“A neurotic is a man who builds a castle in the air. A psychotic is the man who lives in it. A psychiatrist is the man who collects the rent.” Jerome Lawrence

When you rent your unit to someone, you naturally assume them to be your tenant. In some cases you may be renting to a “lodger”. If you do, different rules may apply. For instance, the owner may enter all areas occupied by the lodger and has overall control of the house. Most lodgers have the same rights as tenants, but it is good to know the differences.

WHAT IS A “LODGER”? According to the California Department of Real Estate, a lodger is defined as “a person who lives in a room in a house where the owner lives.” Additionally, residents of hotels and motels also do not have the same rights as a tenant, unless it is a “residential hotel”. A residential hotel is defined as “any building containing six or more guest rooms designed, used, rented or occupied for sleeping purposes by guests, and which serves as the primary residence of those guests. A locking mail receptacle must be provided for each guest of a residential hotel”.

DIFFERENCE BETWEEN TENANT AND LODGER One of the main differences is eviction practices. If there is a SINGLE TENANT in home who doesn’t pay, you may be able to avoid the unlawful detainer and have the police move them out. This varies among police departments and DOES NOT APPLY if there is more than one person living in the room. Another difference is that you have, as an owner full use of the property so you may not be required to give the lodger written notice to enter the rented room. Before doing so, always check with your attorney. In these litigious times, you don’t want to make a mistake which could result in an expensive lawsuit. My suggestion is to always check with your attorney even if you have a good friend moving in for 6 months while looking for a new home.

AS A MULTI FAMILY OWNER WHY DOES THIS MATTER? This matters because you may purchase a building or inherit a property that is a different type from your buildings that you currently own. It is important to know the regulations that would affect a residential hotel or a motel before you take over management. There may be rules you are not aware of which may make it easier to remove problem tenants or perhaps more difficult. Always review all the leases with your attorney, if possible, to make sure everything is correct and current. It could also matter if a relative moves in for a year and decides to sue you. The more you know, the better prepared you are.

“I have never let my schooling interfere with my education.” Mark Twain

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 comparable 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.