Changes to Landlord Responsibilities - HB 693

Understanding Key Changes in Landlord Responsibilities: HB 693

If you own or are considering owning investment property for rent, it is crucial to stay informed about the legal landscape of landlord-tenant relationships. On October 1, significant changes will take effect as outlined in the recent legislative document, HB 693. These updates impact how landlords must interact with tenants, especially when planning to sell their properties. Here's a breakdown of the key changes every landlord needs to know:

Key Changes to Landlord Responsibilities:

1. Planning to Sell Your Property?

• Notice of Sale:
  Landlords will now be required to provide a written notice of sale to the tenant, offering them the option to purchase the property. The tenant has 30 days to respond to this offer before you can list the property on the public market.
• Right of First Refusal:
  If the tenant has not accepted the offer to purchase and the owner has received and intends to accept a third-party offer - if that offer is 10% or more lower than the price previously offered to the tenant, tenants now have the right of first refusal. This means they can purchase the residential rental property by matching the terms of the third-party offer. (If the tenant's offer matches, the landlord must accept it.)
• Counteroffers:
  If the tenant's initial offer deviates from the terms of the third-party offer, the landlord must provide a counteroffer within five days. The tenant then has another five days to accept or reject the counteroffer.
• Documentation:
  The notice of sale and any notice of third-party offers must include the sales price offered by the third party, and a copy must be sent to the Office of Tenant Legal Assistance (OTLA).

2. Limitations and Exemptions:

• Exempt Transfers:
  The right of first refusal does not apply to certain transfers, such as those to family members, business entities wholly owned by the owner, court-ordered transfers, transfers by fiduciaries, or transfers to government entities.
• Waivers and Assignments:
  Any attempted waiver or assignment of the tenant's right of first refusal is void. Tenants cannot waive their rights under this provision.

3. Penalties for Non-compliance:

• Landlords who fail to comply with these provisions may be fined up to $1,000 per violation.

Stay Informed and Compliant

As a landlord, staying informed about current laws and regulations is essential. Consider hiring a reputable property management company to ensure compliance and avoid costly fines. These professionals can help navigate the complexities of landlord-tenant laws and ensure all legal responsibilities are met.

For more detailed information, refer to the full legislative document, HB 693, and keep your rental operations compliant and fair for all parties involved, and as always, feel free to reach out if you have any questions on how this might affect your own personal scenario.

Why I Still Think You Should Buy That House, Even Now.

 

Invest in Yourself by Owning a Home

Are you wondering if it makes sense to buy a home right now? While today’s mortgage rates might seem a bit intimidating, here are two compelling reasons why it still may be a good time to become a homeowner.

Home Values Appreciate over Time

There’s been a lot of confusion around what’s happened with home prices over the past two years. While they did dip ever so slightly in late 2022, this year they’ve been appreciating at a more normal pace, which is good news for the housing market. And while looking at price movement over just a year or two can make you worry prices are usually this unpredictable, history shows in the long run, home values rise (see graph below):

 

Using data from the Federal Reserve for the past 60 years, you can see the overall trend is home prices have climbed quite steadily. Sure, there was an exception around the housing crash of 2008 that caused prices to break the usual trend for a time, but overall, home values have been consistently on the rise.

Increasing home values is one great reason why buying may make more sense than renting. As prices rise, and as you pay down your mortgage, you build equity. Over time, that growing equity gives your net worth a boost.

Rent Keeps Going Up Through the Years

Another reason you may want to consider buying a home instead of renting is the never-ending rent hike. If you've ever felt the pinch of rent increasing year after year, you're not alone. That’s because, rents have climbed steadily over the past six decades (see graph below):

By buying a home, you can lock in your monthly housing costs and bid farewell to those pesky rent hikes. That stability is a game-changer.

In the end, it all boils down to this: your housing payments are an investment, and you've got a choice to make. Do you want to invest in yourself or your landlord?

By becoming a homeowner, you're investing in your own future. When you rent, that’s money you never get back.

When you factor in home values consistently rising, plus the opportunity to get relief from never-ending rent hikes, homeownership can be a path to financial security. As Dr. Jessica Lautz, Deputy Chief Economist and VP of Research at the National Association of Realtors (NAR), states: 

“If a homebuyer is financially stable, able to manage monthly mortgage costs and can handle the associated household maintenance expenses, then it makes sense to purchase a home.”

Bottom Line

When it comes down to it, buying a home offers more benefits than renting, even when mortgage rates are high. If you want to avoid increasing rents and take advantage of long-term home price appreciation, let’s connect to go over your options.

Do You Think of Your Home as an Asset, or Just the Place You Live?

 

Owning Your Home Helps You Build Wealth

You may have heard some people say it’s better to rent than buy a home right now. I urge you not to listen. There are definitely situations out there where renting is the way to go, but all of the good reasons to become a homeowner still exist. One of them is that owning a home is typically viewed as a good long-term investment that helps your net worth grow over time.

Homeownership Builds Wealth Regardless of Income Level

You may be surprised to learn homeowners across various income levels have a much higher net worth than renters who make the same amount. Data from First American helps illustrate this point (see graph below):

What makes wealth so much higher for homeowners? A recent article from Realtor.com says:

“Homeownership has long been tied to building wealth—and for good reason. Instead of throwing rent money out the window each month, owning a home allows you to build home equity. And over time, equity can turn your mortgage debt into a sizeable asset.”

Basically, the wealth you accumulate when you own a home has a lot to do with equity. As a homeowner, equity is built up as you pay down your loan and as home prices appreciate over time. Mark Fleming, Chief Economist at First American, explains how this same benefit isn’t true for renters in a recent podcast:

“Renters as non-homeowners gain no wealth benefit as home prices rise. That wealth actually accrues to the landlord.”

Before you decide to sign another rental agreement, now is a good time to think about whether it would be better for you to buy a home instead. The best way to figure out what makes sense for you is to have a conversation with a real estate expert you trust. That professional can talk you through the benefits that come with owning to determine if that’s the right next step for you. 

Bottom Line

If you're not sure whether to keep renting or to buy a home, know that owning a home, no matter how much money you make, can help build your wealth. Let's connect now to get started on the path to homeownership.