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Old 09-27-2011, 11:19 PM
 
11,093 posts, read 10,132,558 times
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So you're saying that your lease required you to pay rent AND the taxes on the property (that you didn't own)?? Who would sign a lease like that!!?? (That's a rhetorical question) Is that even legal? I sure hope someone who knows about this practice will chime in and explain. I've never heard of this.
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Old 09-27-2011, 11:24 PM
 
11,093 posts, read 10,132,558 times
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Quote:
Originally Posted by freemkt View Post
Properties are reassessed (generally) when they are sold. Rental properties, on average, are sold more often than owner-occupied homes (this appears to be driven largely by federal tax rules on rental property; many landlords find it advantageous to sell rental property a few years after they buy it, and then reinvest the proceeds in a different rental property, thereby allowing them to defer taxes on any capital gains realized).

So people who are renting can live in the same property for years or decades without having the same Prop 13 assessment protections that homeowners enjoy.

That's true and renters also don't have to worry about the liabilities, either. They can trash the place, refuse to pay rent and end up costing the landlord plenty to get them out. Repairs are expensive and time consuming, too. You may be a good renter but there are plenty of them out there who aren't and they don't hesitate to make that known when they leave a place in shambles. Again, tell me why a renter should enjoy the benefits of Prop 13.
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Old 09-27-2011, 11:46 PM
 
Location: Sacramento, Placerville
2,487 posts, read 5,096,972 times
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Property taxes are just a cost of doing business. Businesses raise prices when costs go up. It is as simple as that.

There are a lot of landlords out there who don't give a crap about their rentals. They will not spend a dime on even serious repairs. They buy the place, fail to maintain it and let the place fall apart.

There are landlords who add clauses to their leases for unexpected increases in expenses because renters in general will vote for any tax increase affecting property owners because they think they are getting something while sticking it to "the man." So, if the renters vote for a property tax increase they get a letter from the landlord stating something to the effect of "I'm passing the tax increase you voted for directly to you."
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Old 09-28-2011, 12:00 AM
 
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First... Prop 13 sets in place the property tax mechanism and limits annual increases to 2% plus provides for additional taxes with voter approval... in the case of school infrastructure... 55% approval gets the new tax approved.

My Uncle and my teacher both received rent reductions when the first Prop 13 adjusted tax bills went out... It is incorrect to say renters received no benefit. There were not enough homeowner voters to get Prop 13 passed... it also required the support of renters.

Rent is limited to what the market will bear... if rents are not enough to cover costs it is reasonable to expect fewer rental units.

Not all rentals are at market... I just referred a family to a rental that is owned by an estate... they signed a two year lease at below market because the executor didn't want the property vacant and unkempt...

I have tenants paying the same rent they did in 2001... no increases.... they are great tenants, treat the places as their own and rent is always paid on time... this is something I can do as a owner.

Every day a unit is vacant is a loss... the smart landlords will keep good tenants by limiting rent increases to avoid the high cost and uncertainty of turnover.

Now is a great time to buy... prices in some neighborhoods are down 50% or more... inventory is at an all time high and interest rates at 50 year low...
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Old 09-28-2011, 12:01 AM
 
33,046 posts, read 21,941,105 times
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Quote:
Originally Posted by HereOnMars View Post
So you're saying that your lease required you to pay rent AND the taxes on the property (that you didn't own)?? Who would sign a lease like that!!?? (That's a rhetorical question) Is that even legal? I sure hope someone who knows about this practice will chime in and explain. I've never heard of this.

I was paying n dollars per month. I calculated the monthly property taxes (billed twice a year in unequal amounts), subtracted this monthly property tax figure from the rent, and proposed paying (n - tax) per month rent, plus tax.

So there was NO change in the total amount I paid, until property taxes went up or down (which they did in both directions). The landlord really cared about his bottom line and since the property taxes were now irrelevant to him (he didn't have to reach into his pocket to cover property tax increases since I was covering them monthly), and while I did pay several mostly small increases, he never hit me with an increase in the base rent.

Taking the property taxes off his radar also helped take ME off his radar, so I was cool with it, especially that after living in the house for 10 years, the rent I was paying (including those property taxes) was way below market.
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Old 09-28-2011, 12:13 AM
 
33,046 posts, read 21,941,105 times
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Quote:
Originally Posted by HereOnMars View Post
That's true and renters also don't have to worry about the liabilities, either. They can trash the place, refuse to pay rent and end up costing the landlord plenty to get them out. Repairs are expensive and time consuming, too. You may be a good renter but there are plenty of them out there who aren't and they don't hesitate to make that known when they leave a place in shambles. Again, tell me why a renter should enjoy the benefits of Prop 13.

Sure, I've always tried to be a low-hassle tenant. I once worked with a landlord group on a local issue and got to hear a lot of horror stories, and I've always tried to NOT be one of them. I lived in one house for 13 years before health issues forced relocation (was unable to work for several months, thus no income, left to stay with relatives until I could return to work).

Now right there I see an obvious reason why renters should enjoy the benefits of Prop 13: if I had written Prop 13, I would have extended protection to renters and their landlords for as long as the renter stays in the same property. This is clearly good for renters AND for their landlords, because it gives landlords the added benefit that when they sell, the buyer doesn't get socked with a reassessment as long as the tenants stay. (In the absence of this provision, buyers would anticipate a reassessment and discount (adjust downward) the price they are willing to pay for the property.) This would provide an incentive for landlords to keep good tenants, and an incentive for tenants to stay.
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Old 09-28-2011, 12:15 AM
 
11,093 posts, read 10,132,558 times
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It's always nice to find a renter who wants to stay long term (i.e longer than a year or two) but not always possible. Customarily, after a renter moves, the landlord raises the rent so the new tenant is none the wiser.

But I still don't quite understand why you would offer to pay his taxes as well as your rent. You say you wanted to stay off his radar. And just why would you need that? Sounds suspicious, to me.

(Never mind, I don't want to know)
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Old 09-28-2011, 12:20 AM
 
26,579 posts, read 52,038,772 times
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Triple Net commercial Leases routinely pass all the costs to the renter... taxes, repairs... roof, plumbing, electrical, painting, floors, etc...

Every unusual in residential.

In some ways... jurisdictions like mine with rent control provide tenant protection irregardless of the building changing hands and rising costs.
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Old 09-28-2011, 12:23 AM
 
33,046 posts, read 21,941,105 times
Reputation: 8962
Quote:
Originally Posted by KC6ZLV View Post
Property taxes are just a cost of doing business. Businesses raise prices when costs go up. It is as simple as that.

There are a lot of landlords out there who don't give a crap about their rentals. They will not spend a dime on even serious repairs. They buy the place, fail to maintain it and let the place fall apart.

There are landlords who add clauses to their leases for unexpected increases in expenses because renters in general will vote for any tax increase affecting property owners because they think they are getting something while sticking it to "the man." So, if the renters vote for a property tax increase they get a letter from the landlord stating something to the effect of "I'm passing the tax increase you voted for directly to you."

I believe renters should explicitly bear any property tax increases, and also should explicitly benefit from any property tax cuts. How come landlords want it to work in only one direction?

I once found a copy of a letter sent to tenants by a large suburban landlord saying that if an upcoming tax vote didn't go his way, he was going to have to increase rents.

Since the tax vote was structured in such a way that landlords were guaranteed a property tax cut, and renters were guaranteed an increase in either the sales tax or the income tax, the landlord was going to come out ahead either way, but he calculated that one outcome would put more money in his pocket than the other. I was the only one telling renters they had been set up to be screwed either way.
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Old 09-28-2011, 12:29 AM
 
26,579 posts, read 52,038,772 times
Reputation: 20357
I will let you know how my appeal goes...

Property Values have fallen markedly and assessed values have not... the Assessor in one county specifically excludes "Distress" sales as comparables...

Kind of a problem when 80% of the sales are distressed.

Anyway, the firm I hired takes 40% of the tax savings and the county appeal board has 24 months from the date the $50 appeal fee is paid to make a decision...

I will gladly share any reduction with my tenant that moved-in January 2004 and pays the same rent now as they did back in 2004.
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