Q: Are we locked into a long term contract with North County Property Group?
A: There is NO long term commitment on your part. We're highly service-oriented and confident you will be pleased with our performance. If for whatever reason you are not satisfied you can discontinue our services at any time after the first month on 30-day notice. To assure that there is only one property manager at a time handling a property, however, our agreement is exclusive in nature while under contract.
Q: Can North County Property Group help me with improvements/repairs to get my property “rent ready”?
A: Yes, we have an extensive approved vendor list of subcontractors and vendors for almost any project to get your home ready to rent. Examples of common improvements and repairs that may be needed in advance of listing are painters, electricians, plumbers, gardeners, handymen, carpet/flooring, etc. In such cases, we are working to get these items completed before being paid anything for the ongoing property management as a percentage of rent. Our project management fees for prepping the home is a 15% margin on the advance improvements/repairs we manage to make your home "rent ready". After we have a tenant in the home there is no markup charged by North County Property Group for ongoing maintenance items (vendor invoices are passed through and charged at vendor cost). There is no problem, of course, if you choose to handle the improvement/repair items yourself or hire your own people to do the work.
Q: Can I rent my property if I am in default on my mortgage?
A: No. North County Property Group requires that all property owners provide assurance that mortgages, taxes, insurance and any HOA dues are current and are not in default. Also, we require the assurance that the property is not in foreclosure or pending foreclosure action.
Q: How is prorated rent handled if a tenant moves in part way through the first month?
A: North County Property Group utilizes the “2nd month proration” method of accounting in regard to the rent due in the first month.
This method requires payment of a full month’s rent at the beginning of the tenancy. This provides extra security for our property
owners and allows us to pay all relevant leasing fees and maintenance at tenant move-in. North County Property Group then
prorates rent for the 2nd month based on their actual move in date based on a 30-day month. For example, if a tenant moves
in on the 10th of the month, their first month rent due will be a full one month’s rent. The second month will then be prorated for
the 20 days of rent. Each month thereafter, the rent is due on the first.
Q: Who holds the tenant’s security deposit and prepaid rent?
A: North County Property Group holds security deposits and prepaid rent in our Broker Trust Account for safe
keeping as regulated by California law. By holding the security deposit ourselves, it makes the move-out
process with the tenant easier when it comes time to reconcile any necessary cleaning fees, repair, and the
subsequent security deposit disposition.
Q: What charges can be taken from a tenant’s security deposit?
A: California law specifically allows us to use a security deposit for four purposes:
- For unpaid rent;
- For cleaning the rental unit when the tenant moves out, but only to make the unit as clean as it was when the tenant first moved in;
- For repair of damages, other than normal wear and tear, caused by the tenant or the tenant's guests; and
- If the lease or rental agreement allows it, for the cost of restoring or replacing furniture, furnishings,
or other items of personal property (including keys), other than because of normal wear and tear.
We can withhold from the security deposit only those amounts that are reasonably necessary for these purposes. The security deposit cannot be used for repairing defects that existed at the property before a tenant moved in, for conditions caused by normal wear and tear during the tenancy or previous tenancies, or for cleaning a rental unit that is as clean as it was when a tenant moved in.
Q: What is the “useful life” rule pertaining to security deposit deductions?
A: The method of calculating a security deposit deduction for repair or replacement of an item in a rental home prorates the total cost of the repair or replacement such that the tenant pays only an amount relative to the remaining useful life of the item that the tenant has damaged. For example, suppose a tenant has damaged an eight-year-old carpet that had a life expectancy of ten years, and that a replacement carpet of similar quality would cost $1,000. We could properly charge only $200 for the two years' worth of life (use) that would have remained if the tenant had not damaged the carpet. All fixtures, appliances, furnishings, etc. in a home have a defined useful life.
Q: What is the “Maintenance Limit” as it related to property management?
A: North County Property Group shall obtain prior approval for any expenditure over the maintenance limit (typically set at $250). Any minor items below the maintenance limit will be resolved using our own best judgement. The only exceptions would be when emergency action is needed to protect the property or the well-being of the tenant.
Q: What are “Owner Reserves” and how are they managed?
A: This is an amount (typically $500) of the property owner’s funds that North County Property Group holds in our broker trust account as contingency funds for any repairs, daily obligations, maintenance issues, and emergencies that may occur at the property over the course of the given month. The reserve is funded upon receipt of the first month’s rent and is replenished each month when rent is received to offset expense items during the previous month. If expenses should exceed the $500 reserve, or if North County Property Group needs funds for repairs which are to be completed before the tenant move-in date, an owner deposit will be required to pay for such expenses.
Q: What insurance coverage should I have on my property?
A: We advise all our property owners to consult with their insurance agent to be certain they are carrying an adequate landlord/rental dwelling insurance policy. We require proof of proper insurance and that North County Property Group be named as additionally insured (this is standard procedure with insurance companies and not at additional cost to the property owner).
Q: What are the tax implications of renting my property?
A: We advise our property owners to consult with their tax accountant regarding the reporting and handling of rent income on their annual tax return. North County Property Group is legally obligated to report the gross rental income distributed to you on a 1099 form to the IRS and as such will need your social security number for reporting purposes.
Q: Are tax requirements different if I live outside the State of California?
A: Yes, if a property owner resides outside of the State of California, North County Property Group is required to withhold 7% of the rent collected and submit it to the state tax authorities on a quarterly basis. Withholdings are submitted quarterly by North County Property Group on the property owner’s behalf to the California Franchise Tax Board with a FTB Form 592, Quarterly Nonresident Withholding Statement. Before January 31st of the following calendar year, we provide the property owner with a statement showing the total amount of income subject to withholding and the total amount withheld, using a FTB Form 592-B, Nonresident Withholding Tax Statement.
Q: Is there anything I need to disclose about my property?
A: Yes, CA law requires property owners to disclose any of the following if they apply to their property:
- Lead-based paint
- Bed Bugs
- Water submeters
- Carbon monoxide detector not installed
- Smoke alarms not installed
- Water heater not braced
- Prop. 65 Warning notice not posted
- Unsafe pool/spa drain cover or lack of other pool safety measures
- Death on the property in the past 3 years
Q: What differentiates North County Property Group from other property management companies?
A: The focus of North County Property Group is all about the individual property owner and maximizing your property value and income. Paramount in this “customer first” approach is the work ethic and service required to be dedicated to the interests of our clients. We offer a high degree of value through our two property management programs, Standard and Premier, and also offer many guarantees regarding our performance and protection of your home. We’re dedicated to modern and up-to-date marketing and tenant screening techniques, offer a fully automated online Owner Portal where clients can track their property performance and download owner statements or property reports. Our Tenant Portal makes it easy for renters to pay their rent online and submit work order requests. Finally, as a licensed general contractor, NCPG can provide a broad set of service offerings to keep an eye on your property, maintain it in top condition and make sure the property maximizes its value and income.