Are There Any States With No Property Tax? Lowest Property Tax Ranking 2024

Dreaming of a state free of property taxes? Bad news. In the land of the free, owning land, well, it ain’t tax-free.

The good news? Several states offer refreshingly low tax rates.

Throw a few generous exemptions into the mix, and homeownership just got a whole lot more bearable and potentially lucrative. Nice!

Ranked lowest to highest, here are the lowest property taxes by state in 2024.

What are Property Taxes?

Property taxes are annual (sometimes bi-annual) taxes that local governments levy on homeowners and real estate investors. They use the generated revenue to fund services like schools, fire departments, and maintaining roads.

And how’s it calculated?

The amount taxpayers have to cough up is typically based on the assessed value—basically, what a locally-appointed assessor thinks a property is worth.

State property tax rates aren’t a homogenous type of deal, though. Each American state (and even individual counties or cities) has different spending needs. Some communities and local governments prioritize education, while others focus on public safety or infrastructure.

Geographics and other such variables come into play here, too. Drier climates are prone to wildfires, coastal locations experience erosion issues, and areas prone to heavy snowfall require a lot of infrastructure maintenance.

There’s really no one-size-fits-all approach to property taxes.

Learn more: rental property tax guide for new and experienced landlords.

10 States With Lowest Property Tax in 2024

Here are the states with the most favorable effective tax rates:

  1. Hawaii (0.29%)
  2. Alabama (0.41%)
  3. Colorado (0.51%)
  4. Louisiana (0.56%)
  5. South Carolina (0.56%)
  6. Nevada (0.57%)
  7. Utah (0.58%)
  8. West Virginia (0.59%)
  9. Wyoming (0.61%)
  10. District of Columbia (0.64%)

Keep in mind: Governments can’t pull money for local initiatives from thin air. If it isn’t property taxes, it’ll be from elsewhere. Consider income tax and sales tax. Both can make quite a dent in a resident or landlord’s yearly budget.

For example, Alabama might rank second on the list of lowest property tax rates, but when you account for the state’s entire tax code, it ranks 39th on the Tax Foundation’s State Business Tax Climate Index.

So, do your research and find the state that best fits your overall financial goals and lifestyle.

Learn more: best places to buy rental properties.

States With Highest Property Tax Rates

Here are the states where you can expect the heftiest average property tax:

  1. New York (1.73%)
  2. Ohio (1.53%)
  3. Nebraska (1.67%)
  4. Wisconsin (1.73%)
  5. Texas (1.74%)
  6. Vermont (1.90%)
  7. Connecticut (2.15%)
  8. New Hampshire (2.09%)
  9. Illinois (2.23%)
  10. New Jersey (2.47%)

A heads up: Before you write the above states off, remember that higher taxes often come with benefits worth considering. These states might have top-notch schools, solid infrastructure, or extensive public services.

Weigh up the pros and cons and decide what matters most to you.

That decision might come down to whether you’re a property investor or a resident. Income and sales taxes may not matter to you if you are renting out a property and aren’t living in the state yourself.

Learn more: tips for buying a rental property out of state.

All States Ranked by Property Tax Rates for 2024

How do the remainder of the states stack up? Take a look for yourself:

RankStateMedian Effective Property Tax RateMedian Property Taxes Paid (USD)
1Hawaii0.291893
2Alabama0.41646
3Colorado0.512017
4Louisiana0.56983
5South Carolina0.561024
6Nevada0.571736
7Utah0.581967
8West Virginia0.59756
9Wyoming0.611442
10District of Columbia0.573641
11Delaware0.581570
12Arizona0.621648
13Arkansas0.62878
14Idaho0.631682
15Tennessee0.661270
16Mississippi0.791052
17New Mexico0.81470
18California0.754279
19Montana0.832189
20North Carolina0.81583
21Indiana0.831308
22Kentucky0.851320
23Virginia0.822420
24Florida0.862143
25Oklahoma0.91351
26Washington0.943752
27Georgia0.91850
28Oregon0.933352
29North Dakota12092
30Missouri0.981676
31Maryland1.073633
32Minnesota1.112767
33Alaska1.223464
34Massachusetts1.25091
35South Dakota1.242331
36Maine1.282722
37Kansas1.432355
38Michigan1.482551
39Rhode Island1.534483
40Pennsylvania1.533022
41Iowa1.572522
42New York1.735884
43Ohio1.532447
44Nebraska1.672916
45Wisconsin1.733472
46Texas1.743520
47Vermont1.94570
48Connecticut2.156153
49New Hampshire2.096036
50Illinois2.234744
51New Jersey2.478797

Learn more: property taxes by state lowest to highest.

Factors That Influence Property Tax

Why do your annual property taxes seem to increase year-over-year, even if your house hasn’t magically grown a patio and a backyard pool?

These factors influence property tax rates:

1. Property Value

The higher a property’s value, the more real estate taxes you’ll likely pay. Think of it this way: a sprawling mansion with a pool and a tennis court will probably have a heftier tax bill than a cozy, two-bedroom cottage.

But it’s not just about the size of your house. Location plays a huge role, too. A beachfront condo in Miami will likely have a higher market value and, consequently, higher taxes than a similar-sized condo in a less desirable area.

2. Local Government Spending

Schools, fire departments, roads—they all need funding. Local tax rates are often influenced by how much your municipality spends on these services.

If your town is building a new school or investing in major infrastructure projects, those costs might be reflected in your property tax bill. Yup, unfortunately, taxes are unavoidable no matter where you live, particularly if a new seven-lane highway is in the works.

3. Tax Assessment Cycles

Most states have regular tax assessment cycles, where an assessor determines the market value of a property. The assessment directly impacts your tax bill.

These cycles can vary. Some localities assess every year, some bi-annually, while others push it out to 3-5 years. It all depends on the local jurisdiction.

Properties that are assessed less frequently are typically located where prices are stable. The opposite is true, as well. High price volatility means more frequent visits from the assessor.

4. Millage Rates

Millage rates are used to calculate a tax bill based on a property’s assessed value. They are the tax levied per $1,000 of a property’s assessed value. Basically, they’re a tax multiplier. Each local government (cities, counties, school districts, etc.) sets its own millage rate to fund its budget and services.

Here’s how millage rates look in action:

  • Let’s say a property has an assessed value of $200,000.
  • How’d we end up here? The local government sets a millage rate of 20 mills for this property (this means $20 for every $1,000 of assessed value).

So, to calculate your property tax, you’d do this:

  1. Divide the assessed value by 1,000: $200,000 / 1,000 = 200
  2. Multiply that number by the millage rate: 200 x 20 = $4,000

Voilà! The property tax bill would be $4,000.

5. Tax Exemptions and Deductions

Don’t forget about tax breaks. Many states offer exemptions and deductions that can reduce your property tax burden.

Let’s explore this further:

Property Tax Exemptions and Deductions

Here’s some good news: property tax exemptions and deductions can significantly reduce your tax burden. Win!

Who can benefit?

Although it helps if you’re a veteran, a senior citizen, or a farmer, really anyone can, as long as you meet certain criteria. Let’s explore some of the most common ones:

Homestead and Agricultural Exemptions

You might qualify for a homestead or agricultural exemption if you’re a landowner using your personal property as a primary residence and for farming purposes. These exemptions reduce the taxable home value, which means a lower annual tax bill.

So, how does it work?

Let’s pretend your home is valued at $300,000, and your state offers a $50,000 homestead exemption. You’ll only pay taxes on $250,000 of your home’s value. Sweet deal.

Which states offer the best homestead exemptions?

The big agricultural states like Florida, Texas, Georgia, California, and Louisiana are known for their generous homestead exemptions.

Veteran’s Exemptions

For those who have served, property tax exemptions can provide some much-needed tax relief. These exemptions are often available to disabled veterans, with the amount of the exemption varying depending on the veteran’s disability rating.

States like New York, California, Texas, and Maryland offer substantial veteran’s exemptions.

Senior Citizen Exemptions

Property taxes can become a significant financial burden as we reach our golden years. Thankfully, many states offer exemptions for senior citizens, typically those aged 65 or older.

Which states are most generous to seniors?

States like California, Illinois, Texas, New York, and Washington offer some of the most significant senior citizen exemptions.

Remember: These are just a few of the many property tax exemptions and deductions available. Keep up with your state’s specific rules and requirements to see what you might qualify for. And keep in mind that exemptions change all the time, so do your own research.

Learn more: is rental property tax deductible?

Strategies for Minimizing Your Property Tax Rate

Feeling overwhelmed by those property tax bills? Don’t wave the white flag just yet. You can use some strategies to lower your tax burden and keep more money in your pocket (where it belongs!).

1. Appeal Your Assessment

Remember that assessor who determines your property’s assessed value? Sometimes they get it wrong. If you think your assessment is too high (and let’s be honest, who doesn’t?), you can appeal it.

Gather evidence to support your claim, like comparable median home value in your area or any unique features that might lower your property’s value. Then, present your case to the local tax authorities. It might take some effort, but the potential savings can be well worth your time.

2. Exemptions are Your Friends

Whether you’re a homeowner, a veteran, a senior citizen, or a farmer, there’s bound to be an exemption that can reduce your tax bill.

3. Stay Informed

The world of property taxes is constantly changing. Stay informed about reassessment cycles, local tax policies, and any new legislation that might impact your tax bill.

The more you know, the better equipped you’ll be to minimize your tax burden.

4. Get Organized

Keep thorough records of all your tax-related documents, including your assessment notices, property tax bills, and any correspondence with the tax assessor’s office.

Being on top of things helps you stay organized and protects you in case of an audit or dispute.

5. Consider Professional Help

If you’re feeling overwhelmed by the complexities of property taxes, don’t hesitate to seek professional help. A tax advisor or property tax consultant will help you navigate the system, identify potential savings, and make sure you aren’t leaving money on the table.

Take Control of Your Property Taxes and Ownership Costs

Phew! We’ve covered a lot of ground here. But here’s the biggest takeaway: Property management isn’t just about property taxes. It’s a juggling act of responsibilities that become overwhelming, even for the most organized property owner.

That’s where Ziprent comes in.

We’re more than just a property management company. We’re your partners in maximizing investment and minimizing stress.

Ready to make your investment work for you? Jump over to our property management services page, and let’s dial this thing up to maximum profitability.

How To Evict A Tenant In California

The eviction process has drastically changed since the pandemic started, but assuming the state legislature doesn’t extend the eviction moratorium, the normal eviction laws will return when it expires at the end of September. Here is how to evict a tenant under the normal California laws. 

There are specific reasons a person can be evicted. It can’t be just because a landlord doesn’t like a tenant or some personal reason. Here are the reasons a tenant can be evicted.

  • Tenant fails to pay rent
  • Tenant violates one or more of the terms of the rental agreement
  • The tenant damages the property and the damage lowers the property value
  • Tenant becomes a nuisance to the neighbors
  • Uses the property improperly. For example, they might set up a commercial space or sell/make drugs on the property. 

You can also evict a tenant on a month-to-month lease as long as you give them property notice. 

A landlord can’t use force to remove a tenant. They can’t lock the tenant out or cut off the water and electricity. The tenants can’t be threatened with unlawful methods or threaten deportation of immigrant tenants. Landlords must go through the proper legal channels. 

If unlawful attempts to evict are used, landlords can be held liable up to $2,000 per incident. It is also illegal to file an unlawful detainer action in retaliation because a tenant files a complaint about living conditions with an inspector or agency. 

Serve tenant with proper notice

If you’re evicting a tenant because of a failure to pay rent, you’re required to give a three day notice to allow them to resolve the situation. No penalties and utilities can be required to be paid at the end of the 3 day period. The only amount that can be required to resolve the situation is the rent that is due. The notice must include: 

  • Name, address, and phone number of the person or financial institution to whom the rent must be paid and include hours and days that the person or financial institution is available to receive the rent
  • Date you served the demand to the tenant
  • Name(s) and address(es) of the tenant(s)
  • Total amount of rent due
  • A certificate of service that specifies how you provided the notice to the tenant
  • The signature of the landlord

Tenants will often claim to have not received property notice, so it is important to make sure they are served properly. Tenants may also use the process to notify a landlord’s wrongdoing. If there is any illegal activity, the case could swing in favor of the tenant. 

In order to properly serve the tenant with a notification, you must hand it to them directly or leave it by their feet if they refuse to accept it. You can’t just post a notification on their door. If this isn’t possible, the notice can be given to a person who is over 18 in their property or at their place of work and the notification can also be mailed to the tenant. If none of these options are possible, then a notification can nail a copy to their door and mail it as well. Some counties may require approval to “nail and mail.” the notice. 

If you’re evicting a tenant on a month-to-month lease, you’re required to give them a 30 day notice to move out. If they have lived there for over a year, you’re required to give them 60 days. If it is government subsidized housing, 90 days is required. 

If tenants are committing illegal acts on the property, no 30 day notice is required. The landlord can ask them to vacate the property within three days. 

Wait for notice to expire

The time to wait is all dependent on the type of notification. If the tenant is on a month-to-month lease, you’re required to wait 30 days before filing a lawsuit. A failure to pay rent is required to wait until after the three day window granted to pay rent. 

The proper legal documents must be filed with the county court where the rental property is located. These are the three forms that are required :

  1. Unlawful Detainer Complaint
  2. Civil Case Cover Sheet
  3. Prejudgment Right Of Possession Form

The documents must be filled out with factually accurate information and the clerk will give a summons as well as a stamped copy of the unlawful detainer complaint. You can get a copy of the prejudgment right of possession form or print one yourself. This form is used for a person living on the property who doesn’t have their name on the lease. 

The process takes about 2 months from the date the paperwork is filed. 

These documents cannot be served by just hanging the document on their door. The summons need to be served in person. Do not continue to serve the documents as it will start the process all over again and just take longer. 

Wait for the tenant to respond to the lawsuit

Tenants have five days to file a response with the court challenging the lawsuit. If the tenant fails to file a response within five business days, you can ask for a default judgment by filing another document. The clerk will give you a date and you will have to show a judge you took all the proper steps and the tenant defaulted. 

Go through the court process

The court date is usually set between 10 and 20 days, depending on your local court. During this time landlords cannot collect rent, but tenants are responsible for rent payments. Tenants may file a number of legal objections which landlords in turn will need to respond to in writing. If the judge sides with the tenant, there is a “leave to amend” which is a second chance to prove there is a valid case.  If this is rejected, the case may be dismissed and the process will have to start all over again. 

If the tenant answers the complaint, a trial date will be set and both sides will have an opportunity to present evidence and make their case. 

If the court ruled in favor of the landlord, a writ of possession will be issued which gives the county sheriff the authority to physically remove and lock out the tenant if they don’t leave on their own within five days. The court may also require the tenant to pay any unpaid rent, attorney’s fees, or up to a 600 dollar penalty. A landlord cannot legally evict a tenant without the writ of possession. 

Depending on the location of the property, landlords may have to give the tenants an opportunity to pick up the property. Otherwise it can be sold or disposed of.  You may also be required to move their property to a storage unit for a set period of time.

The eviction will be on the tenants record for up to 10 years and show up on background checks when applying for a new home. 

Some situations can make evictions more complicated

  • If a tenant works for the landlord while living on the property
  • If the tenant lives in a residential hotel
  • If the tenant rents a foreclosed unit
  • If the tenant lives in a mobile home or RV park

The Protecting Tenants At Foreclosure Act gives tenants of foreclosed homes special protections that need to be considered. If the person is the original individual on the lease, it gives some restrictions from new owners to evict. If a bank takes ownership of the property it must give a month-to-month lease to the tenant and give them a 90 day notice to move out if the buyer is ready to move into the property as their primary residence. If the new owner is using it as an investment property or a vacation property, it cannot evict the tenant without any violations of the lease agreement

Be sure to seek professional legal counsel throughout this process.

How To Sell A Home With A Tenant

To sell a home with a tenant, there are laws to consider to make the sales process go smoothly. Like at any other time during the lease, the tenants’ right to privacy is paramount. Once you decide to put a house on the market, make a plan for how and when to communicate with your tenant about the sales process. 

Selling a home with a tenant on a long term lease

The tenant has a right to live in the home for the remainder of the lease even after a property is sold. If they signed a one year lease and there are 10 months remaining on the lease, the new owner will take over the responsibility of the lease. After the lease expires, the new owner can then determine whether or not the tenant can still live there. If they do decide to no longer lease the unit to the tenant, the new owner is required to give the tenant a property 30 day notice. 

Selling a home with a tenant on a month to month lease

With a tenant on a month to month lease, the landlord is required to give the tenant a 6o day notice that the tenancy will end. If the tenant has lived in the property for less than a year, then a 30 day notice is required. Once the landlord has signed a contract to sell the home, they are required to give the tenant a 30 day notice if the buyer intends to occupy the home for at least 12 months after the tenancy ends. A notice must be given no later than 120 days after escrow is opened. 

How to show a property with a tenant

Like any other time a property needs to be entered, there is a requirement to give the tenant ample notice. In order to show the property, a tenant must be giving a notice 24 hours in advance. The property must also be shown during standard business hours. This is usually between 8 and 5 Monday through Friday. If needed, an arrangement can be worked out with the tenants to show the property on the weekends. The 24 hour notices do not need to be in writing as long as the tenant has received a written notice about the intent to sell 120 days prior to the oral notice. 

What happens if the tenant doesn’t leave in time?

The buyer may require that the tenants vacate the property in order to make the sale final. Make sure to give tenants a 30 and 60 notice about when they are required to leave in order to give them ample time to find a place and make plans to move. If there is any trouble when it comes to getting a tenant to vacate a property, you can offer to pay for temporary storage, a moving truck, or help with a security deposit on their new place. If none of this works, consult a lawyer about the legal process for evicting a tenant.

Routine Maintenance For Rental Properties

Regular maintenance for a rental unit can be a lot of work. It will also inevitably cost money for little repairs here and there. It is better to stay on top of any maintenance on a regular basis than to wait until problems can become much larger. Fixing a small leak immediately will be much cheaper than dealing with a burst pipe and flooded room. A great way to make sure tenants report any minor issue is to have an online portal that allows them to submit maintenance requests. 

So what kind of regular maintenance is recommended and how often?

Test smoke and carbon monoxide detector

Make sure you check with your local laws on how often they need to be inspected and updated as well as how many are required and that they are in the required locations. 

Keep door and window locks secure

Locking mechanisms can falter over time. Make sure the locks are functional not just because it can keep people out, but also a tenant may need to open a door or window in an emergency to get out. 

Maintain heating and cooling systems

This can be one of the more expensive systems to maintain. If you don’t maintain them properly though, they can cost a lot of money to fix down the road. Make sure you replace the filters regularly that way the systems work more efficiently and don’t break down from being overworked. 

Check for water leaks and water damage

As stated above, signs of water damage and leaks can mean much bigger problems down the road if they aren’t addressed immediately 

Clean the gutters

This can be part of the regular maintenance of the landscaping. While up there, you can also have the roof inspected. 

Prune trees and clear debris

The last thing you want is an old rotted tree branch to collapse onto the roof or for a storm to blow a heavy branch onto the main structure. 

Pest control

Don’t wait to address any issues around pest control. The last thing you want is a full blown infestation that requires you to tent and fumigate your property and put the tenants in hotel rooms for multiple days. 

Patch cracks in ceiling and walls

This can be done after a tenant moves out, but if a tenant has been living in the unit for a while, you can schedule a time to patch any cracks so they don’t get any worse. 

Flush the water heater

It is recommended that you flush the water heater twice a year. They can collect sediment at the bottom and the water can become dirty. 

Inspect the caulk and grout

Refresh any caulk or grout that is looking a little worn down. This can help prevent any long term damage and also make the place look nice. 

Check for activity that might violate lease

This could be anything from an unapproved pet, or a water bed, or even something criminal. Keep an eye out for any signs of these things during inspections. 

How often should you have a maintenance inspection?

You should inspect each unit thoroughly at least once a year. If tenants don’t renew their lease after a year and move out, it can be done while preparing the unit for new tenants. If you have long term tenants, you should still inspect the unit once a year. Be sure to schedule the inspection with your tenants and give them the legally required notice prior to going into the unit for the inspection.

The Impact Of AB 3182 On HOA Rentals

The housing shortage in California doesn’t just have an impact on homeowners and potential homeowners. It has an impact on the number of potential rental units throughout the state. In order to address the shortage of rental units, the California state legislature passed AB 3182 and Governor Newsom signed it into law. 

What does AB 3182 do?

Approximately 25 percent of the homes in California belong to an HOA. Prior to the passage of AB 3182, any HOA could limit the number of units allowed for rental within the community. The goal of the legislation was to allow for a larger percentage of those units throughout the state to be put on the market for renters and landlords.

The law limits the ability of an HOA to restrict homeowners to lease their units. Now that the law is in effect, an HOA has to allow at least 25 percent of the units to be leased. This doesn’t mean 25 percent have to be rented out. It does require that it allow at least 25 percent giving more owners the option to become landlords. 

An HOA can also no longer ban the lease of an accessory dwelling unit or a junior accessory dwelling unit. If a landlord leases out a room, an ADU or a junior ADU but lives in the main property, it doesn’t count against the 25 percent of the units required to be allowed to be rent-able. Without any grandfather clause, this means that no HOA can block the new law by having different rules signed into contract prior to the passage of the law. 

AB 3182 exemption

There is an exemption for vacation rental/airbnb short term rentals. An HOA can restrict a landlord from leasing their unit out for fewer than 30 days. Another big change is that short term leases over 30 days are required to be allowed under the new law. This means that if there was a previous limit in the HOA for 90 day minimum for rentals, it is no longer allowed. This opens up the possibility for landlords to use their units for seasonal rentals while they are not being used or even short term corporate rentals. 

What if your HOA doesn’t comply with the law?

An HOA that doesn’t comply with the new law can be liable up to a 1,000 dollar fine per person in the HOA as well as be liable for potential damages which in this case could be lost revenue. If you have been considering renting out a unit in an HOA, now would be a good time to speak with the HOA and find out if your unit could be eligible to rent. If they aren’t allowing your unit to go up for rent but fewer than 25 percent are up for rent, the new law is in your favor. Speak with a lawyer and your HOA if there are any issues when it comes to putting your unit up for rent.

Investment Property Tax Deductions for Landlords In 2020

Most people epitomize the American entrepreneur as someone who starts with a basic product or solution and through hard work, perseverance, and determination claw their way to fortune and success.

Consider Bill Gates or Michael Dell, quintessential figureheads considered to be great American entrepreneurs of their time. But many people overlook real estate as a viable avenue to wealth, happiness, and success.

On the contrary, landlords often typify the ‘American dream’ motif. Similar to other business owners, many landlords start from the bottom and work their way up, beginning with one property, then two, four, and so forth.

What’s more, the number of renters continues to increase. Just recently, the number of renters in the United States reached 108.5 million in 2018. It’s no wonder people flock towards investing in rental properties[7].

But how does someone build a real estate empire? How do the millionaires and billionaires of the world manage to stay ahead of the curve? One way savvy landlords stay in front of the pack is by taking advantage of lucrative (and often unique) tax deductions, leaving more money in their pocket.

By partnering with a property management company like Ziprent your costs are fully tax deductible. But let’s take a further look at some of the most optimal investment property tax deductions for landlords in 2020 that can save you more money.

Non-Cash Expense Deductions
In the United States, businesses follow generally accepted accounting principles (GAAP) requirements that businesses expense certain line items that may not have a real cash payment.

Unlike operating expenses, such as utilities, that involve making a payment and getting a good or service in return (in this case power, gas, or even internet), non-cash expenses are accounting expenses that can affect a business earnings.

Landlords can often deduct many of these non-cash expenses translating into substantial tax savings.

Depreciation
Obviously, most landlords would understand that their real estate is considered a long-term asset. According to GAAP, that asset has a designated useful life. As a landlord, you can depreciate the purchase price of the asset (in this case your real estate) over an appropriate period. Residential properties can be depreciated over 27.5 years and commercial properties can be depreciated over 39 years[1].

Major improvements made to the property can also be depreciated and deducted. Improvements, such as putting on a new addition or completed major renovation projects, may be considered appropriate improvements to depreciate. Landlords cannot depreciate simple maintenance expenditures or minor repairs[2].

Casualty Loss and Theft
Similar to depreciation, landlords can deduct casualty losses or those due to theft as qualified business expenses. In order to claim a casualty loss, the loss must have occurred as a result of a federally declared disaster. Certain guidelines also pertain and define what can be considered theft. Form 4684 can be used to itemize and report qualified expenses[3].

Upkeep Related Deductions
As a landlord, you understand that maintaining your investment is crucial, especially if you want to see long-term appreciation. But repairs and upkeep can come at a cost. Recognizing that, the tax code allows landlords to deduct several of these key expenses.

Maintenance and Repairs
The IRS notes state that landlords “can deduct the costs of certain materials, supplies, repairs, and maintenance that you make to your rental property to keep your property in good operating condition[4].” This incentivizes landlords to keep the property in good working order for the benefit of the tenants leasing the space.

Understand that repairs need to be typical and within reason to be considered deductible. Don’t try including major improvements as a deduction under maintenance and repairs. Patching leaks or replacing broken fixtures would be considered ordinary repairs.

The IRS clarifies that “you can deduct the ordinary and necessary expenses for managing, conserving and maintaining your rental property. Ordinary expenses are those that are common and generally accepted in the business[4].”

Financing Related Deductions
If you finance your rental properties you may be able to write off several finance related expenses. One of the largest financing related expenses is mortgage interest, however other expenses, such as mortgage insurance premiums and closing costs paid, can be equally beneficial.

Mortgage Interest
Any interest accrued on loans used to acquire or improve a rental property are a common expense and can typically be deducted. While the 2018 Tax Cuts and Jobs Act (TCJA) limits the amount of interest some landlords can deduct, interest is still an important expense that impacts your bottom line[5].

Closing Costs and Mortgage Insurance Premiums
If you financed the purchase of your investment property, chances are you had to pay closing costs to obtain your loan. The closing costs associated with the purchase of the property are often tax deductible.

Other financing costs that sometimes get overlooked are mortgage insurance premiums. Mortgage insurance is sometimes built into a deal to protect a lender in the event you default on your loan, which is paid by you, the borrower. Over time, these premiums can add up. Luckily, you can deduct these premiums as a qualified expense from your taxable rental income.

Business Operations Expenses and Deductions
Overhead costs are common amongst business owners as they are direct costs that keep the business operating and functioning. Operating expenses such as software, utilities (i.e. phone service, internet, computer hardware), and office space offer some chances for additional deductibility.

Business and Accounting Software
Software that is used to manage the property for the purposes of collecting rents, sending notices, completing background checks and tenant screenings, etc. are permitted expenses that can be deducted. Tax preparation software also falls under this umbrella and is eligible. Fees specifically incurred for background checks and credit reports in of themselves are also deductible.

Utilities (Phone, Internet, Computer Hardware, etc.)
Internet and phone service were not always considered utilities, but over time have become accepted as necessary expenses needed to run a business efficiently as technology continues to evolve.

Computer hardware used for business related activities can be rationalized as business equipment and deducted accordingly. Similarly, if you can document internet and phone usage for business purposes, those bills may be fully or partially deductible.

Home Office Space
Rules on how home offices are treated have changed over recent years. It used to be if you were a remote employee working for a company, you could still claim a portion of your home as a home office. Now, that has been eliminated.

However, as a self-employed landlord, managing your business from your home entitles you a deduction. Since this line item has been highly scrutinized even recently, make sure you can document the designated area in your home used for office space, as well as support the square footage footprint you are using.

Pass-Through Income Tax Deductions
One of the best ways to maximize your tax savings is by ensuring you optimize the legal way in which your real estate holdings are held. Under the current law, qualified individuals (which includes landlords) can receive a massive 20% deduction from their income generated from business entities, including sole-proprietorships, LLCs, partnerships, and S-corporations[6].

While some limitations exist, the qualified business income deduction or QBI, has been in effect to foster new small business ventures. If structured correctly, your rental income will already be lowered by deducting your business operating expenses and depreciation. You can then apply the 20% pass-through deduction to save even more[6].

Interested in using Ziprent? Get started for free by adding your property. We’ll help you take care of everything ‘cause that’s our job. Just sit back, relax, and don’t forget to write off the cost of property management services this next tax season.

Sources
1 Bischoff, B. (2013, April 23). The tax advantages of being a landlord. Retrieved May 26, 2020, from https://www.marketwatch.com/story/the-tax-advantages-of-being-a-landlord-2013-04-23

2 Davis, G. B., Davis, B., Davis, G. B., Davis, G. B., Davis, G. B., Davis, G. B., … Davis, G. B. (2020, April 2). Rental Property Deduction Checklist: 20 Tax Deductions for Landlords in 2020. Retrieved May 26, 2020, from https://sparkrental.com/20-tax-deductions-rental-properties-guide/

3 Form 4684 Theft and Casualty Loss Deduction: H&R Block. (2019, December 20). Retrieved May 26, 2020, from https://www.hrblock.com/tax-center/irs/forms/form-4684/

4 Tips on Rental Real Estate Income, Deductions and Recordkeeping. (n.d.). Retrieved May 26, 2020, from https://www.irs.gov/businesses/small-businesses-self-employed/tips-on-rental-real-estate-income-deductions-and-recordkeeping

5 Fishman, S., & J.d. (2017, January 12). Top Ten Tax Deductions for Landlords. Retrieved May 26, 2020, from https://www.nolo.com/legal-encyclopedia/top-ten-tax-deductions-landlords-29497.html

6 Frankel, M. (2020, May 21). What Is the Pass-Through Tax Deduction? Retrieved May 26, 2020, from https://www.fool.com/millionacres/taxes/articles/what-pass-through-tax-deduction/

7 Decade in review: Number of U.S. renters surpasses 100 million. (2020, March 12). Retrieved May 26, 2020, from https://www.housingwire.com/articles/decade-in-review-number-of-u-s-renters-surpasses-100-million/

Common Lease Agreement Clauses for Landlords and Tenants

A lease agreement is a formal contract between a landlord and a tenant signed by both parties before move-in. This essential, legally binding document outlines the terms of the agreement including monthly rent, deposit, and more. Oftentimes, lease agreements can be intimidating because of the complex language typically used, however they do not have to be. This blog post aims to educate our readers on common lease clauses, what they mean, and how they affect the rental agreement.

First, we will discuss the most common lease agreement clauses. Almost every lease agreement you will ever come across will contain the following:

  • Party identification. Every lease agreement must state who the agreement is between. In the case of a lease agreement, it is typically between the landlord and tenant. All occupants must be included in this section of the lease.
  • Description of the rental property. The leased property must be identified using the full address, including city, state and zip code.
  • Length of tenancy. The term of the lease establishes a start and end date to the agreement.
  • Rental price & requirements. The rental rate defines the monthly rent due, as well as the total amount due throughout the duration of the lease. It will also specify when the rent is due each month, late charges (if any), and accepted payment methods. This clause should identify who is responsible for utilities, and what happens in the case of utility over use.
  • Deposit amount & terms. This is an important clause explaining the deposit amount, the collection date, reasons for deducting from the deposit, and how the deposit will be returned at the end of the lease.
  • Tenant/landlord responsibilities. This clause details the specific obligations of each party. This includes keeping the property up to code, maintenance, safety, hazards, and more. Depending on the complexity of the lease, this can either be a simple clause or go into in-depth detail of requirements, rules, and responsibilities.
  • Party signatures. Without signatures, the contract is irrelevant. In order for the agreement to take effect, both parties must sign the agreement.

Now that we have identified some of the most standard lease agreement clauses, let’s dive into some additional details you might find in the common lease agreement.

  1. Damage & Repairs
  2. Property Inspections
  3. Rules & Important Policies
  4. Pets
  5. Emotional support and service animals
  6. Liability & Idemnification
  7. Guests

1. Damage & Repairs

Identifying who is responsible for what throughout the duration of the lease is incredibly important. Repair clauses are the first defense against end of lease battles over the deposit. In California, the landlord must maintain a safe, habitable, and hazard free environment for the tenant, but it is between the landlord and the tenant to determine who must pay for basic repairs and maintenance.

Tenants must maintain clean, sanitary, and safe premises at all times and are expected to pay for any damage caused on their behalf. The lease must clarify that they are responsible for any tenant abuse or neglect, excluding normal wear and tear. Tenants must alert the landlord or property manager of all broken or dangerous conditions. The lease agreement should outline the process on how these complaints and repairs should be handled.

Another important part of the repairs clause is the discussion of what the tenant cannot do. For example, a tenant cannot paint the house, cut down a tree, remodel a bathroom, or perform any other type of alteration without the explicit consent of the landlord.

2. Property Inspections

This clause needs to clarify the terms in which the landlord or property manager can legally enter the property. For example, it is standard to give 24 hour notice before entering or performing repairs, but that may not be possible if there is an emergency. This clause is incredibly important to avoid any claims against illegal entry or violation of privacy rights.

3. Rules & Important Policies

Every lease agreement should include a list of important rules and what could happen if t hey are violated. For example, a landlord would want to include a rule against any illegal activity to limit landlord liability.

4. Pets

As a landlord, you have every right to determine whether your property allows pets or not. However, it’s also important to understand the role of emotional support and service animals.

No-Pets Policy If you choose to keep your property a pet-free zone, the lease should explicitly state that there are to be no pets living on the premises. If you allow certain kinds of pets (or breeds) but not others, the lease should specify exactly what is and is not allowed.

Allowing Pets If you choose to allow pets, include what types of pets are allowed, specific breeds, pet deposits, and any additional rules and/or requirements.

5. Emotional Support and Service Animals

Emotional support and service animals can get around any no-pets policy because they are not considered pets.They provide a service to their owners, which excludes them from the traditional rules. There are very specific rules on how to handle emotional support and service animals. For example, you cannot ask questions about the owner’s disability, but you can ask if the dog provides a certain service. This article goes into depth what you can and can’t ask when determining whether to allow an animal on your property.

6. Liability & Idemnification

Liability clauses are important in protecting both the landlord and the property. While all landlords are required in some capacity to have insurance in place protecting against injuries suffered on their property, a lease agreement should outline specifics on what may or may not be the landlord’s responsibility. For example, if there is a hot tub on the property, the lease should state that the tenant is responsible to maintain the water and safety of the tub and that the landlord is not responsible for any injuries suffered from misuse. This can go for fireplaces, BBQs, and more.

You can also include specifics like how to properly use or care for the property, its fixtures, furniture, etc.

7. Guests

The number of people you have staying on the property can significantly affect the amount of ‘normal wear and tear’. However, because normal wear and tear cannot be deducted from the deposit, it’s critical to have an occupancy clause restricting who is allowed to reside in the home. You should also include a guest clause that states how long guests are allowed to stay. For example, any guest staying longer than 7 days would violate the lease agreement.

While a lease might contain a number of additional clauses, these are the most common clauses that every lease agreement should include. Lease agreements are not only there for the protection of the landlord, but also the tenant. They establish guidelines and rules that each must follow in order for everyone to maintain an honest, professional, and pleasant landlord-tenant relationship.

Understanding Residential Leases

Leases can be complicated. There is a lot of language in a lease that, for most of the tenant world, could use some explaining. That’s where we come in. We want our tenants to be informed, educated and in the know. We don’t want you to have any unexpected surprises in your lease. To help, we’ve decided to put together this post to walk you through a residential lease.

  1. Section 1: Landlord’s Smoke Detector, Carbon Monoxide Detector, and Water Heater Certification
  2. Section 2: Residential Lease-Rental Agreement and Deposit Receipt

Section 1: Landlord’s Smoke Detector, Carbon Monoxide Detector, and Water Heater Certification

This section covers required safety devices and requirements by law.

I. Smoke Detectors

Per California Law, smoke detectors must be installed in the unit. This is to protect you, the tenant, in the event of a fire.

II: Carbon Monoxide Detectors

Another California Health & Safety Code requirement. Carbon monoxide detectors need to be installed in any property with an attached garage and/or any fossil-fuel burning devices. Gas can be deadly and these little safety devices have saved lives.

III: Water Heater

Because, yes, we have earthquakes here, the water heater must be strapped to avoid displacement due to earthquakes! This is a requirement for any home (rental or owned) in the state of California.

The above requirements will all be installed and operable before tenancy, and will meet the State Fire Marshal’s requirements as well as any local ordinances.

Section 2: Residential Lease-Rental Agreement and Deposit Receipt

This part of the lease goes over the agency relationship (relationship between landlord, tenant and listing agent), the terms of the lease, the deposit and other important legal implications to be aware of.

Agency Relationship Confirmation

An agency relationship is a fiduciary relationship where one person grants responsibilities and trust to an agent to carry out the transaction.

The listing agent is the individual or company who is listing the property on behalf of the owner. If you rent with us, Ziprent is the listing agent and in most cases, will also be the leasing agent for the tenant. Because we make tenant placement so simple and streamline, we often act as both the listing and the leasing agent.

The next part covers the deposit, when it was received and how much. Under that, there will be an itemized list of move-in costs, which could include the deposit, first month’s rent and last month’s rent. The amounts in this list will vary depending on the property, the deposit amount and whether they require last month’s rent to move in.

1.Term

The term defines the type and length of the lease and/or rental. A lease is a long-term lease with pre-defined start and end dates with a total amount in rent due over the course of the lease. A rental is a month-to-month, short-term scenario where the agreement can be terminated by giving the appropriate written notice.

Most tenants feel more comfortable singing a lease than a rental if they are planning on staying for an extended period of time. A lease protects you throughout the entire term, so you won’t have to worry about any termination before the end date.

2. Rent

This is a very important part of the lease. It states how much you owe each month, when it’s due, and any late fees/charges.

Not paying rent on time can result in some expensive consequences, so always make sure you know exactly how to pay rent and when it’s due. Our best practice? Pay rent early. This ensures the rent check is always there when it needs to be, thus avoiding any unnecessary problems.

If you are a tenant of a Ziprent property, we have an Autopay service within our platform. Just link your bank account and your rent will get deducted on time, everytime.

3. Multiple Occupancy

This article simply states that the people who sign the agreement, agree to it’s terms and their respective responsibilities.

4. Utilities

It’s important to understand what utilities you as the tenant are responsible for. Are you paying for energy, water, sewer and trash or are you just responsible for energy and your Internet? Remember to switch any utilities you are paying for into your name prior to move in!

5. Use

This article defines how many people are allowed to live at the house and covers some basic rules about guests, parking spots and additional vehicles. Remember, if the tenant do not abide by these rules, you could forfeit your deposit or risk greater consequences!

6. Animals

Basically, only bring approved animals on premises. If it is a dog-friendly lease, there will be a section stating what animal is allowed to live on the property. If not, do not try and sneak an animal into the home. Again, you might risk forfeiting your deposit.

7. Rules and Regulations

This article is specifically for multi-tenant properties such as condominiums communities. You must agree to the rules of the community NOT just the rules of this lease. If you are moving in to a common-interest community, make sure you read their rules as well to make sure you can abide by them throughout the terms of your lease.

8. Ordinances and Statutes

Simply put, you need to follow the rules and respect the law.

9. Assignment and Subletting

You are not allowed to rent the property to anyone else without the go ahead from the owner.

10. Maintenance, Repairs, or Alterations

Basically, the landlord states that everything in the unit is in properly maintained and working order. The tenant is responsible to inform the landlord of any damage or any necessary maintenance and/or repairs and must return the property in the condition it was received. It also states that the tenant cannot make any changes to the property without consent from the landlord.

11. Inventory

An itemized list of all personal property will be given to the tenant and it’s the tenant’s responsibility to keep that personal property in the condition it was received (with normal wear and tear, of course.)

12. Damages to the Premises

If the property is damaged and uninhabitable, both parties (landlord and tenant) can terminate the agreement via written notice within 15 days of the damage. IF the property is damaged due to the tenant’s negligence, then the owner has the right to terminate. Rent will be prorated for the month (from the time the damage occurred). If the agreement is not terminated and the owner can repair the property, rent will also be prorated until the property is fixed and in a liveable condition once again. Please note, if the damage is due to the tenant’s negligence, the security deposit could be forfeited.

13. Entry and Inspection

The owner/landlord has the right to enter the premises in the case of an emergency and/or to make necessary repairs. The landlord does have to give 24 hour notice and the visits must be during business hours.

14. Indemnification

This is an important article. The owner is not responsible for injury or damage to the tenant, their friends/guests or to any property during the term of the lease UNLESS it is due to the owner’s negligence. Basically, you can’t blame the owner if you hurt yourself while renting the place.

15. Physical Possession

IF the owner can’t give you the keys and let you move in on the date originally discussed, the agreement is not terminated. The tenant just doesn’t have to pay rent until the home is ready to be lived in.

16. Default

If you default on the agreement, for example failing to pay rent, the owner must provide written notice and in no less than three days after providing such notice, can terminate the agreement. The owner has the right to carry out the lease and expect all rent from you and can take legal action to do so, or choose to find a new renter. Best practice? Don’t default. It could cost you A LOT.

17. Security

After you have vacated the premises, you will receive the balance of your security deposit back within 21 days. A lot of times, the tenant receives a large portion of the deposit back, however, if there are unpaid rents or tenant damages, the security deposit will be used accordingly and you will just get back the balance after the repairs and/or unpaid rent.

18. Waiver

Basically, this agreement must be followed.

19. Notices

Any notice must be in writing and either delivered personally or mailed. As a general rule of thumb, we recommend always have any conversations in writing as this holds up more effectively than any oral notice or conversation.

20. Holding Over

This article discusses what happens at the end of the lease term. Typically, after the year, the tenancy becomes month-to-month, but the terms of the agreement still stand.

21. Time

Time is of the essence means that either party must comply with the terms of the agreement within the dates on the contract.

22. Attorney’s Fees

If you have to hire an attorney for any reason or dispute between you and the landlord, the prevailing (winning party) will be responsible for ‘reasonable’ attorney fees.

23. Subrogation

Basically, you and the owner/landlord waive the right to pay each other insurance moneys unless otherwise stated.

24. Fair Housing

By law, there can be zero discrimination when it comes to renting a property.

25. Smoking Restrictions

This article determines if you can smoke in and/or around the property.

26. Additional Terms and Conditions

This is where the owner can fill in any additional terms of the agreement.

27. Rent Control

If this box is checked, the property is subject to rent control.

28. Entire Agreement

This article states that this is an agreement between the two parties and that any modifications must be made in writing and signed by both. It also notes any additional documents that are part of this agreement and must be signed before the execution of said agreement.

No matter the situation, it’s always important to understand the lease agreement and it’s terms. In the case that issues arise, the agreement acts as the basis for all resolutions.

We hope that this guide helps you in better understanding the lease agreement and what it means for you as you move into your new home!

If you have any questions, please feel free to contact us! We are happy to walk through any part of the agreement to make sure all parties are comfortable!

How to Prepare Your Home for Rent

Preparing your house for rent, or getting it ‘rent-ready’, means getting it in proper shape for the incoming tenants. Most tenants expect a property to be free of maintenance issues, professionally cleaned and ready to live in comfortably.

Depending on the property, there may only be a short list of things to do, but as a general rule, here are 6 things you should do before handing over the keys!

  1. Make repairs and address other maintenance items
  2. Put on a fresh coat of paint
  3. Get a deep clean
  4. Rekey the locks
  5. Make sure utilities are switched over (if applicable)
  6. The final walkthrough

Make repairs and address other maintenance items

The first thing you’ll want to do when getting the home rent-ready is to fix and repair any necessary items. Below is a standard list of what you’ll want to check.

General

  • Holes in the wall
  • Damaged carpets
  • Chipped flooring/tiles

Appliances

  • Refrigerator
  • Water heater
  • AC/Heating
  • Dishwasher
  • Garbage disposal (if applicable)
  • Sink/faucets
  • Microwave
  • Washer and dryer

Other Items

  • Garage doors
  • Fences
  • Doors
  • Deck
  • Pool/Spa
  • Lights/electrical
  • Air filters
  • Fans

The rule here is that everything in the home (unless otherwise previously agreed upon) should be in working order and safe for the tenant to use. It is also a good idea to ensure that if you hire someone to do repairs, they are a licensed professional.

Depending on the condition of the home, maintenance and repairs could either be a small or a larger task. Luckily, at Ziprent we can help you coordinate the prep work utilizing our curated network of professional vendors, making the process seamless.

Put on a fresh coat of paint

Once you have made your repairs, it’s time to spruce the place up with a nice fresh coat of paint. Newly painted walls significantly enhance the look and feel of a room. Plus, it’s a great way to cover up any scratches or previous paint damages.

Yes, we know not this type of painting, but hey it’s Bob Ross

Get a deep clean

Clean all the nooks and crannies throughout the home. A professional cleaning team will clean the house from top to bottom, no baseboard or tile left behind. Along with a deep clean, we recommend getting the carpets either professionally cleaned or shampooed and steamed.

While the inside is critical, don’t forget about the yard or patios! Trim any bushes and trees, take out any dead plants and make sure outside furniture is ready to go.

All of this ensures a smooth transfer for both you and the tenant. The last thing you want is the tenant complaining about any of these items when they first move in.

Rekey the locks

You don’t want someone you don’t know having the keys to your house, and neither does your new tenant. Switch out or rekey the locks and reset any electronic door codes. You will also want to think about garage door openers as well as security systems. If you live in a place with resident amenities like a pool or a gym, you can probably reset the FOB or other entry devices. Other locks to think about might be mailboxes, outdoor sheds, side gates, etc. It’s important that both you and your new tenant feel confident they are the only people with the keys to the home.

Make sure utilities are switched over (if applicable)

If the tenant is responsible for their own utilities, you want to make sure both you and the tenant are ready to make that switch. Don’t wait until the last minute. Make sure the owner or previous tenants are all paid up and bills are current. At Ziprent, we provide a utilities list to the new tenant so they know who to contact when they are ready to put them in their name. We make sure everything has been checked and looked over to ensure there are no discrepancies when the changeover happens.

The final walkthrough

This is the best part of prepping your home to rent – the walkthrough. Double check that all of the hard work put in to making this property a home is completed and ready to be enjoyed by the next tenant. This is your opportunity to finish up any last touches and ensure the house is in tip-top shape. With Ziprent, every home receives a thorough walkthrough which is stored within your personal property dashboard!

While tenants enjoy (and expect) to move into a perfectly maintained home, prepping your home provides protection to the landlord. If the property sustains any damage from the tenant throughout their lease, it will be easier to identify responsible parties and execute repairs accordingly.

Do you have questions about how to get your home rent-ready? Contact us for more information and find out how Ziprent can help you through this process.

What happens if a tenant wants to break a lease before moving in?

Life happens, but what happens if a tenant wants to break an already in place lease before moving in? This is an unfortunate situation, but one that can be handled legally and professionally.

Circumstances change in life. Perhaps your new tenant has to move out of state for a job, or maybe they had an emergency that is preventing them from being able to move forward with the lease. Regardless of the reason, a lease is a law-binding contract and therefore must be dealt as such.

A tenant cannot just walk away from a lease, so it’s important for both parties to find a reasonable solution. Keep in mind, there are certain legal situations that allow a tenant to break a lease, but we won’t go into detail here about those specific situations. For the most part, under normal unforeseen circumstances, like a family emergency, new job, cold feet, etc. the tenant has no legal bounds to walk away from a lease without being responsible for the entire lease.

Luckily, this is where hiring Ziprent comes into play. We understand these situations, the law, and know exactly how to tackle it head on to make sure there are no significant financial losses for our owners and the property doesn’t just continue to sit there vacant.

Best Practice: Document Everything

This is a general rule of thumb for any business or professional dealings, but is incredibly critical. Have a file with all emails, lease documents, notices, termination letters, etc. If you have a phone call with the tenant, follow up in an email summarizing the conversation. It is important that you have record of any and all conversations surrounding the lease.

Once a lease is signed, both parties (tenant and landlord) have entered into a legally binding contract, where all parties must abide to the provisions set forth in that document. That means the tenant is still responsible for the entirety of the lease, even if they never occupied it before changing their mind.

Any solution must: * Be legal * Limit financial impact * Be professional * Be in writing

To get the process started, the tenant must speak with the landlord about their situation. Most of the time, if the tenant is flexible and amicable, the landlord will be willing to find a solution that works for both parties. The tenant should first write a letter with a 30-day notice stating they will be leaving the property. The tenant, per the lease, should then be told in writing again by the landlord, that they are still responsible for the rent through the term the of the lease. At this point, both parties should work to find a replacement tenant as part of the ‘Good Faith’ clause held by most states and in most real estate contracts. As soon as an acceptable tenant is found, and a new lease is signed, the previous tenant is no longer eligible for the remainder of the rent and can relieve themselves of any further financial burden.

During the period that the landlord and tenant are finding an acceptable new tenant, the tenant breaking the lease must continue to pay rent each month.

If the tenant has stopped paying rent, that is where the security deposit comes into play. Unfortunately, many security deposits only cover one month and/or a portion of the month, so you need to be prepared to take legal action IF you are not receiving what’s owed in the contract.

If the tenant does pay the rent and/or the either party is unable to find a suitable new tenant by move-in date, the landlord may reserve the right to hold the security deposit in full. However, how each situation is handled varies from circumstance to circumstance. A good property manager will always try to work with the tenant, while establishing a course of action to protect the landlord, but also help minimize the financial impact on both sides.

Please Note: Unlike a real estate sales transaction, there is no Right to Rescind within 3 days. This exists with other real estate contracts, but does not apply to residential leases.

When a tenant tries to break a lease, it can seem like a major bump in the road, but it doesn’t have to be. By keeping all parties aware of the process, the provisions in the lease and the possible solutions, Ziprent can easily move past these hiccups and find great new tenants for their properties.