By LAUREN LIEB
Landlords and investors across the country are encountering extreme increases in insurance premiums. Renewal premiums are increasing anywhere from 20% (at the low end) to 200%+ of the previous year’s premiums, which is putting landlords in a precarious situation when looking at how to afford such astronomical increases.
WHY ARE INSURANCE PREMIUMS GOING UP SO MUCH FOR LANDLORDS?
Various factors are causing the steep increase in insurance premiums in the multifamily industry, and according to insurance companies, those increases aren’t likely to go away this year – or next.
Climate Change
The primary reason for heightened rates is tied to the increase of both the severity and the frequency of catastrophic weather-related events. The GulfCoast states all the way up the Atlantic have faced a large increase in claims and payouts due to hurricanes. The West Coast has been inundated with large wildfire claims, since the wildfire season is no longer being contained to the hotter months, but instead are occurring year-round.
Increase in Tenant Lawsuits
Higher claims due to tenant-caused damage and liability lawsuits are also directly impacting the industry’s premium trends, especially for properties that don’t require or track their tenants’ renter’s insurance. That gap leaves the landlord’s policy to be primary on a claim they may not be responsible for.
Inflation
Properties are also facing higher replacement costs, which are directly tied to insurance premiums, which are in turn due to inflation, labor costs, supply chain issues, and increased timeframe of construction.
Insurance Providers Exiting the Market
Due to an historically high claims payout history for the multifamily industry, some insurance carriers, who had previously specialized in multifamily, have also pulled out of the industry all together, causing less competition in the market. Most of the standard carriers remaining have put a cap on the age of the building they deem as allowable risks, which has put properties older than 30 years at a severe disadvantage when approaching the standard market.
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HOW CAN YOU PREPARE FOR INSURANCE INCREASES
For investors, it’s important to underwrite deals with an insurance agent who is knowledgeable about the industry trends. Assuming a cost-perdoor that last year would have been $500, is now going to likely be double that today. Underwriting without the input of an expert will cause certain strife when budgeting.
It’s also important to take insurance costs listed in Offering Memorandums with a very large grain of salt. Rarely are those figures on the mark, and without the specific details of what the seller was insured for, it is essentially comparing apples to oranges.
Those with or preparing to work with lenders also need to pay specific attention to what the lenders are requiring regarding insurance requirements. Those with government-backed loans will need to budget for the additional coverage that must be carried when working with those lenders.
Lastly, be sure to shop for insurance if you haven’t received a quote in the last 2 years. An insurance broker can help you determine if you are in fact getting the best insurance rate possible and what improvements you can make to your property to reduce your premium.
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By Glenda Taylor
If your most recent property tax assessment caught you by surprise, you have options beyond simply paying it. With a little research and a lot of determination, you can get your property taxes lowered. Here’s how.
1 Lower Your Tax Bills
Property tax rates are decided at the county level, and the money collected is used to pay for schools, streets, and public safety. If you want to own a house, you already know that you’re probably going to have to pay property taxes. What you may not know is that you might be able to decrease the amount of taxes you owe. So, don’t just fume about a high tax bill—do something. Scroll through to discover ways to lower your property taxes and keep more of your hard-earned money for yourself.
2 Review Your Property Tax Card for Errors
Your home’s tax card is the official record of your property. It contains information such as your home’s assessed value, square footage, the year it was built, and the number of bedrooms and bathrooms it has, but tax cards often contain errors. Obtain a copy of your tax card from your local county assessor’s office and go over it carefully. If you find errors—if, for instance, it lists more bedrooms than you actually have—point that out to the assessor and ask for a reevaluation of your tax.
3 Appeal Your Tax Valuation—Promptly
Most county assessors limit the amount of time you have to appeal your tax valuation after they mail out notices; in some jurisdictions, the period is as little as 30 days. If you fail to appeal within that time frame, the window of opportunity closes, and you’ll have to pay the higher tax. The appeal process typically involves filling out a form detailing why you believe the assessor’s valuation is too high—for example, perhaps the house has sustained structural damage.
4 Get Rid of Outbuildings
Structures on your property, including storage sheds, she-sheds, and greenhouses, may also be assessed for taxes. That said, some counties and towns tax only permanent structures with foundations, or only those above a certain size. But if your property tax bill includes a couple of storage sheds that you don’t really need, consider getting rid of them. If you decide to remove them, notify your county assessor’s office so it can update your property tax card.
5 Check to See If You Qualify for Property Tax Relief
Not all states offer property tax relief, but many do offer reductions for homeowners who are seniors, veterans, or disabled. In addition, certain types of property, such as property used for agricultural purposes, may qualify for tax breaks. These reductions are decided at the state level, but you won’t automatically get them—you need to apply. Call your county assessor’s office to find out if you qualify for any tax relief programs.
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6 Move to a Less Expensive Area
Property tax rates vary widely from state to state and from county to county. If you live in a county with high property taxes, you may be able to buy a house in a neighboring county and pay much less in property taxes. You may end up with a longer commute, but you’ll save on taxes.
7 Compare Tax Cards of Similar Homes
If you’re sure you’re paying more than you should in property taxes, you stand a better chance of having your tax lowered if you can demonstrate that houses similar to yours are being assessed at a lower value. Tax cards are public information, so go through the ones of homes like yours (same square footage, age, style, and number of bedrooms and baths). If you can show that your property is valued higher than other similar properties, the assessor’s office may reduce your valuation.
8 Have Your Property Independently Appraised
County assessors and real estate appraisers value properties in different manners, but if a real estate appraiser values your home at less than the county assessor does, you can often get your valuation reduced. You’ll pay $250 to $400 for an independent appraisal, but if it substantially reduces your home’s assessed valuation, you could save thousands every year.
9 File for a Homestead Exemption
A homestead exemption provides tax relief for a primary residence in the wake of a bankruptcy or death of a homeowner. Many, but not all states, offer homestead exemptions, but requirements vary. You typically have to have lived in the house for more than a year and must meet certain income requirements. If you qualify, the county assessor will be able to tax only a portion of the value of your property.
10 Invite the Assessor Over
Sometimes the best way to show the assessors that your house is not worth as much as they claim is to ask them to come see for themselves. The key here is to accompany the assessor and point out all the problems she may not notice, such as cracks in the foundation, structural problems, water damage, and other significant defects.
11 Hire an Expert
Navigating the appeal process can be complex and time-consuming. Fortunately, if you’re not up to it, there are experts who can help. Both tax attorneys and property tax consultants can challenge your property valuation to get your taxes reduced. You’ll have to pay a tax attorney up front for the time spent on your case, while a property tax consultant takes a cut of your tax savings, usually 50 percent of the first year’s savings.
Pay Less
Who doesn’t want to pay less in property taxes? With this advice in hand, you can begin the process of lowering your property taxes.
provided by bobvila.com
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As a landlord or property manager, understanding the intricacies of smoking policies in rental properties is crucial. This comprehensive guide dives into the multifaceted aspects of managing smoking tenants, including legal considerations, tenant rights, and practical enforcement strategies.
Legal Landscape: Smoking and Protected Classes
Understanding the legal aspects of how smoking is treated in the context of rental properties is crucial for landlords and property managers. Here’s a more detailed look:
Fair Housing Rules and Smokers: The Fair Housing Act, a pivotal piece of legislation in the United States, aims to prevent discrimination in housing. It enumerates specific protected classes, such as race, religion, national origin, sex, disability, and familial status. Smokers do not fall within these categories. Courts across various jurisdictions have upheld this view, clearly indicating that landlords are within their rights to impose no-smoking policies without fear of violating fair housing laws.
State-Specific Smoker Protection Laws: While federal law does not protect smokers, there is a patchwork of state-level laws that offer varying degrees of protection to smoking tenants. In 29 states and the District of Columbia, laws have been enacted that classify smokers as a protected class, to some extent. These laws vary significantly in their scope and application. They may, for instance, prevent employers from discriminating against smokers but do not necessarily apply to housing. Therefore, it’s important for landlords to be aware of the specific laws in their state and how they might affect their ability to enforce no-smoking policies.
Differences in Enforcement: The application and enforcement of these state laws can significantly differ. In some states, these protections are robust, while in others, they are more symbolic. Knowing the nuances of state law is essential for landlords to navigate this landscape effectively.
Tenant Rights and Smoking Regulations
The rights of tenants regarding smoking in rental properties are also a complex issue:
Absence of Federally Protected Smoking Rights: At a national level, no law explicitly grants tenants the right to smoke in rental properties. This absence of federal protection means that, generally, landlords have considerable leeway to restrict or prohibit smoking on their properties without infringing on tenants’ legal rights.
Fair Housing Act Considerations: It’s critical to understand that the Fair Housing Act’s primary goal is to prevent discrimination against protected classes. Since smokers are not a protected class under this act, landlords are not discriminating based on this law when they prohibit smoking. This distinction is important because it allows landlords to implement no-smoking policies as a part of their property management strategy without the risk of legal challenges based on federal discrimination laws.
Impact on Tenants’ Health and Safety: The decision to prohibit smoking is often rooted in concerns about health and safety. Secondhand smoke can pose significant health risks to non-smoking tenants. Similar to noise complaints, smoking can be a source of disputes and discomfort in multi-tenant properties. By restricting smoking, landlords are often seen as taking steps to ensure the health and well-being of all their tenants.
Local and State Regulations: Besides federal law, local and state regulations can have a substantial impact on smoking policies in rental properties. Some cities and states have more stringent regulations that may restrict smoking in certain types of housing or areas. Landlords need to be aware of these local ordinances as they can further define what is permissible regarding smoking in rental properties.
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Implementing and Enforcing No-Smoking Policies
Incorporating No-Smoking Clauses in Leases: Clearly defined no-smoking clauses in lease agreements are pivotal. These should explicitly state the restrictions and consequences of violating the no-smoking policy.
Uniform Application and Enforcement: To avoid discrimination claims, it’s imperative that no-smoking policies are applied uniformly to all tenants. Consistent enforcement is also key to maintaining the policy’s integrity and effectiveness.
Managing Existing Tenants Who Smoke
Approaches to Monitoring and Compliance: Employing smoke detectors specifically designed to detect cigarette smoke can aid in monitoring compliance. However, privacy concerns must be taken into account, especially when using security cameras in common areas.
Addressing Violations and Potential Eviction: When a tenant breaches a no-smoking clause, landlords typically begin with a formal warning. Continued violations can lead to eviction processes, contingent on the terms outlined in the lease agreement.
The Case of E-Cigarettes and Vaping
Extending Policies to Include Vaping: As e-cigarettes and vaping become more prevalent, landlords should consider updating lease agreements to encompass these forms of smoking. The effects of vaping on property and other residents can be similar to traditional smoking.
Practical Tips for Landlords
Clear Communication: From the onset, landlords should communicate their smoking policies clearly to prospective and current tenants. This ensures that all parties are aware of the rules and their implications.
Legal Consultation: It’s advisable for landlords to consult legal professionals, particularly when drafting no-smoking clauses and policies, to ensure compliance with local and state laws.
Handling Exceptions and Accommodations: While enforcing no-smoking policies, landlords should also be prepared to handle exceptions or requests for accommodations in a fair and legal manner.
Conclusion
In summary, tenants who smoke are generally not considered a protected class under federal law, specifically the Fair Housing Act. This means landlords have the legal right to impose no-smoking policies in their rental properties without violating federal discrimination laws. However, it’s important to note that in 29 states and the District of Columbia, there are smoker protection laws that may offer some level of protection to smoking tenants, although these laws vary in their scope and application, and often do not directly impact housing policies. Therefore, while federal law largely supports landlords in restricting smoking in their properties, it’s crucial to be aware of and understand any specific state laws that might affect this issue by sourcing a legal professional.
Source: Multifamily Insiders
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