Are you a property owner trying to navigate the complex terrain of managing properties remotely? Have you ever wondered about ‘Ohio Squatters Rights and the Challenges of Long-Distance Landlording’? Understanding squatters rights, which in legal terms is known as adverse possession, goes beyond just knowing what it means. It means understanding the implications, legal processes involved and how to protect your property – especially when you are not physically present to monitor your property.

Understanding Squatting and Trespassing in Ohio

Whether you’re a seasoned landlord or just starting out, understand the nuances of Ohio squatters rights and the difference between squatting and trespassing. Let’s simplify these complex legal terms and their implications.

The Difference Between Squatting and Trespassing

While both squatting and trespassing involve occupying a property without the owner’s consent, they are not the same.

Squatting is when a person resides in an abandoned or empty property without the owner’s permission. Squatters, under certain circumstances, can potentially claim ownership of the property through a legal process known as adverse possession. In Ohio, a squatter can’t claim legal ownership until they have lived on the property for a minimum of 21 years.

On the other hand, trespassing is a criminal offense where a person enters a property without permission, with no intention or legal right to stay or claim ownership.

Legal Implications of Squatting and Trespassing

The legal implications of squatting and trespassing differ significantly. A squatter who meets the requirements of adverse possession can potentially gain legal ownership of a property.

In contrast, trespassing is a criminal offense, with penalties ranging from fines to jail time. A squatter can be considered a trespasser if the property owner makes it clear that they are not allowed to remain on the property.

These laws are meant to protect both the rights of property owners and individuals who may find shelter in abandoned properties. As a landlord, identifying the difference between a squatter and a trespasser can help you navigate your next steps.

The Legal Process of Claiming Adverse Possession in Ohio

In Ohio squatters rights and the challenges of long-distance landlording, understanding adverse possession is crucial. Adverse possession is a legal principle that allows a squatter to gain legal ownership of a property under certain conditions. It’s a complex process that requires continuous and exclusive use of the property for an extended period.

The Requirements for Claiming Adverse Possession

To claim adverse possession, a squatter must meet several specific conditions:

1. Exclusive Possession: The squatter must be the only occupant of the property. Shared occupancy with the legal owner or other tenants disqualifies the claim.
2. Open and Notorious Possession: The squatter’s occupation of the property must be visible and obvious, done in a way that a reasonable property owner would become aware of the squatter’s presence.
3. Hostile Possession: The squatter’s possession is without the owner’s permission and contrary to the owner’s interests. This hostility does not imply aggression, but rather a lack of legal permission.
4. Continuous Possession for 21 Years: The squatter must occupy the property without interruption for a full 21-year period. Any significant break in occupancy can reset the clock on the adverse possession claim.

It’s essential to note that even having a color of title – a document that appears to establish ownership but does not, due to a legal deficiency – does not reduce this 21-year requirement in Ohio.

The Legal Process of Evicting Squatters in Ohio

Dealing with squatters can be a complex and stressful situation for any property owner. However, understanding and following the legal process for eviction can help to alleviate some of these challenges.

Serving an Official Eviction Notice

In Ohio, the first step when dealing with squatters is serving an official eviction notice. This notice informs the squatter that they have a specified period (usually three days) to vacate the property. If they fail to do so, the landlord can then initiate legal proceedings against them. The eviction notice serves as a warning to the squatter, and in some cases, it may encourage them to leave voluntarily, avoiding the need for legal action.

Filing a Complaint for Eviction

If the squatter fails to leave after being served the eviction notice, you can proceed to file a complaint with the relevant court. This step officially starts the legal eviction process. The complaint details your claim to the property and the squatter’s unauthorized occupation. 

Attending a Court Hearing

Once the complaint is filed, a court hearing will be scheduled where both parties can present their case. The court will examine the evidence, including the eviction notice, the squatter’s response, and any other relevant information. It’s crucial at this stage to have all your documentation in order. 

Obtaining a Writ of Execution

If the court rules in your favor, a Writ of Execution is issued. This legal document authorizes the local sheriff to enforce the court’s decision and remove the squatter from the property. It’s the final step in the legal process of evicting squatters in Ohio.

Preventative Measures to Protect Your Rental Property from Squatters

Keeping your property safe from squatters involves a proactive approach and the use of smart strategies to deter unauthorized occupation. Here are some rental property security preventative measures against squatters in Ohio that you can put into action.

Regular Property Inspections

One of the most effective methods of preventing squatting is conducting frequent property inspections. Regular visits to your property send a clear message that the property is actively managed and monitored, discouraging squatters from attempting to occupy it. 

Making the Property Appear Inhabited

A vacant property is a magnet for squatters. Making your property appear as though it’s occupied can act as a significant deterrent. This could be as simple as keeping the yard maintained, installing timer switches for lights, or even hiring a property management service to routinely check on the property.

Installing Security Systems

Security systems can be a powerful tool against squatters. These systems not only deter potential squatters but also provide valuable evidence if legal action becomes necessary. However, it’s crucial to make sure your future tenants are aware of any security measures to avoid any legal issues. 

Securing Access Points

Ensure all access points, including windows, doors, and gates, are securely locked. Regularly check the integrity of fences, doors, and windows and repair any damages promptly. Our property maintenance request feature allows property managers to swiftly address such issues.

Posting No Trespassing Signs

Clear signage indicating that trespassing is not allowed can discourage squatters. According to Ohio law, trespassing is defined as entering or remaining on someone else’s property without permission. Posting “No Trespassing” signs can help enforce your rights as a property owner.

Maintaining a Good Relationship with Local Law Enforcement

Keeping good relations with local law enforcement is a valuable strategy. Prompt reporting of any unauthorized occupants to the authorities can help in faster resolution and prevent squatters from establishing residency.

Prevention is the best strategy when it comes to squatters. By implementing these rental property security preventative measures against squatters in Ohio, you can effectively protect your investment and maintain control over your property.

Utilizing Property Management Software for Long-Distance Landlording

Managing properties from a distance can be a daunting task, especially when it comes to the issue of squatters. Long-distance landlords often face unique challenges, such as identifying squatters and trespassers, managing property maintenance, and preventing squatting. 

Property management software is an essential tool for long-distance landlords. It not only simplifies administrative tasks but also plays a vital role in preventing squatting. By maintaining a regular and efficient communication channel with tenants, you can keep tabs on the property’s occupancy status.

Moreover, with features like online rent collection, automatic reminders, and comprehensive reporting, you can easily monitor any irregularities that could indicate potential squatting.

Are you struggling with understanding Florida eviction laws, especially for non-payment cases? As a landlord or property manager, ensuring a steady stream of income from your rental investment is paramount, and any disruption in rent payments can have a profound impact on your financial health. But, landlords must tread a fine balance in Florida. Yes, you want to protect your income stream, but you also have a legal obligation to follow a strict protocol before evicting tenants for non-payment of rent.

Understanding the aspects of Florida eviction laws will ensure that you, as a landlord or property manager, are equipped to navigate the process efficiently and lawfully. And by being prepared, you can foster fair and respectful relationships with your tenants while protecting your property investments. 

The Legal Grounds for Eviction in Florida

Whether you’re a seasoned landlord or just starting out in the property management game, it’s crucial to understand the legal grounds for eviction under Florida law. This helps you to handle such situations in a fair and lawful manner. Here are the primary reasons that could lead to eviction proceedings:

Non-Payment of Rent

This is the most common ground for eviction, not just in Florida but in many other jurisdictions. If a tenant fails to pay their rent by the due date as outlined in the lease or rental agreement, you as a property owner have the right to issue a three-day notice. This gives the tenant an ultimatum – pay the rent in full within three days or vacate the property. If the tenant neither pays nor leaves, you can initiate eviction proceedings.

Violation of Lease or Rental Agreement

Lease agreements contain specific terms both parties must adhere to. If a tenant breaches these terms — like subletting without permission, keeping a pet against a no-pets policy, or exceeding maximum occupancy — you can issue a seven-day notice to cure. This gives the tenant seven days to correct the violation. If the violation isn’t rectified, you can proceed with eviction.

Damage to the Property

If a tenant causes excessive damage to the property — beyond normal wear and tear — it can be grounds for eviction. The standard is typically significant damage that decreases the property’s value or makes it uninhabitable. In this scenario, you can issue a seven-day unconditional quit notice, after which the tenant must leave. There’s no opportunity for the tenant to repair the damage to avoid eviction.

Use of Property for Illegal Activity

If a tenant uses the property for illegal activities, such as drug dealing or other criminal acts, it’s a valid ground for eviction. Like with property damage, you can issue a seven-day unconditional quit notice, and the tenant doesn’t have the chance to correct the behavior.

The Eviction Process in Florida: A Step-by-Step Guide

Understanding the eviction process in Florida is essential to avoiding costly mistakes and ensuring a smooth transition. This process begins with providing a written notice and ends with the return of the property to the landlord.

Providing a Written Notice

The first step in the eviction process is to issue a written notice to the tenant. This notice should specify the reason for eviction and the time period within which the tenant can remedy the situation, typically 3, 7, 15, 30, or 60 days depending on the rent payment method. Make sure to keep a signed copy of the notice as evidence.

Filing an Eviction Lawsuit

If the tenant refuses to vacate the property within the time frame specified in the notice, the next step is to file an eviction lawsuit. This should be done at the appropriate county courthouse, either in person or via an e-filing portal. The lawsuit should include the names of the landlord and tenant, the reason for eviction, the property address, and the issued notice.

Serving Tenants with Summons and Complaint

After filing the lawsuit, the tenants must be served with the summons and complaint. They have up to 5 days to contest the lawsuit in writing. If the tenant contests, the court process may take longer. If they fail to respond or their reasons are found invalid, the eviction process proceeds to a court hearing.

Attending a Court Hearing

In the court hearing, the judge reviews all presented documents, including the rental agreement, eviction notices, and any other relevant evidence. If the tenant fails to appear, the ruling will be in favor of the landlord.

Obtaining a Writ of Possession

If the landlord wins the case, they receive a writ of possession, which orders the tenant to vacate the premises within 24 hours. If the tenant refuses, they can be forcibly removed by authorities.

Returning the Property to the Landlord

The final step of the process is the return of the property to the landlord. The authorities can place a lock on the property to ensure the tenant vacates.

Tenant’s Rights and Defenses Against Eviction in Florida

In Florida, tenants have specific rights that can serve as defenses against eviction. Here, we break down these defenses to help you understand the landscape better. Every eviction case is unique and may require the assistance of a legal professional.

Improper Notice from the Landlord

The first line of defense a tenant might use is the claim of improper notice from the landlord. Florida eviction laws mandate specific procedures that landlords must follow, including serving an accurate eviction notice before filing a lawsuit. If as a landlord, you fail to meet these requirements, the tenant might use this as a defense.

Landlord’s Failure to Maintain the Premises

Tenants have the right to a habitable living environment. If as a landlord, you fail to maintain the property in a way that meets health and safety standards, the tenant may use this as a defense in an eviction case. This could include not fixing leaking pipes, not addressing pest infestations, or not providing adequate heat or hot water. However, tenants must usually notify the landlord of the issue and give them a chance to remedy it before using this defense.

Retaliation or Discrimination by the Landlord

It’s illegal for a landlord to evict a tenant out of retaliation or discrimination. If a tenant can prove the landlord is evicting them out of retaliation for exercising their legal rights, or due to discrimination based on race, religion, gender, age, disability, familial status, or national origin, it could serve as a successful defense.

Other Potential Defenses Depending on the Circumstances

There are several other defenses a tenant might use against eviction, depending on the circumstances. These can range from the landlord accepting rent during the eviction process (which can inadvertently waive their right to evict the tenant for the time being), to a landlord attempting to evict a tenant using unlawful methods.

Best Practices for Landlords to Avoid Costly Mistakes

As a landlord or property manager, it’s crucial to understand and follow the best practices to avoid costly mistakes and potential legal disputes. Here, we’ll discuss some essential tips to ensure a harmonious rental experience, while staying in compliance with the Florida eviction laws.

Understanding and Respecting the Lease Agreement

The lease agreement is a binding contract between you and the tenant. It outlines the obligations and rights of both parties. As a landlord, have a comprehensive lease that clearly spells out the rental terms, expectations for tenant behavior, and procedures for potential evictions.

Maintaining Accurate Records

Maintaining detailed and accurate records is a must. This includes documentation of rent payments, lease violations, and any efforts to address issues. These records can be crucial in the event of a dispute or eviction.

Making Timely Rent Payments

While this primarily falls on the tenant, it’s your responsibility as a landlord to ensure the rent is collected on time. 

Knowing What to Do When Facing Eviction

No landlord wants to go through the eviction process. However, if it becomes necessary, it’s crucial to follow the legal eviction process to the letter. This will help you avoid any potential legal issues or complications.

FSBO is an abbreviated form of for sale by owner. Sometimes it is known as Fisbo or Fizbo. Term FSBO is used to describe people who are going to sell their property without any assistance of real estate agent/company. Trend of real estate business is increasing day by day. Nowadays people don’t want to pay the commission fees of real estate agents to sell their own property. Sometimes property owners have to pay thousands of dollars in order to sell their property.

Internet plays a significant role in real estate business. Property owners can display their piece of land on Internet and can easily sell their property without paying any commission to brokers. There are several real estate companies that are always ready to help the owners to sell their properties. People choose FSBO just because they want to actively involve in the entire advertising procedure. FSBO enables them to save a large amount of money at the time of selling their own houses. 

FSBO offers multiple listing services that are the best option for the owners. MSL is the best tool to reduce the workload of professionals. Real estate owners can earn a good amount by selling their property through local newspapers. They don’t require real estate agents for the advertisements. Online advertising can attract more buyers because mostly people search on Internet for a good piece of land. 

Real estate owners can easily get a great amount of their house by following certain points. They should determine the exact value of their home and also spend some money to renovate the building so that buyers like the property. They should discuss with their friends, relatives and others about their property. You should try to sell your real estate at actual market price. You can also advertise in newspapers, publications or websites etc. 

For a successful FSBO, you should know complete details of your property like sq footage / lot sizes / restrictive covenants. You should understand all contracts, offers and acceptance etc. You can also consult an attorney to make a best deal. You should tell important features about your property.

You’ve decided to sell your home yourself and decide to have an open house to show off the property. Potential buyers come and you get an offer. What now?

Qualifying Buyers 

Your home is looking sharp and you’ve got the word out telling people about the open house. Now you need to be prepared to take action if a qualified buyer attends, likes your home and wants to buy it. 

Most qualified buyers will have a strong lender letter. If one of them wants to buy, you can move on to the next step. There may be people who come to your open house who would like to buy but don’t yet have a lender letter. Let me suggest a mutually helpful alliance for dealing with that situation.

Call several lenders before you schedule your open house. Tell them you’re planning an open house and you’d like to have a lender on hand to help buyers (even if they don’t want to buy your home) figure out what they can afford. Tell them you’d also like them to help you evaluate any lender letter you’re offered by a potential buyer. Choose the lender you feel most comfortable with and work out a mutually acceptable date for your open house. 

You can introduce all attendees at your open house to the lender. This often proves to be helpful to you, some of the buyers who attend and can be a source of additional loans for the lender. Everybody wins. 

Be Prepared for Action

You need to know how you want to handle a contract should someone want to make an offer. Do you have an attorney who will draw it? Are you going to suggest using a contract form? If so, have one on hand. Do you have a specific settlement company you’d like to use? Do your homework and think these things through in advance. Buyers may have ideas and connections of their own. You should consider any reasonable suggestion a potential buyer makes, but be prepared with your own approach if the buyer isn’t sure how to proceed. The point is to plan your course of action in advance. 

In Closing

FSBO sellers often worry whether anyone will attend their open houses. They are then happily surprised when people arrive. Such happiness can turn to embarrassment when an offer is made and the FSBO seller isn’t sure how to handle it. If you think positively and prepare, this need not happen to you.

For the third successive year, specialist website PropertyInSpain.Net enjoyed the Christmas number one ranking with leading search engine Google.

In the 36 months at number one for key search phrases, pre-qualified visitor traffic from Google search results to the triple award winning website has doubled from 20% to 40%. In addition, Google lists 100s of important pages of advice, information and property showcases from PropertyInSpain.Net that attract 1,000s of serious property buyers and investors.

A traffic spike of 114,000 hits resulted in 4,000 people in one day viewing the EUR 1M Mallorca home of the Christopher Columbus family, sold by PropertyInSpain.Net to a UK TV mogul at the price demanded by it’s German owner. The value could double if FBI and Granada University DNA experts establish a 100% birthplace link with the explorer.

PropertyInSpain.Net’s Terry Walker said: “We never dreamed we’d get the elusive number one slot for three successive years as Google lists 8.2M rival webpages promoting property in Spain. Once again it’s a good Christmas for us and for Spain, as the country remains where it belongs – as the world’s leading living, property buying and holiday destination and being promoted by the top ranked Google website.”

The highly automated website was designed and developed by a creative team led by Rob Pagan of Smallworldit.com following earlier successes with the Delia Smith and Virgin Books websites. The site’s PowerSearch feature is designed to help buyers discover, shortlist and order local checks on availability and price changes on 11,000 properties across 10 main residential Costas, Ibiza and Mallorca.

My Number one FSBO Tip? Don’t sell it yourself! A “FSBO,” or house “for sale by owner” can sell fast, and for as much as it would have if listed with a real estate agent. Sometimes – but not normally. Consider the following ten points.

 1. Buyers work with agents. Most look at MLS listings. Sell it yourself, and they won’t see or hear about your home. How do you find that “right” buyer or get top dollar when you’re invisible to most of the market?

 2. Your FSBO will get lower offers. Naturally, the buyer thinks you’ll take less because you’re saving the commission! Save a $10,000 commission, get $10,000 less – where’s the advantage in that?

 3. Advertising is expensive. The costs the real estate office normally pays are yours if you sell it yourself. How much could you spend on ads if it takes a a year to sell?

 4. They have the resources. And you don’t. Agents have books of sold properties to look at, for example, to determine the best price for your home. You can dig through county records, but you do have to value your time too, right?

 5. They know the market. What’s the target market for your house? Young couples, retirees? What features do they want? You should know these things before you write your ads. An experienced real estate salesperson will know.

 6. They know the laws. What about written disclosures, and who pays for the real estate transfer tax? When you sell it yourself you don’t get to ignore the laws.

 7. Are you a good salesperson? Can you develop rapport and properly answer objections? Could your defensiveness scare off a buyer who criticizes your home? Think back on your own purchases, and you’ll realize that a good salesperson makes a difference.

 8. Paperwork. Will you help the buyer properly fill out an offer to purchase? An agent would. Do you have the other closing documents ready?

 9. Agents negotiate for you. When did you last learn a new negotiating technique? Can you counter-offer without scaring off a buyer? A good salesperson is trained in these skills.

 10. You may not save anything. The documents, newspaper advertising, signs for the yard – it’s all your expense when you sell it yourself. After your hard work, you may get low offers and negotiate poorly. Honestly, sellers often net less money from the sale when they try to save the commission.

Most “FSBO” sellers eventually turn to a real estate agent for help. You could learn the things an agent does, but is it worth it to spend all that time and maybe not even save any money? Don’t sell it yourself unless you really know what you’re doing. That’s my number one FSBO tip.

Over the last 20 years there have been significant changes in the choices people are making in whether they wish to rent or own their house, flat or apartment. In the early 1980’s West European countries averaged between 50% and 60% of homes owner occupied as opposed to rented. However as years progress into the early 2000s there have been some very significant changes with most countries seeing a significant reduction in the number of properties rented. Some of the most significant changes in the percentage of properties rented in Western Europe are:

UK from 42% to 30%;

Luxembourg from 39% to 26%;

Netherlands from 58% to 46%;

Spain from 21% to 11%.

One possibility for this trend is the increasing standards of living combined with market changes improving the choice and availability of financial products to purchase properties. However also to be considered is the very significant differences when comparisons are made across countries. Below is a summary of the most recent data found on the percentage of homes rented for each country.

Austria 40%; Belgium 31%; Denmark 51%; Finland 32%; France 40%; Germany (ex FRG) 55%; Germany (ex DDR) 66%; Greece 20%; Ireland 16%; Italy 25%; Luxembourg 26%; Netherlands 46%; Portugal 21%; Spain 11% Sweden 39%; United Kingdom 30%.

One possible conjecture is that countries with a higher percentage of properties in the rental sector may have higher workforce mobility. This would suggest that Germany may have significantly higher workforce mobility than other West European countries. In contrast Spain may have relatively low workforce mobility.

The data available on property to rent across Western Europe raises many more questions than it answers however one factor that is very evident is the definite trend for a shift from rental to owner occupied homes. 

For landlords and real estate letting agents who have properties to rent this may also suggest that competition will increase to find tenants. However there are other factors to consider such as the type of rental property. For example the UK rental sector can be split into three main categories, these are Council (e.g. Government owned), Housing Associations (often charitable trusts) and Private (e.g. private landlords and investors). In 2003 the Private sector accounted for 35% of rental properties in the UK, and this percentage was increasing as more people invest in private rental property.

Overall it is difficult to draw precise conclusions however taking the UK example there are some specific factors, firstly overall rental stock has reduced significantly from the 1980s into the early 2000s, secondly there has been an increase in private rental properties, particularly within the last 10 years.   The increase in private rental has resulted in more companies who provide free services to landlords and tenants for homes to rent in London and throughout the UK.

Most FSBOs (people who are selling their own homes) are aware of the conventional use of escrow. In this article, we look at ways to use escrow to solve problems. 

Escrow

Escrow means different things in different parts of the country.  In California it’s part and parcel of the settlement process. In Virginia, while there’s no formal escrow before settlement, the settlement agent gathers title information, draws or has a deed drawn, coordinates with the lender, receives various inspection reports and in general conducts an informal escrow in the days before settlement. The difference is that, in Virginia, usually documents aren’t signed by the parties until they meet at the settlement table.  It’s the use of escrow after this period that we’re concerned with here.

A Problem Rears Its Head

What’s possible varies from state to state, but creating an escrow account (usually held by the settlement agent) after a home is sold can solve problems. What sorts of problems? Let’s look at a few.

First of all, let’s assume the buyer or seller needs, or wants, to settle by a certain date. Lots of things can cause this including the date school starts, the date a breadwinner starts a new job or the date of settlement on the seller’s new home.

Now, let’s suppose a problem crops up which would prevent that settlement deadline from being met.  Such problems might be caused by the discovery of termites and termite damage, the discovery of encroachment on a utility right of way by a garden shed on the property being sold or the discovery of high levels of radon gas within the home.  

Let’s further suppose that the buyer and seller have agreed on the basic solution of the problem. In the above examples, typical solutions might be that the seller will have the home treated for termites and have a licensed contractor repair the damage. Or the seller will have a contractor move the shed out of the right of way. Or the seller will install a radon mitigation system.  Of course, everything is negotiable, and a buyer who wants a property badly enough could agree to fix the defects himself.

What if the pest control company, contractor or the radon mitigation company can’t finish their work until after the planned settlement date?  What happens then?  Most frequently, settlement is delayed until these sorts of things are taken care of, but sometimes that isn’t desirable.  Sometimes delay of settlement can be a deal killer.

Problem Solving 101

Enter the “after settlement escrow.” The parties agree that an amount of money (usually a bit larger than the estimate) is set aside in escrow pending completion of the work. The escrow agent has clear (usually written) instructions about what must be done before the money is released to the person who put it up (or before the work is paid for and any excess returned to the person who put it up).

The funding of an after settlement escrow usually comes from the proceeds of the sale, so it can be used where there are no funds to take corrective action any other way. Even if the person responsible could get a loan for the purpose, the process could take too long to meet the settlement deadline. In that way, it can be a “cash flow” solution, too. 

No matter what problem you encounter, it’s usually possible for a willing seller and a willing buyer to work things out. Remember that all sorts of needs can be accommodated without anyone’s being a loser.  Situations in which both buyer and seller are winners happen frequently. With any luck, that’s what will happen in your case. It just takes creativity and persistence.

There is quite a bit of real estate available in Arizona, because new homes are being built constantly. If you’ve ever been to Arizona, you may be surprised by its vast open spaces – and even the new developments that spring up don’t seem to take anything away from all of that wide open space. In fact, all of that beautiful space is what attracts many people to the Arizona real estate market!

Many people buy real estate from a distance, sight unseen. While this practice can be used to scam people out of their hard-earned money, if you follow certain guidelines you and your money should be relatively safe. Start by understanding what documents you should see throughout the sale process. 

The first thing you should see is the MLS printout. MLS stands for Multiple Listing Service. The MLS printout is a copy of the listing that was sent out by the service. It contains a description of the property, and there may be statements made in the MLS that need to be verified for accuracy. If the property or home is in a new sub-division, you need to ask for the Public Report as well. 

Other important documents that you should request include the Seller’s Property Disclosure Statement (SPDS), Covenants, Conditions, & Restrictions (CC&Rs), governing documents from the Home Owner’s Association, HOA Disclosures, the Title Report, the Home Warranty Policy, an Affidavit of Disclosure, Lead-Based Paint Disclosure, County Assessors Records, and a Professional Home Inspection Report. Make sure that you get a copy of all of these documents, for your own protection. It is a good idea to have your lawyer look at these documents as well.

There is quite a bit of information that you need to learn about a property in the state of Arizona before making a purchase. For instance, some places in the state may be infested with scorpions, which are quite common in Arizona and are hard to get rid of. Some areas of Arizona contain soil and groundwater that has been contaminated by improper disposal methods.

“Collecting more taxes than is necessary is legalized robbery.” These words of wisdom, spoken by the 13th president of the United States, Calvin Coolidge, still ring true in today’s society for homeowners and business owners. Robbery may seem like a harsh word, but what would you say if someone tried to sell you one-year-old motel sheets for 90% of the original cost? Based on the appraisal district’s depreciation schedule, this is a fair deal. 

Most people would not consider this a fair deal and either reject the offer or request a lower price. This should be the same thought process when the appraisal district overassesses your business personal property (BPP). Texas law requires business owners to report BPP, personal property used for the production of income, to the appraisal district for assessment and taxation. Although there are no criminal penalties for not complying with the law, there is a penalty of 10% of the taxes. For example, if you have a BPP account assessed for $100,000, your annual BPP taxes are $3,000, based on a 3% tax rate. The 10% penalty for this BPP account would be $300 ($3,000 times 10% equals $300). 

The huge range of assessed value for business personal property (BPP) makes obtaining substantial property tax reductions highly probable. It is not unusual for the range of assessed value for BPP accounts for similar properties to vary by 5,000%! For example, furniture and computers for companies within the same office building sometimes vary from $1 to $50 per square foot. Market value and unequal appraisal are two options for appealing BPP assessments. Given the inequity in BPP assessments and the subjectivity of valuing BPP, property owners have a high probability of success when properly prepared for a BPP assessment appeal. Protest both market value and unequal appraisal. 

How to appeal? 

To appeal your BPP, you can either use the Comptroller’s form, or send a letter to the appraisal review board (ARB) on or before May 31st of each year. The protest letter to the ARB should identify the property and the reason for your protest (section 41.44d of the Texas Property Tax Code). 

Tips: 

· Since the appraisal district’s staff tends to become more motivated to resolve appeals later in the season versus earlier in the season, it is better to appeal or protest on May 31st or shortly before the deadline date. 

· Even if you do not receive a notice of assessed value for your BPP account, it is still important to send a written notice of appeal or protest. The appraisal district does not have to send a notice of your assessed value if the value does not change by more than $1,000. If the notice of assessed value gets lost in the mail, and you do not send a protest notice, you lose your right to appeal for the current year. 

When sending a notice of appeal to the ARB, also send the appraisal district a House Bill 201 request. House Bill 201 refers to section 41.461 of the Texas Property Tax Code that allows property owners to obtain a copy of any evidence the appraisal district plans to use at the ARB hearing 14 days before the hearing. This request prohibits the appraisal district from using any information that was not provided to the property owner 14 days before the ARB hearing. 

Market Value, Book Value & Comptroller Schedule 

Three popular options for describing value for BPP are: market value, book value, and the Comptroller’s schedule. Market value is defined in section 1.04(7) of the Texas Property Tax Code that reads as follows: 

“Market value” means the price at which a property would transfer for cash or its equivalent under prevailing market conditions if: 

(a) exposed for sale in the open market with a reasonable time for the seller to find a purchaser, 

(b) Both the seller and the purchaser know of all the uses and purposes to which the property is adapted and for which it is capable of being used and of the enforceable restrictions on its use, and

(c) Both the seller and the purchaser seek to maximize their gains and neither is in a position to take advantage of the exigencies of the other.

Let’s compare the differences in value resulting from using market value, book value and the Comptroller’s schedule. The BPP for a typical motel room includes items such as bedding, linens, window air-conditioning unit, towels and a television. Based on market value, after one year, these types of items could probably only be sold for 10% to 30% of the original cost. Book value, based on federal depreciation schedules, indicates a value of 80% of the purchase price after one year. The Texas Comptroller’s schedule for BPP for motels has an eight-year life with 10% depreciation for the first seven years. Hence, the Comptroller schedule indicates one-year old hotel furnishings are worth 90% of their original purchase price. This is clearly inconsistent with market value for these items. 

Inventory 

There are a number of controversial issues related to how inventory is assessed. These include shrinkage, damage, functional obsolescence and economic obsolescence. For example, what is the market value of merchandise returned during the week after Christmas on January 1st (the effective date for valuation)? Since returned merchandise has usually been opened, damaged, missing parts or may be an unpopular item, it is worth less than cost in many cases. Market value is relevant in determining the assessed value for inventory for Texas BPP taxes. 

Preparing A Summary For Your Hearing 

 The appraisal district would prefer to see a fixed asset listing, which includes the original cost and date of acquisition for every asset purchased. However, a fixed asset listing is not required. This is good news for small businesses that do not maintain a fixed asset listing. 

Unequal appraisal 

Assessed values for BPP accounts often range from ten-times to fifty-times on a per square foot basis for companies in the same industry. For example, real estate brokerage offices, which have 10,000 square feet of office space, may have assessments ranging from $10,000-$500,000. It seems unlikely that the computers and furniture in one brokerage office are 50 times as valuable as those in a competitor’s firm on a per square foot basis. 

Appraisal districts tend to accept the assessed value rendered by property owners. Many large companies render using fixed asset listings. Appraisal districts use the cost basis information and the Comptroller’s schedule to calculate the “market value” for property. The valuations for these rendered accounts tend to grossly distort the actual value of these properties. Property owners who do not render have values on the lower end of the range of value. While it seems intuitive that appraisal districts would penalize owners who do not render by sharply increasing their assessed values, the practice is the opposite. Appraisal districts tend to reward property owners who do not render by leaving their assessed values at modest levels. This creates a disincentive to render. It also unequally taxes property owners who render with a fixed asset listing. These factors have caused a high degree of dispersion in BPP assessed values. 

How To Appeal On Unequal Appraisal 

Contrary to popular belief, it is possible to appeal BPP utilizing unequal appraisal, a concept that is fairly new. Most property tax consultants and large property owners have not considered or utilized unequal appraisal regarding BPP. Appraisal districts are resistant to the concept of appealing BPP based on unequal appraisal. (It is inappropriate to tax property owners who render using a fixed asset listing at the highest level, based on utilizing the Comptroller schedule, when allowing property owners who do not render very lean levels of assessment.) 

Preparing an appeal based on unequal appraisal for BPP is simple and straightforward. Start by obtaining information on the assessed value, and amount of office space/manufacturing or warehouse space for property owners similar to the subject property owner. This is typically done by using companies with the same Standard Industrial Code (SIC) as the subject property owner. You can obtain this information by sending an open records request to the appraisal district. When appealing, research the assessed value for your competitors. Compile data regarding the assessed value and building area for the subject and comparable accounts into a summary: 

When should you appeal? 

Appeal annually on market value and unequal appraisal. To effectively appeal on these two options, research unequal appraisal based on assessment comparables on the appraisal district’s web site and evaluate the market value of your BPP. After reviewing both the unequal appraisal and market value options, determine your primary focus for appealing your BPP account. If neither market value nor unequal appraisal provides a basis for appealing your property taxes, you can withdraw the notice of protest or just skip the hearing. 

Tips for your hearing (Informal & ARB) 

Informal hearing 

· First meet with the appraiser and politely explain the basis for your adjustment. Give the appraiser a copy of your evidence and explain it in a methodical way. 

· The appraiser will review your information and the information he/she has available, and will then likely make an offer to settle. Consider the appraiser’s offer and explain why your evidence is better than his/her evidence, and again request your value or a value between your value and his/her value. 

· You will quickly learn the lowest value the appraiser is willing to accept. At this point, you need to either agree to that value or proceed to the Appraisal Review Board (ARB) hearing. 

· If you settle the appeal at the informal level, you will not be able to pursue an ARB hearing or a judicial appeal. However, it does resolve the issue in a timely manner.

ARB hearing 

· Introduction of the two parties at the hearing 

· Explanation of the hearing process 

· Property description (address any errors in the description of your property after the appraiser’s description of your property) 

· Property owner presentation 

· Questions from the ARB panel members 

· Appraisal district presentation 

· Rebuttal and closing evidence from the property owner 

· ARB announces its decision

Summary Points 

· Annual appeals will minimize your BPP property taxes. 

· There are huge differences between the market value estimated by the Comptroller’s schedule and actual market value. 

· Based on excessive assessments for BPP for companies who render using a fixed asset listing, a low percentage of property owners who render and the low assessed values for property owners who do not render, there are rich opportunities for appealing BPP by using unequal appraisal.