An important reminder
This past Spring I wrote here about a great threat to property investors. Namely, politically-motivated district attorneys who in their over-zealousness to create more prosecutions, and increase their “win” side to make themselves look good come election time, go after law-abiding property investors (as opposed to their tenants who are doing criminal acts in the landlord’s building).
I had previously noted: “let’s say you purchase a piece of commercial property. You then find a tenant for it, sign your lease, and start collecting rental income that will produce the intended positive cash flow on your commercial building.
Sometime down the road, you then find out that there is suspected criminal activity going on in your building by your tenant. You find this out by criminal charges being filed against you by the local district attorney. Now you have to fight – not simply for your right to make an income on your investment property – but to stay out of jail.
Sound impossible here in the U.S.? Think again.”
A chilling story
I then went on to quote from a local paper on this rather chilling story of a local landlord being victimized by such an overzealous prosecutor: “Recently, this story about a local commercial landlord was reported in the Burlington (Vermont) Free Press: “Chittenden County’s top prosecutor said filing criminal charges against landlords that host spas that mask as prostitution sites is the latest effort by the state in helping local communities combat the problem. State’s Attorney T.J. Donovan admitted state and federal investigators have had little luck in the past 10 years pursuing prostitution at the spas. “We can do better in this community than what we’ve done. And frankly our approach to this problem in the past hasn’t worked. We need a new approach.” Donovan made the comments minutes after a Burlington man pleaded not guilty to a charge permitting his building in Williston to be used for prostitution.”
And now the latest…
Fade in to this past week’s events in the case. The same paper, the Burlington Free Press reported: “The landlord of a former massage parlor in Williston pleaded no contest to a charge of knowingly allowing his prostitution in his building.” The article goes on to say: “Thomas Booska, 68, of Oakledge Drive in Burlington will be able to have the criminal conviction wiped off his record if he stays out of trouble for the next two years.
Vermont Superior Court Judge Brian Grearson imposed a two-year deferred sentence, which requires Booska to abide by the normal conditions imposed on defendants placed on probation.”
But wait – it gets worse…The article goes on to say “The U.S. Attorney’s Office has moved to seize the property at 5649 Williston Road that Booska bought in 2002.” So not only does the property investor plead guilty to not being able to prevent his tenant from running an illegal business, but he gets to lose his building in the process!
Ramifications for property investors
As I detailed before, “imagine the ramifications of this particular case for property investors. Any landlord leasing out rental office space would be liable for the actions of their tenant. Let’s say you’re renting to a hedge fund company that absconds with their investors’ money, a la Bernie Madoff, for example. You get arrested. Let’s say your tenant leases warehouse space from you. To store their ( place your preferred name of contraband here). You get arrested. Let’s say you’re renting out an apartment – maybe it’s your vacant apartment upstairs in a building you happen to also live in. The tenant sets up a meth lab. You get arrested. Or puts in more unrelated “tenants” than your lease allows. Again, you’re on the hook to be arrested.”
Property investors vote too…
Well, the good news is election time is rolling around in a few weeks. And it’s time to pay attention to your local district attorneys and how they’ve been treating local property investors. If you think they’ve been too harsh, too prosecutorial…too politically expedient, and in the process have been hurting property investors…well, then, be sure to vote them out of office! And to repeat what I’ve said before, besides our basic capitalist system being threatened, it’s your investment property dollars that are at stake.
photos courtesy of dreamstime.com, atascaderoins.com, thegreatestrealestateblog.com, tenantscreeningblog.com, nakedphilly.com, money.cnn.com