Potential tenant with annuity income and PoA

[HallLark]

Jurisdiction

Texas

I have a house up for long-term rental, and have a couple of questions:

1. An applicant lists no recent employment history as they are a senior citizen and have been retired for a while. Their credit score is excellent. Their income is listed to be covered by annuity income. I have no problem with any of this if it is on the up and up, but the totality of evidence that I have for income is wording that essentially says "rent will be covered by income from annuities." I would like to ask for evidence of income from the annuities, and the projection for when the annuities will be exhausted.

2. If an applicant has a legal Power of Attorney set up, it could be possible that an agent of the PoA could decide not to pay, exhaust the estate, be removed as a PoA, or be part of other changes and or shenanigans. At the same time, the lease agreement that I enter into is only binding to the Principal. I am scrutinizing this issue to see what my options are for assuring rental income, and also to understand who I can address regarding all communication and transactions for this lease. Is it appropriate for me to ask for a current copy of any PoA that may be in effect, and that we are listed as interested parties in the event that the PoA principal changes agents etc.?

Any answers, thoughts, etc. would be appreciated.

Thanks!

 

[army judge]

Any answers, thoughts, etc. would be appreciated.

Anytime I have doubts, I heed them.

If you are having doubts about a potential renter, now is the time to simply say, NO THANKS, NO CAN DO.

I prefer not to take risks, a strategy taught to me by my father, one that has served me well.

Additionally, no one is required by law to honor a POA.

In fact, many financial institutions refuse to honor a POA, preferring a court order (as in legal guardianship, for example).

 

[adjusterjack]

Any answers, thoughts, etc. would be appreciated.

Being a landlord involves taking risks. Even the best looking tenant at the front end can go bad along the way. And sometimes marginal tenants work out fine.

It's a crap shoot, being a landlord. I learned that when I had my rentals long ago. If you can't accept risk, you should be a landlord.

Have you met the guy personally? What's your impression? Does he want your place to enough of an extent to cooperate in giving you more documentation?

There comes a point where you have to stop with the "what ifs" and go with your gut.

 

[HallLark]

I appreciate the responses so far. Maybe I have set the wrong impression. I can't go by a feeling that a tenant's income stream is adequate if I have zero documentation of it. At the same time, I want to be fair in accepting or denying an applicant. While doing this, I don't want to put myself in a bad situation by asking questions that might get me bit by some obscure law or practice that I'm not aware of.

I'm looking to answer the following questions:

1. Is it appropriate to ask for evidence of income from annuities that are the sole source of income?

2. Is it appropriate to ask for evidence of when annuities will be exhausted when those annuities are the sole source of income?

3. Is it appropriate for me to ask for a current copy of any PoA that may be in effect?

4. Is it appropriate for me to ask that we are listed as interested parties in the event that there are changes to the PoA related to the Principal and the Agents?

Thanks!

 

[adjusterjack]

All of your questions can be answered this way:

You are extending credit to a tenant just like a bank or mortgage company would do for a borrower. You are entitled to ask for proof of the ability to pay just like a bank or mortgage company would do.

I know of no law that would prohibit you from "asking" for all of what you seek. It would be up to the prospective tenant to decide what his limit is.

 

[welkin]

You can ask for copies of the last two annuity statements. That will tell you what the payment periods are and the amount of the payment. I would be surprised if they didn't also receive social security payments. Ask for the benefits letter to see what they receive. And with an excellent credit score (usually above 800 as excellent) they are not fly-by-night people.

It's too bad that banks and now landlords discriminate against retired persons.

As for the POA, an annuity usually has beneficiary and stops paying when you die (goes into the estate). So what do you care about the POA as long as you get the rent.

 

[Zigner]

2. If an applicant has a legal Power of Attorney set up, it could be possible that an agent of the PoA could decide not to pay, exhaust the estate, be removed as a PoA, or be part of other changes and or shenanigans. At the same time, the lease agreement that I enter into is only binding to the Principal. I am scrutinizing this issue to see what my options are for assuring rental income, and also to understand who I can address regarding all communication and transactions for this lease. Is it appropriate for me to ask for a current copy of any PoA that may be in effect, and that we are listed as interested parties in the event that the PoA principal changes agents etc.?

Any answers, thoughts, etc. would be appreciated.

Thanks!

I believe that you may have a misunderstanding of what a power of attorney is. A power of attorney basically allows another person to act on someone's behalf. It doesn't legally restrict what the principal is allowed to do. Your contract is with your tenant, not the person acting as their attorney in fact by way of a power of attorney document.

https://legaldictionary.net/attorney-in-fact/

 

[HallLark]

All of your questions can be answered this way:

You are extending credit to a tenant just like a bank or mortgage company would do for a borrower. You are entitled to ask for proof of the ability to pay just like a bank or mortgage company would do.

I know of no law that would prohibit you from "asking" for all of what you seek. It would be up to the prospective tenant to decide what his limit is.

Thanks adjusterjack! That is the type of answer I was looking for.

 

[HallLark]

You can ask for copies of the last two annuity statements. That will tell you what the payment periods are and the amount of the payment.

I hadn't thought of asking for the last two. Great suggestion!

I would be surprised if they didn't also receive social security payments.

Me too, but the wording in the application only indicates annuities as the income source.

Ask for the benefits letter to see what they receive. And with an excellent credit score (usually above 800 as excellent) they are not fly-by-night people.

I agree, and this one is above 800.

It's too bad that banks and now landlords discriminate against retired persons.

I agree entirely. To be clear, I wasn't looking at this applicant as [old therefore I don't want to rent to them], but rather as a great opportunity to have a mature renter that likely won't tear the place up, while at the same time I can help them out by renting them a good property and NOT discriminating. I know, to all the experienced landlords out there I probably sound as green as spring leaves. Opinions vary.

At the same time, I can't just blindly take them at their word that the income exists. I might be spring-leaves green, but not WindowsXP-default-wallpaper-rolling-grass-hill green.

As for the POA, an annuity usually has beneficiary and stops paying when you die (goes into the estate). So what do you care about the POA as long as you get the rent.

My main concern about the POA is that the Agent doesn't do stuff that causes me extra grief, like not paying where appropriate or exhausting the Principal's estate Monty Brewster style.

You can ask for copies of the last two annuity statements. That will tell you what the payment periods are and the amount of the payment. I would be surprised if they didn't also receive social security payments. Ask for the benefits letter to see what they receive. And with an excellent credit score (usually above 800 as excellent) they are not fly-by-night people.

Thanks welkin!

 

[HallLark]

I believe that you may have a misunderstanding of what a power of attorney is. A power of attorney basically allows another person to act on someone's behalf. It doesn't legally restrict what the principal is allowed to do. Your contract is with your tenant, not the person acting as their attorney in fact by way of a power of attorney document.

Attorney-in-Fact - Definition, Examples, Cases, Processes

I agree with your definition, and also agree that I'm renting to the Principal, not any Agent of the POA. At the same time, if it becomes necessary that I have to work with the Agent for whatever reason, I may not be able to learn anything about them, including but not limited to their identy and contact information, without asking up front. It also occurs to me that if the Agent were to improperly exhaust the estate on a new Ferarri, I'm going to want to know who to go to when the Principal is buried in the aftermath of that. I understand that my beef would theoretically be with the Principal, but that may not get me very far at the beginning of events of this nature.

Thanks Zigner!

 

[adjusterjack]

Is this your first time having a rental or have you had tenants before?

 

[HallLark]

Is this your first time having a rental or have you had tenants before?

First time. Does it show?

 

[HallLark]

Followup: Long story short, the retired applicant had a medical issue and so all applicants had to pull out. We ended up with a different tenant that is the best tenant ever, keeping the rent paid on time, the house clean, yard maintained, etc. Thanks everyone for your help!