Ever-Increasing Complexities

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Ever-Increasing Complexities

Ever-Increasing Complexities

by Sonya Loera

Apartment News, Sept 2022

At the September 21st meeting of the Apartment Association of Orange County, Ron Kingston, the AAOC’s state legislative advocate, gave an excellent and in-depth presentation on “New and Very Important Laws Affecting Rental Property, What’s Next?”

From his perspective, the “What’s Next?” relates to even greater restrictions from legislative proposals rental property owners may be facing in 2022 and the years ahead. However, the immediate concern lies with how rental property owners can best adapt to the already-established future as outlined during his presentation.
One very clear message is that owning properties has become a much more complex undertaking than it ever was in the past.

Last January, I recommended making “Get the Facts” as the #1 New Year’s Resolution that apartment owners and investors should adopt for 2021. That requirement continues to hold true; but, even with the “facts” in hand some of the complexities of the new laws require further expert assistance.
In summing up his thoughts about AB 832, Kingston stated:

It has become extremely difficult for a rental property owner to regain possession of premises or reimbursement for COVID-19 Rental Debt, so it is recommended that you retain competent counsel to assist in successfully regaining possession and maximizing a money judgment.

With all of the different documentation, language and timing needed to comply with the new rules, new forms and new procedures introduced with the signing into law of AB 832, the reality is that few, if any, owners can tackle this process themselves. 

And, even after the COVID 19 Recovery Period ends on March 31, 2022 (assuming no additional extensions), regaining possession may still be a challenge. AB 1487 has established a commission to award grants to non-profits providing legal assistance to prevent tenant evictions or displacements. This new law also allows for targeted outreach to buildings and neighborhoods to advise tenants of their legal rights to prevent or mitigate “displacement.”
What are an owner’s options or best protections.

Back in February, 2020, Tim Gorman wrote an article about “Practicing Purposefulness” as the second part of his series on “How to Survive and Thrive with the New Norm.” The focus of this piece was on being in tune with those who live on your properties. As he stated, “you need to be on top of what is happening with your tenants and to take the actions that you are permitted promptly and decisively.” That advice is doubly true today.

Additionally, although circumstances change as we have all learned from the past year, careful pre-screening of prospective residents remains one of the best protections you can take against future problems. That said, even screening practices need to be updated. As Kingston noted during his presentation, the Department of Fair Employment and Housing Council (DFEHC) has adopted new regulations regarding the aggregation of an applicant’s income. 
It seems like at almost every turn, there are new requirements and rules. And, the reality is – more changes are likely to occur next year, if not sooner.

So what do you do?
If you have always been a hands-on owner and do-it-yourselfer, now might well be the time to consider a professional property management company.

Thought also should be given to the how and why of your ownership position. If you have been keeping your properties as a legacy for your heirs, then perhaps a property management company is a solution that will relieve stress not just for yourself, but for your entire family.

Even if you are not ready to take this step, now would be a good time to do some investigating and fact-finding. Talking with some companies might prove to be an eye-opening experience.  The option of hiring outside management may prove to be exactly the right answer or, perhaps, it is not viable at all. Whichever the case, “getting the facts” is the first step.  And, as heard so frequently from all of us at WR Gorman & Associates, run the numbers and some “what if” scenarios. Investigate all of your options.  The old saying – “Every cloud has a silver lining” need not necessarily be a platitude. You never know what opportunities await discovery.

Sonya Loera
Agent, Manager DRE#01947308