the method of serving an unlawful detainer notice on a commercial tenant. The law provides that service on a commercial tenant can be made by any of the following methods: (1) delivering a copy to the tenant personally, (2) leaving a copy with some person of suitable age and discretion at the property and sending a copy through the mail, as specified, or (3) by affixing a copy in a conspicuous place on the property and sending a copy through the mail, as specified. AB 1263 amends Section 1162 of the CA Code of Civil Procedure.
#2 SB 1149 Prohibits general release of court records in foreclosure-related eviction unless landlord prevails; New cover page with Notice to Quit to tenants after a foreclosure This law authorizes a court clerk to allow access to court records of eviction proceedings involving residential property that has been sold in foreclosure if 60 days have elapsed since the complaint was filed and judgment was entered against all the defendants (tenants). This law also requires, until Jan. 1, 2013, that any Notice to Quit served to a tenant of residential property within one year after a foreclosure sale include a separate cover sheet containing an additional notice to tenants (statutory language in Section 1161c(b) and (c)). Amends Sections 1161.2 and 1166 and adds Section 1161c of the CA Code of Civil Procedure.
#3 AB 1800 Unlawful renting of residential dwelling [I call this the Craigslist Scam Law and I've written about my actual knowledge of this scam and the scammers victims] Existing law makes it a misdemeanor for a person to claim ownership or take possession of someone else's residential property for the purpose of renting or leasing it to another without the consent of the owner. This law increases the penalties for this offense to a maximum of $2,500 or imprisonment in a county jail not exceeding one year or by both. [Not enough of a penalty when I've seen in excess of $5K being lost by unsuspecting would be tenants.] Amends Section 602.9 of the CA Penal Code.
#4 H.R. 5297 (Section 2101(h)) (Small Business Jobs and Credit Act of 2010) Landlords to report payments of $600 or more on IRS Form 1099 [Another in the string of legislation making realtors tax collectors. My small investors are already bad at keeping their records clean. Now the IRS will be after them for not filing a 1099 on the gardener or house cleaner.] H.R. 5297 includes an expansion of the 1099 reporting related to a trade or business. Under existing law only those real estate professionals engaged in property management-type businesses have been required to file Form 1099. This new federal law extends the Form 1099 requirement to any person who receives rental income. This requirement would apply to any landlord (including a small investor), rather than only those who are in the business of managing property. Starting Jan. 1, 2011, any person who receives rental income must provide a Form 1099 for all payments of $600 or more made to service providers such as plumbers, carpenters, yard services and repair people. The purchase of goods is not included within the reporting requirement. The Form 1099 is provided to the IRS and to the service provider. The new requirement applies to both residential and commercial property.
I am not in the business of practicing law but am provided this information from CAR and wanted to pass it along to you. I like to keep my clients in the know and that includes recent legislation. Knowledge is power. Please check with your attorney if you need clarification on how these changes will affect you and your business.
Until next time!