Jul 29

2010

Proper Use of PM Trust Accounts...

Posted by in Property Management Trust Accounts , Property Management , Proper Use of Trust Accounts

Proper Use of Property Management Trust Accounts

Posted on 29. Jul, 2010 by Mary Girsch-Bock "Law"

Misuse of trust accounts is the number one reason why property management companies are audited. That’s why it’s vital that the proper trust fund accounts are established as needed, and used properly.

Improperly using trust accounts that were established to maintain owner funds and tenant security deposits can result in stiff penalties, such as license suspension or revocation. Improper tracking or usage of tenant security deposits can also result in the management company being responsible for the cost of damages incurred while the property was occupied.

Trust accounts are traditionally used as a method to keep tenant deposits and rent payments separate from operating capital. For example, in both California and Arizona, rent payments must be placed into a trust account no later than three business days after the funds have been received.

Funds placed in the trust account can only be withdrawn by the broker or broker-officer whose name the account is established under. Brokers are not allowed to tap into these funds except for trust related items. To complicate matters, many states currently require that security deposits be kept in a trust account, with some state statutes requiring that the deposit be in a separate trust account, while others allow them to be placed with the owner’s trust account. For instance, in Arizona, brokers must maintain a separate account for all tenant security deposits. Note that in most states, security deposits received on broker-owned properties do not have to be deposited into a separate trust account, but it’s always wise to check your own state’s requirement.

In recent years, some states have implemented new laws requiring property managers and owners to specify in the management contract exactly how trust accounts will be used. Even if your state has statutes specific to the use of trust accounts, it’s best to spell out any specifics in the management contract.

The Department of Real Estate in each state has its own set of established rules and regulations governing the proper and improper usage of trust accounts, and it’s wise to get yourself up to speed on these regulations.

While your state’s department of real estate will continue to perform audits, if your management company has followed the statutes, and maintained ‘good accounting practices,’ you should be able to sail through any audit that your property management company may be subjected to.

In the next article, I’ll go over some practices you’ll want to implement immediately, if you’re not already doing them, along with some things to avoid.

*** At Real Property Management we comply with California State Law. If you have any questions regarding trust accounts feel free to contact us Mon-Fri 9-5pm 310.858.5514 or www.rpmwestside.com

Jul 27

2010

DWP OK's New Lawn Watering Rules...

Posted by in Real Property Management , Property Management , New Lawn Watering Rules , Los Angeles , Laws , DWP

DWP board OKs new L.A. lawn-watering rules keyed to street addresses; City Council to review

July 22, 2010 |

The five-member board that oversees the Los Angeles Department of Water and Power voted Thursday to approve a revised set of irrigation rules, allowing residents to water their lawns and gardens three days a week.

The panel, whose members are appointed by Mayor Antonio Villaraigosa, unanimously backed the plan and forwarded it to the City Council for review. Still, one DWP commissioner said he feared that the move from two days to three – and from 15 minutes a day to eight – would cause residents to use their sprinklers any day they choose.

“I anticipate a great confusion out among the members of the public,” Commissioner Jonathan Parfrey said.

Under the proposed rules:

Customers whose street addresses end with an odd number will be permitted to use their sprinkler systems on Mondays, Wednesdays and Fridays.

Customers with even numbered addressed will be allowed to water on Tuesdays, Thursdays and Sundays.

The plan would allow spray-head sprinklers, which do not conserve water, to be used for eight minutes a day, DWP officials said. Standard rotor sprinklers and those with multi-stream rotary heads will be limited to 30 minutes a day – but for just 15 minutes at a time, the utility said.

Watering will continue to be restricted to hours before 9 a.m. and after 4 p.m., regardless of the day.

The revised schedule is part of an effort to help the city conserve water without putting additional pressure on the DWP’s aging system of pipes. A panel of experts concluded that the previous two-day-a-week schedule helped cause a series of blowouts in cast iron water pipes.

-- David Zahniser at Los Angeles City Hall

Jun 01

2010

Water $8% More in L.A. ?

Posted by edgar in Water Tax , Property Management , Los Angeles , LA Water , DWP , blog , 8%

L.A. water rates could rise by 8% this year, DWP manager says

June 1, 2010 | 5:18 pm

Customers of the Los Angeles Department of Water and Power could see water rate hikes of up to 8% in the coming year, the utility’s top executive said Tuesday.

DWP Interim General Manager Austin Beutner said his budget plan for the nation’s largest municipal utility would likely result in increases for the typical residential water customer of 4% to 6%. Those who use greater amounts could see rate hikes of 7% to 8%, he said.

Beutner, who also serves as Mayor Antonio Villaraigosa’s first deputy mayor and jobs czar, will ask the DWP board to approve his proposed budget when members meet June 15. At least a portion of the proposed water rate increases will be presented to the five-member board in October, with a vote by the City Council scheduled for the following month, according to a budget report.

The proposal comes a few months after Villaraigosa and the council engaged in a bruising standoff over proposed increases in electric rates. At one point, the mayor’s appointees at the DWP threatened to withhold $73.5 million from the city’s budget unless the council approved their package of rates.

Beutner said that the DWP would be able to make a $257-million transfer requested by the council as part of this year’s general fund budget. He also said money from the upcoming water rate increase would help the DWP comply with water quality regulations and pay for repairs to its aging equipment and buildings, such as trunk lines and pumping stations.

While those rates are expected to go up, Beutner said the utility is trying to scale back a proposed series of electricity rate hikes originally planned for the 2010-11 fiscal year.

In February, DWP officials said they would need four consecutive electric rate hikes –--between 21% and 22% for business customers and 9% and 28% for residential customers, depending on where they live and how much power they consume. Beutner said his plan for electric rate hikes would be unveiled in two weeks.

The DWP has 1.4 million electricity customers and nearly 666,000 water customers.

Beutner’s proposed budget trims expenses by $263 million, with some of the savings coming from a reduction in construction contracts and energy efficiency programs, as well as a hiring freeze on nonessential employees.

“None of the cuts will impact the reliability, safety or the quality of the service,” Beutner said.

Beutner said he is also looking for ways of selling, leasing or developing some of its vast real estate holdings over the coming years.

-- David Zahniser at Los Angeles City Hall

*Note to property owners this could cut into your bottom line if you pay for water and trash services on your rentals & investment propertys.

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RPM Westside L.A. Blog

Proper Use of PM Trust Accounts...

Proper Use of Property Management Trust Accounts

DWP OK's New Lawn Watering Rules...

DWP board OKs new L.A. lawn-watering rules keyed to street addresses; City Council to review

Water $8% More in L.A. ?

L.A. water rates could rise by 8% this year, DWP manager says

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