Realty Pupil - Secrets of Real Estate

Don’t be a Landlord

Continuing on with lesson 6, we were warned that Oral agreements are unenforceable in Utah, and to always get things in writing.

We then learned about some basic property terms:

Easement/lien: Claim on property
License: permission to use for a set amount of time
Encumbrance - Claim, charge or liability on real estate.
(There are Physical and non physical ones)
As a tenant you are a guest. Landlord must give notice before they enter(24 hours) and must be let in, or they can EVICT you. That said, if they do not give reasonable notice, you can leave your property despite any contracts, and not be legally accountable.

Eviction often depends on the judge dealing with it. Many swing in favor of tenants, particularly female ones according to our instructor.
If you know what you’re doing, you can evict in 15 days in Utah. Utah passed a law accelerating eviction, and you get an appearance before a judge in 3 days. Out of thousands of renters, our instructor claimed that he only had two evictions, though he’s had to threaten a lot more. One of those actually went to the sheriff who escorted them out, the other negotiated and left after a few days.

While most renting contracts here in Utah are yearly, a Landlord must remember that even with a month to month term, he must give proper notice even if lease is up. In Utah that is 15 day notice. So choose the 15th or 16th, no reason is required, just don’t tell them you don’t like them!

This information led to the following cautionary tale from our instructor:

“Some time ago I had a renter doing drugs, drove a lowride with loud music, intimidated women, especially his manager. I suspected he was smoking in the apartment, so when his lease expired, I told my property manager to inform him that his lease would not be renewed. Some time passed and I was disappointed to learn that he had intimidated her into letting him stay. Thankfully, Utah law is in the landlord’s favor in this situation, and I made it clear to him that he would have to be leaving. ”

“He confronted me demanding to know why he wasn’t given an extension, clearly intending on hitting me if I didn’t let him stay. I remained firm, and had my secretary call the police to escort him off my property. He finally left, giving an angry ‘california howdy’ and swearing as he went.”

“When your lease is up, per state law you don’t have to say why you don’t renew. Later we found he was a drug user and smoker. Sadly for the landlord. you cannot accuse without proof, and even with proof of a lease violation, things can get difficult. That problem tenant also later raped someone…”

Our instructor was interrupted by the question:

“So today we learned to never be a landlord?”

The rest of the class clearly agreed with the one asking the question. This kind of mentality among agents may explain why the vast majority of real estate agents do not own investment property.

You think you own this? You don’t own nothin’

Today we were again warned as the instructor began, that this lesson would be boring. True to his word, he delivered a lesson regarding real estate interests and restrictions. This began with an explanation of PETE.

PETE stands for the the four powers which can interfere with real estate ownership. They are defined as follows:

Police power - Despite the name, this power actually applies to the powers which the local governent receives from the state to protect and enforce the public health, safery and welfare. Under these powers, the city is allows to test your pool water’s PH, or respond to a complaint of Mold to force you to replace your carpet. I had a neighbour growing up who’s yard caused him to experience the police power of the city firsthand. In response to complaints, they were forced to spend a healthy sum cleaning up the jungle that was their backyard. The yard quickly reverted back to it’s grown over state as the years went by. Makes me wonder if it worked out to be cheaper to just let the grass grow and wait until the city intervened instead of going to the hassle of maintaining it. Police power provides the city with the right to enforce zoning, and hopefully to protect city residents from becoming recipients of the federal superfund by doing something stupid like allowing development over a landfill.

Eminent domain - Thanks to the news, most people know that legally, a city can exercise it’s right to eminent domain and condemn a home within city limits assuming it has a valid need to do so, and pays fair market value. Cities rarely condemn, as they don’t want to look evil, recently here in Utah a man painted on his house “The City is Stealing my home”. Papers love to cover such stories and so, at least locally, the city generally pays 1.5 times fair market value in order to avoid trouble.

Taxation: This has been covered in other lessons.

Escheat: If a home is left with no heirs, it goes to the state.

The lesson then delved into estates, and the respective interests offered by each. I’ll go over this in part 2.