Emailing Residential Tenants In California

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While email use is common and is growing faster than “snail mail”, the California legislature does not generally recognize email as a valid delivery method for most formal communications provided by California residential landlords to tenants . California law requires other delivery methods for most formal California residential landlord communications.

Generally, California law requires that residential tenants be served notices by:

  • personal service; or
  • posting on the property and mailing a second copy, normal mail the same day; or
  • substituted service by delivery to someone of suitable age and discretion and mailing a second copy, normal mail the same day .

While email has existed for decades, until recently, the California legislature ignored email as a communication method between California residential landlords and tenants.  Finally, beginning in 2013, the California legislature authorized emailing two different California residential landlord communications (1) security deposit accountings (but only with the parties’ agreement) and (2) abandoned personal property notices.

Email can be used:

  • for informal landlord/tenant communications ;
  • to serve security deposit accountings, if landlord and tenant have agreed (preferably written agreement) to email delivery; or
  • as a supplemental method of serving abandoned personal property notices (notifying a resident or other party that when the unit was vacated, personal property was left in the unit).

1. Even if a landlord does not use an authorized service method, in some cases a notice may still be effective if there is proof that a tenant actually received it.  See University of  S. Cal. v. Weiss (1962) 208 Cal.App.2d 759, 25 Cal.Rptr. 475, 480 and Reserve Oil & Gas Co. v. Metzenbaum  (1948) 84 Cal.App.2d 769, 774, 191 P.2d 769, 799; Colyear v. Tobriner (1936) 7 Cal.2d 735, 743, 62 P.2d 741, 745.

2. There are a few exceptions for (1) rent increases, (2) entry, and (3) termination of month to month tenancies; specific alternate service methods (not including email) are allowed for service of those specific notices.

3. Both Federal and state laws prohibit emailed “spam” (i.e. unsolicited commercial email advertisements).

For information about how to serve notices on California residential tenants, see Kimball, Tirey  & St. John’s article, “How to Serve a Notice on a Residential Tenant.”

Buckhorn Grill opening in San Jose

 The tri-tip experts from Winters are going to be opening a new Buckhorn Grill in San Jose next month. This is the midtown Sacramento location.

Noel Neuburger –
The tri-tip experts from Winters are going to be opening a new Buckhorn Grill next month at Oakridge Mall in San Jose.

Born of the more formal Buckhorn Steakhouse in Winters, the Buckhorn Grill is a fast, casual restaurant where people order at a counter. Food includes ribs, chicken, salmon and salads. The star is Buckhorn’s char-roasted tri-tip Angus beef done the Buckhorn way, which includes being marinated, rubbed with spices, chargrilled over wood and then roasted slowly in a smoke oven for many hours.

There are Buckhorn Grill locations in midtown Sacramento, Roseville, Pleasanton, Napa, Walnut Creek and Emeryville, as well as three locations in San Francisco. Buckhorn also has a partnership with Tri Tip Grill, which opened four years ago at 30 Rockefeller Plaza in Manhattan. The chain has subsequently added another New York Tri Tip in New York’s Grand Central Station.

Opening the Ranch House — a Case Study in Home Renovation

by Greg Mix –

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With millions of Ranch homes built in America from the early middle through the close of the 20th Century, many homeowners are now updating layouts & finishes to meet modern lifestyles.

In this photo of our design case study, the Sitting Area of the Living Room is in the foreground, and Kitchen Island immediately behind. The Pantry, to the left behind the sofa, features a beverage center with wine cooler and a pass-through, as well as storage for needed food prep items.

Before
As you can see in the Existing First Floor Plan, we removed a central wall that divided the front room (Living) from a back room (Family) to create a large, open Living Room and Kitchen. (See the next Plan, with color highlights, to understand what we proposed — and scroll down for more pictures.)

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After
Working with interior designer Teresa Hamilton and our clients, we proposed a dramatic transformation to the uses of space in the home.

We expanded the former Shared Bath (off the Hall, left of the Family Room, in the Plans) to accommodate increased usage.

Here’s the new design. (Scroll down to see more exciting photos!)

Below is a somewhat more detailed view of the Kitchen. The Island in the foreground does triple duty for snacks & entertaining, storage & dishwasher, and sink & prep counter. The Pantry in the background, to the left in this photo, is located in the area formerly occupied by the kitchen in the old layout.

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A slight change in the view of the Kitchen shows how finishes were carefully coordinated by the interior designer, maintaining consistency throughout. Natural light is introduced from multiple sides of every space and plays an integral part in the life of the home. Glass subway tile, stainless steel appliances, and chrome & glass lighting fixtures enhance the sense of light with specular twinkle, while indirect cove lighting, recessed cans, and undercabinet task fixtures enhance the work surfaces, as seen below.

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From the Pantry, the Dining Porch is seen through a window, with suspended bike storage. It will be converted into conditioned space in the next phase of the project. The window will be converted into a pass-through to aid serving and return of dining ware.

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We proposed converting the former Sunroom into a future Formal Dining Room and expanding the former Screened Porch, incorporating additional area beyond the extant footprint of the house, to create a future Den for the kids as a second phase. These changes were accepted, so we proceeded with construction documents, and Mahfoud Construction, the selected GC, built it. Remember — phasing is a way to achieve high quality on a budget!

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The last item — but by no means least! — in the first phase is the upgraded Hall Bath. Our design expanded the bath to allow a double vanity, this time using a bright colored base beneath an ebony counter.

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It’s easy to see from just a few pictures that details take a project from mundane to one in which the owners will delight for many years. To see additional photos and also some construction photos, check out the page for this project 

Commercial Real Estate Financing – Estimating A Property’s Maximum LTV

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Commercial real estate financing for income producing properties is a little different from residential real estate financing. In residential financing, the bank looks toward the borrower’s income as the primary source of repayment on the loan. With commercial financing, the bank looks first at the property’s income as the primary source of repayment on the loan.

When a bank finances commercial real estate, like an apartment building, that lender generally has two tests to determine how much they can lend on a building, the LTV and the DCR tests. Based on the results of these two tests, they can lend a maximum of the lower of the two calculated mortgage amounts.

Loan to Value – LTV Test – The first, and simple test, is a loan to value test. For example, based on the appraised value of the apartment building, the bank can lend up to 75% of the value. Let’s say the building is worth $2,000,000, in this example the bank could lend up to $1,500,000 or 75% of the value. It’s really that simple.

But since there is a second test for the maximum amount a bank will lend, the bank needs to calculate that loan amount too. Then they pick the lesser mortgage amount of the two calculated amounts.

Debt to Income – DTI Test – The second test is called a debt-to-income test. Basically the bank will review the property’s financial statements and come up with a Net Operating Income (NOI) calculation based on actual income that the property has generated. Let’s say the NOI is $125,000 per year.

The bank wants a cushion between that $125,000 and the loan payment and that is called the debt coverage ratio (DCR). Let’s say a bank has a minimum DCR that NOI must be at least 1.25 times the mortgage payment amount. In the above $125,000 NOI example, that would mean that the maximum loan payment (annualized) could be $100,000 per year. See the cushion between the $125,000 NOI and the $100,000 mortgage payment? This hopefully insures that if the bank takes back ownership of the property, the income off the property will service the loan payments.

With a $100,000 maximum annual mortgage payment allowed under the DCR analysis, and let’s say for illustration purposes a 5.00% interest rate on a 25 year amortizing loan, that means the maximum mortgage amount would be calculated as $1,409,000.

So under the LTV test above, the loan could be $1,500,000. Under the DCR test, the loan could be $1,409,000. And since banks want to be conservative in their lending, the maximum amount they will loan is the lower of the two, or the $1,409,000.

So what’s the actual loan to value allowed? If we divide the $1,409,000 by the $2,000,000 property value, we get an LTV of 70.45%.

Finally, different banks may have slightly different DCR’s, like 1.2, or 1.35, and different types of commercial properties also may have different DCRs, like an office building versus a retail center. Check with your lender for details and always shop a few lenders to find the best deal.

Mortgages ratchet up, and so does anxiety

By Polyana da Costa • Bankrate.com

Mortgage rates ticked up this week amid better-than-expected U.S. economic data and investors’ anxiety over when the Federal Reserve will trim its stimulus program.

30 year fixed rate mortgage – 3 month trend

30 year fixed rate mortgage – 3 month trend

The benchmark 30-year fixed-rate mortgage rose to 4.59 percent from 4.54 percent last week, according to the Bankrate.com national survey of large lenders. The mortgages in this week’s survey had an average total of 0.31 discount and origination points. One year ago, that rate stood at 3.77 percent. Four weeks ago, it was 4.48 percent.

The benchmark 15-year fixed-rate mortgage rose to 3.65 percent this week, compared to 3.61 percent last week, and the benchmark 5/1 adjustable-rate mortgage rose to 3.57 percent from 3.54 percent. The benchmark 30-year fixed-rate jumbo rate rose to 4.73 percent from 4.69 percent.

Weekly national mortgage survey

Results of Bankrate.com’s July 31, 2013, weekly national survey of large lenders and the effect on monthly payments for a $165,000 loan:
30-year fixed 15-year fixed 5-year ARM
This week’s rate: 4.59% 3.65% 3.57%
Change from last week: +0.05 +0.04 +0.03
Monthly payment: $844.88 $1,191.75 $747.39
Change from last week: +$4.92 +$3.26 +$2.78

 

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Mortgage rates had been flat most of the week until Wednesday morning, when payroll processor ADP released its monthly employment survey showing that businesses added 200,000 jobs in July. Economists had expected ADP to report about 180,000 jobs.

“I’m glad they didn’t spike more,” Michael Becker, a mortgage banker at WCS Funding in Baltimore, says of the latest rate movement.

A more closely watched employment report will be released Friday by the Department of Labor. If that report shows the economy is growing at a stronger pace than economists had expected, rates could increase again.

Paul Edelstein, director of financial economics at IHS Global Insight, forecasts that Friday’s report will show a gain of 180,000 jobs, which is close to consensus forecasts.

Unlimited Vacation Days: Treat Employees Like Adults

If you’re looking to improve your company culture and impact employee retention, it’s time to consider dropping your standard vacation day policy and taking a more flexible route. The unlimited vacation day honor system is sparking a wave of positive interest across companies and industries.

Many companies like Best Buy, Netflix, Evernote, Zynga, Red Front Events, and even my Web marketing agency Ciplex have all made the transition to unlimited vacation days–and it’s time for you to do the same. In fact, the average American employee leaves two unused paid vacation days every year.

Still on the fence? Take a look at some of the benefits of offering unlimited vacation time:

1. Establishes employee responsibility. Break away from the fear of being faced with an empty office, mountains of work, and unhappy customers–your staff may surprise you with their use of their new freedom. Offering unlimited vacation days is one way to show your employees you trust and respect them.

2. Acts as a recruiting perk. Are you looking to expand? One of the best ways to gain the interest of potential job candidates is to tout your perks. In fact, nearly half of working adultsreported they would be willing to give up some percentage of their salary for more flexibility at work.

3. Keep employees engaged and productive. Allowing your employees to take time off when they need it most encourages a more productive work environment. Instead of working when their minds are elsewhere, they’ll be able to give you their full attention.

4. Eliminates a sense of hierarchy. Does upper-level management have more flexibility with their PTO? Stop hierarchy in its tracks by giving your entire staff a fair shot at a flexible schedule.

Transitioning may still seem impossible, but I can assure you it’s not. Drop your fear of change and stop making your employees keep tabs in order to travel or fulfill personal commitments. Use the following steps to help you transition:

Step 1: Survey Your Employees

Get a feel for what your employees really want before you make the transition to unlimited vacation days. Start by educating them on what exactly unlimited vacation days are: a highly-flexible paid-time-off policy, not a free-for-all. Give your employees the necessary information to get them onboard and then send out a brief survey to get a feel for their interest.

Step 2: Craft Your Policy

At Ciplex, we offer unlimited PTO, not just vacation days. It’s up to you to create a policy most suited to your company’s needs–create a standalone vacation policy or add it onto the current PTO policy that includes both sick days and flextime.

Step 3: Establish Requirements

For a successful unlimited vacation day policy, you’re going to have to develop some basic rules. Start by requiring team approval — not just manager approval — for any employee interested in taking vacation days or PTO, set up a standard amount of advance notice for taking vacation days, a limited number of consecutive weeks of leave, and potentially frozen times of the year where a full staff of employees is crucial.

Step 4: Carefully Track Performance

If you’re still worried about lost productivity, keep a close eye on the performance of your employees in conjunction with your new policy for unlimited vacation days. At my company, I noticed a boost in productivity, engagement, and overall happiness in the workplace.

Step 5: Grow Your Policy

Good things take time. Survey your employees after a few months with the policy in place and see if they have any insight worth noting.

The benefits of unlimited vacation days are endless. Make the transition today and see how quickly your employees become more productive and engaged.

Do you provide unlimited vacation days? What prompted to you to make the switch?

Image courtesy of Kevin Dooley; Flickr

About Ilya Pozin:

Founder of Ciplex. Columnist for Inc, Forbes & LinkedIn. Gadget lover, investor, mentor, husband, father, and ’30 Under 30′ entrepreneur. Follow Ilya below to stay up-to-date with his articles and updates!

Modular apartment building rises in 19 days

All the pieces of The Stack, the appropriately-named, 28-unit, six-story apartment building in the Inwood section of Manhattan, have been assembled. “It almost makes your head spin.”

The Stack

Nineteen days. That is all the time it took to put up a 28-unit, six-story apartment building in the Inwood section of Manhattan this summer. The secret? Modular construction.

Working Monday through Friday from June 20 to July 18, a crew of just eight iron workers, a crane operator, and half-a-dozen helpers installed the 56 modules that make up the apartment building at 4857 Broadway. In a bow to the property’s innovative construction technique, the building is to be known as The Stack. It was created by a partnership of developer/builder Jeffrey M. Brown Associates and Gluck+ architects.

“We’re now done stacking,” said Peter Gluck, principal at Gluck+. “Building any building is a nightmare, but this was not a nightmare. Given that this is the first one we’ve ever done, this went amazingly smoothly.”

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Part of modular construction’s appeal of is that by building in a factory, the modules—as well as carpenters, plumbers, electricians and others building them—are protected from the elements, which helps ensure quality control and quicker construction. And when it comes time to put the pieces together, a building can blossom in just a few weeks.

“It almost makes your head spin,” said Jeffrey Brown the CEO of the property’s eponymous developer. There is also the benefit of price, which Mr. Brown estimates as 15% less than conventional construction.

In the case of The Stack, it only took a few months to prepare the site and lay the foundations, and all the while crews were busy building the modules at a factory in Pennsylvania.

As Crain’s recently reported, modular construction is catching on in a big way in New York, and this is one of more than 17 modular projects underway in the city.

All that remains to be done on Upper Broadway is “zipping up” the development: connecting the pipes and ducts, building the elevator—the shaft for which was contained in one set of modules—and attaching the façade.

“Door bells, lights, switches, bathrooms, tiles, kitchens, everything’s in there already,” Mr. Gluck said. “Even the first coat of paint.”

Mr. Gluck could barely contain his excitement for the project, though he did note that modular construction has its limits. “It’s not a panacea,” he said. “For the right job on the right site, it can be a game changer, but it’s not going to work on every application.” In other words, conventional construction will hang around for some time.

Still, both partners said they look forward to undertaking more modular work. Mr. Brown said he’s already scouted a number of sites in the city, including some that, like 4857 Broadway, are irregular and conventional construction is more difficult. Projects like those make modular that much more appealing.

“We’ve already invested a lot in this … it would make sense to repeat it and take our lessons on the road,” Mr. Brown said. “I think this approach is in its infancy. For the right application, we have a long way to go.”