Utah RHJ December 2017 by Professional Publishing, Inc

December 2017 - Vol. 9 Issue 12

Rental Housing Journal Utah

2. President’s Message – Explaining to Tenants Their Rights and Responsibilities 3. Director’s Message – Housing in an HOA 5. Stable Housing is a Social Detirminate of Health Ask the Attorney – What do I do When a Tenant Stops Paying Utilities at the Property?

UPCOMING EVENTS

Good Landlord Class Salt Lake ........................................................ Fri, Feb 9th, 8:30 AM Ogden .........................................................Wed, Feb 21st, 8:30 AM www.GoodLandlordTraining.comUAA Annual Meeting

UAA Tribute Awards Banquet Thurs ...................................................... Jan 18th, 7:00 PM Little America Hotel.....500 Main St, Salt Lake City

UAA General Membership Meeting Thurs ....................................................................... Jan 18th, 7:00 PM UAA Offices.......................448 E Winchester, #460 in Murray

www.rentalhousingjournal.com • Professional Publishing, Inc Official Publication of The Utah Apartment Association Utah’s Leading Advocate for the Rental Housing Industry – 888-244-0401 – WWW.UAAHQ.ORG

Family Trusts What does the New Salt Lake City Recycling and Real Estate Ordinance mean to your company? By Robert Watson, WSI Recycling

S By Jeff Breglio

Professional Publishing Inc., PO Box 6244 Beaverton, OR 97007

PRSRT STD US Postage P A I D Sound Publishing Inc 98204

am often surprised by the number of real estate investors that ask me a very simple question: Do I need a family trust? We get this question from single people, young couples, big families and even older clients. While it’s true that pretty much everyone can benefit from a family trust and having an estate plan, it is absolutely critical for anyone that owns real estate (personal residence or rentals) or owns a business entity (like an LLC). As many of you know (or should know!), real estate cannot be transferred by someone who is deceased without going through probate. Even when there is joint tenancy, the final joint tenant can

alt Lake City has the Goal of “Zero-Waste” by 2040. In order to make this possible, Salt Lake City has enacted an Amendment to the “Solid Waste and Recycling Ordinance”, which directly affects the Business and Multi-Family Dwelling Communities of Salt Lake City. Several questions and expressions of confusion about

the Amended Salt Lake City Recycling Ordinance have surfaced during the past two years. Several deliberations and discussion with City Officials including representatives from several associations - UAA (Utah Apartment Association), RCU (Recycling Coalition of Utah), URA (Utah Recycling Alliance), Recycling MRFs

(Material Recycling Facilities), Various Housing and Multifamily Residential Management Organizations, Waste Hauling & Recycling Vendors and others occurred before the Ordinance, as Amended, went into effect on January 16, 2016 and starts being subject to enforcement in January , 2018. ...continued on page 6

Carbon Monoxide in Residential Rentals

By Paul Smith Utah Apartment Association

arbon monoxide (CO) is a colorless, odorless, tasteless, non-irritating gas found in both indoor and outdoor air. It is formed when carbon-based fuel (e.g., gasoline, oil, wood, coal, etc.) is not burned completely in engines, natural gas furnaces and water heaters, indoor wood stoves, continued on page 4 kerosene space heaters, open fires, and smoldering coals. Carbon monoxide attaches to the hemoglobin in red blood cells and prevents those cells from carrying oxygen. The more CO that enters the bloodstream, the less able the blood is to carry oxygen to the body. In high amounts, CO can limit the human body’s ability to carry oxygen in the blood stream to vital organs, which can be fatal. Carbon Monoxide should not be confused with Carbon Dioxide (or CO2), which is a normal part of respiration. Research by the Utah Office of the Medical Examiner revealed that an average of 31 people in Utah die each year from Carbon

Monoxide poisoning, and that “incidence of CO poisoning in Utah is declining.” Despite that decline, Carbon Monoxide deaths remains a preventable tragedy. In 2008 the Utah State Legislature passed a law which enables cities to require the occupant of a building to install and maintain a Carbon Monoxide detector. Putting this responsibility on the person who is actually occupying the property makes sense since it is their life at stake and they have the day to day ability to monitor and maintain the detector. That being said, most landlords choose to help their tenants fulfill this responsibility

by providing Carbon Monoxide detectors and batteries to their tenants. The Utah Apartment Association strongly encourages landlords to do just that – provide resources and education to your tenants in order to help them protect themselves and their families. As noted above, this approach has helped to decrease the number of deaths and incidents of Carbon Monoxide poisonings in the state, but there is always room for improvement. So please continue to help your tenants fulfill their obligations under the law.

Utah Apartment Association 448 E Winchester St Ste. 460 Salt Lake City, UT 84107 Ph: (801) 487-5619 Fax: (801) 484-8649 www.uaahq.org

President’s Message Explaining to Tenants their Rights & Responsibilities

T Jayme Buhlman UAA President Utah Apartment Association

he Utah Apartment Association believes that fair and just laws protect both landlords and tenants. We frequently work to protect the rights of tenants, and we advocate for laws that will protect them while still protecting the rights of landlords and property owners. Individual property owners and landlords can make a big difference in the quality of their tenants’ experience by carefully explaining to tenants their rights and responsivities under the lease and under state law. Many landlords sit down and go through the lease with their tenants

You never know what is covered until it is not covered!

upon signing or move-in to clearly outline what they expect from the tenants and what the tenants have a right to expect from them. An increasing number of landlords are also starting to use customized tenant handbooks that not only have general details about state laws and local ordinances, but also specific provisions in the lease and particular information about the unit they are occupying. Many of these handbooks include: yy Information about the appliances in the apartment yy An overview of their responsibilities under the lease yy Ideas for how to save on utilities yy Tips for how to clean the apartment yy Suggestions for routine maintenance that the tenant can preform

yy Contact information for the landlord or manager yy Emergency contact information for police, fire, ambulance, and for any preauthorized contractors yy An explanation of how the deposit will be handled The UAA publishes several forms that tenants can use to assert their rights. They are available to the public on the UAA website under the renters tab. You are under no obligation to give these forms to your tenants, but you should be familiar with them because (1) you should know what to do if you receive one of these forms; and (2) you know tenants (whether they are friends, family members, neighbors, or former tenants) who might need help finding forms like these. You are welcome to point them to our website.

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info@rentalhousingjournal.com Rental Housing Journal Utah · December 2017

Utah Apartment Association 448 E Winchester St Ste. 460 Salt Lake City, UT 84107 Ph: (801) 487-5619 Fax: (801) 484-8649 www.uaahq.org

Director’s Message

Rental Housing in an HOA

L. Paul Smith, CAE UAA Executive Director Utah Apartment Association

perating rental properties in HOA’s can be a challenge, because many of the associations and their policies can be anti-landlord and anti-renter. In both 2014 and 2015, the Utah State Legislature passed legislation to prohibit many policies that associations had passed that were hurting landlords and tenants. The Utah Apartment Association pushed for these rules on community associations because owners and property managers had reported an increase in hostile

policies that seemed designed to treat renters and rental owners differently and charge them more. Examples of policies that were made illegal include (1) charging extra fees to rent a unit; (2) restricting renters from using pools or tennis courts; and (3) having a $500 fee each time a tenant moved in or out (but not having such a fee for owners). If you have questions about specific policies or charges with your community associations, feel free to call us to discuss.

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What Community Associations Can Do HOA’s and condo boards can have policies limiting the number of units in the community that will be used as rentals. This is necessary, because in some cases, if the percentage of rentals in a community becomes too high, lenders will no longer finance individual units. So state law allows community associations to set a cap. Be sure you understand that before you buy a unit in an HOA or Condo association. 1. They can require the names and contact info of tenants residing in the rental. 2. They can require an owner get a signed addendum stating the tenants will follow the community rules. 3. They can require a generic copy of the lease. 4. They can have rules that are the same for owner-occupied and rental-occupied units. What Community Associations can’t do 1. They cannot require landlords give them copies of credit reports or applications with personal info. 2. They cannot insist on board pre-approval of applicants. In other words, they don’t get a say in who you select. 3. They cannot charge any higher fees or assessments on tenants or landlords than they do to other residents. 4. They cannot have different rules or privileges for owners than renters.

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Rental Housing Journal Utah · December 2017

Rental Housing Journal Utah

Family Trusts and Real Estate pass away without notice. The heirs are then left to probate the decedent’s estate, which can cost $1500 or more—and that’s when all the heirs are playing nice! Probate is also a public court process that can take a long time depending on the circumstances or disputes. The same is true in order to transfer ownership interests in an LLC when a member of that LLC dies. A family living trust solves these issues and saves on cost and time. A trust is actually allowed to own property (be on title) and take ownership of business entities. This eliminates the need for probate. The trust will also dictate exactly how you want your assets allocated—something outside your control in a probate proceeding. The trust can hold and control other assets as well, including bank accounts, CDs, stock brokerage accounts, retirement accounts and the like. People often come to us who are surprised when they find out grandma’s IRA or stock portfolio cannot be liquidated. While it is true, you can name beneficiaries on these types of accounts. But the beneficiary can die before the account holder. Unfortunately, this happens all the time. If the named beneficiary is deceased, that estate must be probated before accessing those accounts. The trust provides clarity in allocation, control over access and the comfort your heirs will have knowing that your wishes are being followed. Sometimes, I get a follow up question: Can’t I just put my children on title as joint tenants so that they will get the property when I die? You can, but this has a number of tax and legal issues. First, it’s a taxable event and gift taxes may apply. Whereas, if they take ownership at your death, it may be tax free as part of your estate, AND they get the step up in basis—saving them taxes down the road! Also, for rental properties, we never recommend keeping these kinds of assets in anyone’s

...continued from page 1

personal name for liability protection purposes (among other reasons). And remember, business ownership doesn’t transfer automatically upon death either. Only a trust can provide these benefits of immediate transfer and control of assets. Another question asked is: I already have a will, does that work? The answer is No. While a will is helpful in defining the allocation of your assets, it cannot own property and must still be probated before you can sell the real estate, transfer an entity or access other accounts. Probate will also make the will public! This is something that most of our clients care a lot about—Privacy! A trust is a private document and not recorded publicly. When teaching clients about real estate investing, we always discuss succession planning! Succession planning is thinking about and taking care of the transfer, control and allocation of property and assets IN ADVANCE of dying. It works like this: First, you need to think and create plan. This begins with making lists and checking them twice. Creating a list of all your assets of any kind. Finding contacts, phone numbers and other vital information regarding the asset is paramount in creating your plan. You’d be surprised at the number of clients that don’t even know what they own! Or don’t know how title or ownership is held on their assets. Many clients are caught unawares when someone dies! Second, the family trust is just one document in an estate plan package. Other documents include the pour-over will (works in conjunction with the trust), powers of attorney (for control of assets while you’re alive), and the “living will” or health care directive (this is the document for end of life decisions or the “whether to pull the plug” document). It’s possible you may also need estate tax

savings strategies as part of your estate plan. Third, your trust (and other documents) should work in coordination with your asset protection strategy. We have numerous vehicles for asset protection, including family limited partnerships, LLCs and corporations, as well as other kinds of asset protection trusts. This is something all real estate investors should take seriously and discuss with experienced asset protection attorneys. But these documents need to work with and not against the family trust. We use special corporate documents (like the transfer on death agreement) to connect businesses with the family trust. Many attorneys won’t use these devices and may ruin the asset protection value of your entities, so watch out for that. Finally, you should also be thinking about management and control of your real estate after you die (not just who gets what!). Do you want your children managing your rental properties? Will they understand the market and best times to sell, or sell at all? Will they need help hiring contractors to make repairs? These should be questions you ask as you complete your succession planning—and questions many clients forget to ask. Your documents should be

prepared to answer these questions. We don’t like to think about dying. It’s part of our nature. But smart individuals who want to protect and control their assets do! Creating a good family estate plan typically runs between $2000 and $4000. This can be less costly than probate. And you get all the other benefits and the confidence in knowing you’re well prepared! Take some time TODAY and start planning! Talk with an experienced lawyer to get your family and assets protected. Jeffrey S. Breglio is an attorney in Salt Lake City practicing real estate, asset protection & estate planning law and provides title & escrow services. He is a regular educator at local and national real estate investor associations and is an active real estate investor himself. (801) 560-2180 234 E 2100 South, Salt Lake City, UT 84115 jeff@bregliolaw.com www.bregliolaw.com

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Rental Housing Journal Utah · December 2017

Rental Housing Journal Utah

Stable Housing is a Social Determinate of Health By Christine Gianchetta Nguyen Utah Department of Health

he Partnership for Healthy Outcomes Fact Sheet, October 2017 states: People covered by Medicaid experience higher rates of poverty, chronic illness, and disability than individuals who are privately insured. Given the growing acceptance that improving heath is as much about addressing social determinates of health as it is about providing high-quality medical care, Medicaid programs are increasingly focused on the social needs of beneficiaries, such as housing and food security. It is an exciting time for the Department of Health: Division of Medicaid and Health Financing. This year our Division applied for and was one of eight states to be selected to participate in the Medicaid Innovation Accelerator Program (IAP). This program is focused on the development of public and private partnerships between Medicaid and the housing systems across Utah. We are working closely with our federal partners who include the US Department of Housing and Urban Development, the Substance Abuse and Mental Health Services Administration, the Office of the Assistant Secretary of Planning and Evaluation, and the US Interagency Council on Homelessness, who recognize the importance of developing statewide relationships with housing stakeholders in order to improve housing options for Medicaid participants. We are working to develop the types of partnerships that will lead to increased opportunities for the people we serve to live in integrated settings. In an effort to assist in the increased efforts to offer options to Medicaid members the 2016 General Legislative Session was presented with a Report on Medicaid Long Term Services and Supports. The report, along with the recommendations for success, were reviewed during the session and an interested legislator worked to help define the suggested State Level Housing Coordinator position, which was filled in July by Christine Gianchetta Nguyen. Chris is working to establish collaborative relationships with

housing-related stakeholders, meeting with community partners, and offering housing education to New Choices Waiver Program case workers. The New Choices Waiver is designed to serve individuals who are residing in long term nursing facilities, licensed assisted living facilities, licensed small health care facilities or other types of medical institutions. The program offers an option for these individuals to move into an integrated community-based setting if they wish to do so and if their needs can be safely met in the setting that they have chosen. Once enrolled in the program, they may receive an expanded package of supportive services through Medicaid which are intended to help with community-based living. The initial focus of the IAP is on those served across the state participating in the New Choices Waiver Program. The program goals focus on Medicaid partnering with community efforts to increase the supply of affordable housing, working with New Choices Waiver participants to assure access to safe, stable and affordable housing opportunities beyond assisted living facilities, and to offer the supports necessary to maintain their homes, in settings other than assisted living facilities. We are making important connections and developing collaborations which will lead to opportunities for increased housing options for Medicaid members. We are interested in meeting and working with those in the Rental Housing Community who would like to join us in creating the opportunity for New Choices Waiver participants to live within their own supportive communities. Please contact me if you have questions or are able to offer suggestions regarding our goal to increase options for people who choose to build lives within their own community. Christine Gianchetta Nguyen cgnguyen@utah.gov Utah Department of Health: Division of Medicaid and Health Financing

Rental Housing Journal Utah Âˇ December 2017

Ask the Attorney What do I do when a tenant stops paying utilities at the property?

By Jeremy Shorts Utah Eviction Law

irst, check your lease to see whether or not your tenant was required to put any utilities in their name. If they are required to do that and have not, they are in breach of the lease and you may have grounds to provide them with a 3 day lease violation notice. Typically you will want to make sure that the notice gives them the opportunity to come back into compliance or vacate the property. If the utilities are in the landlordâ&#x20AC;&#x2122;s name, the best practice is to pay the utilities and then provide the tenant with a 3 day notice to pay or vacate based on the amount

owed for utilities. DO NOT ask the utility company to shut off the utilities. If you do, the tenant may have a claim for a wrongful eviction, which will be a much larger pain to deal with then going through the proper process of eviction. Keep in mind that if the tenant has not paid, and not had the utilities placed in their name as required under your lease, you can provide the tenant with two separate notices (one about payment and one about establishing utilities in their name), as they are to separate violations. Jeremy Shorts, Esq. Utah Eviction Law Phone: 801-610-9879 Fax: 801-494-2058 Email: info@utahevictionlaw.com

Utah's leading advocate and recource for owners, real estate professionals, developers, management teams, suppliers and service providers dedicated to quality rental housing. 5

Rental Housing Journal Utah

New Recycling Ordinance ...continued from page 1 During the deliberations and discussions of the Ordinance Amendment, several concessions were sought and many were provided by Salt Lake City, which significantly changed the tone of the Ordinance from a “punitive” to much more of an “educationally” motivated Directive. As such, Salt Lake City is taking the approach of “Education First” with “NonCompliance Fines” to follow the educational efforts. Salt Lake City is to be commended for taking this approach as it provides needed additional time for those affected by the Ordinance to make final preparations in order to be in compliance with it. As such, since the enactment of the Amended Ordinance, Salt Lake City has held several training meetings regarding the implementation of the “Business & Multi-Family Recycling Amended Ordinance”. Though these sessions have been well attended, several members of the Business and Multi-Family Dwelling Community are still either uninformed or misinformed regarding the contents of the Amended Ordinance. If your Business or Multi-Family Dwelling Unit produces 4 or more cubic yards of trash weekly, (approximately equivalent to 8 - 96 gallon residential Toters), according to the enacted Amendment, you are subject to the mandatory recycling required by the Ordinance. This Article is presented to assist with further understanding and successful implementation and compliance of the Amended Ordinance. The Salt Lake City Division of Waste & Recycling has adopted the Moniker “SLCgreen” (SLCgreen. com) and provides several web pages and other site references for various recycling questions and solutions. Several of the Departments of this Division have come together to assist with the implementation efforts of those affected by the Ordinance. Essentially there are 7 Steps recommended by SLCgreen. They are as follows. -- 1st Select a Recycling Coordinator -- 2nd Conduct a Waste Audit -- 3rd Decide What to Recycle -- 4th Select A Hauler

-- 5th Design a Collection System -- 6th Promote Participation -- 7th Follow-Up An “Approved Waste Hauler” can assist with each of the aspects of this implementation program including the required onsite “Recycling Plan”, “Education Materials” to help educate for proper recycling and with the Quarterly “Waste Hauler Report” an accountability report that is an integral part of compliance with the Ordinance. The List of Approved Haulers is available on SLCgreen.com under the Tab “Authorized Haulers”. Solutions by the Authorized Haulers provide provisions of onsite Recycle Dumpsters, Contamination Free Door-Side & Consolidated Site Recycling Programs (such as those provided by Recycling Valet Companies) and other recycling “Drop Off” and “ Bulk Item Pick Up” opportunities, for items such as “Bedding Mattresses”, “Glass” “Furniture” and “Appliances”. Compliance with the City’s Ordinance also requires the following: • Having a Recycling Plan - That outlines how recycling will be provided and how tenants, employees and customers will be educated on how to recycle. • Providing Education - Once the plan is in place handouts, emails, posted signs and other creative methods can be utilized to meet the ongoing “Education Requirements” of the Recycling Ordinance. • Providing adequate Recycling Containers - For tenants, employees and customers is also a requirement under the Recycling Ordinance. • Contamination Avoidance - In addition to Ordinance requirements, the Ordinance also provides for The Waste Hauler to charge a fee if contamination exceeds 25% of the recyclable material in a recycling container. Contamination can turn an entire container of recycling into trash that cannot be recycled. Waste Haulers are subject to contamination fees from Material Recycling Facilities

and in turn, the Ordinance has impacting Property Presentation), authorized the Haulers to pass spread throughout the Multithese costs on. Family Residential Communities, Other provisions, including without any controlled access, great opportunities possible exemptions, additional creating for contamination. All of this compliance suggestions and information is available from occurred with protest of this the City. The City will review action by both the Albuquerque exceptions and possible exemptions Apartment Association, Private Recycling Valet Companies on a case by case basis. and several representatives of No one likes to have government Management of Multi-Family involved in private business affairs. Residential Communities. It increases cost to some extent for This is just one of many examples all parties involved, including the regulatory governmental agencies. of how events can transpire when The cost of not properly recycling there is little or lack of partnership places an even higher cost on a between all interested parties in community in the form of wasted developing municipal recycling re-useable resources, negative programs. Salt Lake City is to be environmental impacts on natural commended for their outreach resources, (including air quality, efforts and input driven approach inland waterways, lakes, ground to Amending this Ordinance. Now water and oceans, (including the it is imperative that we all work health of edible fish and marine life together to make “Zero Waste in populations), not to mention the 2040” a reality not only for our ever rapid expanding need for more benefit, but for the generations to costly landfill spaces. Most other come. industrialized countries, especially Robert Watson works for WSI of in Europe where recycling Utah Trash and/or Recycling Valet annually tops 85% to 95% for many is an approved Hauler. WSI can ascountries and communities, have sist you with your recycling needs. already addressed the necessitation To Contact Robert Watson email robert.w@wsi-usa.net or call of properly recycling materials. The city of Ottawa concluded 801-713-1306. in its research of this issue that at For a list of approved Salt Lake City least 80% of all items consumed Waste Haulers and For Answers to by Multi-Family Dwelling Questions Regarding Ordinance Education & Outreach Contact: Communities can be recycled. Mitch Davis, Waste & Recycling In a recent article in ‘Units” a Sanitation Permits Coordinator study conducted by HD Supply 801-535-6984 or email: mitchell. found that residents were more davis@slcgov.com acceptant to a cost increase if And For Additional Information go there was a positive environmental to: SLCgreen.com aspect associated with it, especially if this involved Trash & Recycling Valet and other environmentally friendly amenities and appliances. To reach the desired goal of “Zero Waste by 2040” will require the utmost cooperation and partnership of all interested parties. Several other Cities across the country have already moved or have started moving towards implementation of programs to enforce mandatory recycling, some with far more draconian measures than those currently being presented by Salt Lake City. In Albuquerque, what amounts to a “$2 Per Month Door Tax” has been instated, with large numbers of 96 gallon Recycling Toters, (negatively

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Rental Housing Journal Utah · December 2017

Rental Housing Journal Utah

Salt Lake City Multi-Family Recycling st Ordinance Goes Into Effect January 1

n ordinance requiring multifamily properties with 8 units or more to provide recycling to tenants went into effect on January first, affecting approximately 20,000 housing units in Salt Lake City. “This ordinance has been in process for many years,” said Paul Smith, UAA Executive Director who worked closely with the city on the issue. “There have been years of preparation time and time for landlords to learn about the particulars, but now the rubber meets the road,” he said. Smith said this issue is part of a commitment Salt Lake City has, as part of a group called Energy City USA, an organization founded by conservation groups, to be a “zero waste” city by 2040. Initially, the city has a goal of “diverting” 50% of what it sends to the landfill though recycling, in the next few years.

Logistics of the Ordinance Unlike many city recycling ordinances which are extremely onerous and costly for housing providers to implement, Smith says Salt Lake City was very reasonable to work with and the final product was a collaborative effort that balanced many needs. Smith says from day one the industry supported the concept of waste diversion through recycling and sought only to make the ordinance easy for landlords to understand and comply with. Smith said the industry position is that recycling is a good idea, but that that since most tenants pay for waste removal costs, that any increases in cost should be able to be passed on as well, and that landlords shouldn’t have penalties if tenants put the wrong things in the wrong places. “The city did three main things here that helped earn the support of the industry. First, they exempted affordable housing units that are often precluded from passing on

garbage costs to tenants. Second, they exempted owners if the space requirements of recycling were prohibitive or required reductions in parking spaces, etc, and third they are not going to levy fines against landlords for crosscontamination (when a tenant puts a pizza box with food in it in recycling), like so many of the first cities to do this did. We can’t control what tenants do, we can only give them opportunities to recycle,” says Smith. Another component of the program that UAA appreciated was that competition was encourage. “Some of these programs select one provider, and costs skyrocket,” says Smith. In this program they set a standard to be an “approved provider” and almost 30 companies have been approved, so there will be healthy competition for the business. Initially the ordinance will be enforced by complaint only, which Smith says means there is

time to learn how to comply and to implement this properly. The UAA and Salt Lake City will be doing training on the ordinance at the annual conference in April. For more information contact the UAA.

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Rental Housing Journal Utah Â· December 2017