Let’s get positive for ourselves

I, like so many others in this crazy environment that we live in today am really tired of hearing the same doom and gloom over and over.  So my goal to you today is to put some positive thought there for you. Let’s start the New Year off with what we have and be Thankful. Let’s look around us and garner the good from the bad (even evil). Let’s focus on the goals that we have and accomplish something that makes us happy.

 

My son and his wife are teachers and while this has been a really difficult time for them, they have stayed focused on spending time with my two young grandchildren.  This is time that they will not get back and they have not missed the time with the toddlers.

 

How many times has someone told you to “Follow your passion”? Advice around this topic is given ALL the time.  Today, I wanted to explore this advice and maybe dispel some lies and add a little clarity around what passion is.

 

First, people all the time say they don’t know what their passion is. The reality is most people do not find it, they cultivate it.  Most people find something that is interesting and then simply works on whatever that is.

 

Second, I’m sure you have heard the phrase “Go big or go home.” I read Originals by Adam Grant and the research is completely different.  Most people gradually ramp up and take small consistent steps on their interests over a long time.  They don’t just quit their day jobs.

 

Third—Balance.  Today, it is heard from a lot of young people that think they can have balance every day. Not true. A friend of mine has a GREAT book called The Fantastic Life. In this book are rules and Rule 18 of his book, The Fantastic Life, is Do Nothing in Moderation.  Everyone wants to have clarity and focus so we can spend our most valuable asset, our time, on the most important things in our lives. Life is all about tradeoffs.

  

Make YOUR Fantastic Life happen!

Call me, I really do answer my phone.  602-688-9279

Linda

/5 Comments/by

The Difference between and the Letter of Intent and the Contract

As many of my Clients are aware, I often write my Blog about real life situations and certainly about education. This is the case here.

 

I want to discuss the reasons that the Letter of Intent (LOI) is used and how this relates to the Contract.

 

First, let’s discuss the Contract often referred to as the PSA (Purchase and Sale Agreement).  The Contract is a binding contract on ALL parties, namely the Buyer and Seller of the Property.  The Contract spells out the legally binding Terms and Conditions of the deal.  It’s important to obtain the Buyer and Seller’s signature.  While it is important if for some reason, an initial is missed on a page-this is still binding.  The only way that the Terms of the Contract can be changed is by an Addendum that is signed by BOTH the Buyer and Seller. Many agents present a counter to the Contract after this has been signed and this is NOT used.  The rule of thumb is that you would use Counters before the Contract is accepted and addendums after the Contract has been accepted. Emails, Text Messages do not change any terms of the contract.  Also, the Agent or Broker cannot change anything on the contract unless they are a party to the Contract and this would mean that they are either the actual Buyer or Seller named on the contract.

 

The Letter of Intent is sometimes used to define terms before the expense or time of preparing a contract.  Let me clear that the LOI is nonbinding and is used only for guidelines with which to prepare documents.  Often I see items in the LOI that the Seller may not want to agree to when the Contract is prepared.  Then it is appropriate to prepare a Counter to the LOI. Even when these are signed by the Buyer and Seller it is still not binding.

 

Many times the Agent will write the LOI and then once the basic items have been agreed to the LOI is shipped off to the Attorney to actually write the contract. A good Real Estate Attorney will write the contract as close as legally possible to the LOI. 

 

I do not always use an LOI on a basic Contract as the LOI is non-binding and if we are going to go to contract, then let’s do it.  However, it does NOT mean that I will be discussing the Terms that my Client wants incorporated into the Contract with the Cross Agent.

 

I use the LOI always when the Attorney is preparing the Contract.  In fact, usually I will send the LOI over to the Attorney for Blessing before presenting it to the other Agent.

 

The Letter of Intent is really used to define the outline of the final Contract.  Sometimes this will prevent a long list of Counters to the Contract.

 

Remember that the LOI is only an outline and does not bind anyone to the Terms-only the Contract does this.

I answer my phone, feel free to call me.  602-688-9279

/6 Comments/by

How about a Broker that really does return phone calls?

 

As a veteran of 24 years in the business, it astounds me that agents do not return another agent’s calls. Let alone a potential Client!

 

When I answer my phone, the most common response that I receive is-YOU answered my call.  My response is often, well you called me.

 

If the Sellers of these listed properties even know how often that their listing agent NEVER returns a call for an inquiry on a property, they should FIRE them!  I spoke to a new client yesterday (yes on a Sunday on a Holiday weekend) and I could feel their frustration as other agents would not help them.  They are qualified and really nice people.

 

Many times I have to ask over and over for marketing and rent rolls on properties.  It is a time suck and I really do want to deliver to my clients any information on a timely basis.  This week, I was trying to write a cash offer on a mid-sized apartment building.  I reached out to the Listing agent MANY times. Per the guidelines that I work under as a Broker, if the Listing Agent does not respond I can go directly to the Seller.  I do not like doing this but again, representing my client is my top priority.  Only after threatening to do this, did the Designated Broker respond (she was the listing agent). She said that it was off market and that she would update all sites.  WHAT A WASTE of time for everyone involved.

 

Many times I have agents call me and laugh because they will say straight across the board that they knew I would answer my phone!

 

Here is a story that is true.  Tom and I have been a couple for over 23 years.  Guess what?  I was the only agent out of thirty (he says) that answered his call on a Sunday.  He came into my office with three little girls and here I am today. We joke that he found me in a newspaper and I ran a credit report before I would go out with him.  He made me laugh and still makes me laugh.

 

So remember that I answer my phone or certainly return calls and emails VERY timely.  Call me and see!  602-688-9298.

 

Take care!

 

Linda

/5 Comments/by

My experience with Covid-19 and Real Estate Tips-Multiple Offers and Listing w/Covid-19

First and foremost, I am well on the road to recovery from Covid-19. Yes, both Tom and I had it.  He first, then me.  While he was nearly as affected as I was, he is still feeling the after effects of the general  fatigue.  He is back at work and should be fine.  Many of you know that I was in hospital and am still recovering at home.  I tire quickly and still (probably for some time) have a cough.  However, neither of us are contagious anymore.  This is something to take seriously and please be careful with distancing and using your masks.

 

I will say that many of my clients have given me great support and I want to thank you for this!

 

Real Estate continues to be very lively in Phoenix. Many investors are against multiple offers.

 

I wanted to share my thoughts when you may be in a multiple offer situation.  As a Buyer’s Agent, I am seeing this quite often.  I REALLY hate to get into a multiple offer situation.  Here’s why, you are simply bidding against yourself.  You and I have no knowledge of what the other offer is and we are simply allowing the listing agent to raise the price or remove contingencies.  If this is what you want, I will certainly do my best.  My recommendation is often, withdraw the offer and go on to another property. Many times the listing agent suddenly becomes much easier to work with and we still get an accepted offer.  Did the listing really have another offer? Who knows? A few days ago, I wrote an offer for a client that had several offers.  The listing agent wanted my client to pay 20K over listing price and remove appraisal contingency. Also to remove the inspection contingency.  While I certainly spoke with my client to offer them the terms and conditions, my solid advice was to move on.  In another case last week, we wrote a really good offer on a property and the agent called the next day that they had accepted another offer.  She let it slip that the other offer was one of her own clients.  Did she use my offer to encourage an offer from her client? PRobably.  This is called “shopping the offer”. Hard to prove but highly unethical!

 

As a Seller, if you received more than one offer be careful.  I usually recommend that we work with the best offer.  If you use the multiple offer forms and it is done correctly, often you may lose ALL offers for the very reasons that I have outlined above.  If we vet the offers on the table, while there is never a guarantee in Real Estate, most often we go to a successful closing,

 

I also wanted to touch base on the differences that I am personally using with Covid-19 and listing a property.

 

While I alway use professional photos and supply the due diligence upfront thus circumventing many buyers that are not serious, I have added other tools to the tool chest. I now have virtual tours done to all listings.  I also am in the process of obtaining actual floor plans for each property. This way every potential buyer has a tour of the property and floor plans.  Of course, I have always kept up with current books and records along with the most current rent roll.  Some properties have 20 to 25 different pieces of due diligence provided on the more than 30 websites that I list on.  Remember that this takes me almost 6 hours to update every month.  I want to thank the property managers and the owners for helping gather all of this information.  Without this timely help, this task would be insurmountable.

 

I hope that this Blog helps draw back the curtain to the job that I work on every day and again I want to thank everyone for their continued support while I am still recovering from Covid-19.

 

Remember that I do answer my phone and feel free to call me.  602-688-9279.

 

Linda

/6 Comments/by

Now Is A Great Time To Refinance That Investment Property

Mortgage rates are at all-time lows.  Many homeowner’s are taking advantage and locking in for the long term.  But what about investors, are they doing the same?

Refinancing rental properties can unlock a good deal of wealth-building opportunities for investors, including the ability to lower interest rates and monthly payments, improve loan terms, and earn additional cash flow.

Interestingly, many investors have not taken advantage of today’s market.

For one reason or another, there are a number of investors that don’t even realize the opportunity that’s in front of them.

Should I Refinance My Rental Property?

In most cases, investors should consider a refinance to:

  • Lower the mortgage rate
  • Convert from an ARM to a fixed-rate
  • Turn a hard money loan into a conventional one
  • Pay off the loan more quickly
  • Upgrade a current investment property

Much has changed in a relatively short period of time regarding rates and valuations…and they are almost all in favor of the investor.

As mentioned earlier, interest rates are historically low…and they look a lot better than they did even this time last year, let alone a few years ago.

5.75% versus 4.5% example

If you purchased an investment property in October of last year, for example, many borrowers took on mortgages with an interest rate in the high 5% range.

Today, if that investor were to refinance their $250,000 loan from 5.75% to 4.5% for example, they would save nearly $200 per month.

There might be some discount points involved depending on the scenario, but they can be financed into the loan amount, so the only out-of-pocket cost would be that of an appraisal.

Assumptions: $250K loan, 70% loan-to-value and 760+ credit score

In Conclusion

When you own an investment property, the goal is to earn a solid rate of return…and refinancing that property can increase your short-term cash flow and help you build longer-term wealth.

The above is from my referral partner Tom Bonetto and is geared for 1-4 units.

Remember that I answer my phone and call me to discuss the market anytime!

Linda 602-688-9279.

 

/3 Comments/by

Here is GOOD news to my New and Existing Clients!-Cost Segregation – Tax Saving Solutions

Cost Segregation is an application by which commercial property owners accelerate depreciation and reduce the amount of taxes owed!  I have used this myself quite successfully.  This savings generates substantial cash flow that the investor can use to reinvest into other investments or pay now their loans for principal reductions thus generating more cash flow!

 

A Cost Segregation Study is an engineering-based calculation that you can provide to your CPA. These calculations are used to change the way their commercial property is depreciated. This is an affordable, legal method of reducing income so the investor pays less in income taxes. The AICPA and Journal of Accountancy both suggest the use of Cost Segregation Studies for clients who own commercial and residential rental income properties.

 

When I sell a piece of commercial property, it is likely that my client is not taking advantage of all the tax strategies and write-downs, written to their benefit, that are available to them through new and existing tax code. This information could not only benefit them on the property they just purchased, but on others in their portfolio. Most of my clients would love additional cash flow from a reduction in their largest expense: taxes.

 

If you have an interest in this, I have a good source for this service. Schedule a call with me today.  If even you are thinking of purchasing or have already purchased.  

 

One fourplex saved me $12,000 to offset against my own tax bill!!!  I am always looking out for your bottom line!!!

 

I hope that everyone is doing well.  The Phoenix Market is absolutely on fire.  

 

Call me and as you know I answer my phone  602-688-9279.

 

Linda

/5 Comments/by

AZ Property Taxes and how this works at your Close of Escrow

My next few blogs will be moving towards education.  

 

I am often asked questions about investing in tenant occupied properties.  I am going to break the top 50 questions that I am asked into sections and will dedicate the next few blogs for this.  If you have missed one, scroll down and see the data rich information from past blogs.

 

Property taxes are one of the most common questions so let’s start this week with Property Taxes.

 

Many investors come from other states where the property taxes are reassessed at Close Of Escrow to a much higher rate.  Guess what?  NOT in AZ!  In Arizona the county assessor assesses the property on the ASSESSED Value not the Sale Price.  This is typically much lower than the sale price.  Our taxes here are paid in arrears and while you can pay in full once a year, the taxes are typically split into two payments and due twice a year.

 

Let’s say that the accessed taxes are $5000.00. Great at Close of Escrow the taxes are prorated.  If the Seller will owe for a part of the period; the Buyer will get a credit from the Seller at the CLosing to compensate for the next payment.

 

People have asked me how the access value is done and frankly, I am not sure.  What I will say tath sometime in February there is a postcard sent out for the taxes fro the following year.  Watch for htis and if you see that there is a problem this is the time to contest the taxes-not later.

 

Around the 20th of September of every year, the taxes are public record and viewable on the assessor’s website.  

 

CAUTION, keep your mailing address up to date with the country so that you receive the notices.

 

One last question answered as well.  Will I be charged a transfer tax at the CLosing?  When I first heard about this, I had to look this up many years ago. Here is the really good news-THERE IS NOT A TRANSFER TAX IN THE STATE OF ARIZONA!

 

A touch on personal property taxes.  Mostly dealt with on Assisted Care or Mobile Home Parks.  Be sure to look for outstanding personal property liens as this typically is accessed against the perosanlproerty and does not always show up on your title reports. If purchasing this type of property, simply have the seller provide the documentation that this has been paid.

 

This market is STILL hot and please call me to discuss your needs!  I answer my phone or return the call quickly!  602-688-9279.

 

Hope that you have a GREAT day! 

 

 Remember to look for my book on Amazon about investing in commercial real estate!

 

Linda

/3 Comments/by

V-shaped recovery in the cards? 

I feel confidant in the Multifamily Market for Arizona. Most tenants are paying the rent and units are renting.  Investors are buying and real estate (multifamily) prices do not seem to be dropping much if any.

Below is an article published by AZ Central.com and the Arizona State Economists

 As Arizona and other states gradually reopen their economies, grim headlines will persist for months. But better news may not be far off.

Arizona State University economists are predicting a recession of three to nine months, followed by a swift recovery if consumer spending — bolstered by heavy federal stimulus — kicks in as they expect. 

“We’re going to see some startling numbers,” said Dennis Hoffman, an ASU economics professor, citing what he expects will be annualized drops in national Gross Domestic Product during the second quarter of between 20% and 40% and unemployment rates for Arizona that could exceed 15%.

However, Hoffman and other speakers at an annual forecasting webinar hosted by the W.P. Carey School of Business and the Economic Club of Phoenix expect a relatively quick V-shared recovery as suppressed consumer spending and service industries rebound.

And in some ways, Arizona could emerge from the downturn well-positioned to attract further business investment and expansion.

V-shaped recovery in the cards?            

After what will be a dismal April to June stretch, the third and fourth quarters “could be stronger than many people expect,” said Lee McPheters, another economics professor at ASU during the forecasting webinar.

Some forecasters worry that the national economic rebound could be slow to materialize, characterized by an L-shaped pattern, with flat economic progress after the drop. Another scenario is of a W-shaped pattern, where the economy falters again if another severe coronavirus outbreak surfaces.

But Hoffman and McPheters said they expect a V-shaped recovery, with a robust rebound. That would suggest a recession of three to nine months from a starting point in March of this year, returning the economy to normal by early 2021.

A U-shaped rebound, another possibility, would take a while longer to complete. It would get the economy back to where it was — before the outbreak occurred — sometime in 2021, possibly by the fall.

Arizona’s job losses, while severe, have been relatively muted compared to those of many other states.For example, jobless-benefit claims amounted to 14% of Arizona’s labor force from mid-March through April 25. Only 13 states had better, meaning lower, rates.

Still, the Arizona unemployment rate likely will rise from an average of 4.7% in 2019 to an average of 9.4% this year before easing to 5.5% in 2021, McPheters said. He predicted population growth will slip from 1.7% last year to 1% this year before recovering a bit to 1.4% in 2021.

For both Arizona and the nation, the rebound will be helped by the $2.9 trillion in increased federal aid, much of which has yet to kick in, McPheters said. That aid — in the form of small-business loans, stimulus payments, jobless benefits and income-tax relief — is roughly four times what was spent during the Great Recession more than a decade ago.

“By 2021, we’re expecting the economy to come back,” McPheters said.

Housing direction still unclear

Real estate is one wild card in the mix, with hotels, malls and other sectors devastated by coronavirus-related shutdowns. However, homebuilding, supermarkets, manufacturing, data centers and other property types are holding up well.

Nationally, Realtor surveys have shown a decline in buyer interest on single-family homes, yet sellers haven’t budged much on asking prices, said Mark Stapp, an ASU real estate professor. Arizona hasn’t seen much impact yet, he added, though other measures such as requests for mortgage forbearance, including payment delays, point to problems ahead.

“We’re beginning to see stress on homeowners,” Stapp said.

But several characteristics of Arizona’s property market could help the state emerge in fairly good shape and could position Arizona as a destination for more business expansions and relocations.

In terms of social distancing, for example, Stapp pointed to factors that include relatively low density in Arizona’s cities and towns, the mild dependence on public transit here, an outdoor-focused lifestyle and no major international gateway airports.

These factors present an opportunity to brand metro Phoenix as a “healthy area,” he said.

Lingering uncertainties for the future

For Arizona and the nation, all sorts of economic and societal questions remain unanswered.

How much will air travel pick up? What about large-scale gatherings, including sporting events? Will many employees continue to work at home, reducing the demand for office space? Could downtown Phoenix and other urban centers lose their luster, replaced by more vibrant suburban centers with more restaurants, entertainment and other localized amenities?

“There will be a lot of questions coming out of this, and businesses will need to make some significant decisions,” Hoffman said.

Please let me know if we can speak personally about the Phoenix Market-I have gained a GREAT deal of insight with the conversations and market research that I am doing!

602-688-9279 let me know the best time to speak!

Linda

/4 Comments/by

Get Ready to be Well-Positioned for a Market Return

The Covid-19 Pandemic is forcing us all to change the way we live and work.  We hope this is a temporary situation.  In order to protect our clients and staff to the highest degree possible, and still provide the best service possible, we have undertaken the following steps.  We ask for your cooperation and understanding as we all deal with the circumstances presented.

While I am taking calls and there are several, I am finding that experienced investors are ready to buy and while the beginning investor is a bit more cautious I am helping  position everyone in the best possible positions.

I have had lengthy conversations about the Covid-19 and the effect of industry and investments for the Phoenix Market.  I am on top of what is happening and would welcome the chance tospeak with you in person.

As it is getting warmer here; many experts believe that the heat will help burn off the virus faster than other parts of the country.  This is good news for the economy here is Phoenix.  This week we will reach 100 degrees.  I NEVER thought that I would be happy to see the hotter temperatures.  I have lived here since 1968 and relish out winters.

It is felt that many people will be relocating to the Phoenix area (I have already seen this in several clients).  This will bring a work force base that we will need.

This being said, there are 5 distribution centers currently being built in the western part of the Phoenix Area.  I know that two of them have been realocated to become manufacturing plants.  I think that we all agree that we need to bring a great deal of America’s manufacturing home!

I understand from people that I have been speaking to that there are currently around 250 NEW companies relocating to the Phoenix area.

Many of you know that Tom works at Boral Roofing and he is still working.  The plant is manufacturing concrete roof time and they have just moved the crew to 7 days a week.  This means that houses are in demand.

With the above said, the thought is that rents will remain or increase as demand is needed. Jobs will come back and the employment base will be needed.

The projections that are being seen is that the middle of the third quarter and the last quarter may very well be exdtremly busy for Real Estate.

Effective immediately, Empire West Title Agency will:

  • Allow only those customers whose signatures are required to attend closing or signing appointments.  Realtors, lenders and non-signing family members, including children, will not be permitted to attend signings.
  • Any customers who have traveled by air, train or bus or to any heavily affected area within the last 2 weeks are asked to retain a mobile signor.  We will assist in arranging one. 
  • Our staff is taking the necessary precautionary sanitary measures and practicing social distancing.
  • All writing implements will be unused and either thrown away or given to the customer if desired.
  • Hand Sanitizer is available for use prior to and after signings.
  • Any employee showing signs of any illness will be instructed to stay home.
  • A portion of our staff is currently working remotely to allow for more distancing in the branches.
  • All signings in the branch offices must be by appointment only.
  • All deliveries and pickups will be handled at the office door.

  

Courtesy signing appointments at branch locations are currently unavailable. Some of our vital services or affiliates may not be available or you may experience less than normal response times due to the current circumstances. It is our intention to continue to provide our services within the restrictions placed upon us all by the Pandemic.

 

Thank you for your understanding and patience as we continue to keep health and safety front of mind.

 

 

COVID-19 (the coronavirus) has been declared a pandemic by the World Health Organization and has likely impacted many aspects of your life. We understand how stressful this time is for you and your family. At Mynd, the health and well-being of our residents and owners is our top priority.

We have taken steps to ensure business continuity and are committed to being responsive to the needs of our customers as the situation evolves. We are in contact with the maintenance and utilities vendors that service your home in order to minimize possible interruptions, and we will keep you posted if we expect any service delays. The easiest – and safest – way to reach us is through your resident portal. You can use the portal to pay your rent and submit maintenance requests completely online, without leaving the comfort of your home.

/4 Comments/by

I wanted to repost this from my Referral Partner in Property Management-MYND-Harry D’Elia

– BREAKING NEWS – EXECUTIVE ORDER 2020-18 

COVID-19 HULL, HOLLIDAY & LEGAL HOLLIDAY— ATTORNEY NEWS

DENISE HOLLIDAY 

“STAY HOME, STAY HEALTHY, STAY CONNECTED” EFFECTIVE 03/31/2020, AT 5:00PM THROUGH APRIL 30, 

IMPACT ON RESIDENTIAL RENTAL INDUSTRY, AN UPDATE UPDATED—April 7, 2020 

To Our Valued Clients: Unless you are living on a private island, your life has been impacted over the past few weeks as a result of COVID-19 and the reaction by both the government and private citizens. It is an odd sensation to walk into a store only to find a large number of empty shelves and people wandering around with worried and panicked looks. Most Americans have never experienced empty shelves and the closure of businesses and schools, even though we hope and pray it is only temporary. Because we don’t have hurricanes, tornados, earth- quakes, or tsunamis, many Arizonans have never experienced a disaster that has been more than a mere an- noyance in our daily lives (even the occasional “Haboob” is over quickly). 

Over the past few weeks all levels of the government have implemented many changes to the way we do busi- ness. On a hopeful note, on March 27, 2020, the President signed the CARES Act which may offer a reprieve to many of you and your businesses. This very important law is discussed in detail below and in a second Guidance Memorandum that we are preparing for our clients. We hope that our email blasts are helpful in guiding you through this tumultuous time in our industry. Below are the most important changes that have oc- curred in the past week. This information is what you need to know if you own or manage rental property. 

Arizona Changes IMPORTANT UPDATE—All Commercial Evictions Stopped by April 6 Executive Order. On April 6, 2020, Arizona Governor Ducey issued another executive order stopping all commercial evictions. The order specifically prohibits any eviction action “including lock out, notice to vacate, or any other attempt to inhibit the operations of small business.” The Governor’s intent is to provide relief to small businesses statewide im- pacted by the COVID-19 pandemic. The suspension of these evictions runs through May 31, 2020 and pro- tects commercial tenants with fewer than 500 employees and all manner of entities including sole proprietor- ships, partnerships, C-corps, S-corps, LLCs, independent contractors, the self-employed, 501(c) (3) entities, 501(c)(19) entities, and tribal businesses. Any actions instigated prior to the March 11 State of Emergency order may continue, but any actions that began after that date are suspended. 

Housing Providers and Real Estate Professions are deemed “Essential Services”: On March 23, 2020, Governor Ducey issued Executive Order 2020-12, intended to provide our state with a consistent, overarch- ing policy of the businesses and operations he deemed “essential” and such services would continue to be provided to the citizens of the state of Arizona. We are pleased that the Governor recognized that housing providers and real estate professionals are a critical facet of Arizona housing industry, as are the trade per- sons that aid in the maintenance of the residential rental industry. The reason Executive Order 2020-12, is an important directive is obvious – without property management and maintenance professionals being able to leave their homes and supply the necessary services, serious health and safety issues would impact the lives of our residents and cause potentially irreparable harm to the premises. On April 3, 2020, the Governor clari- fied in a public statement that apartment pools, gyms, etc. must remain closed. 

Postponement of Non-Payment Evictions for Renters that have been negatively impacted by COVID- 19: On March 24, 2020, through Executive Order 2020-14, the Governor surprised everyone by issuing an order that all constables and sheriff deputies temporarily delay the enforcement of a non-payment of rent eviction (the lockout) if the tenant notified the landlord in writing that they are suffering hardship as a result of the coronavirus. EO 2020-14 is clear that all other types of residential evictions (Immediates, Health and Safety breaches, regular material Non-Compliances situations, and Material Falsification of the application) may continue in the normal fashion. If the landlord disagrees with the constable’s decision, they may apply for an emergency hearing that would require the tenant to provide proof that the tenant qualifies for the pro- tections of the EO 2020-14. As a reminder, despite a misstatement by the Governor during a recent town hall meeting, the Executive Order allows landlords to require proof that the tenant qualifies for an extension of time before the Writ can be executed. 

Arizona Changes, continued… Arizona Supreme Court orders all Maricopa County evictions to be heard telephonically as of March 31, 2020: In Administrative Order 2020-048, all Maricopa County evictions (both the initial appearance and the trial) must be heard telephonically. Many courts had already taken similar steps to help reduce the spread of the coronavirus, but AO 2020-048 clarified that even Immediate evictions and all trials are now re- quired to be conducted telephonically until April 17, 2020. This will require all clients to ensure that their wit- nesses are prepared to testify telephonically and that our firm has all the evidence needed for the trial at least one day in advance so that we can provide a copy to the court and the tenant. You will be provided a phone number to call into the court so please follow those instructions. The virtual courtrooms have numerous par- ties and hearings occurring at the same time, so please be patient and mute your phone until you hear that your case has been called. 

$50 Million in New Rental Assistance: The Department of Housing launched this new funding as of March 30, 2020. This initial $50 million will be paid out of the State Housing Trust Fund. The process to apply has been streamlined at www.azhousing.gov. For renters that do not have internet access, they can call their lo- cal Community Action Agency. For a complete list, contact our office. We have created a working list of all the Arizona agencies and private businesses that can provide rental, utility, and food assistance. We encour- age you to get a copy and provide it to all residents. You may attach it to the five-day non-payment of rent notice or provide it when entering into a partial payment agreement with your resident. 

Extensions of certain licensing requirements: Executive Order 2020-17 mandates that state agencies and boards extend the time frames for licensing and eliminates barriers to online classes. This was a critical issue for the real estate professionals that are required to complete licensing requirements while this pan- demic interferes with their ability to take the necessary classes etc. 

Federal Changes Families First Coronavirus Response Act (FFCR): HR 6201 went into effect on April 2, 2020 and remains in effect until December 31, 2020. The biggest changes that impact owners and real estate professionals are the Emergency Paid Sick Leave and expanded FMLA provisions. In a move rarely seen by Congress, these laws specifically target the small business owner in that it only applies to employers with fewer than 500 employees. The Emergency Paid Leave Act applies to any company regardless of how long that employee has worked there. It provides a list of qualified reasons the employer must provide paid sick leave (all of the reasons listed as COVID-19 related), including caring for a sick family member or a minor child because the schools are closed. Full time employees are eligible for an additional 80 hours of paid sick leave on top of the mandatory paid sick leave currently required by federal law. Part-time employees are entitled to the equivalent of the hours they would have worked during a two-week period. The amount they must be paid is dependent on which qualifying reason the employee invoked. The employer cannot require the employee to first use all other paid leave provided by the employers prior to the Act. The employer can seek reimbursement for the wages paid to the employee through a tax credit applicable to the employer’s portion of Social Security taxes (seek advice from your tax professional). 

Emergency Expansion of FMLA: The FFCR also includes the Emergency Family and Medical Lease Expansion Act which provides a new source of paid leave for eligible employees whose child’s school or place of care has closed due to COVID-19. Usually FMLA applies only to companies who employ 50 or more employees that have worked there for at least 12 months and worked at least 1250 hours during the previous 12 months. This new emergency expansion now applies to all employers who have less than 500 employees that have worked at least 30 days. Under the new law, an eligible employee can take up to 12 weeks (some of which may be unpaid). There is a special way to become exempt if you have fewer than 50 employees if you apply with the Secretary of Labor. A word of caution: This section is included as a courtesy, but our firm doesn’t practice in the area of labor law. If you employ less than 500 employees, you need to be aware of these changes and you are encouraged to seek specific advice from your HR specialist/legal advisor. 

Federal Changes, continued… 

Coronavirus Aid, Relief, and Economic Security Act (CARES Act): President Trump signed the CARES Act into law on March 27, 2020. Among the trillions of dollars addressed in the Act, several portions will critically impact the residential rental industry. We have drafted separate cover sheets for each of those issues so please review each of those for the specifics of each section, but here is a quick summary: 

– Section 4024 Non-Payment Eviction Moratorium: There is now a temporary moratorium on certain eviction filings for 120 days. The types of evictions impacted are only for non-payment of rent and only for new filings so all existing evictions can proceed (although the lockout may be impacted by EO 2020-14 discussed above). Covered properties include any property that is insured, guaranteed, supplemented or assisted in any way by HUD, FHA, Fannie Mae or Freddie Mac, or participate in PRAC 202 or 811, HOOWA, McKinney-Vento, Section 236, accepts Section 8, rural housing assistance program or LIHTC. The Act prohibits the landlord filing a non-payment of rent eviction and charging late fees. If you are subject to the law, it will require you to modify your nonpayment of rent notice. There is also an odd provision that stops landlords from issuing any new non-renewal notices for 120 days. Check your loan documentation if you are unsure if this applies to you. 

– Section 4022 and 4023 Forbearance of residential mortgages. This portion of the Act addresses the forbearance (temporary relief from timely paying) of a single family home and a separate section addressing multifamily properties. The purpose behind these two sections is to provide the owner of rental property that has a federally backed mortgage some temporary relief due to the eviction moratorium discussed above. 

– Section 1102 Paycheck Protection Program: This section is designed to help small business owners (those with less than 500 employees) keep their employees on their payroll through June 30, 2020. It is available not just to traditional small businesses, but also to those who are self-employed, independent contractors, and sole proprietors. In general, the employee can apply for an SBA loan as well as an Emergency EIDL Grant, to help pay the payroll, mortgage interest or rent, utilities, and some other recurring debt. Unlike most SBA loans, the loan is non-recourse (unless the money is not used for the required purpose), does not require a personal guarantee or collateral, and does not require the borrower to prove they have exhausted other loan possibilities. The beauty of this portion of the Act is that the loan can be completely forgiven pursuant to section 1106 as long as all requirements are met. There is also an emergency grant available for businesses that have been in business at least one year that is based upon your credit score rather than tax returns. It is designed to help you immediately cover your payroll, sick leave, mortgage/rent, utilities and other urgent financial needs. 

We recognize that some of the paperwork required to take advantage of some of these programs may be daunting for the small business owner. We are able to help our clients navigate those procedures, prepare all the necessary paperwork, and help you submit it to the proper agency. 

Conclusion and Personal Greetings Please take the time to read and understand this important update. Timely and accurate information about the industry is critical to protect you, your business, and your residents. We understand that these are difficult times and things are changing from day to day. Our first hope and prayer is that each and every one of you stay safe and healthy during this time. You are important to us. Your business is important to us. We will continue to be here to provide you with these updates and advice that is tailored to you and your company’s legal needs. We will endeavor to be prompt in our responses and at the same time continue to give you the most up to date advice when it becomes available. See our contact information below. Remember, we’re all in this together! 

HULL, HOLLIDAY & HOLLIDAY 602-230-0088 holliday@h3landlordlaw.com

/4 Comments/by