The Charleston Real Estate Search.com

Tax Law Changes Affect 2011 Landlord Filing

January 20, 2011 – 12:38 pm

If you own rental property and claim rental payments as income, chances are you save up every receipt during the year to deduct against that income.  But there’s a new law that  could require you to take an extra step in the process.

If during 2011 make payments of $600 or more to a service provider (such as a plumber, painter, or accountant) in the course of earning rental income, the 2010 Small Business Jobs Act requires you to provide an information return (typically Form 1099-MISC) to IRS and to the service provider. In order to do that, you must obtain the payee’s Name, SSN and contact information before making payment. The IRS provides Form W-9 for that purpose.

There is a “Catch-22” for which you need to be aware. For example, you call a plumber and pay him $400 for a service call at your rental property and don’t bother to have him complete and sign a W-9 since the amount is under $600. Later in the year, you need him again and pay him another $400 for the second service call at the rental property. Again, you fail to obtain the completed W-9. Now you have a 1099 filing requirement but do not have the information you need to file the information returns in 2012. If the plumber can’t be found, then you are left holding the bag. The moral of this story is to always collect a completed W-9 from the payee before paying him!

What happens if you don’t meet your filing obligation? Simple- there are monetary penalties! Also part of the 2010 Small Business Jobs Act, the penalties were doubled for information returns required to be filed after 2010. Last year, Form 1099-MISC must have given be given to the service provider by January 31 and the original mailed to IRS no later than February 28. As it was, if you were 30 days late filing the information return with the IRS or furnishing a copy to the payee, then you were subject to a $30 per payee penalty. With the new law this year, if the returns are more than 30 days late but filed by August 1, then the penalty per payee is $60; if filed after August 1, the penalty jumps to $100 per payee.

The penalties can be substantial and you are cautioned to establish a procedure for obtaining W-9s from your service providers before the beginning of 2011. Note: Payments to incorporated businesses and those made for the purchase of merchandise are not included in these requirements until 2012.
Form W-9 may be found on the IRS website.

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SC Landlord Tenant Act

August 11, 2010 – 1:18 pm

Common Questions from my Landlord Clients

Answers interpreted from the SC Landlord Tenant Act  SC CODE OF LAW TITLE 

As a Realtor and a Landlord myself, I understand how difficult it may be to deal with tenant issues.  You don’t want to interfere with your tenant’s right to quiet enjoyment but you also want to protect your vested interests.  It pays to know the laws governing these issues and how to interpret them.  Here are some of the most common questions I received from my landlord clients.  Some I have personally experienced and others I just researched.

DISCLAIMER: Since I am not an attorney, you may also want to seek legal advice on your own for any of the these issues.   Better yet, Carolina One as an in house property management department that will take of everything for you and simply send you a check every month for your net rental payments.

Q: Can I withhold some of the security deposit for cleaning fees on a rental property?

A: Yes, if the cleaning necessary was beyond normal wear and tear and necessary to bring the home back to the same level of cleanliness it was at the time of the lease.

Q. Do I have to notify the tenant about the deposit not being returned?

A. Yes, within 30 days of termination.  Otherwise “(b) If the landlord fails to return to the tenant any prepaid rent or security/rental deposit with the notice required to be sent by the landlord pursuant to subsection (a), the tenant may recover the property and money in an amount equal to three times the amount wrongfully withheld and reasonable attorney’s fees.”

Q. I want to sell my rental property.  Can the tenant refuse access? 

A. No.  Provided that reasonable notice is given.

SECTION 27-40-530. Access.

(a) A tenant shall not unreasonably withhold consent to the landlord to enter into the dwelling unit in order to inspect the premises, make necessary or agreed repairs, decorations, alterations, or improvements, supply necessary or agreed services, or exhibit the dwelling unit to prospective or actual purchasers, mortgagees, tenants, workmen, or contractors.

c) A landlord shall not abuse the right of access or use it to harass the tenant. Except in cases under item (b) above, the landlord shall give the tenant at least twenty-four hours notice of his intent to enter and may enter only at reasonable times.

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