Archive for the 'Legal Stuff' Category

Minneapolis Duplex Owners: CRPs Due

said on January 27th, 2014 categorized under: Legal Stuff

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crp deadlineA quick reminder that if you’re a Minnesota rental property owner; by January 31, 2014,  you must provide a Certificate of Rent Paid (CRP) to each person who rented from you in 2013.

Married couples may receive a joint CRP. Unmarried adults each receive their own copy (even if they are roommates).

If you bought or sold a property in 2013, you are still required to provide a CRP for the period of time you owned the building.

If a tenant moved, you must send the CRP to their forwarding address. If you do not have that information, you should send it to their last known address. You must keep a record of this for the tenant until August 15, 2015.

Failure to provide a CRP by the specified deadline can result in a $100 fine per infraction, so it pays to beat the deadline.

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vikingsI know how the city of Minneapolis could pay for the Vikings new stadium.

They could simply fine all of the duplex owners in the city who currently don’t have rental licenses. After all, there are a lot of them.

The fine for operating a rental without a license in the city of Minneapolis is $500. This is in addition to any costs the owner might incur in the process of obtaining one.

The fee for the initial inspection required on a duplex that either hasn’t had a valid rental license in the last 12 months, or on a property being converted to a rental property is $1000. However, this fee can be reduced by $250 if the owner can present proof of attendance at a fundamentals of rental property management class.

This class is conducted by the Minneapolis Police Department and costs $30 to attend.

After the initial inspection fee, duplex owners are required to keep their licenses current. The annual license fee is $69 for the first rental dwelling unit, and $19 for each unit after that.

All rental licenses in the city of Minneapolis must be renewed prior to August 31.

And if not?

More skyboxes for the Vikings.

Minnesota Tenants Get More Rights

said on May 28th, 2010 categorized under: Legal Stuff

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pawlentyEarlier this month, Minnesota Gov. Tim Pawlenty (R) signed a bill into law which has commonly been called the “Tenant Bill of Rights”.

Highlights of the bill include:

Cap On Late Fees– As of January 1, 2011, late fees can not exceed 8 percent of rent.

Receipt For Rent – As of August 1, 2010, if tenants pay their rent with cash, they must be given a receipt. Tenants who use money orders may use those receipts as proof of rent paid unless the landlord can provide proof it wasn’t.

Screening Fees: Starting August 1, 2020, landlords must use a consistent process to screen prospective tenants and inform those applicants of the process they use.

A duplex owner must now tell the applicant what criteria they consider. She must also process applications in the order they were received, and if she rejects someone for reasons other than those they provided, return the application fee.

Security Deposits  – After August 1, 2010, a landlord who doesn’t return the right amount of a security deposit in bad faith can be penalized up to $500. The previous cap was $200.

Tenants Living In Foreclosures – In August, both state and federal law will allow for tenants living in foreclosed property to stay through the term of their lease, or 90 days after the redemption period ends, whichever is longer.

For a complete text of the bill and its changes, click here: HF2668.

Minneapolis Bedroom Requirements Come Out Of The Closet

said on May 10th, 2010 categorized under: Legal Stuff

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A row of colorful row t-shirts hanging on hangersIf I asked you to describe a bedroom to me, chances are that early on, you’d include the word “closet”.

For most of us, a closet is a necessity in a bedroom. After all, where would we hide the mess when company’s coming over if we didn’t have one.

So if you see a duplex or single family home with a room that doesn’t have one, it can’t be a bedroom. Right?

Not in the city of Minneapolis.

In fact, the word closet isn’t even mentioned in the city’s requirements for a bedroom.

Minneapolis bedrooms are required to have a door and at least one escape window. The window has to be at least 20″ wide and 24″ tall, with a net overall clear opening of 5.7 feet.  What’s more, the bottom sill can’t be more than 44 ” above the floor.

Of course, you can’t cover the window with anything that would keep someone from escaping during an emergency, like grilles or grates, unless they have approved release latches.

If the bedroom is below ground level, the window needs to have a window well. If the well is more than 44″ deep, it’s also  required to have a permanent ladder.

Bedrooms must also provide the equivalent of at least 8 percent of the floor area in window glass. For example, if you have a room that’s 200 square feet in size, you would need window glass totalling at least 16 square feet.

According to the city of Minneapolis, bedrooms must also have a minimum ceiling height of 7 feet, and be no less than 70 square feet in size.

Since this is Minnesota, it goes without saying that the city also demands a bedroom feature a heat source capable of keeping the room at a minimum temperature of 69 degrees.

The city clearly cares about the health and well-being of its residents.

But it could care less what they do with their clothes.

Title Is Everything When Buying With Family

said on March 5th, 2010 categorized under: Buying A Duplex, Legal Stuff

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Realty PuzzleIt’s often said that blood is thicker than water.

With that in mind, I often have two family members express an interest in buying a duplex together. Each intends to live in one of the units.

Sometimes the buyers are a grown child and a parent who winters in warmer climates.

Sometimes the buyers are siblings.

In one case I even encountered a former husband and wife who saw a duplex as a way to co-parent their children, but continue on with their respective lives.

Sharing a multifamily property can be a workable solution for some people. And while family may well look out for each other’s interests more reliably than friends or acquaintances, it’s important to remember life circumstances can change.

And that’s why deciding how your going to take ownership at closing is so very important.

There are two ways a pair of buyers can take title; either as joint tenants or tenants in common.

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Don't Cheat On Your Minneapolis Duplex Agent

said on February 22nd, 2010 categorized under: Legal Stuff

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two too manyOne of my buyers cheated on me last week.

He called another agent about a property the agent had listed.

After he told me he’d see only me!

It could cause me not to get paid.

See, in real estate there’s something called “procuring cause”.  And it belongs to the agent who caused the buyer to purchase the duplex.

If my client called and asked me to help him see or write an offer on the property, I could have to split my commission with the listing agent. Why? Because that Realtor could argue that he was the one who was responsible for the purchase; having provided my client with the information that caused him to write an offer.

The same could be true if you asked another agent to show you a property, walked through an open house and spoke with the agent, or even called on a newspaper ad.

It doesn’t matter how long I’ve been working with that buyer, how many duplexes I’ve shown him, nothing. And I’d have to split my check because of that one phone call.

Of course, I do practice safe real estate and have a Exclusive Right to Represent Buyer contract in place. However, even that may not protect me entirely.

So my buyer and I had a talk; one in which I reminded him to always disclose to other agent that he’s working with another Realtor.

As part of our understanding, he can’t ask another agent to show him a property, call listing agents for information, and must always tell open house agents he’s working with me.

He understood. And since he’s a good guy, I forgave him.

What's Different About Buying A Minneapolis Duplex?

said on January 22nd, 2010 categorized under: Legal Stuff

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????What one thing do you have to do after closing on your new duplex or rental property that you don’t have to do when you buy your own house?

Get a license.

Whether you’re owner occuping your duplex or intend to operate it as an investment, many cities require you to have a rental license.

What does that take?

Rules vary according to municipalities. In Minneapolis, however, a new rental property owner must fill out an application, as well as provide the city with a copy of either the Minneapolis Truth & Housing Certificate of Approval or Buyer Certificate of Completion.

If the property is owned by an LLC, partnership or corporation, articles of incorporation are also required. New owners must also attach proof of ownership, which is generally covered by a HUD Statement, copy of a Certificate of Real Estate Value or Bill of Sale.

The fee, at least in Minneapolis, is $65 for the first unit, and $19 for each additional unit. This covers licensing from September 1 to August 31 of the following year.

And if you don’t get a license? Fines can run north of $500, and tenants can file a rent escrow case, where rental income is escrowed until the situation is resolved. Tenants may not, however, withhold rent simply because you don’t have a license.

You Mean I Need A License For That?

said on September 17th, 2009 categorized under: Legal Stuff

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Adorable border collie and her homeIs there ever a reason you don’t need a rental license in the city of Minneapolis? For any kind of house?

What if you’re selling your Minneapolis duplex, do you need one? After all, you’re almost done with the property, right?  How about if you live there?

The answer is yes. To all of the above.

As long as there are tenants, the city of Minneapolis requires any type of  rental dwelling to have a license; whether it’s a single family home, duplex, apartment or rooming house, regardless of or whether or not it’s for sale.

And yes, if the duplex is owner occupied, it too needs to be licensed.

The rental license application fee is $84. The fine for not having a license is $500.

What if you buy a Minneapolis duplex?

Provided the property has been a licensed rental property in the past, your license application fee is the same $84.

As of June 8, 2009, however, the city doesn’t stop there. When the property changes ownership, you are required to pay a $450 “change of ownership inspection fee”.  A truth in sale of housing report doesn’t count, nor does the independent inspection you paid for prior to purchasing it. The city wants to look at it again to make sure it’s in compliance.

What if you’ve decided to rent out your house instead of selling it? Well, as it’s never been a rental property before, the city requires not only the $84 application fee, but an additional $1000 for inspections.

Are you surprised? After all, these are the folks that require us to license dogs.

Minneapolis Encourages Duplex Tenants To Get Married

said on August 13th, 2009 categorized under: Legal Stuff, Tenants

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wedding ringsSometimes government rules and regulations just don’t make sense.

Take, for example, the city of Minneapolis’ rule on the number of unrelated people who can occupy a rental unit.

If a property has a zoning designation of R 1-3 (residential 1- 3 units), a maximum of three unrelated people can live in each of the units.

The number of bedrooms or amount of square footage in each is irrelevant. In other words, if you own a duplex with a five bedroom unit, you can only have three unrelated people living in it.

If the multi-family property is zoned R 4-6, however, you can have up to five unrelated people in each unit; even if there’s only one bedroom in each apartment.

Of course, if the other people occupying a unit are related by blood, marriage, or adoption, an R 1-3 property can house the family plus two unrelated people.

In a R 4-6 zoned multi-family building, a family can have up to four unrelated people living with them; again, regardless of the number of bedrooms in the apartment.

What happens if the city discovers there are more residents than allowed in a duplex? The landlord can lose his rental license.

So if you have a Minneapolis duplex, say, by the U of M or in Uptown with a couple of four bedroom units, how can you make sure you’re in compliance?

Get your tenants to marry or adopt each other.

Why Working With A Realtor Is A Lot Like Dating

said on July 27th, 2009 categorized under: Legal Stuff

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relax in my heartWorking with a Realtor is a lot like dating.

But with a contract.

And without those perks.

Once you’ve reached a certain point in your relationship with your agent, she may ask you to sign what’s known as a Buyer Representation agreement. There are many types of representation, but most often, she’ll ask you to sign a document that gives her the exclusive right to represent you.

If you think about it, this document makes sense. Agents work long and hard to find the right properties for our buyers.  And once we do, we want to have the legal assurance we’ll be paid for our efforts. After all, we don’t get paid a thing; not a salary, not mileage, not base pay…nothing, until you buy your duplex.

So it makes sense that you should be committed to your agent. And, your monogamous relationship with that agent is considered so sacred you may even walk into an open house and have other Realtors ask whether you’ve signed a buyer representation agreement.

Why do they ask? Because the state of Minnesota says if you have, they’re not allowed to talk with you in any way that could be perceived as a violation of that pact. This law is so thorough that even if you’ve successfully negotiated a purchase agreement, but have yet to close, you aren’t allowed to speak with the agent representing the seller unless it’s through your Realtor.

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