Rather than view the lease as a "throw away" part of being a landlord, Real Estate Attorney Mark Zinman teaches us why this is the most important part of any rental transaction. Discover legal ways to let the lease documents be the "bad guy," give you the power, and let you enjoy the fruits of your investment.

Rent Perfect helps landlords onboard tenants with ease from the initial background check to leasing and payment collection. You can learn more by visiting www.rentperfect.com or calling 1-877-922-2547. https://bostonrealestateinvestorsassociation.com/ep-3-a-powerful-lease-is-a-landlords-best-friend-w-mark-zinman/

Additional Insured and Loss Payee Roles in Insurance

The designations of Additional Insured (AI), Loss Payee, and Lender’s Loss Payee often cause confusion for those not well-versed in insurance. While these roles might not directly impact an investor’s day-to-day business, understanding each helps avoid potential complications in the claims process and ensures all involved parties are protected as intended.  

Additional Insured

An Additional Insured (AI) is any person or entity other than the policyholder that has an insurable interest in the property. This could include a business partner, property manager, or lender. Additional Insureds are added to policies to protect themselves in cases where they either have a financial stake (as with property policies) or some liability exposure (as with general liability policies).  

Each Additional Insured listed in a policy is entitled to the coverage available under that policy. This means Additional Insureds have the right to make claims on the policy when it concerns the insurable interest outlined in the contract. However, they are only listed on claim payments if they are also designated as a loss payee, which we’ll discuss later on.  

Changes in partnerships, mortgagees, or property management can lead to inaccuracies in Additional Insured listings. If a name or role is inaccurate, additional documentation must be provided to update the Evidence of Insurance. Without these updates, errors may occur in coverage or claim payments and could even delay claims settlements, potentially causing issues for both the policyholder (you, the investor) and the AI.   

Loss Payee

A Loss Payee is a third party with a direct financial interest in the property, most commonly a lender, but may also be a business partner or private investor. This designation ensures that if there is a covered property loss, the Loss Payee will receive payment alongside the insured. However, being named as Loss Payee does not grant any rights under the policy beyond the claim payout. The insurer is not obligated to provide coverage or settle a claim with the Loss Payee if the loss is denied to the insured.   

The insurer is not required to notify the Loss Payee that coverage is in force. Instead, the Loss Payee is simply included in any payment following a covered claim. Misunderstandings around these rights can be avoided by clarifying these distinctions early on in business dealings and in contracts.  

Lender’s Loss Payee

The Lender’s Loss Payee designation provides a higher level of protection for lenders by creating a direct contract, or “privity,” between the lender and the insurer. This protects the lender’s financial interests even if the policyholder does not meet their obligations or commits a wrongful act. With a Lender’s Loss Payee clause, the lender’s interest is protected, even in cases where the insured’s claim would otherwise be denied.  

The Lender’s Loss Payee designation is often favored by lenders because it includes additional benefits. For instance, if coverage is cancelled or not renewed, the insurer is required to notify the lender. This allows lenders to stay informed of any changes to the policy that might impact their financial interest.  

For example, if an investor’s policy lists the lender as a standard Loss Payee, the lender and the insured would both be listed on any payout check for a covered loss. But if a policy provision or non-compliance by the insured prevents payment, the lender would also forfeit the payout. Conversely, if the lender is named as a Lender’s Loss Payee, they may still be entitled to payment even if the insured is disqualified due to non-compliance or other policy provisions.  

Avoiding Potential Complications

Accurate designations of Additional Insureds, Loss Payees, and Lender’s Loss Payees keep claims processes smoother and ensure all parties have clear, documented roles in the event of a loss. Understanding each distinction helps investors navigate claims, avoid unnecessary disputes, and maintain transparent communication with lenders and partners. If you have additional questions about these roles, feel free to contact your Client Service Advisor!  

Source link https://bostonrealestateinvestorsassociation.com/additional-insured-and-loss-payee-roles-in-insurance/

Mastering Coinsurance & Avoiding Costly Penalties

Understanding the Importance of Coinsurance in Protecting Your Investment Properties

When it comes to safeguarding your investment properties, simply purchasing an insurance policy is not enough. It is crucial to grasp the key factors that can significantly impact your coverage and payouts, with coinsurance being one of them. Coinsurance is a standard provision in the property insurance industry that mandates you to insure your property to a specific percentage of its total value, typically 80%, 90%, or 100%. Failure to meet this requirement at the time of a loss can result in penalties, potentially reducing the amount you receive from a claim. The primary purpose of coinsurance is to prevent underinsuring of properties.

An Illustrative Example

Consider a scenario where you have an investment property insured for $100,000 with a $3,000 deductible. If the property experiences a $40,000 loss and you file a claim, an adjuster will assess the cost of rebuilding the property in the event of a total loss. Suppose the adjuster determines the rebuilding cost to be $250,000 and you have an 80% coinsurance clause in your policy. This means you agreed to insure the property to 80% of its true replacement cost at the time of policy inception. However, since you only have coverage for $100,000, you will face a coinsurance penalty for being underinsured by 50% in this case.

The coinsurance penalty is applied before factoring in the deductible and depreciation. In the example provided, the penalty would reduce your claim amount to $20,000, minus the $3,000 deductible, resulting in an actual payout of $17,000 for a $40,000 loss.

Avoiding Coinsurance Pitfalls

To prevent coinsurance penalties during a loss, insurance carriers may inflate the Insurance to Value (ITV) of your property to ensure adequate coverage. While this may protect you from penalties, it can lead to higher premiums for coverage levels you may not necessarily need. At National Real Estate Insurance Group (NREIG), we take a different approach by working closely with investors to determine fair property valuations per square foot, offering Actual Cash Value (ACV) and Replacement Cost (RC) coverage options without coinsurance starting at competitive rates.

Why Choose NREIG?

Opting for NREIG means opting for peace of mind. Our no-coinsurance policies are designed to shield you from unexpected penalties without overpaying for coverage. With flexible coverage options and a team of experts dedicated to simplifying the insurance process, NREIG provides support at every stage of your investment journey.

 

Originally published at ICOR.

https://bostonrealestateinvestorsassociation.com/mastering-coinsurance-avoiding-costly-penalties/

MYTHS Debunked - NAR Commission Settlement

There are a lot of myths being told about the NAR Commission Settlement (NAR = National Association of Realtors). The media is saying that it's the end of the agent to housing prices are going to become more affordable to brokers will reduce their fees to seller's no longer paying a buyer fee... The list is endless.
So let's examine what is being said and see what is most likely the result of this lawsuit settlement.
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Disclaimer: These are the opinions of Jeffrey Chubb personally and not REAL Broker. You should do your own research to come up with your own conclusions when it comes to making the investment decisions of buying or selling real estate. Jeffrey is not a practicing tax accountant or a licensed attorney or financial adviser. Therefore, the information in these videos shall not be relied upon as tax, legal, or financial advice from a qualified perspective. If you need such advice, please contact a qualified tax accountant, attorney, or financial adviser. We have taken reasonable steps to check that the information in this video is accurate but we cannot represent that it is free from errors. You expressly agree not to rely upon any information contained in this video - it is for entertainment purposes only. https://bostonrealestateinvestorsassociation.com/myths-debunked-nar-commission-settlement/

A Powerful Lease is a Landlord's Best Friend w/ Mark Zinman

Rather than view the lease as a "throw away" part of being a landlord, Real Estate Attorney Mark Zinman teaches us why this is the most important part of any rental transaction. Discover legal ways to let the lease documents be the "bad guy," give you the power, and let you enjoy the fruits of your investment.
Rent Perfect helps landlords onboard tenants with ease from the initial background check to leasing and payment collection. You can learn more by visiting www.rentperfect.com or calling 1-877-922-2547. https://bostonrealestateinvestorsassociation.com/ep-3-a-powerful-lease-is-a-landlords-best-friend-w-mark-zinman/

2024 REIA Chapter Benefits and Pricing: How Rent Perfect Simplifies Property Management

The world of property management is complex, especially for landlords managing rental properties. The 2024 REIA Chapter has partnered with Rent Perfect to simplify and streamline the rental management process. From tenant applications and screenings to online rent payments, Rent Perfect provides tools that help landlords save time and minimize stress, allowing them to focus on enjoying their investments. Here’s an overview of the benefits and pricing available through the REIA Chapter for using Rent Perfect.

What Is Rent Perfect?

Rent Perfect is a property management solution designed for landlords, offering tools to automate critical tasks. These tools cover the rental process from application to move-in inspection, providing an integrated system that’s accessible on any device. The goal is to ease the workload of property management, ensuring landlords can manage their properties efficiently.

Exclusive Benefits for REIA Members

REIA members can access Rent Perfect at an incredibly low cost, unlocking a suite of powerful tools with a one-time account setup fee of just 95 cents. Here’s how REIA members can benefit:

- Discounted Access: Members can create a Rent Perfect account for under a dollar by using the REIA referral link.
- Rewards Program: Members can participate in the National REIA’s rewards program, which provides additional incentives for referring Rent Perfect to others.

To enjoy these benefits, members must sign up through a unique referral link, which can be shared via the REIA website or email.

Comprehensive Services by Rent Perfect

Rent Perfect offers a broad range of services designed to simplify rental management. Here’s a closer look at what REIA members can expect from this system.

1. Tenant Screening and Applications

With Rent Perfect, landlords can invite prospective tenants to complete an online application, pay for their background check, and create a Rent Perfect account. For $44.95 per applicant, landlords can access extensive screening services, including background checks, credit history, criminal records, evictions, judgments, and liens. These checks are conducted by licensed private investigators, ensuring accurate and reliable information. This fee is typically paid by the applicant, making this a no-cost benefit to REIA landlords.

2. Customizable Leases and Move-In Inspections

Rent Perfect offers free customizable lease templates for REIA members. Once a tenant is approved, landlords can generate a digital lease, which tenants can view and sign online, eliminating the need for physical paperwork. The lease can be accessed on any device, making it convenient for both landlords and tenants.

To avoid disputes over property condition, Rent Perfect also provides a move-in inspection tool. This digital solution enables landlords to document the property’s condition at the start of the lease, making it easier to assess potential damages at move-out.

3. Renter’s Insurance

Tenant negligence can lead to unexpected damages. Rent Perfect allows tenants to purchase liability insurance starting at $4.95 per month, giving landlords protection against potential lawsuits and damages. As an added benefit, landlords are notified if the insurance policy is terminated early, giving them peace of mind.

4. Online Rent Payments

Collecting rent has never been easier. Rent Perfect’s online rent payment tool allows landlords to manage rent collections securely and conveniently. Tenants can set up automated monthly payments, which helps them build a positive credit history with each on-time payment. Landlords benefit from a streamlined process, tracking payment details, due dates, and even late fees in one place. For each account, landlords pay a $10 monthly fee, while tenants pay $3.95 per ACH payment.

5. Skip Tracing Tool

Rent Perfect includes a skip tracing tool, which costs $5 per order. This tool helps landlords locate past tenants who have skipped out, making it easier to initiate the legal process for recovering owed funds. With just a tenant’s name and SSN, landlords can obtain current addresses to facilitate collections.

6. Vendor VIP and Work Order Management

Coming in 2024, Rent Perfect will integrate with Vendor VIP, providing landlords with a seamless work order management solution. This tool allows landlords to manage work orders directly with their chosen vendors, ensuring that repairs and maintenance requests are handled efficiently. Through the Vendor VIP platform, REIA members can establish a preferred vendor list and invite their preferred service providers to join.

Free Educational Resources

Rent Perfect doesn’t stop at property management tools; it also offers a variety of educational resources to support landlords in making informed decisions. Here are some of the valuable resources available:

- Weekly Video, Podcast, or Article Updates: Rent Perfect updates its educational content feed every week, so landlords can stay current on industry trends without extra effort.
- The Rent Perfect Podcast: With 10–20 minute episodes, this podcast provides insights on rental management best practices, covering relevant topics for landlords.
- Articles and Blog: Expert articles written by seasoned landlords are accessible through Rent Perfect, covering essential tips and strategies.
- The Successful Lazy Landlord Video Series: This 14-episode series is designed for landlords seeking efficient methods for tenant placement and property management. Each episode is only 2-3 minutes, offering concise, actionable advice.
- Live Zoom Presentations: Led by David Pickron, founder of Rent Perfect, these presentations provide live demonstrations of the Rent Perfect system and practical advice for rental management.
How to Get Started with Rent Perfect

REIA members interested in Rent Perfect can sign up quickly using their chapter’s referral link. Once registered, they can access all the available tools and educational resources, with many features provided at no additional cost.

For those looking to add value to their rental operations and create a streamlined management experience, Rent Perfect offers a reliable solution. Members are encouraged to explore Rent Perfect’s free resources and take advantage of the benefits offered through the REIA Chapter.

In Summary

Rent Perfect is more than just a management tool—it’s a comprehensive solution designed to enhance every aspect of rental management. REIA members gain access to an extensive set of features, from tenant screenings and digital leases to rent collection and work order management. These tools not only save time and reduce stress but also empower landlords to focus on maximizing their investment returns. With additional educational resources and member-exclusive discounts, Rent Perfect and the REIA Chapter provide everything a landlord needs to manage their properties with confidence and ease.

Ready to Streamline Your Rental Management?

Sign up today through the REIA Chapter referral link and start enjoying the benefits of Rent Perfect’s innovative property management system. Whether you’re new to property management or a seasoned landlord, Rent Perfect has the tools and resources to make your job easier.

GET YOUR SIGN UP LINK HERE

Download the full program brochure below

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https://bostonrealestateinvestorsassociation.com/2024-reia-chapter-benefits-and-pricing-how-rent-perfect-simplifies-property-management/

A new law was recently signed by Governor Healey in Massachusetts that aims to protect tenants from the negative impact of eviction records. This law, part of the Affordable Homes Act, allows tenants to seal certain eviction records from public view and prevents these records from appearing on credit reports. It will come into effect on May 5, 2025.

What This Law Means for Tenants and Landlords

The goal of the law is to help tenants find housing without being blocked by past eviction records, which can be caused by financial difficulties. Tenant advocates believe this will reduce housing discrimination, but landlords are concerned. They often rely on eviction records as a key part of tenant screening and fear this change could make it harder to assess renters. Some landlords may respond by requiring higher credit scores or income levels for applicants.

Under this new law, the tenant has to take action to get their eviction record sealed. If they don’t apply to have it sealed, it will still be publicly available. But once a tenant does apply, the process of sealing the record is quick and easy, and landlords might not even know the record was sealed.

Different Rules for Different Types of Evictions

Here’s how the law handles different types of eviction cases:

No-Fault Evictions

A no-fault eviction happens when a tenant is evicted for reasons unrelated to their behavior, such as when a landlord decides to sell the property. In these cases, tenants can apply to have their record sealed. If the landlord doesn’t object within seven days, the court will approve the request without a hearing.

Non-Payment of Rent

For cases where tenants were evicted for not paying rent, they can apply to seal their record if they have had no evictions in the last four years. The tenant also needs to prove that financial hardship was the reason for the non-payment. Again, the landlord has seven days to object, and if they don’t, the court will automatically seal the record.

Evictions for Serious Issues (At-Fault Cases)

Evictions involving serious lease violations, such as criminal activity or property damage, are called at-fault cases. Tenants can apply to have these records sealed if they have been eviction-free for seven years. If the landlord doesn’t object within seven days, the court will typically seal the record. For certain criminal-related evictions, the court will need to hold a hearing to make sure sealing the record doesn’t compromise public safety.

Dismissed Cases or Tenant Wins

If a tenant wins the eviction case or the case is dismissed, the tenant can immediately apply to seal the record. The court will seal the record without notifying the landlord or holding a hearing.

Impact on Credit Reporting Agencies

This law also imposes new restrictions on credit reporting agencies. They will no longer be able to include sealed eviction records in their reports. Additionally, if an eviction record is not sealed but is still included in a report, the agency must specify the type of eviction, whether it was no-fault, non-payment, or for cause. These changes will make it difficult for credit agencies to report eviction information accurately, and many may stop reporting eviction records altogether in Massachusetts.

Changes to Rental Applications

Landlords in Massachusetts will now have to include a new disclosure in their rental applications. This allows tenants with sealed eviction records to legally answer “no record” when asked about evictions.

What Happens Next?

The law won’t be in effect until May 2025, giving the courts and credit reporting agencies time to adjust to these new rules. Landlords and rental agents will also need to update their processes. There’s still some uncertainty about how the law will be enforced and how smoothly things will run once it’s live, but for now, this new law represents a major change in tenant rights in Massachusetts.

Download Law PDF HERE https://bostonrealestateinvestorsassociation.com/massachusetts-passes-new-law-to-help-tenants-seal-eviction-records/