Archive for the ‘Property Management’ Category

The Purchase Agreement and Lease: Sign Or Not

May 11, 2014

Signing Purchase Agreement

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 “IF I DON’T ACCEPT THE SITE LEASE I’VE BEEN OFFERED CAN I BE FORCED TO MOVE? What happens if I decide to relocate my manufactured home to a different community before this lease ends? I don’t like all the terms in the offered lease, can they be changed?” These and similar questions often are concerns of a first-time manufactured home purchaser in a land-lease community.

While the foregoing represents a small sampling of the common questions that arise, to be most helpful answers to questions should be obtained from an attorney retained to assist with the manufactured home purchase agreement and/or the site lease before they are signed. Unfortunately too many folks think an attorney unnecessary to buy a so-called “mobile home” or sign a site lease only to later face these types of issues and questions.

Despite our recommendation to use an attorney, in the absence of one we advise that New York requires the community manager to offer no less than a one-year site lease, and although the resident-tenant is not required to sign it, without a signed lease that resident enters a month-to-month tenancy. Among other things it means that little more than a notification of thirty days can require the tenant to leave the community for no particular reason. Sure, we’re not likely to terminate a tenancy simply because it could be done, yet by itself such a tenancy virtually offers no protection for the homeowner tenant. Consequently the tenant should not summarily dismiss an offered site lease without serious investigation, consideration and attorney input.

If the resident decides to move before the lease expires, an advance notice of such a decision is required. Assuming the resident’s rental account is current, there are no resident violations and such a notice is received, we then try to negotiate a premature end to the lease. This sometimes means working with the departing resident to find a new tenant for the soon to be vacant site.

Can lease terms be changed? For our properties the lease terms and provisions tend to be based on practice and experience so any request to change the lease would need to be very compelling to be considered.

So what’s the bottom line? As with any substantial or major purchase or obligation, thoroughly read the documents and consult with your attorney before making any commitment. A failure to understand the terms to the transaction and the liability it may bring can lead to problems later.

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Need consulting, coaching or problem troubleshooting regarding other single-family or multi-family housing issues? We’ll be pleased to help you. Visit us at the Inhouse Corporation website or contact us at inhouseco@aol.com

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Blog Terms of Use and Disclaimer: The purpose of this blog is to promote awareness and general discussion of the presented topic. Use of this blog shall be the reader’s agreement this blog is not a substitute for the advice of a qualified professional and each action that may be taken shall be under the specific guidance and oversight and/or performance of a professional qualified in the subject matter. If you have a question or want assistance with a featured or related matter please contact us at InhouseCo@aol.com (include the blog article title on the subject line). Links, references and credits in this blog are for convenience only and are not endorsements by the author or Inhouse Corporation. Statements and/or opinions of guest authors may or may not reflect those of Inhouse Corporation.

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When The Money Tree Wilts

April 13, 2014

Money Tree

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ALL OF US RUN INTO A CHALLENGING MONEY SITUATION AT ONE TIME or another. Its almost an inescapable part of modern life. As property managers we often become aware of renters/ residents struggling to meet expenses, particularly after some life-altering event, such as the loss of a job, a health problem or family emergency. These are unfortunate and regrettable circumstances over which few  have little, if any, control.

When such things occur most renters apparently are too stressed, emotional or embarrassed to talk about a reversal of their finances. This is fully understandable since one’s fiscal matters are generally viewed as personal and private. So most will try to slug it out on their own. In the meantime, if rent payments start to suffer and the resident is silent as to why, the property manager likely will conclude rent is deliberately being withheld and take the appropriate actions, which adds to the expense and stress levels. Moreover, as the manager watches rent payments arrive late, are partially paid or not paid at all, the time has passed for the resident to reorganize his/her finances and have a better chance at avoiding the fees that result, making the situation even worse.

Sure the rent still needs to be paid, but when a resident willingly discusses his/her economic difficulty with our property manager, and does so in a manner that allows the manager time to offer helpful suggestions,  we usually recommend one or more community organizations that can aid and/or work with him/her. Often the approach is to create and maintain a realistic household budget that can cover necessary expenses out of the resident’s remaining income. Sometimes we will teach household budgeting to residents where such training is unavailable through community groups. However, working with a community group usually is more beneficial to the resident in that it provides guidance while soothing the anxiety otherwise associated with speaking to management about the problem, and it may be a benefit to the property manager if it can appropriately side-step an eviction and resulting vacancy.

Of course, not all property managers will react the same way though we think most responsible managers are likely to view sufficient advance warning of a resident’s fiscal problem as an opportunity to assist that resident avoid the consequences of nonpayment. As professional property management, we do.

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Need coaching, training or problem troubleshooting regarding other housing issues? Visit us at the Inhouse Corporation website or contact us at inhouseco@aol.com

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Blog Terms of Use and Disclaimer: The purpose of this blog is to promote awareness and general discussion of the presented topic. Use of this blog shall be the reader’s agreement this blog is not a substitute for the advice of a qualified professional and each action that may be taken shall be under the specific guidance and oversight and/or performance of a professional qualified in the subject matter. If you have a question or want assistance with a featured or related matter please contact us at InhouseCo@aol.com (include the blog article title on the subject line). Links, references and credits in this blog are for convenience only and are not endorsements by the author or Inhouse Corporation. Statements and/or opinions of guest authors may or may not reflect those of Inhouse Corporation.

A Service Dog Does Not A Pet Make

March 23, 2014
Service Dog Patch

Service Dog Patch

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BY NOW MOST FOLKS KNOW A SERVICE ANIMAL (usually a dog, but not always) assists a disabled person with various aspects of daily life and that federal and state laws permit a service animal to enter spaces typically barred to pets. Also, most professional property managers understand that among other things the federal Fair Housing Act allows service animals to reside with their owners despite any “no pets” rule that may exist. Hence, a service animal should not be considered a pet.

So when does an animal become a service animal? And what separates a service animal from a pet? These are questions that can entangle managers of properties that prohibit pets. The matter becomes more complicated because there seems to be no uniform or definitive guide upon which a manager may rely. Apparently there are no animal training standards required in law, either. Yet, a service animal is not a pet.

Then how does the manager ensure a tenant is not just labeling his/her pet as a service animal in order to keep the pet? What to do? We suggest discussing with the housing attorney the applicability of the following four-step process. First, acknowledge a disability may not be visible, such as with emotional or mental disabilities. Second, have the involved tenant produce evidence of the disability and how the service animal assists that tenant with the stated disability (a note from the tenant’s doctor could serve this purpose). Third, have the involved tenant produce a service animal registration issued by the organization that trained the animal to provide the needed assistance. Fourth, whether production of the said collective documentation can be a reliable dividing line between a service animal and a pet.

Of course, there are other requirements for Fair Housing and service animals (reasonable accommodations, for example). But hopefully the foregoing will provide a starting point for separating service animals from pets. Also, more information on this topic can be found at http://www.petpartners.org/page.aspx?pid=489

Want help with developing a pet/service animal policy? Feel free to contact us at InhouseCo@aol.com  and place the word “Pets” on the subject line.

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Need coaching, training or problem troubleshooting regarding other housing issues? Visit us at the Inhouse Corporation website or contact us at inhouseco@aol.com

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Blog Terms of Use and Disclaimer: The purpose of this blog is to promote awareness and general discussion of the presented topic. Use of this blog shall be the reader’s agreement this blog is not a substitute for the advice of a qualified professional and each action that may be taken shall be under the specific guidance and oversight and/or performance of a professional qualified in the subject matter. If you have a question or want assistance with a featured or related matter please contact us at InhouseCo@aol.com (include the blog article title on the subject line). Links, references and credits in this blog are for convenience only and are not endorsements by the author or Inhouse Corporation.

Immediate Family or the Whole Clan?

March 8, 2014

Family Tree, generic

Immediate Family: Probably Not What You Think 

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AS A PROPERTY MANAGEMENT AND CONSULTING FIRM WE SOMETIMES BECOME INVOLVED IN DISCUSSIONS ABOUT THE MEANING OF “IMMEDIATE FAMILY” with landlords and residents.

Such a topic probably seems nonsensical since most folks believe they know who is and who is not in their immediate family circle. But the definition of “immediate family” can be elusive and it can vary depending on circumstances. If a landlord or property manager issues a lease that provides certain accommodations or privileges for the lessee’s (tenant’s) immediate family, such as assignment rights or occupancy, conclusively knowing that definition suddenly becomes important, maybe very important.

Moreover, since definitions vary, the lessee (tenant) should proceed cautiously before exercising any of those privileges, especially if the lease is not particularly clear about which relatives are considered immediate family. In fact, reliable clarification should be obtained first. So contacting the property manager or an attorney is a good idea.

Although we’ve seen immediate family often defined as a spouse (or significant other), children, parents and siblings (also known as nuclear family or simply referenced as close relatives) some only see a spouse and children filling that role. Others would include grandparents and grandchildren … and in some cases definitions expand to in-laws, aunts and uncles.

The bottom line: If your lease contains provisions for immediate family, if you intend to utilize those provisions don’t assume to know which relatives are covered. Getting a solid interpretation first then being able to prove an individual’s relationship to you can save inconvenience, heartache, headaches and money.

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Need coaching, training or problem troubleshooting regarding the foregoing or other housing issues? Visit us at the Inhouse Corporation website or contact us at inhouseco@aol.com

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Blog Terms of Use and Disclaimer: The purpose of this blog is to promote awareness and general discussion of the presented topic. Use of this blog shall be the reader’s agreement this blog is not a substitute for the advice of a qualified professional and each action that may be taken shall be under the specific guidance and oversight and/or performance of a professional qualified in the subject matter. If you have a question or want assistance with a featured or related matter please contact us at InhouseCo@aol.com (include the blog article title on the subject line). Links, references and credits in this blog are for convenience only and are not endorsements by the author or Inhouse Corporation.

Hey, Is It Maintenance, Property Management or Administration?

March 2, 2014

2014-03-01 Property Management

Think It’s Property Management?  

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RIGHT OFF THE BAT LET’S CLARIFY A FEW POINTS. First, a property manager can be an employee of the property owner (or the manager might be the property owner him/herself) or may be a separate business retained by the property owner.

Second, a property manager can reside and/or have an office on the managed property (often referred to as an “on-site” manager), or may reside and/or have an office elsewhere (an “off-site” manager). Usually a property owner will retain full-service off-site property management but if property owner wants to save money or perform a handful of operational duties, some management firms allow the owner to select or customize certain functions for consulting, monitoring, troubleshooting and/or specific support services.

The third point of clarification is the term “property management” itself. For too long a mention of property management has been similar to a mention of property maintenance, which confusion not only continues in some circles but seems more frequent on residential properties. But they’re different.

Basically maintenance is involved with manual repairs to and upkeep of a property’s physical features while property management is concerned with all aspects of the property, including maintenance. Unfortunately too many still incorrectly view the property manager as a maintenance person who just happens to also collect rent. Adding to the confusion are properties where this scenario actually exists or where the maintenance person (sometimes known as the property or building superintendent) is an employee who has the added job of property manager.

Most folks seem to have a fundamental understanding of maintenance work. It is physical, obvious and frequently involves inconvenience or worse, causing the problem–and the repair–to be remembered. If a tree on the property falls against a building or a roof begins to leak the maintenance employee or firm is dispatched.

However, much of the property manager’s work is behind the scenes, thereby generating uncertainty as to what the manager does, other than collect rent. For instance, in the above example property management verifies the problem then authorizes maintenance to make the repair though few, if any, get to see that activity. Its a case of out-of-sight, out-of-mind.

Yet the duties of full-service property management span the entire spectrum of rental property responsibilities and tasks. This means property management should be, and most are, licensed and insured firms of trained/ experienced professionals accustomed to applicable law compliance, applicant screening, lease/ rule enforcement, compliant resolution, habitability, low vacancy rates, acceptable income/ expenses, etc. Thus the inaccurate interchanging of terms blurs the role of management.

Given the prolonged period of incorrect terminology use, the word “management” probably will always have some association with maintenance. So, in the interest of clarity the following definitions are offered: (i) The term “maintenance” should refer to maintenance; (ii) “property management” should refer to aspects of both maintenance and management; and (iii) “property administration” should refer to the overall running of the property.

Seems simple enough. Let’s see if the industry and time agree with these suggestions.

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Need coaching, training or problem troubleshooting regarding the foregoing or other housing issues? Visit us at the Inhouse Corporation website or contact us at inhouseco@aol.com

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Blog Terms of Use and Disclaimer: The purpose of this blog is to promote awareness and general discussion of the presented topic. Use of this blog shall be the reader’s agreement this blog is not a substitute for the advice of a qualified professional and each action that may be taken shall be under the specific guidance and oversight and/or performance of a professional qualified in the subject matter. If you have a question or want assistance with a featured or related matter please contact us at InhouseCo@aol.com (include the blog article title on the subject line). Links, references and credits in this blog are for convenience only and are not endorsements by the author or Inhouse Corporation.

A Co-Op Nightmare: When Conflict Rules, Part 3

February 15, 2014

Conflict, many persons

Conflict: When a cooperative divides.

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SOME SHAREHOLDERS ALSO FEEL THEY DON’T NEED TRAINING, after all they just need to pay occupancy charges on time and comply with the cooperative documents, right? No … not exactly.

While its true occupancy/ maintenance charges must be paid and there must be compliance with the cooperative documents, our work shows most shareholders either have little specific knowledge of those documents or forgot what they contain. The cooperative certificate of incorporation, bylaws, rules and regulations and occupancy agreements (proprietary leases) are often an unread series of mysteries.

Of course, we are not suggesting shareholders have intimate knowledge of every last detail in that paperwork, especially since it can be overwhelmingly voluminous. But at a minimum they should have a basic, if imprecise, understanding and familiarity with the documents sufficient to optimistically search for and locate relevant passages that address particular cooperative situations as needed.

Knowing the ropes can alleviate a sense of helplessness shareholders sometimes experience. Not knowing why certain tasks and responsibilities are necessary or the reasons for board actions can make them feel, rightly or wrongly, that they deliberately are kept in the dark. Moreover, if there is a lack of adequate communication between the board and shareholders that feeling can substantially magnify. Circumstances may veer out of control when shareholders perceive themselves as powerless and having  little to lose by venting their frustration as board meeting disruptions or circulating unverified rumors and allegations that can be hurtful to the cooperative, other shareholders and/or board members.

Such an environment is fertilizer for shareholder discontent and turmoil despite the fact that shareholders as a group typically hold the real power within a cooperative—and shareholders can exercise that power when they correctly employ the appropriate procedures usually provided within the cooperative structure. If a board overtly or covertly believes there is a benefit to have shareholders floundering in their efforts to make changes or have grievances redressed, that board should quickly reconsider that position. A suitably trained board would realize a cooperative is designed to be a democratically run organization in which every shareholder in good standing has a voice, a vote and energetically participates in the efficient operations of the cooperative.

Ironically, we find the more stable cooperatives are those that adhere to cooperative principles, are transparent and aggressively ensure continual communication with shareholders. Those boards proactively seek ways to create incentives that encourage shareholder participation at all meetings, on committees and at social events. Such activities boost shareholders’ realization that they truly have a stake in their cooperatives’ success which, in turn, fosters an ownership interest in the cooperative and thereby aids in dispelling the harmful “landlord versus tenant” temperament that too many mistakenly embrace in the co-op setting.

Moreover, filling a seat on the board should not be a lifetime activity for any person. Ideally every shareholder should serve on the board of directors at some point. This would give each of them the hands-on experience of knowing the challenging difficulties a board encounters and strives to deal with on a regular basis … hopefully portraying the board and shareholders are on the same side.

Consequently, appropriate shareholder training would impart or restore the basic understanding of a cooperative, explain the gains derived from participation in all activities and show shareholders how to responsibly and respectfully employ such authorities as are given them in the cooperative documents. It would also help them understand their obligations as well as those of the board. All of which often quells or reduces the conflicts, disagreements and organizational gridlock that can grip less transparent co-ops.

All in all, effective training establishes the platform on which a successful co-op can be built.

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Need coaching, training or problem troubleshooting? Visit us at the Inhouse Corporation website or contact us at inhouseco@aol.com

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Blog Terms of Use and Disclaimer: The purpose of this blog is to promote awareness and general discussion of the presented topic. Use of this blog shall be the reader’s agreement this blog is not a substitute for the advice of a qualified professional and each action that may be taken shall be under the specific guidance and oversight and/or performance of a professional qualified in the subject matter. If you have a question or want assistance with a featured or related matter please contact us at InhouseCo@aol.com (include the blog article title on the subject line). Links, references and credits in this blog are for convenience only and are not endorsements by the author or Inhouse Corporation.

A Co-Op Nightmare: When Conflict Rules, Part 2

February 9, 2014

Conflict, many persons

Conflict: When a cooperative divides.

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SO WHAT CAN BE DONE TO AVOID CONFLICT IN THE FIRST PLACE? We have yet to find the one remedy that works in every situation. Differing situations typically require differing variations of cure. However, there are actions that should be implemented in all cases to proactively help reduce conflicts and diminish their severity when they do take place.

Experience shows disagreements between residential cooperative shareholders and their boards of directors are frequently rooted in misconceptions and misunderstandings, which seemingly result from something many co-op boards seem to dismiss too readily: Training — regular specific training for the board, co-op officers and shareholders. Consequently we’ll begin to look at training.

Too often we find a co-op views training as an unnecessary expense or needless luxury … and we’ve heard most, if not all, of the so-called rationale reasons to avoid it: The board has an attorney and knows what to do; shareholders don’t need training; its a waste of time; we already do what’s right; no one will attend; etcetera, etcetera.

Unfortunately, reality frequently paints a contrasting picture.  Many times board members have little or no background in business (yes, a residential cooperative is a business), have an incomplete knowledge of applicable co-op and housing laws, and may be unfamiliar with the corporate documents to be enforced. This is not a criticism but rather an observation that underscores proper board training can be beneficial and open opportunities for each board member to give his/her best efforts in service to the cooperative.

Yet, beyond other responsibilities involving legal, operational and residential aspects of the cooperative, the board needs to be a driving force for unifying and keeping co-op members on the same page. Like any group, a cooperative is most effective when everyone pulls in the same direction. It’s no easy task and is a never-ending work in progress. Even for the cooperative that does provide occasional board training, we’ve found new board members under the impression their only task is to attend board meetings. While attendance at meetings is necessary, newbies and veteran members alike often have no clear or full idea what is expected of them, what their authority is or what comprises their responsibilities. For example, some board members are shocked to learn they typically have a fiduciary duty to the cooperative–that is, placing the interests of the cooperative ahead of his/ her own personal interests.

When a board is in this situation it flies by the seat of its pants, generating decisions that can easily become inconsistent (or worse) and cause confusion that can leave the cooperative vulnerable to strife as well as potential liability. Without understanding their roles there is an absence of focus or a straightforward vision, and without focus inadvertent inconsistencies are likely to follow. When it occurs such erratic behavior tends to ferment uncertainty for shareholders, who may see it as whims that fluctuate according to who is involved and the prevailing mood. By itself this type of climate yields a fertile ground for uneasiness that can turn into shouting matches at board meetings or divide shareholders into factional camps. But if this situation is coupled with a lack of adequate two-way communication between the board and shareholders, it starts to get nasty with rumors and accusations running amuck.

This is especially true when the board needs to enforce rules against shareholders.  When the board interprets a rule one way for a violator then interprets it another way for a different person, anyone who is treated more harshly may feel “picked on” or singled out, an event that can turn ugly very quickly.

So, the very first thing to consider for smooth cooperative operation is proper training for the board and its officers, which can be two different types of training sessions. If both types of training are not provided on a regular basis, at least once every two to three years, they should be.

Certainly, each cooperative shareholder should be grateful for every person who serves as a board member. But what should be gratitude can be rapidly replaced with contempt, and it can happen even more quickly without the guidance and focus of training. Indeed, when the cost of training could be a bargain when compared to the stress and burdensome expense of dealing with these difficulties.

More next time.

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Need help with training or problem troubleshooting? Visit us at the Inhouse Corporation website or contact us at inhouseco@aol.com

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Blog Terms of Use and Disclaimer: The purpose of this blog is to promote awareness and general discussion of the presented topic. Use of this blog shall be the reader’s agreement that at no time will the reader rely upon or act upon anything contained or implied in this blog and that any and all actions that may be taken shall be under the specific guidance and oversight and/or performance of a professional qualified in the subject matter. If you have a question or want assistance with a featured or related matter please contact us at InhouseCo@aol.com (include the blog article title on the subject line). Links, references and credits in this blog are for convenience only and are not endorsements by the author or Inhouse Corporation.

A Co-Op Nightmare: When Conflict Rules, Part 1

February 2, 2014

Conflict, many persons

Conflict: When a cooperative divides.

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WHENEVER WE’RE ASKED TO ASSIST WITH RESOLVING RESIDENTIAL COOPERATIVE complaints and instances of noncooperation we generally see fingers pointing in all directions: From shareholders towards their board of directors and property managers; from the board or manager towards shareholders; and/or from one group of shareholders to another.

How can this be? With the very term “cooperative” suggesting folks will cooperate, what causes the breakdown? Unfortunately there may be many factors at play, meaning identification of the culprits can be a tricky undertaking. An organizational division can stem from almost anything if not properly handled and even then it may still occur. Examples are: A seemingly inconsequential two-neighbor spat that grows to encompass the community; the effect of no regular purposeful interaction between the board as an entity and shareholders as individuals; board members or officers who are not properly trained to perform their tasks; or shareholders who aren’t taught ways they may participate in and monitor cooperative operations.

Since complaints against a board appear more commonplace, though not always deserved, we’ll begin with that aspect here. In other writings we’ll look at problems some boards have with shareholders as well as problems that occur when shareholders take sides.

Overall, if a cooperative board does not conduct its affairs openly (except for executive session items), if it doesn’t endeavor to generate shareholder interest in and contributions to operational matters (interaction), and if it isn’t aggressive in assuring a steady flow of accurate communication with shareholders, there is little, if any, transparency of cooperative business. Since shareholders are generally entitled to have this information, lack of transparency should be expected to cause  negative speculation (gossip) that likely translates into suspicion which, in turn, could ignite a slow-burning distrust that incubates just under the surface, covertly evolving into shareholder noncooperation, and complaints to the board as well as to governmental authorities. Moreover, distrust can flare into serious disruptions of cooperative business that may seem to have no basis, though usually do, or it may explode into lawsuits.

Naturally, none of the foregoing dismisses the possibility of legitimate grounds for a complaint. The problem is taking the time to find it objectively and avoid jumping to premature conclusions, especially when its embedded in misperception or distortion. Taking action on wrong information can make the situation worse, perhaps much worse, but not seeking to resolve it in a deliberate and timely manner may lead to other consequences. For these reasons the process can be painstaking but if conducted properly, implementing findings that are produced can offer an opportunity to restore and improve cooperative relationships and efficiency … provided, of course, all parties are genuinely willing to accept indicated reform. If the matter polarized or became encrusted in spite, bias or personality conflict it becomes increasingly involved and may be more difficult to correct, though the prospect of a fruitful outcome should make the effort worthwhile.

So what can be done to help avoid such occurrences in the first place? We’ll discuss this next time in part 2 of this article.

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To go to the Inhouse Corporation website click here or contact us at inhouseco@aol.com

Blog Terms of Use and Disclaimer: The purpose of this blog is to promote awareness and general discussion of the presented topic. Use of this blog shall be the reader’s agreement that at no time will the reader rely upon or act upon anything contained or implied in this blog and that any and all actions that may be taken shall be under the specific guidance and oversight and/or performance of a professional qualified in the subject matter. If you have a question or want assistance with a featured or related matter please contact us at InhouseCo@aol.com (include the blog article title on the subject line). Links, references and credits in this blog are for convenience only and are not endorsements by the author or Inhouse Corporation.

Manufactured Housing: A Reputation Revisited

January 26, 2014

OLYMPUS DIGITAL CAMERA

Street scene of properly managed manufactured home community (Inhouse Corporation photo).

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WHENEVER  A MANUFACTURED HOME COMMUNITY is mentioned what does your mind perceive? Is it a decent place where folks of modest means can affordably own a home and enjoy a plot of land, or is it a ramshackle and rundown collection of “trailers” sitting amid weeds within an arm’s length of each other?

Although most folks have become more familiar with manufactured homes and manufactured home communities, some of the old negative stereotypes and misconceptions still seem to persist — as was evidenced during a recent discussion with other real estate agents. Some of those agents convey a sense that such homes do not standup well and decline in value while their communities deteriorate to unflattering conditions. They speak in terms that imply the homes themselves are to blame.

To be sure, such misperceptions have been addressed by manufactured home representatives numerous times in the past. So we’ll just briefly touch upon these issues here.

Despite being built to the same construction codes, are there manufactured homes of good to excellent quality? Yes, indeed. And are there manufactured homes of lesser quality? Yes, of course. But on the flip side of that same coin are there not stick-built homes of good to excellent quality while some stick-built homes have lesser quality … even though they are all fashioned under the same building code? Yup.

So why should manufactured homes be viewed as though the structures themselves are devilishly possessed by some monstrous intent to unnaturally force their own deterioration? Obviously, they should not be. If the owner of any structure does not maintain it, the structure degrades whether it is manufactured or stick-built.

Moreover, with all other factors being favorable, whether a structure is manufactured or stick-built if it is properly maintained it will either keep or increase its value.

Similar rationale should be applied to manufactured home communities. After all, if an apartment complex falls into disrepair most folks blame its management for the problem. The same should be true if a crumbling manufactured home community is encountered. It is not the homes within that community causing the trouble. Most times it is the lack of appropriate property management.

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To go to the Inhouse Corporation website click here or contact us at inhouseco@aol.com

Blog Terms of Use and Disclaimer: The purpose of this blog is to promote awareness and general discussion of the presented topic. Use of this blog shall be the reader’s agreement that at no time will the reader rely upon or act upon anything contained or implied in this blog and that any and all actions that may be taken shall be under the specific guidance and oversight and/or performance of a professional qualified in the subject matter. If you have a question or want assistance with a featured or related matter please contact us at InhouseCo@aol.com (include the blog article title on the subject line). Links, references and credits in this blog are for convenience only and are not endorsements by the author or Inhouse Corporation.

Credit Score: When Closing Accounts May Go Wrong

January 19, 2014

2014-01-18 - Credit App Review
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Not too long ago we helped unravel a situation worth mentioning: If you will soon apply to rent (or purchase) a home, be wary of closing zero balance accounts.

What does this mean? Evidently some prospective tenants with many credit cards believe a landlord rental application review can be improved by “strengthening” their credit reports through consolidation of debts on several credit cards into just one or two cards then closing the others that have a zero balance. Perhaps they think reducing total available credit lines will not only decrease their ability to use credit but also have the converse effect of somehow amplifying the perceived purchasing power of their income. Since their earnings and overall expenses are likely to be stable during the landlord’s review process, at first glimpse  such a thought process may appear appropriate … though in reality an adverse result from account closures is probable and more likely to occur in the near-term.

Of course, having too much available credit for a given amount of income can be a negative factor. But voluntarily closing accounts should be carefully planned. Even if the level of debt remains unchanged, account closures elevate the percentage of debt against the total credit limit, which could have an unfavorable outcome on a credit score. To illustrate the principle involved, let’s look at a hypothetical case.

For simplicity we’ll assume: (i) Mr. Applicant has annual income sufficient for his housing and overall expenses; (ii) his credit card debts total $16,000; (iii) he has two credit cards, each with a credit limit of $15,000; and (iv) he has two more credit cards, each with a credit limit of $10,000. Accordingly, his overall credit limit is $50,000 ($15,000 x 2 = $30,000;  $10,000 x 2 = $20,000;  $30,000 + $20,000 = $50,000). Under this scenario he would be using 32% of his credit lines ($16,000 of debt  / $50,000 overall credit limit  = 32%).

If Mr. Applicant consolidates his credit card debt into the two $15,000 limit credit card accounts, then closes the two $10,000 limit accounts, he would reduce his overall $50,000 credit limit down to $30,000. With this credit limit reduction Mr. Applicant’s use of his credit lines suddenly vaults to 53% ($16,000 of debt / $30,000 overall credit limit = 53%).

Since a credit score is inclined to prefer a low debt percentage (which is often a benchmark less than one-third of the credit limit), if the percentage jumps above the benchmark it may lower a credit score and capture the attention of the landlord, which could strain a rental application review. So if you’re seeking to proactively improve your credit score for a rental or purchase application, or any other reason, you should first talk with and get the advice of your financial advisor or accountant before taking action.

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