“Obey the laws, or they will be obeyed in a way you won’t like.” Benjamin Franklin

As of April 1, 2024 there is a new law about relatives living in your rental units. As of that day, SR 567 requires that the property owner or family member (like a spouse, parent, child ,grandparent or domestic partner) needs to move into the vacated unit within 90 days and occupy the unit as their primary residence for 12 months.

WHAT DID WE DO BEFORE. Before 567, many investors, including those who were planning to fix and flip properties for resale and those who were planning to live in their own unit, were not restricted. A potential problem could now occur, for instance, during the escrow period for a new home or when you planned a major renovation on your personal residence and needed a place to stay for a few months. The new regulation could even affect you if you had a child or grandparent who needed to stay for 6 months. Prior to this Senate bill, many of these examples would be a perk of property ownership, but no more.

WHAT ARE THE CONSEQUENCES? You could be liable for up to three times actual costs, to the displaced previous tenant along with attorney’s fees and costs. In the case of a tenant who was displaced so that the owner could renovate the unit, you could be forced to offer the remodeled unit to the old tenant at the same rent.

WHAT TO DO? Before embarking on a project that involves removing an existing tenant, always speak to your real estate attorney first. Make sure that you are operating within the law, in these litigious times. Protect your investment. Doing so will save you money, time and heartache.

“If you can’t handle the pain, stay off the court.” Kobe Bryant.

What we at PRS PROPERTIES CAN DO. We can give you a good idea of the current value of your building. We can suggest changes you might want to make before sale to give you an idea what type of building you would be able to exchange into. You may decide to stay in the rental business. We are always available to chat. We can give you referrals for professionals, such as lenders, contractors, and engineers, so that you can decide who you feel best with. We can supply you with rent and sale comparables in the area of your properties, so that you know what rental values are in your area. It is important that you know the true value of your rental units, so that you can get them rented right away at market value, or at least as much as possible with rent control restrictions. We can look at potential purchases that you may be interested in to make the property more desirable, and maybe look at potential issues that an insurer might require you to repair.

If you should decide to sell your building, we can help you exchange into a larger or smaller properties. We can even help you move into something with less management responsibilities. We can also help with getting the paperwork together for a refinance if that is your desire. We can also recommend experienced licensed contractors who can perform any repairs or installations you may need prior to selling. We can also look at your building for other easy and inexpensive changes that might allow you to get a higher value. We can help you to get the maximum value for your property, should you decide to sell, or the maximum return if you are planning to keep your building.

We are currently looking for “as-is” properties and are willing to purchase with low rents, deferred maintenance or even with a problem tenant in place. We can offer a 7 day escrow and all cash at closing. Give us a call. We have also put together numerous transactions over the years which involve properties that are not listed for sale. Many investors are currently in 1031 exchanges and need to identify a replacement property before their 45 day identification period runs out.

Should you decide to put your property on the market, we will put together an aggressive, targeted and professional campaign to get your property sold fast. We have been doing this for over 40 years, and we will use all the tools available to bring you the most dollars at closing. If you are thinking of selling or are just curious about the value of your property, don’t hesitate to give us a call.