Category: Real Estate Law

Rental Property Turned Meth Lab: Identify and Prevent

How do I identify and prevent my rental property from becoming a Breaking Bad nightmare?

Breaking Bad, the hit television series based Albuquerque, New Mexico, is in its final season.[1]?While many of us are sad to see this show end, I for one am grateful that my everyday life is not a Breaking Bad world of meth labs and drug dealers.

How do I identify and prevent my rental property from becoming a Breaking Bad nightmare.

However, I am trying to not be naive. Meth labs are often set up in rental homes, so landlords and property managers are at risk of having their rental properties turned into methamphetamine production facilities. This is a big deal because the chemicals that are used to make meth are highly flammable and explosive. And meth residue is extremely toxic and considered hazardous waste. Once it is discovered, the property owner is responsible for cleanup, which can cost tens of thousands of dollars, and most insurance policies will not cover it. In addition, meth residue can permeate an entire building, which means remediating all affected units, losing rental income, and relocating residents.

Given the physical dangers and financial consequences of renters setting up meth labs in your rental home, I thought some meth guidance might be in order:

1) Identify:
What are signs my rental property is becoming a meth lab?

Certain ingredients are necessary to make meth. If you watch Breaking Bad, you might recognize some of them. When you see the list, you understand why it is ?so toxic and why it is good to spot these toxic residues:

  • Large amounts of cold, diet, or allergy pill boxes (over-the-counter ephedrine or pseudoephedrine)
  • Sheets or filters that are stained red or have a white, powdery residue.
  • Empty containers of anti-freeze, white gas, ether, or starting fluids.
  • Drain openers, freon, lye, paint thinner, acetone, or alcohol.
  • Ammonia or propane tanks, anhydrous ammonia (in coolers).
  • Camp stove fuel containers or other compressed gas cylinder.
  • Jars or bottles with rubber tubing attached.

To make one pound of methamphetamine, six pounds of hazardous, toxic waste is produced. Besides ending up in the walls, floors, HVAC system, carpet and other places, some of the waste is often dumped on the ground, so also look outside for dead grass or plants, and stained soil.

2) Prevent:
How can I prevent my rental from becoming a meth lab?

Screening your tenants is and critical. People who cook meth tend to end up in rentals that are self-managed and do not have a standardized tenant screening procedure. So make sure to:

  1. Have a solid tenant screening system in place, or hire a property management company?that does.
  2. Call previous landlords to confirm that your applicant was a good tenant in the past (make sure the phone number you have is to the actual landlord, and not someone pretending).
  3. Check employment references, and verify income. Follow up if your tenant pays for rent in cash.
  4. Include in your lease agreement that there will be regular inspections (with the proper 24- or 48-hour notice, as required by state law. Regular inspections may deter someone who is engaged in illegal activities.
  5. Let the neighbors know you are the property owner, and that if they notice anything suspicious you’d appreciate a phone call to either yourself or your property manager.

3) Disclosure:
Should I let new tenants know that the unit was previously contaminated?

The answer depends on which state you live in. Scripps Howard news service examined state meth disclosure laws in 2012 and found that seventeen states require property owners to tell renters about prior meth contamination, although several of those states waive that requirement if the meth residue has been officially cleaned up.

One more warning for rental property owners: if you are planning on expanding your rental property inventory, make sure you are confident that any properties you purchase were not used as meth labs in the past, because as soon as you own it, you become liable for the cleanup. During due diligence, if you have any suspicions, consider checking with the local police department, and have the property tested during the inspection. If you find suspicious residue, you can even test it yourself with a ten-pack meth residue test kit from Amazon.com for about $30. If you get a positive result, that $30 would be money well spent.

Have you had any Breaking Bad experiences with your rental property?

Are you looking for a local property manager expert?

As always, the information provided here is just that–it is for informational purposes only and is not legal advice. If you have any particular questions or issues, please consult an attorney.

By Tracey March


[1] For those who don’t follow it, Breaking Bad is about a high school science teacher (played by Brian Cranston) turned methamphetamine cooker and dealer to provide additional income for his growing family when his cancer treatments start eating up his savings.

April 2, 2014 | 19 Comments More

Do I Need a Lawyer to Sell My Rental Home?


By
Tracey March
legal advice

In most states, involving an attorney in a residential real estate transaction is optional. If you’re using a realtor to help sell your rental and there is nothing out of the ordinary about the transaction, you probably don’t need a lawyer.

However, if you’re selling a rental under one or more of the following conditions, consider seeking advice from an experienced real estate attorney:

  • Seller-financing: an attorney will advise you on the best way to structure the deal to protect you and the rental property.
  • Short sale or foreclosure: an attorney will help negotiate with your bank, protect your other assets, and limit your personal liability.
  • Uncooperative tenant in the rental: an attorney will advise you about your rights and obligations under the lease agreement, and help transition the rental business to the new owner.
  • Executor or personal representative: an attorney can help probate the will (if necessary), advise you on how to deal with conflicts between beneficiaries, and help limit your liability and stress by making sure the sale is handled appropriately.
  • Co-own with a reluctant seller: an attorney will advise you on how to protect yourself if the reluctant seller changes his or her mind.
  • Complicated properties: if there’s a title problem, an issue such as questionable water rights or possible environmental contamination, an attorney will advise you on which disclosures must be made and help you figure out which issues to resolve prior to sale.
  • Judgments or liens: an attorney can help negotiate payoffs and develop strategies to protect your other assets.
  • LLC or corporate owner: if your business owns the property, and not you personally, an attorney will help draft the documents authorizing the sale and assist with debt payoffs, distribution of the proceeds among owners, reinvestment and tax implications.

In a few eastern states you may be required to involve an attorney. In most states you are free to go it alone, but remember that an ounce of prevention is worth a pound of cure. Hiring an attorney to prevent trouble, minimize liability, and give you peace of mind might be worth the money.

May 15, 2013 | 0 Comments More

Are You Subject to Fair Housing Laws?

By Tracey March

April is Fair Housing Month, which is a great time for both tenants and property owners to study up on their respective rights and responsibilities. But believe it or not, some people aren’t even required to comply with fair housing legislation.

Federal and state laws prohibit rental owners, property managers, and landlords from discriminating against certain groups in any aspect of renting residential real estate, including advertising and tenant screening. However, these laws exempt certain properties.

Federal Law: Fair Housing Act Exemptions

Single-family homes rented without the use of a real estate agent or advertising are exempt from the federal Fair Housing Act as long as the private landlord/owner doesn’t own more than three homes at the time.

Apartments of four units or less are also exempt if the owner lives in one of the units. However, even if this multifamily exemption applies to you, your rental advertising must still comply with the Act.

Other exemptions include the rental of a single room in a home, qualified senior housing, and housing operated by religious or private organizations, if certain requirements are met.

State Fair Housing Laws

Regardless of the federal exemptions, many local and state jurisdictions have their own fair housing laws, often with additional protected classes and different exemptions. For example, California’s fair housing law covers any form of housing which can be described as a “business establishment”–a term which courts have broadly interpreted to include almost every type of housing. Accordingly, the owner-occupied multifamily homes and the single-family homes exempted under the federal fair housing law are not exempt from the California law.

Even if you are exempt under state or federal fair housing laws, those laws were enacted to prevent discrimination in the provision of shelter–a basic human need. Renting in a way that is consistent with the spirit of the law isn’t only good business, it might also protect your karma.

As always, the information provided here is just that–it is for informational purposes only and is not legal advice. If you have any particular questions or issues, please consult an attorney.

April 23, 2013 More

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