Thanks to the many folks who sent in this article about a seller who stayed in his house after escrow closed. In this raging market, it is customary for listing agents to suggest seller rentbacks as one of the sweeteners to get an offer accepted, and will deliver a nice rental agreement but if the sellers don’t move, what are you going to do? In the more affluent areas, a lawyer’s monthly retainer fee is less than the rent, so the squatter can delay until you pay enough lawyer fees to reach a deal – and it probably won’t include paying the back rent. I know of one landlord who hasn’t received one penny of his $5,000+ rent since covid started!
RIVERSIDE, Calif. – When Tracie and Myles Albert purchased a beautiful four-bedroom house in Riverside, California they never realized that at the end of escrow the seller would suddenly refuse to give up the keys and leave.
“It’s just draining, emotionally and financially,” says Tracie. On January 31, 2020, the couple purchased the home. More than a year later, they still haven’t been able get inside their property. Chris Taylor is the Real Estate Agent who sold the house to the Alberts from a man who wanted to sell immediately.
“He needed $560,000 from the sale of his house in two weeks and he called me on a Sunday, so in traditional real estate there’s no way of doing that unless the buyer’s a cash buyer,” says Taylor.
Since the house was free and clear and worth more than $560,000 the Alberts felt it was a great deal.
“It took us scrambling to get everything we had, our life savings put together and a hard money loan on top of it to make that happen,” Myles stated.
During escrow they discovered there was a $30,000 tax lien on the house which slowed things down, but in the end, all parties signed on the dotted line and the sale was completed.
“We own the house, outright. That’s our house and it’s all in a contract, written, legal, done. He’s been paid the money in his account. How could we have no rights to go into our home,” asked Myles.
Taylor says, “It’s genuinely unfathomable to me that we live in a state where something like this is even possible. They closed escrow on this home January 31, 2020.” The Alberts and Taylor have contacted authorities and tried to get the seller evicted but because of the pandemic, they’ve gotten nowhere.
“They have this case under a COVID tenant situation, of no evictions when it doesn’t fall under that at all. This transaction went through in January 2020 before any of that, it isn’t a renter who was getting thrown out. It’s the guy who collected all of this money,” stated Myles.
Eviction Attorney Dennis Block says, “This year alone, we’ve handled at least 7 maybe 8 cases of this exact type of situation.”
He says people purchasing homes need to be extremely cautious, especially if they notice any red flags during the process. Block says what’s happening to the Alberts could happen to anyone.
“This person is not a tenant, it’s a previous owner who is enjoying the benefits of the money that was transferred to his account but of course doesn’t want to move out of the premises that he no longer owns,” Block stated.
The Alberts filed an unlawful detainer but because of the California eviction moratorium, the case has been stalled. Time is simply passing by and the immaculate house they fell in love with is now becoming an eyesore.
Tracie says, “I tried watering the lawn one time and he came out and ripped my sprinkler lines, ripped all the wires. The Palm trees are dying, everything was beautiful and everything is dying.”
Her frustrated husband says when he contacted law enforcement, they told him, “If you were in Arizona, if you were in Nevada, this wouldn’t be a problem, you would just go take your house back. But in California, like our hands are tied, even though we’re on your side, there’s nothing we can do.”
Two downtown residential condominium buildings with a mixture of market-rate and affordable housing, ground-floor commercial space and underground parking got the go-ahead for construction last week from the Carlsbad City Council.
The Carlsbad Station project will cover 1.76 acres of the city block between State and Roosevelt streets, north of Grand Avenue and a half-block walk from the Carlsbad Village train station. The site includes several different lots with eight buildings constructed between 1947 and 1981, some which are occupied by long-time tenants such as Hennessey’s Tavern that could resume business in the new structures.
The two four-story buildings will include 79 residential condominiums ranging from 14 one-bedroom units, each with 747 square feet, to four four-bedroom units, each with 2,877 square feet. Twelve of the condos will be reserved for occupants who qualify for affordable housing and will be indistinguishable from the market-rate condos. Four commercial units will occupy the ground floor, and the underground parking will have 143 spaces.
Frontage along Roosevelt and State streets will get new curbs, gutters, sidewalks, bike racks, street trees and landscaping.
The City Council voted 3-1 Tuesday to approve a tentative tract map and site development plan for the project, with Councilwoman Cori Schumacher opposed. Schumacher said the city should be “more prescriptive” with its affordable housing requirements, such as specifying whether the affordable condos should be for sale or for rent. City officials said those details will be determined later.
Mayor Matt Hall and a number of long-time Carlsbad residents praised the project.
“You truly went far and beyond,” Hall said of the applicant McKellar McGowan, a San Diego real estate development firm. “I like the architecture and that you will bring back some existing tenants.”
Parts of the two buildings will be set back from the street to make them appear less tall than they really are. The side facing Roosevelt will only have three stories at the street, and the side facing State will only have one floor at the street, with the upper three stories set back 50 feet. A pedestrian promenade will connect Roosevelt and State streets between the two buildings.
Several speakers said the project is an example of “smart growth,” in which more dense residential development with affordable homes is built near public transit, jobs and services.
“This is exactly where a mixed-income project should be located,” said Angeli Calinog , a policy manager for the nonprofit public transit advocate Circulate San Diego.
“This is one of the best projects we’ve seen in many, many years, and the first one to use the new Village and Barrio Master Plan,” said Gary Nessim, a Carlsbad Village business owner. “It fits the community very nicely.”
While all the speakers at the council meeting supported the project, a few residents wrote letters in opposition.
“It’s sad to see major developments taking over our beach town,” wrote lifelong resident Adam Faringhy. “I beg of the City Council to slow their pace and consider saving some of our local landmarks.”
Others said the project would increase traffic congestion and force out more small businesses.
But most were in support, including Christine Davis, executive director of The Carlsbad Village Association, a nonprofit that promotes business and culture in the Village.
“While a large project, it has been thoughtfully broken into smaller pieces to blend into our downtown environment,” Davis wrote.
San Diego didn’t make the NAR list of vacation-home areas (counties where 20% of the housing stock is for seasonal use), but our market should be enjoying some additional second-home purchases:
Vacation home sales are outperforming total existing-home sales. Sales of homes intended for vacation use rose to 109,100 in the past three months of July-September, a 44% gain from the level of 75,600 sales during the same period last year, according to NAR estimates based on information gathered from the monthly REATORS® Confidence Index Survey and NAR’s existing-home sales estimates. In comparison, total existing-home sales during July-September rose 13% year-over-year (1.72 million in July-Sept 2020 vs. 1.52 million in July-Sept 2019).
The pandemic and low mortgage rates have increased the desirability and affordability of owning a vacation home. Buyers may be desiring a vacation home as a weekend getaway as urban-based leisure activities are still constrained by social distancing. The ability to work from home also means buyers who can work from home can spend more time at and enjoy their vacation home. Historically low mortgage rates have also made a home purchase more affordable, while rising prices in past years have yielded larger home equity gains that can be tapped (through say a home equity loan) to use for a down payment.
There should be some scrambling to purchase properties in the two highlighted areas below, but the cost for Mom & Pop to add an ADU is still a hurdle ($50,000 to $100,000 min).
San Diego further loosened rules for granny flat construction Tuesday, eliminating all parking requirements and allowing property owners to construct extra granny flats if they agree to rent restrictions on at least one of them.
Tuesday’s loosening of granny flat rules builds on recent state and city efforts to encourage construction of the homes, which city officials call the cheapest and fastest way to help solve the local housing affordability crisis.
The City Council unanimously approved the regulations as part of a package of reforms aimed at boosting housing construction.
Other updates encourage construction of more “micro” housing units, allow buildings to be three stories taller if all their units are rent-subsidized, and let housing intended for students to have more units than previously allowed.
“This isn’t the sexy, make-the-news kind of story, but at the end of the day it’s helping create more housing,” Councilman Scott Sherman said. “Hopefully we can start bringing down the cost of housing for residents.”
Mayor Kevin Faulconer, who has spearheaded dozens of housing revamps in recent years, said the new moves will make a difference.
“The changes we’re making now are going to speed up the development process, cut burdensome regulations, and make it easier to build units that San Diegans can actually afford,” he said.
On granny flats, which the city and state call “accessory dwelling units,” parking spaces will no longer be required. San Diego has been requiring one parking space per new granny flat unless the unit is less than 500 square feet, in a historical area, within a residential parking district, or the granny flat is near a transit line or ride-sharing station.
On the bonus granny flats, property owners are eligible if they agree to make one of the granny flats they build rent-restricted for low-income residents for at least 15 years.
For granny flats within a half-mile of an existing or planned transit line, the number of bonus units is unlimited. For granny flats not near transit lines, a maximum of one bonus unit is allowed.
The rule change for micro housing units builds on 2018 city legislation that allowed developers to double the number of units in a project if they made the units smaller than usual – 400 square feet maximum.
The change approved Tuesday will create additional incentives based on height of the building and distance from the property line. City officials said the change would allow more projects to take advantage of the city’s micro unit incentives.
The new density bonus for projects with 100 percent rent-subsidized units builds on recent state legislation, AB 1763. That law allows a developer to double the size of a project if half the units are rent-subsidized.
San Diego will go beyond that. If all the units are rent-subsidized, the city will allow an unlimited number of units, and allow the height of the building to increase by three stories above what is allowed under current zoning. But the city’s change only applies in areas within a half-mile of an existing or planned transit line. In addition, 80 percent of the units must be for low-income or very-low-income residents, meaning a maximum 20 percent of the units can be for moderate-income residents.
On student housing, a new state law, SB 1227, allows developers to build 35 percent more units if their housing project is geared for students. The city has added two local incentives on top of that.
San Diego also increased the number of zones in the city where emergency shelters for homeless people can be located, a change required by recent state legislation.
The city will now allow shelters in all “community commercial” zones, which are essentially low-intensity commercial areas. Shelters were previously allowed only in mostly industrial areas, such as the Midway District near the sports arena.
Leaders of local development praised San Diego for being on the cutting edge of housing reforms.
“The city of San Diego continues to be the leader in our region to jumpstart affordable housing through incentivizing affordable housing at all levels,” Jeanette Temple of the Atlantis Group told the council.
More excitement to stir up next year’s selling season!
Most landlords can survive a while, but faced with no rental income for months, won’t a few long-time landlords say, “Screw it, I’m cashing out and I don’t care about paying the taxes!” Evicting the non-payers doesn’t mean they will have the same rent coming in again immediately either.
Landlords, apartment owners and housing industry groups have unleashed a barrage of legal challenges against the Trump administration’s order protecting renters from eviction, leaving millions of families once again facing the risk of homelessness in the middle of a deadly pandemic.
Over the past month, an array of lawyers and lobbyists have inundated federal, state and local courts. They have sought to stop renters from invoking the federal ban, and in some cases, they’ve tried to quash the policy altogether, arguing that the government did not have the authority to issue it in the first place.
One federal lawsuit brought by a Virginia landlord, for example, argues that the Trump administration wrongly halted evictions based on a “flimsy premise” that doing so might prevent displaced Americans from contracting the coronavirus. The case is supported by an anti-regulatory conservative group with documented past financial ties to a foundation backed by Charles Koch, a Republican megadonor. The lawsuit has also picked up key legal help from a major lobbying organization representing apartment owners.
“There’s a reason eviction is a remedy in the law,” said Caleb Kruckenberg, a lawyer at the Koch-funded New Civil Liberties Alliance, who stressed that landlords are experiencing significant financial disruption, too.
The flurry of lawsuits has created a wave of legal uncertainty, exposing millions of Americans once again to the sort of hardships the Trump administration initially sought to prevent. Federal officials tried to clarify some of the ambiguity in policy guidance issued late Friday night. But the update instead appeared to give landlords a clearer green light to start eviction proceedings against some cash-strapped renters, even though a moratorium remains in place until the end of the year.
The Trump administration’s latest move perplexed Diane Yentel, president of the National Low Income Housing Coalition, who said she remains fearful about a wave of evictions on the horizon.
“To understand, ask yourself the question: Why would a landlord want to start eviction proceedings in October for an eviction that can’t happen until January? The answer: to pressure, scare and intimidate renters into leaving sooner,” she said.
White House spokeswoman Karoline Leavitt said in a statement that the administration “has actively engaged with stakeholders across the country to ensure both renters and landlords have the necessary resources to make timely rent and debt payments.”
The legal plight facing millions of cash-strapped renters highlights the nature of the nation’s unequal recovery, as Americans who struggled most at the outset of the pandemic continue to face severe hardship — even as the economy begins to improve.
About 1 in 3 adults say it is somewhat or very likely that they could face the threat of eviction or foreclosure over the next two months, according to survey data released last week by the U.S. Census Bureau, underscoring how sustained unemployment and dwindling federal aid may be creating the conditions for a housing crisis.
California is known for being a tenant-friendly state, and now the eviction moratoriums make it feel like it’s Free Rent For All! It is particularly hard on the mom-and-pop landlords who live on their rental income and who are conflict-adverse, which puts them in a position where they just have to eat it.
Tenants are required to detail in writing why they can’t pay the rent, but is that all you can do?
From the AAOA:
While the recent CDC moratorium on evictions requires that tenants sign a declaration under penalty of perjury, detailing why they can’t keep up with rent payments and their efforts to seek assistance, the reality is that many tenants will still falsify their declarations. Even without tenant declarations, or with lawful reasons under the CDC mandate, many courts are refusing to enforce evictions across the board. What is a landlord to do?
Tenants who are taking advantage of CDC’s COVID mandate simply should not get a free pass. With credit reporting their account, they won’t. There is no moratorium on accurately reporting the state of a tenant’s account.
By credit-reporting tenant accounts, renters can’t put off the consequences of non-payment.
Where a tenant is truly impacted by COVID, and the landlord wants to work with that tenant, then the tenant can be reported positively. Where the tenant is taking advantage of the CDC mandate, the power is back in the hands of the landlord to let the Credit Bureaus know that the account holder is not living up to their financial obligation.
There are companies that will help landlords with reporting to credit bureaus:
Are you looking for a smaller one-story view home to re-finish?
Do you like being at the top of the hill on a quiet single-loaded culdesac?
The insurance company did the remediation of a water leak, but expect these seniors to manage their own reconstruction project. We’d rather you do it your way! The house has a roof, newer sliders and windows, and shutters – do you mind doing the rest?
Here is the last sale of this floor plan – it closed at $842,500:
Tom T. and I were lamenting earlier this week about the plight of the mom-and-pop landlords due to the ban on evictions – because some tenants are taking advantage. The ban might get extended too:
Senator Elizabeth Warren (D-MA) and Representatives Jesús “Chuy” Garcia (D-IL) and Barbara Lee (D-CA) introduced legislation on June 29 that would extend and expand a nationwide eviction moratorium to protect tenants who have been impacted by the coronavirus pandemic. The “Protecting Renters from Evictions and Fees Act of 2020” would extend the federal eviction moratorium until March 27, 2021, one year after the date of enactment of the “Coronavirus Aid, Relief, and Economic Security (CARES) Act,” and expand the moratorium to cover all renters. The bill would also prohibit fees, fines, and extra charges due to nonpayment of rent.
The federal eviction moratorium included in the CARES Act covers fewer than 30% of renters, and it is set to expire on July 25, 2020. Advocates warn of a surge in evictions and a spike in homelessness if Congress does not intervene. The “Protecting Renters from Evictions and Fees Act of 2020” aims to ensure renters will not lose their housing if they experience economic hardship during the crisis and need additional time to make payments.
“Without a significant federal intervention, there will be a rash of evictions and a spike in homelessness across the country,” said NLIHC President and CEO Diane Yentel. “Ensuring housing stability for all is both a moral imperative and a public health necessity. I applaud Senator Warren and Representatives García and Lee for introducing legislation today that will keep renters in their homes and give them the security and stability needed to stay safe throughout the duration of the pandemic.”
If you, or someone you know, is thinking about disposing of a property that is tenant-occupied, contact me today. I have a wealth of experience in convincing tenants to move!
