Posted by tang-0-rang on November 03, 2003 at 19:24:20:
She could wait 3-6 months to get this refund. And if it cost her a couple thousand in the first place to pay the bill… what if she didn’t have it? What a pain in the neck!! If for no other reason, I would do it to avoid the hassle involved.
thanks for your time.
Todd Williamson
Here’s another reason to own property in Trust… - Posted by William Bronchick
Posted by William Bronchick on November 01, 2003 at 12:32:28:
True story…
My mom owned a property in her corporation name. There were several thousand dollars due to the utility company, which is the responsibility of the previous owner. Unpaid utility bills do not generally become a lien on property, as do unpaid property taxes or water bills.
A utility bill is a private contract between the user (owner, tenant, etc) and the utility company. When you purchase or rent a property, the utility companies often try to bully you into paying a bill from the previous tenant or owner. When you stand your ground or speak with a supervisor, they generally back down. Personally, I believe this practice is fradulent, but I’ve yet to see a state Attorney General do anything about it.
Anyway, my Mom refused to pay the bill. My mom’s corporation (the same one that owns the property) also had an office lease across town and an account with the same utility company. The utility company simply added the back amt due on the vacant property to her existing office account, then threatened to shut off the power at her office! She paid it, then had to go through the chain of command to get a refund.
Lesson: had she owned the property in a land trust (with corporation as beneficiary), this would not have happened!
Mechanics Lient too? - Posted by Ken (Fl)
Posted by Ken (Fl) on November 04, 2003 at 16:50:01:
Does the trust protect you from Mechanic’s Liens?
Long story short, I had a contractor I deemed slow and ineffective. Missed the completion date by 3 weeks and was asking for 2 more weeks. We had words, he took his tools I removed the lock box; he wanted the balance of the contract paid to him even though he wasn’t complete. His lawyer sent me a letter and I refused payment. He did not lien the property and I was wondering if the Trust was one of the reasons?
I refused to pay, and haven’t heard from him in 1 month.
I don’t like doing business that way, but I feel I am justified.
God Bless,
Does the same hold true for Prop. taxes? - Posted by Brian,Wi
Posted by Brian,Wi on November 03, 2003 at 03:23:00:
Can a land trust “protect” you from being assessed a “fee” on your property taxes if you are in violation of something?
Not too long ago, Milwaukee came up with a nuisance ordinance holding landlord responsible for what their tenants do…if there are “x” number of calls at the same address the landlord will then be fined.
Needless to say I’m getting sick of the buck being passed instead of just going after those responsible.
Will putting a property in a landtrust protect you from this as well?
Thanks
Brian,Wi
Re: Here’s another reason to - Posted by Rob FL
Posted by Rob FL on November 02, 2003 at 12:11:45:
Most of the utility companies I deal with want a social security number or tax ID number to open up an account. Unless you plan on holding the property for a while, isn’t it an awful lot of effort to get a tax ID number for each trust? I guess you could use the trustee’s tax ID or the beneficiary’s tax ID, but then that foils the whole trust thing. The other issue is the utility normally requires a deposit unless they have done business with you in the past. Rehabbing 5 houses in 5 trusts would require 5 deposits of $100 or more each.
Of course if they are trying to get you to pay up thousands of dollars in back payments, it might be a good idea to figure out a way to skirt around it.
Excellent point - Posted by Ken (in Iowa)
Posted by Ken (in Iowa) on November 01, 2003 at 18:12:48:
This is an excellent point and a great reason for having separate trusts for each property owned. I own several properties that I bought back in the mid 80’s and something very similar to what you described has happened to me. It is infuriating that the utility companies can get away with this sort of sanctified thievery. Your story will spur me to create trusts for my properties.
Thanks for posting this, Bill.
Ken (in Iowa)
Re:Trust… - Posted by JD
Posted by JD on November 01, 2003 at 14:57:31:
I currently have a similar problem with a gas company. I prefer to use a different LLC. Additionally, it is quite possible that the utility company would have required your mom’s Trust to put up a new user deposit before they would have put the utilites into the name of your mom’s trust.
They would have nailed the trustee (nt) - Posted by Dave
Posted by Dave on November 01, 2003 at 13:37:22:
nt
Not the same animal - Posted by DaveD (WI)
Posted by DaveD (WI) on November 03, 2003 at 09:29:32:
The taxing authority, be it municipal, county, state and I suppose feds can pretty much lien your property at will for real or imagined violations. The trust would only “protect” against property liens from attaching directly to you or your organization.
The authority doesn’t really care who owns it because they can always force sale. Eventually they will get either their dough or a house. Fortunately you will be getting a new mayor soon, hopefully one more sympathetic to landlords.
All the best…
-Dave
Re: Here’s another reason to - Posted by William Bronchick
Posted by William Bronchick on November 02, 2003 at 21:41:19:
You can get an account in the name of your “property management company” if you NEED to, regardless of who it on title. So, that solves the “new account” issue, which requires a deposit if you are a business.
The title in trust issue will help you avoid getting an unpaid utility bill forced down your throat.
Re:Trust… - Posted by Bill Bronchick
Posted by Bill Bronchick on November 01, 2003 at 15:02:08:
Yes, that’s true if you need a utility account. In this case, the
property was vacant (condemned, to be accurate!)
Nope - Posted by phil fernandez
Posted by phil fernandez on November 01, 2003 at 13:47:40:
The trustee is not the owner, the corporation is. So how can the trustee be nailed. And with the land trust, the utility would have no idea who actually owned the office building.
Am I correct Bill.
Re: Here’s another reason to - Posted by Rob FL
Posted by Rob FL on November 02, 2003 at 21:56:41:
The property management co. is a good idea. Thanks for your insight.
Hope she didn’t buy it from you! - Posted by DaveD (WI)
Posted by DaveD (WI) on November 03, 2003 at 09:17:55:
Bill, I almost choked on my morning coffee I was laughing so hard at the image of the shyster lawyer hosing his own mom by selling her a vacant condemed property. Say it ain’t so, Bill!
Phil is correct - Posted by Bill Bronchick
Posted by Bill Bronchick on November 01, 2003 at 14:04:00:
Neither the trustee, the trust or the corporation are liable. In my
mom’s case, she called the utility company and got them to
refund her.
The trust will simply help avoid getting held for ransom, like she
did. The property is titled in the trust name. Even if the property
is titled in a trust name, of trustee lives out of state and doesn’t
have any other accounts in his/her name in that state, the
scenario I described can’t happen.
Re: Phil is correct - Posted by TJ
Posted by TJ on November 01, 2003 at 20:19:02:
So why should you own in a trust? Seems like your mother got her refund, so what is the problem?
Re: Phil is correct - Posted by Nate(DC)
Posted by Nate(DC) on November 01, 2003 at 16:57:01:
Or if the trustee is named John Smith, how will the utility company know which John Smith it is…
NT