The weekend is getting closer. It looks like this Sunday I will take my second Sunday morning snowmobile ride of the season. But before then, I have to survive today, another installment of the Dr Rent Radio Show this evening… and Friday… and what a week it has been.
The biggest topic of the week is that Rep. Schneider’s proposal to limit CCAP that died in committee a few months ago was slightly modified and rushed through a completely different committee where it looks like it had the votes to clear that hurdle (and it did, the bill was met with a 3-3 tie which was broken by the committee chair, a co-sponsor of the bill). The main show topic we will discuss is how this newest proposal compared to the older proposal, what steps the new proposal has gone through, and where it goes from here.
The questions about rent certificates continue. A landlord called with a rent certificate request from a past tenant where the landlord got stuck with the water utility bill. There is a place for services provided by the landlord on the rent certificate form which will lower the amount of rent the tenant can claim. Can the landlord put the utility bills they had to pay here?
A call came from a tenant yesterday. They are staring at an eviction action, however they didn’t get any notice… well sort of. They got notice of the original eviction action but they made a payment plan with the landlord and the landlord said they would just adjourn (delay) the case. However, the tenant never got notice of the new court date. Can the eviction proceed?
And of course, my open invitation to any candidate for Wausau City Council who wants to take some of my air time to talk about issues facing Wausau as it relates to rental properties, or even real estate or development continues to be there.
Last week, we had a question on Rent Certificates that had to do with when the rent was paid. If a tenant fell behind in their payments and December rent was not paid until February. But AFTER this rent was paid, the tenant wanted a rent certificate filled out, do you as a landlord list December rent because it wasn’t paid in 2009? If the rent wasn’t paid in 2009, but was paid at the time you fill out the rent certificate, then yes – you do list it on the form. If the rent hasn’t been paid at all, then you don’t list it.
A question that I had that related to an eviction I was doing I got the answer from my friend, Attorney Schmidt. One of our tenant’s rental agreement has ended and for reasons I am not going to get into, we have decided to not continue it. So, lease ended January 31st and they are still there, so time to file for an eviction action. However, we have reason to believe they have anywhere from 2-4 people living there whom are not on the lease. My question was, can I just evict my tenant, or do I somehow also have to name these “squatters” as a part of the suit? The answer was just list my tenant, the other unauthorized occupants are trespassers because they never had our permission to be there. So, if they try to stay after the tenant leaves, I can have them removed and charged with trespassing.
The main topic of last week’s program was the life expectancies of certain items. If you want information on what items I discussed and what the sources were for that information, drop me a line at firstname.lastname@example.org. There was just too much information to cover in this blog. However, these life expectancies are NOT the same as the depreciable life of these items, which is important when filing taxes. Depreciable life is how long you have to expense out certain purchases per the IRS. For example, when you purchase something like a car, you cannot just expense it when you buy it (okay, there is Section 179 of the IRS code that does sometimes allow you to take the entire expense in one year, but that just complicates the point I am trying to make). Instead, you would expense it out over the next 5 years, which is how long the IRS says this asset should last.
However, how long the IRS says something should last and how long something really does last – well not the same thing. So why is it important to know the average useful life of things such as appliances and carpeting? Because, if a tenant damages these things and you have to replace them, you most of the time cannot charge the tenant the full cost for the replacement.
If the tenant destroyed a brand new refrigerator and it costs you $500 to replace it with a similar one, yes you can bill them $500. However, according to the September 2005 issue of Appliance Magazine, a “standard” refrigerator has a useful life of 13 years. If a tenant destroys a refrigerator that was over 15 years old and it cost you $500 to replace it, it will be difficult to collect anything in court because that appliance was already on “borrowed time”. However, if they destroyed an appliance that was about 7 years old or so, half way through its useful life, you could bill the tenant for ½ of that cost of the new one.
When you are pro-rating the charge based on the useful life of what was damaged, you may have to demonstrate to the court how you determined the average useful life. I have been doing this for 16+ years with around 200 rental units, so my useful life estimates are based on that extensive personal experience. However, if you only have a few rental units or haven’t been at this for very long, you may need to find an outside source of information to help you justify the useful life that you are claiming.
As always, the Dr. Rent Show can be heard on WNRB-LP, 93.3 FM in the Wausau area from 5 PM to 6 PM on Thursday evenings. Your other option is to tune into our live stream broadcast on the web, which can be found at http://wausauhmong.org/WNRB.htm.
Until then.. HAPPY RENTING!