Michael Emilio » Rental Tips

How To Pay Less Charges in Your Lease

Michael Emilio — Mon, 29 Oct 2007 20:42:29 +0000

When in a commercial lease, tenants are usually required to contribute payments for taxes, utilities, and building operating expenses. They are billed typically during the first or second quarters of the year.

Review the charges

Remember to always revise and review these bills! They often contain errors. One of the reasons why there are many mistakes is that the provisions in the lease are very complex. There are many small details that can add up to big payments a tenant may be paying for unnecessarily. If you’re a tenant, it really pays to learn as much as you can about lease structures and basic contract language and wording. And when I say it “really pays” it really does! You can really save a lot of money you’d be unnecessarily paying by looking over your contracts and the bills you receive to contribute to your lease. As a landlord it also pays to learn as much as you can about lease and contracts or pay someone who really knows to handle it for you! As a landlord you have to do a cost-benefit analysis of the situation. Is it worth you taking the time and look and look and revise and revise a contract? Or is it worth paying an expert in the field that has intimate knowledge of contracts and legal knowledge to revise them for you? Perhaps your time and money is better spent in marketing or developing your business and not with your nose buried in paperwork.

Make sure the items charged are correct

Another reason why these bills may contain errors is that landlords often are unable to devote the proper time to customize the bills to each individual tenant’s particular lease. There may be so many tenants in the office building or retail space that the landlord cannot create a custom lease for each office tenant. As a tenant, take responsibility and look over the lease and see if there’s items in there that may not pertain to your situation. Maybe you’re getting charged for a particular service you’re not using. Maybe you’re paying for parking you’re not utilizing. Maybe there’s a concierge service that is not applicable. Look into the details and make sure everything is detailed correctly. As a landlord, again think of the benefits of your time and money! Is it worth the time involved to do this yourself? You may actually be losing money in the long run (and getting way more headaches in the process) by doing the contracts and billing yourself. You may be overbilling some of your tenants and underbilling others, and it may even be to the point where you’re getting a net loss from the lack of tailoring your bills to each tenant!

30 days to dispute the charges

There are legal restrictions to dispute any erroneous charges on a lease. If you’re a tenant you better be quick with any disputes you want to resolve because often there is a time limit of 30 days or less. There must be a detailed objection given within 30 days that the bill has been issued. There are many legal templates available that you can use as a tenant to submit a bill dispute. You want to customize the template to fit your situation and then submit this, in person if possible since you don’t want the possibility that this may get lost in transit or in the mail (as we know, the post office sometimes has a magical ability to make mail disappear). Make your letter, take it in person, and keep the communication lines open. Call them up and ask them questions. Get the details and use that to your advantage in the letter. Get names of people that have answered questions that pertain to your situation and write down their responses with their full name and department. This is your evidence.

Compare and contrast

In this situation you must compare your charges as a tenant to the lease language. If possible compare them to the landlord’s books and records – a legal profession should help you here. It’s a tricky situation but it’s one that as a tenant and as a landlord you should be on top of.

The money is in the details.

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5 Steps to Adding a Roommate to Your Rental Lease Agreement

Michael Emilio — Wed, 26 Sep 2007 01:35:39 +0000

1.Give your landlord a note about your intention to have a roommate. Yes, if you’re on good personal terms and have a friendly landlord you can speak to them directly. A note gives the landlord some time to think the decision over without pressure. Although many landlords will agree and cooperate with your desire to add a roommate, they may want to have your new roommate be a co-tenant. Having this roommate be a co-tenant means they will then have the same responsibilities and rights as you have. When you write this letter, be cordial, polite, and focused on your goal. Don’t ramble on and on. Get to the point and let them know basic facts about your potential roommate and possibly a reason why you want to add them. If you can think of any potential benefits this can bring the landlord, make sure to add that in the note! Landlords in general will be thinking about their best interests first. So if you can show that adding a roommate can add to your value as a tenant then make sure to show that and elaborate in your letter!

Possible reasons why adding a roommate can be beneficial to your landlord are:

a) Adding a second party may give a measure of security to your landlord since now two people are responsible for the monthly paycheck. In case one person falls on hard times, the other can now pick up the slack!

b) If you have someone living with you, this may give you more incentive to live longer at that current residence since now both of you will establish yourself at that location. Landlords love long leases!

c) If your new roommate is clean, that means two people will now be in charge of housekeeping, which will ensure an extra tidy and well-kept home!

2. Get approval from your landlord. By this step, you’ve already verified that your new roommate is more than acceptable in terms of their financial stability to handle their portion of the rent. They also have a compatible personality to yours. But just because you may be best of friends with this person doesn’t mean the landlord will accept them!

a) Make sure your new housemate will meet the good-tenant criteria set forth by your landlord. Most landlords have a very thorough screening process they run new tenants through. This can include credit checks, background checks, references, and rental history. If you know your new roommate’s credit is good, then get a copy of it and submit it to the landlord with the new tenant application. Being upfront with the credit history of your roommate can only help your chances of getting approved! Be sure to attach an explanation of any possible negatives on the credit report, like bankruptcies, evictions, or late credit card payments.

b)Make sure you’re not exceeding the occupancy limit your landlord may have set for you in the rental contract you signed when you started the lease. Even with this, there’s still a chance you can overcome this – but it may not be easy! This requires excellent rapport with the landlord, amazing qualifications by the potential tenant, and great luck in finding an landlord open to revising your contract.

3. Sign the new lease or month-to-month agreement. Although this step doesn’t happen every time you add a tenant, it is a strong possibility. Don’t take this step lightly because your landlord definitely won’t! Making sure the new tenant is added to your lease agreement is very important to the landlord and resident/property manager because it formalizes the arrival of your roommate and makes sure they are one hundred percent responsible for the steady payment of rent checks and that they are just as liable as you in case any damage should happen to the unit. This isn’t just a good thing for the landlord though! It’s also a beneficial step for you because this makes it crystal clear in formal legal writing that your homemate now has the same rights in the legal system under law and formal rental responsibilities that you have.

4. Be prepared for a rental increase. Now the bad part! Most landlords that agree to an additional co-tenant in your unit will want a bump in the rental rates. Their thinking is that since there’s another person in your apartment, townhouse, or rental house, there’s going to be a larger amount of wear and tear that’s going to take place on a daily basis. More wear and tear is not a good thing for a landlord! More wear and tear means more repair for a property manager when you end up vacating the premises when you end your lease and decide to move on to a different location. Since this will be a new legal lease, the landlord can now raise your rent immediately since this is basically going to be a new tenancy under law. Usually a landlord will give you a 30 day notice when you are in a month-to-month lease agreement that your rent will be raised or will wait until your lease ends if you have a long-term rental contract. If your unit is under rent control then you may be helped out by that. Otherwise, your landlord can legally raise your rents for as much as the current rental market will give.

5. Be prepared for conditions in the terms of your lease to change. Big one that’s probably going to change? Your security deposit. Keep in mind that many states limit the amount of security deposit a landlord and property owner can legally charge! If you live in Florida, then no luck, since there’s no statutory limit! However, usually you can expect the security deposit to be some multiple of the monthly rent. Since it’s a multiple of the monthly rent, if your monthly rent went up because of the new tenant, then your security deposit will probably go up also.

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Florida Landlords Can Charge Renters Who Break Lease Two Month Penalty

Michael Emilio — Tue, 01 May 2007 20:54:39 +0000

The Florida rental laws get a major change.

Landlords are happy; tenants aren’t.

The Florida Legislature updated the state’s 34-year-old rental laws on an almost unanimous vote, allowing landlords the ability to levy thousands of dollars in penalties against renters who break their leasing agreements.

How was the rental law before this?

A landlord or real estate investor renting a property to tenant could only charge a renter who breaks the lease for the time required to get a new tenant for the home. Overlapping payments weren’t allowed, a practice known as “double rent”.

How have the rental laws changed?

Tenants are now culpable who not only leave before their lease term is over but also those who do not give a 60-day written notice that they will not be renewing their lease. These new changes will now allow landlords in Florida to collect thousands of dollars in penalties from their previous tenant even if they have a tenant lined up and ready to move into the property immediately.

How much would a renter who breaks their lease have to pay?

The penalty is equal to two month’s rent. The renter may also face additional expenses equal to another month to pay back any concessions offered. These concessions may include a free month originally given by a landlord as an incentive to sign a lease.

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College Life: Is it Better to Live On-Campus or Off-Campus?

Michael Emilio — Tue, 24 Apr 2007 20:05:59 +0000

Who can escape the allure of the dorm room?

You get the thrill of college life… and along with that, the cramped conditions, shared bathrooms, and nosy resident assistants that stick their nose into all of your business.

Because really, who can escape the unbridled freedom of living off-campus, by YOUR rules.

So what’s better: living on campus in a dorm room or living off-campus?

The advantages of living on-campus

You are fully connected to your college social scene. Just being around the dorm areas you can take a look at fliers posted for upcoming parties. You are actually IN school, which means you have access right across the hall to a fellow student. You can’t really escape the benefit of having everyone in your same building being roughly the same age as you also!

“It’s great being able to hang out with my college friends just by walking down the hall of my dorm and giving them a quick knock on the door! Another cool thing is that the bulletin boards have fliers so I’m really plugged in to the parties going on.” – Samantha Cole, University of Miami

You are close to your classes and resources. You don’t have to worry about the time involved in driving to campus. The school library is also much more accessible – whereas if you lived too far, you might conclude driving to the library isn’t worth the time involved.

“I live maybe 30 minutes away from school, so it’s a pain to be driving just for the library. What I usually just do is schedule any library time for right after I get out of a class.” – Terry DeFortuna, Miami International University of Art and Design

The advantages of living off-campus

You play by YOUR rules. A major complaint by those in dorm rooms is the fact they have very nosy resident assistants that can sometimes peer too much into your private life. Remember, most colleges do not allow you to cohabitate your dorm room with a boyfriend or girlfriend as coed rooms are usually not permitted. You’d like to maybe have a cocktail party and have some drinks with friends in your dorm room? Drinking alcohol is usually not allowed in a dorm room, but of course you’re perfectly free to do as you please in your off-campus rental.

“It’s just great to do what I want. I can have my boyfriend over for some wine and then invite my friends over. It was just such a pain when I lived on campus in the residence halls, I had to check everyone in, they couldn’t come over after a certain time, my boyfriend couldn’t stay over… I guess I like my freedom!” – Monica Suero, Florida International University

You get more room for less money. The average cost of room and board for college students in a four-year public university is $6,960 and $8,149 for a private university. Most of the time, off-campus apartments are less expensive than a college dormitory. You can get more square footage for either the same price or less as a dorm room. Remember, you’ll actually be able to have your own room instead of sharing a room with one or more people as you would in a dorm room!

“I have so much space in my own place here. When I go visit my sister at her dorm, I’m shocked with it – I mean, my sister and her roommate are packed like a sardine can!” – Antonio Casalas, Carlos Albizu University

You can actually get your schoolwork done off-campus. Although the social life of dorms is tempting, the fact is that the fast paced lifestyle of dormitories is usually a major distraction for studying and homework. Most students report that their grades improve when they move off campus because there are less interruptions and you can actually study in your own room as opposed to finding an outside location to study.

“I was kind of struggling last semester with my grades so I decided to move into my own apartment with my cousin maybe 5 minutes away from school and my grades have definitely improved. Although I liked having my friends in and out of my dorm room, it just got to the point that it seemed to hang out with my friends more than do what I had to do for school.” – Pat McCormick, Nova Southeastern University and Miami-Dade College

Ultimately, the decision is up to you. Weigh out the pros and cons of each and decide what’s right for you!

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My Landlord is Forcing Me Out of My Apartment and I Have No Lease!

Michael Emilio — Thu, 19 Apr 2007 00:10:14 +0000

My landlord has said that he needs to knock down the walls to the rental where I am staying at and fix the pipes because the heat is messed up. He says he’ll need about 2 months to do this and I’ll need to move out for those 2 months.It is a basement apartment and I have no lease because he told me he doesn’t do leases and consequently I didn’t sign a lease with him and just pay him cash month to month. When I moved in, I inquired about the lack of a lease and he said I could stay there as long as I want, but now it seems like he’s trying to push me out. My question is, if he requires me to move out for months, is he required to pay my rent at wherever I move to for those 2 months? – STG

Technically a lease is defined as, “A contract granting use or occupation of property during a specified period in exchange for a specified rent.” Since there is no lease (or contract) in place for this rental, you are on a very precarious position. The landlord in this case is able to force you to leave because there is no official contract in place and is under no obligation to pay you anything. If there was a contract in place however, you would be able to contact a lawyer.

I can see two possible outcomes here:

1.If you wish to continue living at your current location, either find a place to live with friends/family or an extended stay hotel until the repairs are complete. Then move back in.

2.If you really feel the landlord wants to fully evict you permanently, then I would suggest to start looking for a new place to rent immediately.

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Real Estate Legal Terms and Definitions

Michael Emilio — Wed, 29 Nov 2006 12:58:39 +0000

Abstract
A summary; an abridgment. Before the use of photo static copying public records were kept by abstracts of recorded documents. (Not used in Arizona and most Western states.)

Acre
A measure, usually of land, equal to 160 sq. rods (43,560 sq. ft.) in any shape.

Action to Quiet Title
A court action to establish ownership to real property. Although technically not an action to remove a cloud on a title, the two actions are usually referred to as "Quiet Title" actions.

Adjustable Rate Mortgage (ARM)
A mortgage where the interest rate is not fixed, but changes during the life of the loan in line with movements in an index rate. You may also see ARM’s referred to as AML’s or VRM’s.

Agency
An Agency relationship is one in which one person is empowered to act on behalf of another, subject to the control and consent of the person being represented.

Agent
The person who is acting on behalf of the principal or client.

Agreement of Sale
In some states it is synonymous with a purchase agreement (Purchase Agreement). In other states, it is synonymous with a land contract Land Contract).

Alienation Clause
A clause calling for a debt under a mortgage or deed of trust to be due in its entirety upon transfer of ownership of the secured property.

Amortize
To reduce a debt by regular payments of both principal and interest, as opposed to interest only payment.

Annual Percentage Rate (APR)
A measure of the cost of credit, expressed as a yearly rate. It includes interest as well as other charges. Because all lenders follow the same rules to ensure the accuracy of the annual percentage rate, it provides consumers with a good basis for comparing the cost of loans, including mortgage plans.

Appraised Value
An option of the value of a property at a given time, based on facts regarding the location, improvements, etc., of the property and surroundings.

Arrears
Payment made after its due is in arrears. Interest is said to be paid in arrears since it is paid to the date of payment rather than in advance.

Assumability
When a home is sold, the seller may be able to transfer the mortgage to the new buyer. This means the mortgage is assumable. Lenders generally require credit review of the new borrower and may charge a fee for the assumption. Some mortgages contain a due-on-sale clause, which means that the mortgage may not be transferable to the new buyer. Instead, the lender may make you pay the entire balance that is due when you sell the home. Assumability can help you attract buyers if you sell your home.

Assumption of Mortgage
Agreement by a buyer to assume the liability under an existing note secured by a mortgage or deed of trust.

Balloon Note
A note calling for periodic payments which are insufficient to fully amortize the face amount of the note prior to maturity, so that a principal sum known as a "Balloon" is due at maturity.

Balloon Payment
The final payment of a mortgage which is larger than the regular payment; it usually extinguishes the debt.

Binder
A report issued by a title insurance company setting forth the condition of title and setting forth conditions, which, if satisfied, will cause a policy of title insurance to be issued.

Blanket Mortgage
A mortgage covering more than one property of the mortgage.

Bridge Financing
A form of interim loan, generally made between a short term loan and a long term loan, when the borrower needs to have more time before taking on long term financing.

British Thermal Unit (B.T.U.)
Unit of heat required to raise one pound of water one degree Fahrenheit.

Buy-down
With a buy-down, the seller pays an amount to the lender so that the lender can give you a lower rate and lower payments, usually for an early period of a loan. The seller may increase the sales price to cover the cost of the buy-down.

Cap
A limit on how much the interest rate or monthly payment of an ARM can change, either at each adjustment or during the life of the mortgage. Payment Cap’s don’t limit the amount of interest the lender is earning so they may cause negative amortization.

Certificate of Eligibility
A certificate obtained by a veteran from a Veteran’s Administration office which states that the veteran is eligible for a V.A. insured loan.

Certified Copy
A true copy, attested to be true by the officer holding the original.

Cestui que trust
One having an equitable interest in property, legal title being vested in trustee.

Chain of Title
The chronological order of conveyance of a parcel of land, from the original owner to the present owner.

Chattel
Personal property.

Closing Statement
The statement which lists the financial settlement between buyer and seller, and also the costs each must pay. A separate statement for buyer and seller is sometimes prepared.

Cloud on Title
An invalid encumbrance on real property, which if valid, would affect the rights of the owner.

Co-Maker
Equally responsible for repayment as the borrower.

Commitment
A written promise to make or insure a loan for a specified amount and on specified items.

Comparables
Properties used as comparisons to determine the value of a specified property.

Condominium
A structure of two or more units, the interior space of which are individually owned.

Construction Loan
Short term financing of real estate construction. Generally followed by the long term financing called a "take out" loan, issued upon completion of improvements.

Contingency
The dependence upon a stated event which must occur before a contract is binding.

Contract of Sale
Depending on area of country it may be a Land Contract or a Purchase Agreement.

Closing Cost
Expenses incurred in the closing of a real estate or mortgage transaction.

Conventional Mortgage
A loan neither insured by the FHA nor guaranteed by the VA.

Conversion Clause
A provision in some ARMs that allows you to change the ARM to a fixed-rate loan at some point during the term. Usually the conversion is allowed at the end of the first adjustment period. At the time of the conversion, the new fixed rate is generally set at one of the rates then prevailing for fixed-rate mortgages. The conversion feature maybe available at extra cost.

Cost Plus Contract
A building contract setting the builder’s profit at a set percentage of actual cost of labor and materials.

Contract Sales Price
The full purchase price as stated in the contract.

County
A division within a state, usually encompassing one or more cities or towns.

Certificate of Reasonable Value (CRV)
An appraisal of property for the purpose of insurance by the Veteran’s Administration.

Declaration of Restrictions
A set of restrictions filed by a sub-divider to cover an entire tractor subdivision.

Defective Title
Title to a negotiable instrument obtained by fraud. Title to real property which lacks some of the elements necessary to transfer a good title.

Depreciation
Decrease in value to real property improvements caused by deterioration or obsolescence.

Devise
Real estate left by will.

Devisee
One to whom real estate is given by will.

Devisor
A testator who leaves real estate.

Direct Reduction Mortgage
An amortized mortgage. One on which principal and interest being computed on the remaining balance.

Disbursements
Payments made during the course of an escrow or at closing.

Discount
Is an ARM with an initial discount, the lender gives up a number of percentage points of interest to give you a lower rate and lower payments for part of the mortgage term. After the discount period, the ARM rate will probably go up depending on the index rate.

Documentary Tax Stamps
Stamps, affixed to a deed, showing the amount of transfer tax.

Dragnet Clause
A clause in a mortgage or deed or trust which places the real estate as security for existing debts between the parties.

Easement
A right created by grant, reservation, agreement, prescription, or necessary implication, which one has in the land of another.

Eminent Domain
A Government right to acquire private property for public use by condemnation, and the payment of just compensation.

Encroachment
Construction onto the property of another, wall, fence, etc.

Encumbrance
A claim, line charge, attached to and binding real property.

Equity
The difference between the market value of the property and the homeowners mortgage debt.

Escrow
Delivery of a deed by a grantor to a third party for delivery to the grantee upon the happening of a contingent event.

Escrow Payment
That portion of a mortgagor’s monthly payment held in trust by the lender to pay for taxes mortgage insurance, hazard insurance, lease payments, and other items as they become due, also know as "impounds" in some states.

Escrow Reimbursement
An assumptions or wrap loan transactions, the buyer reimburses the seller for the current balance of his escrow (or impounded) funds.

Federal Home Board
The board which charters and regulates federal savings and loan associations, as well as controlling the system of Federal Home Loan Banks.

Federal Tax Lien
A lien attached to property for nonpayment of a federal tax.

Fee Simple
An estate under which the owner is entitled to unrestricted powers to dispose of the property, and which can be left by will or inherited.

Federal Home Loan Board
The board which charters and forbids discrimination in the sale.

Federal Housing Administration
A federal Agency which insures first mortgages, enabling lenders to loan a very high percentage of the sale price.

Freddie Mac (FHLMC)
Federal Home Loan Mortgage Corporation. A federal Agency purchasing first mortgages, both conventional and federally insured, from members of the Federal Reserve System, and the Federal Home Loan Bank System.

Foreclosure
A proceeding in or out of court, to extinguish all rights, title, and interest, of the owner(s) of property in order to sell the property to satisfy a lien against it.

Full Disclosure
Revealing all the known facts which may affect the decision of a buyer or tenant.

General Lien
A lien such as a tax lien or judgment lien which attaches to all property of the debtor rather than the lien of, for example, a trust deed, which attaches only to a specific property.

Ginnie Mac (GNMA)
Government National Mortgage Association. A federal association working with FHA which offers special assistance in obtaining mortgages, and purchases mortgages in a secondary capacity.

Grandfather Clause
The clause in a law permitting the continuation of a use, business, etc., which, when was permissible but, because of a change in the law is now not permissible.

Ground Rent
Rent paid for vacant land. If the property is improved, ground rent is the portion attributable to the land only.

Heir and Assigns
Words usually found in a deed, showing the interest the grantee is receiving.

Home Owner Association
An association of people who own homes in a given area for the purpose of improving or maintaining the quality of the area.

Impound Account
Account held by a lender for payment of taxes, insurance, or other

Index
The index if the measure of interest rate changes that the lender uses to decide how much the interest rate on an ARM will change over time. You should ask your lender how the index for any ARM you are considering has changed in recent years, and where it is reported.

Independent Contractor
The term is most important as used to describe the relationship of broker and salesperson, employee or independent contractor. If employee, the broker must withhold income tax and pay social security, provide workmen’s compensation, and may be liable for some negligent acts of the salesperson while on the job. All of this is avoided by the broker if salesperson is an independent contractor.

Installment Sale
A tax term used to describe a sale which is usually accomplished by use of a land contract.

Insured Mortgage
A mortgage insured against loss to the mortgagee in the event of default and failure of the mortgaged property to satisfy the balance owing plus costs of foreclosure.

Interest Rate
The percentage of an amount of money which is paid for its use for a specified time.

Joint and Several
A liability which allows the creditor to sue any one of the debtors or sue altogether.

Joint Tenancy
An undivided interest in property, taken by two or more joint tenants. The interests must equal, accruing under the same conveyance, and beginning at the same time. Upon death of a joint tenant the interest passes to the surviving joint tenants, rather than to the heirs of the deceased.

Judgment
The decision of a court of law. Money judgments, when recorded, become a lien on real property of the defendant.

Late Charge
A penalty for failure to pay an installment on time.

Legal Description
A description by which property can be definitely located by reference to surveys or recorded maps. Sometimes referred to simply as the legal.

Lease with Option to Purchase
A lease under which the lessee has the right to purchase the property. The option may run for the length of the lease or only for a portion of the lease period.

Lender
A general term encompassing all mortgages, and beneficiaries under deeds of trust.

Letter of Intent
A formal method of stating that a prospective developer, buyer or lessee, is interested in property.

Liber
A Latin word for book.

Lien
An encumbrance against property for money, either voluntary or involuntary.

Life Estate
An estate in real property for the life of a living person. The estate then reverts back to the grantor or on to a third party.

Limited Partnership
A partnership consisting of one or more general partners who conduct the business and are responsible for losses, and one or more special partners, contributing capital and liable only to the amount contributed.

Lis Pendens
A legal notice recorded to show pending litigation relating to real property and giving notice that anyone acquiring an interest in said property subsequent to the date of the notice may be bound by the outcome of the litigation.

Loan Package
The information given to the lender regarding the borrower and the property necessary to decide to give or not to give the loan.

Loan Ratio
The amount of a loan to the value or selling price of real property.

Loan-to-Value Ratio
The ratio of the mortgage loan amount to the properties appraised value (or the selling price whichever is less).

Margin
The number of percentage points the lender adds to the index rate to calculate the ARM interest rate at each adjustment.

Marketable Title
Title which can be readily marketed to a reasonably prudent purchaser aware of the facts and their legal meaning concerning liens and encumbrances.

Mechanics Lien
A lien created by statue for the purpose of securing priority of payment for the price of value of work performed and materials furnished in construction of repair of improvements to land, and which attached to the land as well as the improvements.

Mortgage Broker
One who for a fee, brings together a borrower and lender, and handles the necessary applications for the borrower to obtain a loan against real property by giving a mortgage or deed of trust as security. Also known as a loan broker.

Mortgage Guaranty Insurance Corporation (MAGIC)
A private corporation which, for a fee, insures mortgage loans similar to FHA and VA insurance, although not insuring as great a percentage of the loan.

Mortgage or Deed of Trust
Written pledge of real property given by the mortgagor to secure a debt. Should be recorded in the County Recorders Office.

Mortgagee
The lender of money or the receiver of the mortgage document.

Mortgagor
The borrower of money or the giver of the mortgage document.

Mortgage Insurance
Insurance required for loans with a loan above 80.01%.

Mortgage Warehousing
A system whereby a mortgage company will hold loans which would ordinarily be sold, in order to sell later at a lower discount. These are used as collateral security with a bank to borrow new money to loan.

Negative Amortization
Amortization means that monthly payments are large enough to pay the interest and reduce the principal on your mortgage. Negative amortization occurs when the monthly payments do not cover all of the interest cost. The interest cost which is not covered by the payment is added to the unpaid principal balance. This means that even after making many payments, you could owe more than you did at the beginning of the loan. Negative amortization can occur when an ARM has a payment cap that results if monthly payments not high enough to cover the interest due.

Nonconforming
Use A property which does not conform to the zoning of an area.

Note
A written promise to repay a certain sum of money on specified terms.

Open End Mortgage
A mortgage permitting the mortgagor to borrow additional money under the same mortgage, with certain conditions, usually, as to the assets of the mortgage.

Origination Fee
A fee or charge for work involved in the evaluation, preparation and submission of a proposed mortgage loan.

Owners Policy
Title insurance for the owner of property, rather than a lien holder.

Package Mortgage
Mortgage covering both real and personal property.

Paper
A mortgage, deed of trust, or land contract, which is given instead of cash.

Partial Release
A release of a portion of property covered by a mortgage.

Perc Test (Percolation)
The test to determine the capability of the soil to absorb liquid, both for construction and septic systems.

Permanent Mortgage
A mortgage on completed construction on the same property under one mortgage or trust deed.

PMI Private Mortgage Insurance
Insurance similar to FHA or VA insurance, insuring part of the first mortgage or deed of trust, enabling a lender to make a conventional loan of a higher percentage of the property value.

Points
A point is equal to one percent of the principal amount of your mortgage. For example, if you get a mortgage for $100,000, one point means you pay $1000 to the lender. Lenders frequently charge points in both fixed-rate and adjustable-rate mortgages in order to increase the yield of the mortgage and to cover loan closing costs. These points are usually collected at closing and may be paid by the borrower or the home seller, or may be split between them.

Property
Tax Generally, tax levied on both real and personal property.

Prorate
To divide in proportionate shares, such as taxes, insurance, rent, or other items.

Purchase Money Mortgage
A Mortgage given by the buyer to the seller as part of the purchase consideration, as opposed to a hard money mortgage.

Quit Claim Deed
A deed operating as a release; intended to pass any title, interest, or claim which the grantor may have in the property.

Real Estate
Land and anything permanently affixed to the land, and those things attached to the building.

Recital
Setting forth in a deed or other writing some explanation for the transaction.

Recourse
The right of the holder of a note secured by a mortgage or deed of trust to look personally to the borrower or endorser for payment.

Refinancing The repayment of a debt from the proceeds of a new loan using the same property as security.

Reissue rate
A charge for a title insurance policy if a previous policy on the same property was issued within a specified period. Reissue is less than the original charge.

REIT (Real Estate Investment Trusts)
A method in investing in real estate in a group, with certain tax advantages.

Release
An instrument releasing property from the lien of the mortgage, judgment, etc.

Recision of Contract

Annulling a contract and placing the parties to it in a position as if there had not been a contract.

RESPA (Real Estate Settlement Procedures Act)
A federal statute requiring disclosure of certain costs in the sale of residential improved property which is to be financed by a federally insured lender.

Revenue Stamps
Formerly federal tax on a sale of real property. Canceled and replaced by state tax stamps.

Secondary Financing
A loan secured by a mortgage or trust deed, which lien is junior to another mortgage or trust deed.

Secondary Mortgage
The buying and selling of first mortgages of trust deeds by banks, insurance companies, government agencies, and other mortgagees.

Security
Real or personal property pledged by a borrower, as additional protection for the lender’s interest.

Septic System
A sewage system, whereby waste is drained through pipes and a tile field into aseptic tank.

Set Back Ordinance
Regulates the distance from the lot line to the point where improvements maybe constructed.

Settlement Statement
A statement prepared by broker, escrow, or lender, giving a complete breakdown of costs involved in a real estate sale.

Sheriff’s Deed
Deed given at sheriff’s sale in foreclosure of mortgage.

Signed Sealed and Delivered
A phrase indicating that everything necessary to convey has been done by the grantor.

Specific Performance
An action to compel the performance of a contract, when money damages for breach would not be satisfactory.

Statutory Lien
An involuntary lien, includes tax liens, judgment liens, mechanic liens, etc.

Substitute of Trustee
A document which is recorded to change the trustee under the deed of trust.

Tax Lien
Lien for nonpayment of taxes.

Tax Sale
Public sale of property at auction by governmental authority, after a period of nonpayment of property taxes.

Tenancy by the Entirety
A form of ownership by husband and wife whereby each owns the entire property. In event of death of one, the survivor owns the property without probate.

Title
Often used interchangeably with the work ownership. It indicates the accumulation of all rights in property, the owner and others.

Title Insurance
An insurance policy which protects the insured (purchaser and lender) against loss arising from defects in title

Vesting
Denotes the manner in which title is held. Examples of common vesting are: Community Property, Joint Tenancy and Tenancy in Common.

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Can a Landlord Prohibit Smoking on Their Property?

Michael Emilio — Mon, 13 Nov 2006 13:39:29 +0000

Is it true that it’s possible to agree in a lease that there can’t be any smoking inside the rental property but that I can’t refuse to rent my property out to smokers? My situation is that I have tenants that are smokers who, although they don’t smoke inside, they do smoke in the common areas and they leave cigarette butts all over the ground, sometimes near my other tenant’s front doors and even rose beds! They haven’t bothered to clean them up up to this point, I guess we’ll see if they clean them up when they move out. So, after this situation, I really would like to deny tenancy to anyone that smokes or at the minimum completely prohibit smoking anywhere on the premises. Can either of these be done?

- O.L. Homestead, Florida

Smoking is a lawful activity, but it still may be restricted on private property depending on the rules set in place by the property owner or on public property by regulations or laws. You, as the owner, are fully capable under law to limit smoking at your property. Keep in mind that people who smoke are not a protected class of individuals (like religion or race). However, they should still not be referenced as a group when making your leasing rules since you don’t want to stigmatize anyone. What you do is just include these new smoking restrictions in any new lease you make. These new rules will now apply to anyone on the property, including visitors. If you have tenants on month-to-month tenancies you will need to give them a change of terms of tenancy notice with your new smoking prohibition rules.

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A General Definition of Real Estate

Michael Emilio — Fri, 10 Nov 2006 13:17:26 +0000

From Wikipedia:

Real estate, is real property consisting of land, anything permanently affixed to the land (i.e., buildings), and those things attached to the buildings (including such things as lighting fixtures, window coverings, built-in appliances, etc.).

The term "real estate" was derived from "royal estate", real meaning royal in Spanish. A more modern US term is realty. A person dealing in real estate is usually called a real estate agent; those United States real estate agents who are members of the National Association of Realtors call themselves Realtors, a trademarked term which the NAR claims may not be used to refer to real estate agents who are not members. (In the United Kingdom the offices and staff are just ‘estate agents’.) In civil law jurisdictions the term is immovable property.

Because such property is essential for industry or other activity requiring a lot of fixed physical capital, economics is very concerned with real property and rules regarding its valuation and disposition, and obligations accuring to its owners. In economic terms, real property consists of some natural capital (or land, one of the factors of production especially in agriculture), and infrastructural capital (the buildings, water and power lines, and other improvements necessary to make real property useful for some human purpose). Other fixed physical assets, indistinguishable economically from infrastructure, such as machines, may be stored on real property and may require natural or infrastructural attributes (such as running water for a turbine or an isolated location to allow loud noise emissions) hard to duplicate even nearby.

Accordingly, real estate tends to be difficult to evaluate in terms of commodity markets – each piece is unique and has unique advantages and drawbacks. What is more, zoning laws and severability requirements vary so much that the law regarding real estate is among the most complex law there is. Specialists are usually required to valuate, broker or sell real estate. Real estate businesses divide into several broadly stated types:

Brokers attempt to match available properties with buyers. They usually retain a monopoly access to a multiple listing service in order to share information with other brokers. Agents work for brokers. The basic profits are a 6% fee on the purchase price. 3% of the fee goes to the broker listing the property, and 3% to the broker locating a buyer.

Commercial Real Estate businesses rent buildings and parking lots to other businesses. Businesses usually make excellent tenants. They pay on time, and generally fulfill contractual obligations. The difficulty is that it can be difficult to find commercial tenants. Some commercial real-estate owners specialize in small retail properties, and place their own businesses, usually franchises, in their own real estate. Basic profits come from the fact that a building that sold for $100 a square foot may rent for $1 per square foot per month. To increase ROI, commercial landlords place a mortgage with a lender. A major source of cash is that they borrow the cost of the building, but must depreciate it. Most landlords reinvest the cash allocated for depreciation, growing their assets.

Apartment Buildings are usually owned by businesses. The management and upkeep costs are much larger than commercial real-estate, but the business has far less difficulty finding tenants. To increase ROI, commercial landlords place a mortgage with a lender. Basic profits come from the fact that a building that sold for $100 a square foot may rent for $1 per square foot per month. A major source of cash is that they borrow the cost of the building, and invest the cash allocated for depreciation. The standard way of coping with the management problems is to retain professional managers certified for residential real estate.

Developers build on land, thereby increasing its value. Developers are extremely concerned with providing useful buildings and structures. Useless buildings have no value, which means they can’t be sold or rented. The basic profits come from the fact that rural land sells for about $1200/acre in the U.S., and converts to 43,560 square feet of building that can be sold for $100/sq. foot, or rented for about $1/sq.foot. However, the building can only sell if it’s in the right location, has utilities, construction costs can be managed, and the project completes on time. The standard solution to the construction problems is to retain a registered professional engineer who specializes in supervision of construction, and involve this person before purchasing the land. The standard solution to the salability problems is to retain an architect to design an attractive development. Many developers retain ownership of profitable rental properties.

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Condo-Hotels: Questions and Answers

Michael Emilio — Sat, 02 Sep 2006 17:16:23 +0000

What is a condo-hotel?

A condo-hotel (also known as a condotel or hotel-condo) is a building that is used as a condominium and a hotel. The building is created as a hotel but the units are sold to people who want to own a piece of real estate in a popular resort area and enjoy the amenities and convenience of a top-notch hotel with the bonus of rental revenues. The real estate investor that owns a condo-hotel unit can now rent this room out as a standard hotel room and receive a stream of income from their investment. When you buy this unit, you own a portion of the hotel property. You buy that hotel suite and you receive a deed for it. This means that your hotel suite is all yours. Apart from the actual unit, you also own an undivided portion of all the common areas of the hotel (lobby, hallways, pool area, gym, etc).

Condo-hotels are usually given to the buyer fully-equipped and fully-furnished to the buyer as a complete real estate turn-key property investment. Note that in a condo-hotel real estate investment, you also enjoy hotel services as part of ownership – services such as room-service, maid service, massage services, hotel nightclubs, and more.

So let’s say I buy a condo-hotel unit for rental income purposes. How do I manage the rentals?

Most condo-hotels have an onsite hotel rental program that manages your property. You are usually free to choose your own rental service, but remember to ask your Realtor to check the contract! Your room is then rented out to hotel tenants and you share in the rental revenue.

What is the standard split of the room revenue that a unit owner shares with the hotel?

Owners usually keep 35 to 40 percent of the rent generated by the room.

Besides the cost of actually purchasing the unit, are there any ongoing costs with owning a condo-hotel unit?

Condo-hotel units, like other condominium units, usually have a monthly maintenance fee attached to them. For example, at the Nicky O South Beach, the maintenance fee is $1.60 per square foot (of your unit). So a 400 square foot unit would have a monthly maintenance fee of $640. All utilities are usually paid by the condo association and/or hotel, including insurance. Besides the maintenance fee, your only other costs would be property tax (assessed each November) and interest on your loan (if you borrowed funds from a lender to finance your unit).

What’s a typical occupancy rate and daily rate for a hotel in the Miami Beach area?

For example, the 194-room Delano luxury hotel in Miami Beach posted an occupancy rate of 72 percent in 2005 with an average daily rate of $474.

Why would a developer create a condo-hotel instead of just creating a hotel?

Creating a hotel costs a lot of money. When development costs go up, hotel development costs can make developing new hotels difficult (especially in such a high development cost area such as the South Florida area). Since the developer is now selling the units as individual condominiums, the development cost burden now shifts in large part to the real estate investors who are now becoming condo-hotel owners.

Are there any condo-hotels in the South Florida area?

	Nicky Olivia Hilton, daughter of Richard Hilton and Kathy Richards (and heiress of part of the Hilton Hotel chain), has created the Nicky O South Beach, located on 940 Ocean Drive in Miami Beach. The focus of the Nicky O South Beach is on design and designers. Nicky Hilton has commissioned some of the world’s top designers to create hotel suites in their style. Even the hotel staff will be dressed in designer clothing. Designer Roberto Cavalli will be creating the 5,000-sq. foot penthouse in this South Beach hotel in a gold theme that mimics his retail stores. The Nicky O condo-hotel units start at $500,000.
	The Mayfair Hotel & Spa is a 179 suite condo-hotel in the bustling Coconut Grove area of South Florida. Each Art Nouveau-style rooms is unique with private, furnished terraces including Japanese spa tubs. The outdoor courtyard is the prime location of the hotel, with fragrant orchids, botanical gardens, etched wooden doors, and stained-glass windows welcoming the hotel guests. Located on 3000 Florida Avenue, the Mayfair suites range in size from 400 to 970 square feet and range in price from $200,000 to $500,000.
	The W Hotels South Beach Residences, located on 22nd Street and Collins Avenue in Miami Beach, has condo-hotel units starting at $800,000.
	The Atlantic Condo-Hotel, located on 601 N. Fort Lauderdale Beach Blvd in Fort Lauderdale, is a 15-story oceanfront condo-hotel with 124 units starting at $470,000.

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11 Steps to Finding the Perfect Rental Apartment, Townhouse, or House

Michael Emilio — Mon, 31 Jul 2006 22:42:35 +0000

In order to find the right apartment, townhouse, or house to rent, you must be prepared for what to do before you set out to look at homes, what to do during the search, and what to do once you’ve find the right place.

Before you start the search

1. Create a list of everything and anything you’d like your new home to have. Would you like a dishwasher, hardwood floors, washer and dryer, or pool? Would you prefer an apartment, townhouse, multifamily home, or single family home? It’s a great idea to set priorities on your preferences. Remember to make a distinction between what you want and what you need!

2. Always be prepared! Have on hand some important information that your Realtor will need. This includes:

Credit check.
Resume/Letter of Recommendation.
Pay stubs/tax returns.

3. Keep in mind that many landlords will want to verify your work references. Contact your references (including your former landlord) ahead of time so that they know they may receive a call. A great tip to getting a great reference is to ask the person ahead of time, “I’m going to be looking at places to rent and I’m going to need references. If I were to put you as a reference, would you be willing to give me a glowing recommendation?” Remember, if you don’t ask for it, you may not get it!

During the search

4. It’s best to look at the potential units during the daytime. It’s important to know how much natural light enters a home. It’s also easier to see in what condition the unit is in and whether more work is needed on the unit to make it more habitable.

5. Always do a walk-though of any unit you’re seriously interested in. You’re also going to want to ask about any damage you may see (always do this before you sign the lease!) Make a list of any damage you see and give this to your Realtor. Your Realtor will get the landlord’s intials on the list and will attach this to your lease in order to absolve you of responsibility later. This prevents many headaches down the road!

6. Ask questions! The time to ask is before the lease is signed. Some great questions to ask are:

How large is the water heater?
What’s the water pressure like?
How are the neighbors like?
Are there shopping malls/supermarkets nearby?
What is the pet policy?
What are the utilities that you will be responsible for?

7. Introduce yourself to your potential neighbors! The most important neighbors to meet are the ones that you will share walls with, which are the ones on the same floor and those above and below you. Find out their thoughts on noise, what they like about the area, and most importantly, find out if they’re friendly!

8. Bring a tape measure and a list of your larger furniture’s measurements so you can see how things will fit and what you might need to buy.

9. See a few places that fit your characteristics of a potential place to live so you can have an idea of what your budget generally gets you as a home.

Once you’ve found the right place

10. Be prepared to ACT QUICKLY when you find something you like and make sure your Realtor knows how much you like the home! A rental that might be on the market one day can be gone the next day! That’s why it is so imperative to act quickly and give your Realtor the initial deposit so that your Realtor can fill out and give the landlord the Memorandum to Lease! The Memorandum to Lease demonstrates your serious intent to rent the property and this generally means the property is held for you until negotiations are over between both Realtors.

11. Take a look at your lease and be sure you understand it. If you have any questions, make sure to ask your Realtor!

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