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TRR's Blog

By TR Realty | Broker in Las Vegas, NV
  • Brad comments today on required paperwork.

    Posted Under: Agent2Agent in Las Vegas, Property Q&A in Las Vegas, Rentals in Las Vegas  |  November 4, 2010 4:55 PM  |  509 views  |  No comments
    Nevada law requires that real estate brokerages retain certain documents for each transaction. Among the required paperwork: Duties Owed, Consent to Act, listing agreements, purchase and sale agreements, leases, certain disclosures, HUDs, etc.
     
    I have always, since the inception of TRR, had a policy of following the law to the letter. Regardless of how many other brokers in town talk about the "gray area", regardless of how many other brokers in town do not care about adhering to the law, I have never wavered.
     
    On every single file that passes through TRR, there are required documents, and our office manager, Emily, is charged with ensuring that we get what we need. And, the documents must be accurately signed and initialed, as well. It is our policy that commissions are not released until files are completed. In my opinion, all responsible brokers ought to have this same policy.
     
    Furthermore, on our web site, there is an associates-only page that our staff can access, in order to ascertain which documents we will need, whether the transaction was residential, commercial, rental, referral, etc. That way, the associates know in advance what is mandatory, and they can prepare accordingly.
     
    The point I wish to make today is that TRR seems to be on an island in this regard. In other words, we seem to be relatively unique in our requirements. And, so many other brokerages seem not to care much about the required paperwork at all.
     
    Literally countless agents have come to me for help in gathering the necessary documents. This takes the cooperation of title companies, inspection companies, and other real estate companies, as well. The latter seems to be the sticking point.
     
    On many, MANY, occasions, my associates have contacted agents in other brokerages with whom they have completed real estate transactions, and requested signatures, initials and paperwork, only to be told that their broker does not require it, or that they will not release it.
     
    Nevada law is very clear: if a real estate brokerage represents a party to a transaction, then that company is required, by law, to obtain and retain paperwork in their files for a minimum of five years from the date of the last activity in that file.
     
    Yet, I have to get involved countless times, to track down other agents, and if they fail to comply, their brokers, in order to obtain what we are legally entitled to have. Then, when I finally reach a person who is able to provide what we need, I have to beg, cajole, negotiate (and sometimes, sadly, even threaten), and explain why it is that we need what we need.
     
    This week, one of my associates came to me for help with a rental file. He had been requesting paperwork from the listing broker for a rental transaction for SIX MONTHS! (My associate represented the tenant). And for all this time, his requests were ignored. So I contacted the broker of record, and had a lengthy conversation with her about what we needed and why. She told me that in her 27 years (27 years!) as a broker in Las Vegas, no other broker had ever explained to her what the law required. She said that several times she had been contacted, but refused to provide any paperwork to other companies thinking that she didn't need to, and no broker ever pursued the matter. Until me, that is.
     
    So, I took the time to explain that when a real estate company represents a party to a contract, the broker is entitled to the pertinent paperwork. Of course that's true! Isn't it common sense? What in the event of a dispute? A complaint? A lawsuit? It should go without saying that the company is responsible, and therefore, must have the proper records.
     
    In this particular situation, the broker mentioned that this was a "referral", not a rental. WRONG! TRR showed the property, and legally represented the tenant (hence, Duties Owed), and that is not a referral. A referral is simply passing the customer from one agent or company to another without legal representation. Her response? She said I was right: that she never thought of it that way.
     
    She even went on to tell me that if I were going to enforce the law this way and retain paperwork for all my transactions, I would be "rocking the boat", as she put it. Well, rock on.
     
    I have a pretty good success rate of obtaining paperwork from other companies in town, but why should I have to get involved at all? When one of my associates requests something, it should be granted without delay, just as it is when another company requests something from TRR.
     
    Even when it upsets other brokers or agents, even when it takes some extra work, I will always make sure that we have what we need to properly close out every single file that goes through my office. I am going to protect my customers, my associates, my reputation and myself in every case. As long as my name is on the door, compliance will never take a vacation.

    If you enjoyed today's post, please subscribe to my blog: http://www.Toyoda-Roberts.com/Bblogs.
  • A real estate agent asks how to choose a good tenant.

    Posted Under: Agent2Agent in Las Vegas, Rental Basics in Las Vegas, Rentals in Las Vegas  |  September 15, 2010 6:00 PM  |  980 views  |  No comments
    Smart property owners, when deciding if a prospective tenant is a good fit for their property, should request their listing broker to conduct a background check. 
     
    TRR has contracted with a company that provides us with a criminal history, eviction history and credit scores. The service costs $49 for one person, or $69 for two persons on the same application. Each application is property specific, meaning that it cannot be reused. Every applicant who intends to be named on the lease needs to undergo a background check.
     
    Since TRR does not do property management, once we receive the signed authorization from the tenant along with the fee for the background check, we process the request and submit the results directly to the landlord. The landlord can then make his own decision as to whether someone meets his criteria. TRR associates may NEVER make this determination on their own. The liability for the associate and also for the company is astronomical, so it needs to be the landlord's own decision.
     
    There is a lot more to an applicant than just his FICO score. In today's economic environment, many otherwise good people have encountered financial difficulties, including short sales, foreclosure, repossessions, charge offs and even bankruptcy on their records. In my opinion, none of these things would necessarily disqualify someone from being a valuable tenant. Some people who had excellent credit before have recently suffered due to their employment situation, the housing market and other of today's woes.
     
    I think we should normally allow more flexibility when considering an application for tenancy than we would for a mortgage, as an example. Some people rent only because their finances are not strong. So even under normal circumstances, their credit might not be perfect. But in today's climate, we need even more flexibility. I have seen countless tenants turn out to be fantastic for the landlord, but if they had been rejected just because of how they look on paper, they never would have been approved in the first place. After all: good credit does not automatically make a good person; conversely, bad credit does not mean the person is not worthy of approval.
     
    Something that might, and should, give landlords caution would be an eviction history. That is somewhat of a red flag, depending on how long ago it occurred and under what circumstances. So I would recommend probing that matter if it showed up on an applicant's record.
     
    In my opinion, the one thing that is a definite obstacle is a criminal history. If I were a landlord pondering an applicant with a criminal history, I would most assuredly decline that person, especially if the criminal history includes a felony. I would not be willing to take that chance for many reasons.
     
    When we review background check reports, we often see collections, and many of those are for medical bills. Keep in mind that there are nearly 50 million Americans without health insurance (what a sin in the richest country in the history of the world, but that's another blog). Personally, I would not discriminate against someone for unpaid medical bills, because I have great empathy for that situation.
     
    Another option that a landlord has is to investigate the applicant's current housing, either by asking to visit or speaking directly with his current landlord. That might provide a wealth of information.
     
    Regarding credit, though, we really need to have some flexibility and understanding of someone's circumstances, and try to work with them the best we can. It might behoove a landlord, rather than rejecting someone with low scores outright, to request additional security deposit, perhaps two months instead of one. That offers the landlord more protection, while giving the applicant an opportunity to prove himself. And if he pays on time for a year, than upon renewal, perhaps the landlord might be willing to reduce the security deposit for the second year.
     
    Bottom line: if an applicant's criminal history and eviction history are both clear, I would probably accept most types of credit, with a possible increase in security deposit, especially in today's tough economic times.

    If you enjoyed today's post, please subscribe to my blog: http://www.Toyoda-Roberts.com/Bblogs.
  • A tenant asks about the status of his lease on a condo that is in foreclosure.

    Posted Under: Market Conditions in Las Vegas, Rental Basics in Las Vegas, Rentals in Las Vegas  |  September 10, 2010 5:34 PM  |  473 views  |  No comments
    This is a common problem today: the tenant is paying rent to the landlord, but the landlord is not paying the mortgage.
     
    In this case, the tenant is really exposed. He was probably unaware until it was very late in the foreclosure process that this was even happening.
     
    Savvy tenants in the Las Vegas area can find out if a Notice of Default (NOD) has been recorded against the property they are currently renting by visiting: https://recorder.co.clark.nv.us/oncorewebecommerce/Search.aspx. Records can be searched by the property owner's name or the parcel ID number, which can easily be obtained online through county tax records. The NOD is often the first clue that a tenant has that the landlord has stopped paying his mortgage. 
     
    If no record is located indicating a NOD, then the tenant should be fine. But if a record is located, then the date that record was filed with the county should give some idea of what's going on with the property.
     
    Under Nevada law, once a NOD has been filed with the county, the law requires a minimum time period of 3 months and 20 days before a lienholder (usually a lender) can foreclose on the property. So if the date is very recent, then the tenant knows he has at least this much time before he might be thrown out of the property. But if the elapsed time is more than the statutory period above, then foreclosure could come at any time.
     
    Of course, Nevada law requires that the tenant be notified of the eviction, but by that time, it could be too late for the tenant to protect his financial interest.
     
    If a property is foreclosed on, and the tenant gets evicted, then in all likelihood, he will lose whatever rent he has paid, along with any security deposit he might have coming to him. Even though the landlord does not have the legal right to retain the security deposit, in most cases the landlord is in financial trouble, hence, the foreclosure. A tenant could bring a legal action against the landlord for return of partial rent and/or security deposit, but even if he wins a judgment it is unlikely he could collect from a former homeowner in deep financial trouble. In fact, in most of these cases, legal action such as this is not worth the expense and time. Needless to say, if the foreclosure does occur, then the lease is null and void.
     
    I believe that smart tenants should check the web site above frequently, in order to ascertain whether trouble is forthcoming. And if it is, then I believe the best course of action is communication with the landlord. Property managers may not know, or may be unwilling to divulge, information regarding the property owner's financial status. So they are not a very reliable source, in my opinion. After all: property managers can do little if anything to stop a foreclosure. 
     
    I hear all the time about property managers who know that their clients (property owners) are in foreclosure, yet they still lien on the tenant to pay the rent. I think this may be unethical. I believe that ethical property managers contact the tenant right away when they become aware of foreclosure proceedings and try to work with the tenant to relocate him into another property. If a property manager pretends that nothing is wrong, or only cares about collecting rent (and his commission), then that could leave the tenant in a very bad situation. The tenant could pay the rent, and have a security deposit on account, but still end up in the street. Relying on what the property manager is saying might be a mistake.
     
    Tenants should watch carefully and never ignore legal documentation that is delivered to the property. They should be skeptical of what owners and  property managers are telling them. And if they become aware of trouble, they should immediately begin negotiating with the landlord to extract themselves from the property before it's too late. They might be able to stop paying the rent (with an agreement), use their security deposit in lieu of rent, or come to some other arrangement that doesn't leave the tenant financially exposed.
     
    Communication is key. Tenants should never ignore signs of trouble, and they should take action at first notice of it.

    If you enjoyed today's post, please subscribe to my blog: http://www.Toyoda-Roberts.com/Bblogs.
 
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