CA Real Estate

November 4, 2016 by Peter Maclennan Leave a Comment

Water-Efficient Fixtures & California SB-407

In 2009, then California governor, Arnold Schwarzenegger signed SB-407 into law. The law requires that water-efficient fixtures be installed in homes and commercial properties.

The law defines non-compliant water fixtures as:

Any toilet manufactured to use more than 1.6 gallons of water per flush.
Any urinal manufactured to use more than one gallon of water per flush.
Any showerhead manufactured to have a flow capacity of more than 2.5 gallons of water per minute.
Any interior faucet that emits more than 2.2 gallons of water per minute.

Residential Property Owners

One of the main features of this law is that as of January 1, 2017 all water fixtures in a single-family home are to be replaced with water-efficient fixtures. Most homes that have undergone a major, permitted remodel after 2014 were required to update plumbing fixtures to water-efficient fixtures to obtain a building permit.

b) On or before January 1, 2017, noncompliant plumbing fixtures in any single-family residential real property shall be replaced by the property owner with water-conserving plumbing fixtures.

and

(c) On and after January 1, 2017, a seller or transferor of single-family residential real property shall disclose in writing to the prospective purchaser or transferee the requirements of subdivision (b) and whether the real property includes any noncompliant plumbing fixtures.

Disclosure on Transfer (Sale)

This law requires that the seller must disclose to buyers if the fixtures in their home are in compliance with this law.

Do you know if all of your fixtures are in compliance? I certainly don’t. This will likely require you to either update all the fixtures to low flow, or have an inspection certifying that they are low flow.

Commercial Real Estate and Multifamily Properties

Commercial properties and multifamily real estate have to be in compliance by January 1, 2019. For purposes of the law, the authors defined commercial real estate and multifamily real estate:

(a) “Commercial real property” means any real property that is improved with, or consisting of, a building that is intended for commercial use, including hotels and motels, that is not a single-family residential real property or a multifamily residential real property.

(b) “Multifamily residential real property” means any real property that is improved with, or consisting of, a building containing more than one unit that is intended for human habitation, or any mixed residential-commercial buildings or portions thereof that are intended for human habitation. Multifamily residential real property includes residential hotels but does not include hotels and motels that are not residential hotels.

Duplexes, Triplexes, and Fourplexes

Based on the definition of multifamily residential real estate as containing more than one unit intended for human habitation, most duplexes, triplexes, and fourplexes should fit into this category.

Disclosure on Sale or Transfer

Again the law requires that the seller of commercial real estate or multifamily property disclose to the buyer if the property is in compliance.

Plumbing Police?

Does this mean that the state is going to create the plumbing police? Beats me. The law does allow for local communities and water retailers to enact ordinances to enforce compliance. Check with your local municipalities and water district to see if they have an enforcement mechanism.

If you are considering selling residential real estate in the near future you will need to work with your real estate professional to comply with this law. Hiring a property inspector can go a long ways towards this.

It looks like the plumbers, handymen, and handywomen of California are going to have a lot of faucets to fix.

February 2, 2016 by Peter Maclennan Leave a Comment

Residential Landlords and Mold – Senate Bill 655

A Moldy Wall – by Matti Mattila*

Senate Bill 655 Housing Standards Mold

Senate Bill 655 was signed into law on October 9, 2015 and went into effect on January 1, 2016. This law adds mold to the list of habitability issues that a tenant can use in defense of an eviction case.

How is mold defined under SB 655? “Mold” means a microscopic organism or fungi that can grow in damp conditions in the interior of a building.
The California Apartment Association boasts that this law protects both the landlord and the tenant. The tenant is protected from the harmful effects of exposure to mold over an extended period of time.

The landlord is protected from eviction defense attorneys using “mold” as a last minute defense in an unlawful detainer proceedings. To qualify as a habitability issue, the mold must be visible, the landlord must have been notified of its presence, and it must NOT be attributable to the tenants misuse or neglect.

Dealing with Mold in a Rental

From the California Association of Realtors® (CAR) Q&A on the law:
QUESTION: “If the landlord suspects that the tenant’s failure to keep the property clean and sanitary has contributed substantially to the mold problem, should the landlord nonetheless repair the mold problem?”

ANSWER: “Yes. Even where it’s clear that the tenant’s own negligent actions have led to the mold problem, the conservative course of action from a risk management perspective, is to act quickly to repair the problem. Afterwards, if it’s clear that the tenant had caused the problem, the landlord may bill the tenant for the cost.

Recall that a landlord has a duty to maintain the habitability of the property. This obligation is found under common law, by statute, and often in the terms of the lease agreement. Failure of the landlord to maintain the property in a habitable condition may allow the tenant various legal remedies such as rent withholding, termination of the rental agreement, discounted rent and other rights and damages. Because the risk of liability is high, it’s prudent to take a cautious approach by remediating first, and assessing costs afterwards.”

CAR® Form on Mold

The California Association of Realtors® provides a standard form, “Lease/Rental Mold and Ventilation Addendum”, for dealing with mold issues when you are leasing a unit. You can use it to address some of these issues when a new tenant takes occupancy.

You should always address tenant issues with your legal counsel to get their advice on matters pertaining to law.

How Much Are California Investors Spending?

Some interesting takeaways from the graphic above.

The final sales price grew by a whopping 17.2% from 2014 to 2015. “Good deals” are getting harder to find.
Costs are going up.

I think the costs of rehab are rising because contractors are busier. They are having to pay their employees more to retain them. Some contractors are experiencing a shortage of labor.

As equity in housing increases, expect to see more owners renovate their homes. This will keep upward pressure on construction costs.

If you have questions about investing in real estate, please feel free to reach out to me via phone or email.

Alameda Investment Properties

$28,080,000 : 42010 Blacow Road, FREMONT

3 beds, 0 baths

Lot size: 3.00 ac

Year built: 1968

Parking spots: 38

Days on market: 61

Walk Score®: 75
$7,900,000 : 32211 Meteor Drive, UNION CITY

0 beds, 0 baths

Lot size: 871 sqft

Year built: 2011

Parking spots: 2

Days on market: 173

Walk Score®: 71
$5,500,000 : 381 5, OAKLAND

0 beds, 0 baths

Year built: 2017

Days on market: 89
$4,950,000 : 412 Monte Vista Ave, OAKLAND

0 beds, 0 baths

Lot size: 16,552 sqft

Year built: 1908

Parking spots: 14

Days on market: 5

Walk Score®: 81
$4,500,000 : 9849 Macarthur Boulevard, OAKLAND

6 beds, 0 baths

Year built: 2015

Days on market: 3

Walk Score®: 58

See all Real estate matching your search.
(all data current as of 5/29/2017)

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Contra Costa Investment Properties

$4,560,000 : 120 W Linda Mesa Ave., DANVILLE

6 beds, 3 baths

Lot size: 5,662 sqft

Year built: 1927

Parking spots: 3

Days on market: 40

Walk Score®: 85
$629,000 : 459 43Rd St, RICHMOND

3 beds, 2 baths

Lot size: 5,000 sqft

Year built: 1951

Days on market: 32

Walk Score®: 82
$649,000 : 512 43rd St., RICHMOND

4 beds, 2 baths

Lot size: 4,125 sqft

Year built: 1968

Days on market: 5

Walk Score®: 79
$1,195,000 : 1003 Roosevelt Ave, RICHMOND

1 bed, 1 bath

Lot size: 5,227 sqft

Year built: 1922

Parking spots: 8

Days on market: 130

Walk Score®: 78
$610,000 : 3325 Rheem Ave, RICHMOND

4 beds, 3 baths

Lot size: 6,400 sqft

Year built: 1941

Days on market: 39

Walk Score®: 77

See all Real estate matching your search.
(all data current as of 5/29/2017)

Listing information deemed reliable but not guaranteed. Read full disclaimer.

March 21, 2012 by Peter Maclennan Leave a Comment

Landlords: Beware of “Successful Rent” Scam

The California Association of Realtors® posted the following warning about “Successful Rent” courtesy of the Apartment Owners Association to landlords about a scam being perpetrated on rental property owners and property managers:

Beware of “Successful Rent”

The Apartment Owners Association is warning of a company called Successful Rent run by a lady named Sunny who is scamming rental property owners.

Sunny calls owners who have vacancies and claims she has prospective tenants from out of the country looking for homes. She then sends someone over who fills out the rental application and gives the owner or manager a fake cashier’s check to hold the apartment. She also says that she will run the credit report for the owner for free.

On the day of move-in, she calls the owner and says the tenant found another place and they would like their money back. The owner then writes a check for the deposit amount and a week or two later, gets a letter from their bank saying the original cashier’s check was fraudulent.

For more information about real estate investment call Peter @ (925) 385-8798 or visit http://www.maclennaninvestments.com.

January 11, 2011 by Peter Maclennan 1 Comment

Risk: Getting Your Money Back Guaranteed?

I have been reading Investing for the Future by Larry Burkett on investing principles. I was struck by the author’s clarity in defining risk.

Almost without exception the degree of risk is rated based on the guaranteed return of the principle, not how much earnings the investment might yield.

The key factor in evaluating an investment’s risk is: Will I get my money back?

An investment that could lose lots of money, should provide the investor with a greater reward for their willingness to take that risk. Conversely, “safe” investments provide less reward to investors, because they have a greater certainty of getting their money back.

This explains why savings accounts are bearing such a low rate of return. The federal government has guaranteed that savings accounts up to $250,000 will be made whole, by the FDIC. Investors in savings accounts are taking almost no risk, so they get almost no reward or return.

If you are interested in earning a higher yield on your savings, please feel free to contact me at (925) 385-8798.

Water-Efficient Fixtures & California SB-407