On Friday, the Los Angeles City Council unanimously passed mandatory new earthquake retrofitting requirements for over 15,000 buildings whose second floors are built over carports. This includes the “dingbat” in which I currently reside. The good news is: this will save dozens of lives in the next major earthquake. I’m sure you can also guess the bad news: landlords have to pay for it.
The city is discussing some ways to help landlords, like a small increase in rent, which may cover the capital outlay in twenty years. But the retrofitting needs to be completed within 7 years of being noticed, according to the law. The LA Times reports that the retrofitting for wood structures can cost between $60,000 to over $130,000. You can read the LA Times article here.
What does this mean for you? If you don’t have $100,000 cash to retrofit, you may be forced to sell your property if the city doesn’t come up with a better solution. If you do have the cash, that’s a big blow to your savings.
If you think you may need to sell your property, the best move would be not to wait. Sell your building to a buyer with the capital to make the necessary safety improvements now, or else a much worse disaster could be on our hands. Not to mention incredibly low interest rates mean the highest prices paid for income property in a long time.