Tree Troubles

What should you do if a neighbor’s tree or a limb of a tree falls on your property or if your tree or a limb of the tree falls on a neighbor’s property? Before we discuss what to do after the fact, we’ll consider what should be done to avoid the problem

If you’re paying any attention to your property you may know in advance that there are trees or limbs of trees on a neighboring property that represent a potential risk to your property or vice versa. If you notice a tree on your property that represents a potential risk of damage to a neighboring property, you should take the necessary steps to eliminate or at least minimize the risk.

If you wish to avoid the cost of hiring a professional to remove or trim a tree on your property consider carefully whether location of the tree related to items on the neighboring property represents a risk in view of your talents and experience regarding such work. If you hire someone to remove or trim the tree, be sure that the person is properly licensed and adequately insured in case the work results in damage or injury related to the work, both regarding the neighboring property and your own.

If you recognize a potential risk of a neighbor’s tree falling or dropping a limb on your property that might result in damage to your property you might consider taking preventive action before his dead, diseased or listing tree falls through your roof or over your property line.

If you and the neighboring property owner are on friendly terms you can simply discuss the matter with him and possibly arrive at a mutually acceptable resolution. If you and the neighbor are not on friendly terms or if your casual approach is not successful you can prepare for possible legal actions by writing a letter to the owner of the neighboring property.

The letter should include (1) a detailed description of the problem, including the listing of potential structures on your property that might be damaged in the event of an event involving his tree; (2) photographs that clearly show the problems with his trees, and (3) a request for the neighboring owner to take action to protect your property. You can consider having an attorney put your information on his letterhead. Although the letter being on an attorney’s letterhead does indicate that you mean business, it can also create unnecessary animosity from a previously friendly neighbor.

If you were unable to resolve the matter via a casual approach or did not get a positive result from your letter, there may be another solution. If it is a matter of limbs hanging over your property rather than the tree as a whole being likely to fall on your property in a way that would cause damage there is another possible approach. In most jurisdictions, if the limbs of a tree hang over your property line you may trim the branches up to the property line without the owner’s permission.

However, do not hack off large limbs or branches at the property line without consulting the owners, no matter what the law says. The law should be your last resort. If a tree dies after your trimming, the neighbor could pursue a claim against you in civil or small claims court. Depending on the laws of your state, your neighbor may have to prove the damage was deliberate or caused by negligence, but may also be able to recover up to three times the value of the tree. Thus, it would be best to seek his participation in the trimming project, preferably in writing or in presence of a friendly witness. Telling your neighbor what you intend to do to protect your property before undertaking the trimming may result in him offering to trim the whole tree instead of risking your possibly amateurish job. Obviously, you may not cut down the entire tree without his permission.

If the base of the tree straddles the property line, it will be necessary to take the matter to court if a mutually agreeable solution cannot be reached between owners.

Now, we return to the original question – what to do if a neighbor’s tree or a limb of his tree falls on your property or if your tree or a limb of your tree falls on a neighbor’s property

The first thing you should do is check your insurance policy or call your agent regarding the matter.

Homeowner and landlord policies usually cover tree damage caused by perils like wind and winter storms. Most policies also cover the cost of hauling away tree debris if the mess is associated with house damage; some policies will cover cleanup even if no structures were harmed.

Although the laws can vary among states, falling limbs or falling trees, whether to wind or old age, are usually considered to be “acts of God.” It is not usually considered in any way a trespass. Usually, your neighbor is responsible when a tree or a part thereof falls over your shared property line and causes damage on your property only if you can prove he was aware that his tree was a hazard and refused to remedy the problem. Regardless, your insurance company restores your property first, and later decides whether or not to pursue reimbursement from the neighbor or his insurer if the neighbor was negligent in maintaining the tree.

Likewise, you are usually responsible for damages on your neighbor’s property only if he can prove you were aware that your tree was a hazard and you failed to remedy the problem. However, responsibility can occur in either case when the tree’s owner wasn’t aware of the problem, but the the risk was so apparent that the tree’s owner should have been aware.

If your tree falls over a neighbor’s property line, you will not usually need to have your insurance policy cover damages to the neighbor’s property. You may not be liable unless you knew or should have known the tree was in a dangerous condition. If you pruned a tree or shored up trunks to prevent problems in a reasonably adequate manner, gather receipts and any before and after photos related to the work to prove your diligence.

However, if you and your neighbor cannot soon come to agreement regarding the matter and you think that the neighbor or his insurer might be able to make a case that you were at fault for reasons previously discussed, you should consider notifying your insurance agent regarding the event and discussing the facts with the agent. This is because many insurance policies allow the insurer to avoid liability for covered risks if the insured did not notify the insurer about a potential claim in a timely manner, the definition of “timely” sometimes varying among insurers.

Finally, remember that the laws of your state may be different than the principles mentioned above. If you and your neighbor cannot settle the matter amicably, you should consult an attorney who is knowledgeable and experienced regarding this particular issue.

Trees can beautify a property; even significantly increase its value. However, when trees are located near property lines with neighboring properties, property owners must be aware of risks associated with their trees and take steps to minimize those risks.

Question

Yesterday an applicant dropped off an application on which he failed to include his social security number. Can I require him to provide the number? Can I simply just reject the application if he refuses?

Answer

Refusal to provide a valid SSN would usually be an acceptable reason for rejection as long as that is something that the landlord requires from all applicants. The Fair Credit Reporting Act (FCRA) requires notice of rejection for credit reasons (not necessarily only related to a formal credit report) in the form of an adverse action report, but the fact that an applicant refuses to provide a Social Security Number probably waives this requirement because he did not complete the application in the first place.

If it were me, I’d call the person and tell him that his application cannot be processed unless a valid social security number is provided in writing within some specific short period of time. Make a memorandum of all facts regarding the matter, including any reason why he refuses to provide the information, and attach it to the application form.

To be safer, if he refuses to provide his SSN, you could send him written notice that his application is incomplete and cannot be processed. Also, be sure that your processing of applicants includes proof of identity (at least two IDs, with at least one being a photo ID), as it can be much worse to rent to an applicant who used a phony ID for which a great credit report is obtained than to rent to an honest person who has bad credit.

Question

I know I must have smoke detectors in my rental units. Do I also need carbon monoxide detectors?

Answer

As for smoke detectors, requirements regarding carbon monoxide detectors may depend on what state or county, even what municipality your units are located in.

In review, carbon monoxide (CO) is a colorless, odorless gas potentially generated by any fossil-fuel (most commonly oil, gas, coal, or wood) burning device, including furnaces, kitchen ranges, water heaters, and clothes dryers. CO is a product of incomplete combustion of the fuel, so it is also a product in most fires.

Fossil fuel burning devices that are not well-maintained are particularly dangerous. Inadequate venting for the devices is another source of danger. Since gasoline engines also generate CO, attached garages are also a potential source of danger.

Although not all jurisdictions require CO detectors by law, the number doing so has been increasing in recent years and will almost certainly continue to increase in the future. Even when not required by law, landlords will be exposed to significant liability if an inadequately vented or improperly maintained device results in injury or death to tenants.

Since detectors can be purchased for as little as $15 each, the prudent landlord will provide them for all units having fossil-fuel burning devices or attached garages. The detectors will go a long way toward preventing serious injury or death and staying out of court. Installation should be in accordance with the manufacturer’s instructions in whatever locations as might be required by law.

Inspection of fossil-fuel devices at least once a year is highly recommended, with all necessary adjustments and repairs made immediately. In many areas, the local gas company will inspect gas appliances for free. Even if the landlord must pay for inspection by a qualified professional, the cost will be negligible compared to the judgment that might be handed down by a jury if someone is seriously injured or killed due to failure to properly maintain the devices. As a minimum, for battery-operated units landlords should themselves replace batteries once a year or at such lesser interval as recommended by the manufacturer or required by law.

When Landlords Buy Tenant Occupied Properties.

Existing tenants in rental property that is being considered for purchase can be either assets or liabilities.

The most obvious benefit is having no rent-up time for any units that are currently leased.  A related secondary benefit is that obtaining financing may be easier because the lender knows what the true rental income is for the property rather than having to depend on the borrower’s projections, possibly overly optimistic, or do extensive market research of its own.

However, inheriting existing tenants can also mean more risks unless the buyer takes adequate steps to know exactly what he/she is getting.  In this short article we’ll briefly discuss a few of the issues.

Some potential risks are minimized by (1) actions prior to making an offer, (2) writing a good purchase offer contract, (3) adequately analyzing accounting records and lease documentation during the due diligence period, (4) verifying the condition of the unit interiors as early as possible, and (5) corresponding with the tenants immediately following close of  escrow.  We will discuss these items only as they relate to the existing tenants.

Pre-Offer Tasks

If possible, require certain written information prior to even writing a purchase contract.  In addition to knowing the current rents and the lengths of existing leases, this should increased, tenancies terminate, and introduction of the buyer’s own lease agreement can be important to current value and future operations.  It is particularly important to know such information for commercial properties before deciding on the price to offer, because multi-year options are almost always part of commercial lease agreements, while only occasionally seen in residential agreements.

Writing a Good Purchase Contract

In general, the most important issues related to a good purchase contract is that it contain requests for copies of all relevant documentation and adequate contingency clauses related to all issues that are material factors in a buyer’s decision of whether to own the property for the price that will be offered.

Regarding existing tenants, the most important documentation includes lease agreements: Rules & Regulations or other policy statements issued by the seller to tenants; rent payment histories; and application forms, screening reports, and move-in checklists.  If the property currently has a resident manager, the employment contract and associated lease agreement as well as instructions and policy statements related to management should be requested.  It should also require copies of leases and related documents and verify that leases agree with information previously provided and contain adequate legal clauses and no illegal ones.

It is recommended that there be contingency related to inspection of units early in the due diligence period, not only to determine general interior physical conditions, but to also ascertain that there are not damages that could not be reimbursed from existing security deposits – hence the need for move-in checklists.

The offer should require that the seller confirm that there are no lawsuits, regulatory agency actions, or other claims pending against the property related to previous or current tenants not previously disclosed in writing and require a warranty that the seller has complied with federal and state lead laws and other potential contaminants.  It should require that the seller provide copies of required disclosure documents for existing tenants under federal, state, and local laws and any inspection reports related to possible contaminants.  The contract should require that the seller provide copies of documentation related to complaints by other tenants, neighbors, and government agencies about any tenant.

Avoid potential after-closing problems by utilizing Estoppel Certificates and making execution by all tenants a contingency.  Although often not utilized unless required by the lender, as they usually are for lager properties, Estoppel Certificates should be used for every purchase of a tenant occupied property.  An Estoppel certificate is a document signed by a tenant that, among other things (1) affirms the lease documents (attached to Certificate) and the deposit/rent amounts: (2) confirms that there are no agreements outside of the attached documents; and (3) confirms the amount of security deposit, the current rent, and the date to which rent has been paid.  The document is sometimes called a Certificate of No Defense.  In addition to verifying information provided by the seller, the Estoppel Certificate “stops” the tenant from making claims regarding the included issues after close of escrow.

If closing is delayed, it might be necessary to get updated amendments to the certificates to cover rents collected since the previous versions were executed or because of certain other special changes in circumstances, including amended or new leases.

Although the buyer would theoretically have legal recourse against the seller if he/she had been provided false information or not been provided “material” information, doing anything about it might take years.  It might even be impossible, for example if the seller moved to Switzerland immediately after closing escrow.

Escrow Issues

Since the buyer will be responsible for returning all or part of security deposits when the existing tenants leave, the purchase offer contract (and any subsequent escrow instructions) should explicitly state that the buyer is to be credited with security deposits at closing.  The seller should also be required to provide a signed letter at close of escrow informing the tenants that the property has been sold to the named buyer.

After Closing

A buyer should correspond with the tenants immediately following close of escrow.  A copy of the letter from seller mentioned above should be attached to a letter from the buyer.  The buyer’s letter should confirm being the buyer, instruct the tenants where to pay their next rent and how to contact the new landlord, inform them that he/she and /or his/her vendor will be making a detailed inspection in the near future (with reasonable notice) to check for maintenance problems, and request them to report any problems of which they are aware.  If the previous owner utilized Rules & Regulations and the buyer wishes to change them as would be allowed under the lease agreements and general lease agreement legal principles, the new Rules & Regulations could also be included.  the new landlord can also affirm that he/she is a “Fair Housing” landlord.