LOCKOUT PROCEDURES
by Harry Anthony Heist, Attorney at Law

If you have a policy whereby if a tenant is locked out of the premises, he or she is to call a locksmith, you may not have to read any further. In this case, you have no involvement with the situation, and hopefully the locksmith will not have damaged the lock and/or changed out the lock. Hopefully as well, the tenant does indeed call a real locksmith rather than simply break the lock to gain access. Many of our clients do have a policy of opening up a locked door for a tenant and sometimes will charge the tenant for this service. How the landlord goes about giving access to a tenant can have a serious effect on the landlord's liability.

The Scenario

It is 3 a.m., and your on-call maintenance tech or maybe you receive the dreaded phone call or knock on the door. The "tenant" has misplaced his keys and is obviously intoxicated. You are quite familiar with this tenant, having seen him at the pool, you have seen him drop off rent in the office, he plays volleyball on Sundays, uses the exercise room and has even made maintenance requests. You simply grab the keys and allow him access. The problem is that he is not an actual tenant, but has been an unauthorized occupant for quite some time. He has now decided, once you grant him access, to take his roommate's valuables, leave, never to return again.

The Problem

It is quite obvious what the problem is in this case. You failed to see if this person was indeed the tenant on the lease, and the ramifications could be severe. Each year we see this scenario unfold, and landlords are faced with paying fairly large sums of money to the actual tenant who was not home when you allowed the unauthorized person access. You may argue that it was not your fault that the unauthorized person took his roommate's personal property, as after all they have been living together for quite some time, but the problem remains. You allowed an unauthorized occupant, not on the lease, access to the rental premises.

Creating a Policy

Your first step should be to create a written policy for your company regarding lock outs. All employees who engage in allowing a locked out tenant access should be required to read this policy and sign a statement that they have read it and agree to abide by the policy. No exceptions should ever be made to the policy. Your next step will be to provide the lock out access rules or procedures to the tenant and make this part of the lease, the Community Rules and Regulations, or a separate addendum to which the tenant has clearly agreed.

Lock out access procedure

In the event a tenant is locked out, they need to follow certain procedures for you to even act upon this lock out. They should be required to provide you with 2 forms of government issued identification. This identification should then be brought to the office and compared with the copies of the identification you have in the tenant's file. Names should match up completely, and a visual examination of the picture ID you have in the file should match up with not only the ID the tenant is showing you, but the tenant himself. Once this match is established to the satisfaction of you or the bleary eyed maintenance tech who was just awakened, the identification provided by the locked out tenant should be copied, notes made on the copy, and the copy of the ID placed in the file. If the tenant cannot provide you with the required ID, the tenant should not be given access. If the tenant cannot provide you the required identification, there is no doubt that the tenant will not be satisfied, and an altercation or argument could ensue. Keep your lock out policy handy in the event the tenant is not able to satisfy your requirement, express regret, and tell him he must hire a locksmith.

But, we know this tenant!

Most of the legal problems we deal with occur when the landlord or an employee makes an exception to the rule. Every time an exception is made, the chances of a problem increase dramatically. If an exception is made once, it may be expected that an exception is made the next time. If you make an exception for one resident but not another, you run the risk of being accused of discrimination. People often look alike, especially when related to one another. Most recently, we dealt with a situation where the brother of a tenant gained access due to looking similar to the actual tenant. Had the maintenance tech carefully looked at the identification and made the comparison, the difference would have been evident, but this was not done and the landlord paid the price.

The inherent problems with lock out access

a. The person giving access will need to have both access to the keys to the unit and the tenant's file. Due to privacy issues, it is recommended that there is limited access to the tenant's file.

b. Some companies fail to keep a copy of the tenant's identification in the file. There is absolutely nothing illegal about keeping a copy of the tenant"˜s identification in the tenant's file. This is not a fair housing violation. We strongly urge you to keep a copy of the picture identification in the tenant's file.

c. Many landlords do not have a written policy for the employee who will be engaged in granting access. This is simple. Write one up now.

d. Many landlords have not provided the policy or rules to the tenant regarding lock outs. Create your rules, and distribute them to all tenants.

Charging the tenant for giving access

After reading this article, you may have decided to take the route of telling the tenant that he must call a locksmith, but some of you may have decided that you will assist in lock outs and should be compensated if you grant access. We agree. The extra work involved and the increased liability on the landlord justifies a reasonable charge to the tenant. Some of our clients require this to be paid before the access is granted; others charge it as additional rent which must be paid with the normal rent at the next payment period. If you are going to charge the tenant for anything, it must be clearly agreed to by all parties involved. Landlords often create charges upon a whim and expect that they can force the tenant to pay the charge. Clearly state the charge in your lease or whatever is incorporated in your lease, such as the community rules and regulations.

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RELEASING CREDIT REPORTS AND SOCIAL SECURITY NUMBERS
by Cathy L. Lucrezi, Attorney at Law

The scenario usually goes like this: The tenant vacated and owes money to the owner. The owner is angry and wants to file a lawsuit against the tenant for the money owed or otherwise attempt some collection activity. The owner asks you to give him a copy of the credit report and/or social security number so he can collect the money owed. Should you release it? No.

The situation is controlled by the federal Fair Credit Reporting Act (FCRA). This is the same law that controls Equifax, Transunion, and other credit reporting agencies. The law states that if you provide credit-related information to others on a regular basis, you too are a credit reporting agency. So, in addition to being a property manager, you become a "CRA" subject to all the laws, regulations, and liabilities as Equifax. Not good.

A debtor (tenant or applicant) can sue for a violation of the FCRA, as can the Justice Department. Damages are awarded, even if there's been no harm done to the debtor! Add attorney fees and court costs to that, and one has a very unhappy property manager.

The federal Fair Credit Reporting Act says that credit information can only be released for appropriate purposes. The word "appropriate" is defined by the law. It does NOT include releasing credit information for the purpose of suing to collect on a debt.

Aside from the FCRA, there is another reason to hold tight to that credit report and social security number. Identity theft is on the rise, with increasingly clever ways of using a person's private information to cause financial havoc. By keeping the credit report and social security number totally secure, you limit your risk of liability to a tenant who becomes a victim of identity theft.

Two myths need to be debunked. One, the fact that the owner hired you as his agent and you obtained the report in that capacity of agent, does not change any of the advice above. This is true even though the owner may have paid for the credit report. The owner designated you as agent for the purpose (among others) of finding a tenant. Since he has delegated that authority to you, the owner has no appropriate purpose for the credit report.

A second myth involves releasing the credit report if the tenant gives written consent. This is NOT true. There is no form or document that is so carefully worded that would allow the release of the information. The debtor (the tenant) cannot waive his rights under the FCRA.

There are some very limited exceptions. If served a proper subpoena for the document, it can be released. If you are seeking legal advice involving the tenant, you can let your attorney see the document. Otherwise, keep that information under lock and key.

Unfortunately, many property owners do not care what the law is and feel they are entitled to the information. A savvy property manager will have the following clause in their management agreement which can diffuse a touchy situation:

Due to laws which may affect disclosure of private and credit information, LANDLORD shall not be provided with the TENANT'S credit report and/or application unless specifically authorized in writing by the TENANT(S) and the provider of the credit report.

Note: You will never get this authorization from the tenant and the credit report provider, but we recommend you place it in your management agreement so you can convince the owner that it is indeed not an option.

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EVICTIONS AND REPAIR REQUESTS
by Harry A. Heist, Attorney at Law

Your tenant owes you 3 months' rent and is currently under eviction. The air-conditioning breaks, and the tenant places a work order. The eviction is almost completed. Must you make the repair? The answer is a simple "yes". The tenant has three unauthorized occupants living in your apartment, and his garbage disposal is broken. Do you need to get it fixed? You bet. The rent delinquency, noncompliance or eviction status has nothing to do with your obligations under the lease and Florida law to maintain the premises and make necessary repairs. No matter how angry you are at the tenant or how delinquent the tenant may be in rent or other monetary obligations, the landlord must proceed as if the tenant is completely current and not in violation of any of the lease terms or under eviction.

The Landlord's Obligations

The landlord's obligations are many. Florida Law Section 83.51 clearly states the landlord's obligations, and they must be followed unless specifically excluded in the lease agreement. The lease agreement may add further obligations on the landlord, and finally there is the common law implied warranty of habitability.

1. The Landlord's Obligations under the law

83.51 Landlord's obligation to maintain premises. (annotated) (1) The landlord at all times during the tenancy shall:

As you can see, there is no exception here for evictions or when the tenant is in default. The landlord's obligations are "at all times during the tenancy"

(a)Comply with the requirements of applicable building, housing, and health codes; or

All state and local building housing and health codes are included here. These can be obtained by the landlord ahead of time, or you can wait until you get an inspection by the DBPR if you are an apartment community, or local code enforcement office for single family homes, and you will surely find out!

(b) Where there are no applicable building, housing or health codes, maintain the roofs, windows, screens, doors, floors, steps, porches, exterior walls, foundations, and all other structural components in good repair and capable of resisting normal forces and loads and the plumbing in reasonable working condition"¦ The landlord's obligations under this subsection may be altered or modified in writing with respect to a single-family home or duplex.

The above requirements apply to all housing. In the event you are renting out a single family home or duplex, you may shift these obligations to the tenant, but this must be done clearly in the lease agreement or addenda. For example, a single-family landlord or duplex owner or manager may wish to make the tenant responsible for plumbing issues, and this would be allowed.

(2)(a) Unless otherwise agreed in writing, in addition to the requirements of subsection (1), the landlord of a dwelling unit other than a single-family home or duplex shall, at all times during the tenancy, make reasonable provisions for:

This wording is a bit confusing, but the following obligations apply to apartment communities but do not apply to single family homes or duplexes IF these obligations are placed on the tenant by the lease agreement or addenda.

1. The extermination of rats, mice, roaches, ants, wood-destroying organisms, and bedbugs"¦
2. Locks and keys.

This does not require that the landlord re-key after each move-out, but we recommend it.

3. The clean and safe condition of common areas.

This is a very serious obligation, especially in light of the "safe condition" requirement.

4. Garbage removal and outside receptacles therefore. 5. Functioning facilities for heat during winter, running water, and hot water.

Note that air conditioning is not mentioned here. This is an example in which the lease will govern and/or if there is air conditioning provided, the landlord must keep it working. Also, many local building codes do contain provisions requiring central air conditioning or screens on windows.

(b) Unless otherwise agreed in writing, at the commencement of the tenancy of a single-family home or duplex, the landlord shall install working smoke detection devices. As used in this paragraph, the term "smoke detection device" means an electrical or battery operated device which detects visible or invisible particles of combustion and which is listed by Underwriters Laboratories, Inc., Factory Mutual Laboratories, Inc. or any other nationally recognized testing laboratory using nationally accepted testing standards. (4) The landlord is not responsible to the tenant under this section for conditions created or caused by the negligent or wrongful act or omission of the tenant, a member of his family, or other person on the premises with his consent.

In the event a tenant intentionally or negligently breaks or damages something that would normally be the landlord's obligation, the landlord does not need to take action. However, the problem is proving the tenant's actions or negligence. Always document and photograph a repair after it is completed, as some tenants will intentionally break something again in an attempt to withhold rent.

Common repair requests

Some common requests by a tenant during an eviction would be items such as pest infestation problems, plumbing problems, garbage disposal repair, water heater repair, and quite often, air-conditioner repair. We recommend that unless you are dealing with a situation in a single family home or duplex in which these obligations may be shifted to the tenant by the lease or addenda, the items are dealt with immediately, just as you would for any other tenant. The property manager or landlord must completely put out of his or her mind the fact that the tenant may be delinquent or under eviction.

2. The landlord's obligations under the lease

The landlord may have further obligations to the tenant for repairs or maintenance under the terms of the lease. We always recommend shifting as much of this as practical, but there will be many situations where the landlord is contractually liable to maintain or repair something on the premises, or this liability is implied. An example of this might be a hot tub or pool. While we doubt that either of these are a necessity of life, if they exist on the premises and are not excluded from the landlord's obligations, these items would need to be fixed and put in working condition just like any other item, regardless of the tenant's delinquent rent or eviction status.

The consequences of not making a repair

The landlord may have filed a typical eviction for nonpayment of rent. During the eviction, the tenant requests a maintenance issue be attended to. The landlord refuses to deal with the problem, and a hearing is set by the court. Even though the landlord's failure to make a repair after an eviction action is filed or after the tenant is delinquent should not become a part of the testimony put forth in an eviction trial, this type of thing invariably will come out in court, causing the judge to possibly not look kindly on the landlord. The landlord may be placed in a position in which he or she will have to explain to the judge why something that was indeed the landlord's obligation was not fixed. If the judge is not satisfied with this reason, the sympathy factor for the tenant increases dramatically, and if the tenant had other repair or maintenance issues prior to the eviction which he or she is using as an eviction defense as the reason for rent withholding, the landlord will definitely not look good.

Once you pay the rent, I will make the repair!

Unfortunately, we hear that landlords say this to their tenants on occasion. This is probably one of the worst things you can say to a tenant, and if a judge knew you did, you would be in some hot water in court. This is clearly not allowed under Florida law.

The dangerous, threatening or belligerent tenant

A tenant under eviction or delinquent in rent may be a danger to the landlord. Tempers may flare during a repair which could result in a serious altercation involving injury or even death. If necessary, retain the services of the police when going to the rental premises if you feel in any way that you are in danger, and refrain from discussing the eviction or delinquency at all costs.

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WHO DO YOU WORK FOR?
by Harry Anthony Heist, Attorney at Law

You have been diligently managing a rental property, but the property owner is in deep financial trouble and is not giving you money to make repairs or is going into foreclosure. You feel sorry for the tenant, who has told you that he is going to break his lease. You then begin trying to find another property for the tenant. Anything wrong? Yes. In most cases you work for the property owner and have a fiduciary duty to that owner. Helping the tenant who is breaking a lease with your owner may seem like the right thing to do, but can constitute a serious conflict of interest and breach of fiduciary duty, resulting in a nice, big, complicated FREC complaint or lawsuit against the property owner. Many situations will arise in property management in which the relationship between the property owner and the property manager breaks down to a point that the property manager forgets the fiduciary duty they have toward the owner and takes actions which seem to be proper but are not.

The owner is not reimbursing you

Property managers often incur expenses which must be reimbursed by the property owner. While we strongly recommend that you never make an expenditure with your own money, but rather use the funds held for such repairs or expenditures, we realize there are times when this fund is not adequate and the expenditure occurs. If the owner is refusing to reimburse you, never pay yourself from any funds, unless specifically authorized by the owner or your property management agreement. Of course, you can never tap into prepaid/advance rent or a tenant's security deposit.

The owner is not making repairs

While you can overlook certain repair refusals by a property owner and continue managing the property, there will be times when there are safety issues or serious repairs which must be made and for which the owner refuses to fund or allow. This puts a property manager in a very bad position, because the manager knows that the repair must be made, the tenant is demanding the repair, but the owner is refusing to allow or pay for the repair. Invariably, the property manager will sympathize for the tenant. Whether the tenant can break the lease, withhold rent, or move is not relevant. You manage the property, and you must not tell tenants their rights or advise them in any way. Never tell a tenant that the owner does not have the money to make repairs, even if this is true.

The owner is harassing the tenant

Some property managers are "blessed" with the property owner living in Florida or visiting often. The owner will sometimes go to the property and "harass" the tenant. The tenant will then complain to you about his. All you can do in such a situation is advise the owner on how unwise it is to have tenant contact, and how such contact can result in the owner having to come to court in the event of any litigation. If the owner returns up north, coming to court on short notice will be a serious burden.

Excessive sales traffic

If an owner is desperate to sell and the price is right, this can dramatically increase traffic from local real estate sales associates and their clients to the unit. Most tenants fear a sale, thinking that their lease will be terminated, or they simply get tired of having to keep the unit clean or tidy, knowing that people will be traipsing through the unit while they are at work. The property owner will have no sympathy for this, and again you should show no sympathy to the tenant. A sale of the unit is an unfortunate part of rental living, and the tenant must put up with this. Florida law specifically states that the tenant must allow access for showings. It is advisable to make it convenient to the tenant or attempt to minimize the tenant's disruption of tenancy, but never do anything to prevent the property from being shown. In the event the owner's agent wishes to place a lock box on the door, we recommend you call your attorney to see if this will be allowed.

The owner is in foreclosure

The owner in foreclosure is a common theme at the moment. Can the tenant break the lease? Do they have to continue paying rent? When asked by the tenant, your answer should be simple: "You still must pay your rent to us as before. Until the foreclosure actually goes through and a sale occurs, the property belongs to the owner. At any time your owner may be able to pull out of the foreclosure." Is there a good chance the tenant will end up having to leave if the property is foreclosed? Absolutely, but you cannot take any action based on this uncertainty. If the tenant wishes to break the lease, do not put them into another one of your properties without the express written permission from the property owner whose property is being foreclosed. Some owners may actually give you this permission.

Your owner fired you

For whatever reason or no reason at all, your owner may fire you. You may feel this is unfair or unjust. You may be extremely angry with this owner, as money may be owed to you. Getting the commission due to you should never be done in a self-help fashion. You should call your attorney and weigh the benefits of litigation or legal action versus the dangers of a FREC complaint, in which this owner who fired you for no reason will come up with some excellent reasons that you now will have to counter. If the tenant comes to you asking if you have another place for them to rent, and in the process the tenant will be breaking the lease with your former owner, resist the temptation.

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DESPERATE LANDLORD ACTIONS
by Harry Anthony Heist, Attorney at Law

Never in 17 years have we seen so many desperate moves on the part of landlords when trying to get or retain a tenant: failure to perform background checks, accepting sexual predators or offenders, accepting tenants with foreclosures, allowing tenants to move in with no money paid or uncleared funds, allowing work in exchange for rent, waiving deposits, free rent during the lease, renewal leases with past delinquencies, promissory notes, and overlooking noncompliances are just a few. While flexibility is necessary in uncertain economic times, landlords need to look at potential dangers to protect themselves when doing things novel or out of the ordinary and act accordingly.

Security Deposit payment plans

The tenant does not have the full security deposit and wants to make payments. This should be a warning sign. but we see this arrangement accepted often. Usually, the tenant decides once he is in, there is really no need to pay the security deposit, and the landlord spends the next few months chasing after the tenant only for the tenant to skip out. If a tenant is allowed to make the security deposit in payments, the tenant should sign an agreement which makes it clear when the payments are to be made, converts the payments into rent and accelerates the payments upon default. If a landlord wishes to do this, we can prepare the proper form, but we will urge the landlord to resist.

Concessions

Concessions are rampant right now. The tenant is often given a deep discount on the first few months' rent. Sounds good, and the tenant loves it. The landlord is fine with it until the tenant skips out, and the landlord realizes he got $250.00 per month rent for the past 3 months. It is possible to charge back the tenant for the concession, but the concession addendum (which probably was not used) clearly needs to state the terms, and currently Florida case law is putting into question the legality of requiring a concession payback. We recommend a clear, concise concession addendum is used and followed. The moment the tenant defaults, action should be taken to evict.

Partial Payments

Accepting partial payments is an extremely common act of desperation on the part of the landlord. Faced with foreclosure or financial ruin, the attitude is to take something rather than nothing right now, because maybe the rest will never be paid. Accepting partial payments can create an unexpected modification of the lease agreement which can haunt the landlord later when a Three Day Notice is given, and the tenant defends the eviction based upon the history of partial payment acceptance. If you are a property manager, you will be doing a serious disservice to your owner if partial payments are accepted, unless you are authorized to do this in writing by the property owner.

Accepting cash

Accepting cash is fraught with danger. Tenants who pay by cash sometimes do not receive receipts, misrepresent how much was paid, or claim to place cash in a drop box or mail slot. Landlords need to have a strict no cash policy and NEVER deviate. One deviation can open the door to a tenant's claim of paying cash when in fact nothing was paid. This creates a factual dispute which could trigger a payment defense and a court hearing.

Split rent checks

The lease states that only one rent check will be allowed, but one roommate decides to pay her share to the landlord. This continues for the next month, or the two separate payments are made at different times, triggering a late charge. The landlord's acceptance of partial payment can now potentially unwittingly establish a separate tenancy with the paying tenant. In the event of an eviction, the paying tenant feels she has paid her share. A dispute now arises as to what the rent really is, and if the late charge applies. What is the rent: the full amount or 50%? One check or money order should be demanded from the tenants. Never allow split payments, no matter how desperate the situation.

Work in exchange for rent

The tenant does not have a full security deposit but happens to be a painting contractor. The home needs painting, and the tenant offers to paint in exchange for the security deposit or rent. The owner will buy the paint, and the tenant will paint. The tenant will potentially do the job correctly as per the owner's wishes, keep painting other things and remodeling the entire house while deducting from the rent, do a mediocre job, simply not paint at all or fall off a ladder and sue the owner. Maybe as a bonus, the tenant will place a lien on the landlord's property. Now when in court, the whole painting and paint reimbursement arrangement complicates the eviction immensely. Stay far away from allowing a tenant do any work whatsoever on the property.

No criminal background checking

He seemed like such a nice guy. Saving some money by skipping a criminal background check, the landlord allows the tenant to move in, only for the landlord to later find out that the tenant is a sexual predator. The neighbors love this and spray paint "Child Molester" on the front of the house multiple times. While a criminal background check is not required by law, at least the FDLE website should be checked. It is free.

Free rent during term

Pay rent for the first 5 months, and the 6th month is free. Problem is that the tenant has not paid the pet deposit, the electric was not placed in the tenant's name for 2 months, the security deposit is not paid in full, and the property has been damaged. The lease says nothing about this, other than pay the first 5 months and the 6th is free. A landlord could be faced with giving free rent to a tenant in default if the lease is not worded properly.

Allowing significant delinquency

4 months in the hole? We see this all the time. There is no reason to allow someone to become this delinquent. The tenant will usually not get out of such a situation, and the landlord has simply helped out a deadbeat. Eventually, the tenant will fall even further behind and end up being evicted. No, the tenant will not pay you when the tax refund comes in or the lawsuit with his employer gets settled.

Accepting personal checks for late rent

The landlord should have a strict policy that late rent will not be accepted in the form of a personal check. Make one exception and the next time, the tenant will be able to argue that it is allowed, and the landlord will be seen as refusing rent. Accepting personal checks on late rent increases the risk that when the check bounces, the landlord will be deep into the next month.

Renewing leases with delinquencies

Renewing a lease with a tenant that has delinquencies on the prior lease can result in the landlord not being able to use the leverage of eviction to collect from the tenant. A new lease is a new contract, and a good argument can be made that if the new lease does not refer to the past delinquency and does not have a payment plan stated clearly in the new lease, the landlord loses.

Accepting a tenant who claims to be in foreclosure

Who does not feel sorry for a person in foreclosure? I don't, unless I can verify it. The "I was foreclosed on" story is the latest in the ploys that play on the sympathy and desperation of the landlord. If an applicant claims to have been foreclosed on, make sure you confirm this by looking up the case on the website of the county court where the alleged foreclosed property is located. If in fact there is a foreclosure action pending or finished, the information will appear on the site.

I can move in right away!

All the landlord's problems are suddenly solved! There is no bigger red flag then a tenant who needs to move quickly. Very few people MUST move quickly, unless there is some problem such as an eviction, domestic violence situation or someone skipping from a prior landlord. Exercise extreme care. If the applicant wishes to move fast, the landlord should move slowly.

A word to the property manager

When managing property for another, the manager may be asked to engage in one or more of the aforementioned risky behaviors common to the desperate landlord. Should you oblige? Only do so if you have advised the owner against the course of action in writing, and the owner has authorized you in writing to proceed nonetheless.

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FORECLOSURE SCAMS
by Harry A. Heist, Attorney at Law

With any financial crisis, there always seem to be individuals who will capitalize on someone's misfortunes and drain them of even more money. The latest scams have to do with foreclosures and services who claim to be able to help the property owner either get out of foreclosure or somehow save their homes. As many of your owners are going into foreclosure, you have a duty to keep them from making some serious mistakes which will cause them to be further harmed and cause you to lose the account.

How are your owners solicited?

While we all know that a foreclosure action, once it is filed, becomes public record which can be found online at the County Courthouse, you might wonder how people can find out that your property owner is in financial distress even prior to a foreclosure action being filed. Prior to the foreclosure actually being filed, the mortgage company or bank files a Notice of Lis Pendens, which is putting the public on notice that a foreclosure or something else bad is on the way. Individuals are at the courthouse every day looking up these filings and looking up foreclosures, and the information they gather is purchased by legitimate foreclosure buyers and scammers alike. Once the Notice of Lis Pendens is filed, there is a good chance that the next filing will be the actual foreclosure action against the property owner, thus making your financially troubled property owner a hot prospect for a scam.

The House Sign over Scam

An owner under foreclosure these days often has little to no equity in the home. While they may have put $20,000 down on the house when purchased, the appraised value of the home has dropped significantly, and the sale price now, if they are lucky enough to sell it, could be 50% of the purchase price. These owners would like to simply walk away from the property. Scammers will approach such an owner and offer to "purchase" the property. This sounds attractive to the property owner. The property owner then signs a quitclaim deed over to the "purchaser", who is supposed to continue to make payments on the mortgage that stays in the owner's name. Besides the fact that the quitclaim deed probably violated the due on sale clause in the mortgage, the new "owner" then quickly rents the house out at a below market price, takes the rent money for as long as possible and does not pay a dime to the mortgage company. Your client ends up getting foreclosed on, but has lost more in the process.

The Sale/Leaseback Scam

In this scam, the distressed owner sells the property to an individual who claims they will make the payments current. The owner then becomes a tenant and rents the property from the individual. In the rental agreement, the new owner gives the tenant an option to purchase the property back. Often the tenant actually pays the scammer for this option, and this could be the money that the scammer paid the property owner for the property. When the original property owner now wishes to exercise this option, the price to buy the property back is too high or the payments are too much for the owner to handle, and the property is foreclosed with the tenant/former owner still on the mortgage.

The new loan

Your property owner may have some significant equity in the property and is approached by a company who offers to give the owner a new loan to refinance the property. This new loan may have an incredibly good teaser rate and a huge adjustment set for the future. This deal simply postpones the inevitable and sucks more money out of your property owner in the meantime.

The Bankruptcy Delay

Filing a bankruptcy will delay a foreclosure action, but not for long. Your desperate owner may try this approach, only to find out that they have only gained a few months but in the process have ruined their credit even further. While it is possible that the bankruptcy judge will restructure the terms of the mortgage, the owner should not count on this. Never should your owner try to file a bankruptcy himself or use a non-lawyer document preparing company.

The Pure Credit Saving Scam

The purest of all scams is simply when the property owner is approached by someone who claims that if the owner pays them a fee and signs the property over to them, all will be well. This scammer claims to have bad credit already, and for a fee will allow a foreclosure to be filed against them, because they have nothing to lose. The owner is told that they will no longer be responsible for the mortgage and the foreclosure will go against this person. Unfortunately, your owner pays the fee, the mortgage remains in the name of the owner, and the foreclosure simply will be filed against the owner.

Some advice for your owners

Just about every property manager has dealt with or is dealing with an owner in foreclosure. Your best advice to your owner will be to encourage them to contact a real estate attorney. Our office strictly handles landlord/tenant law, so we are not the ones for the job, but an attorney experienced in real estate law will be your best bet.

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Lease Renewals And Money Owed
by Harry Anthony Heist, Attorney at Law

Your tenant's lease is nearly up. You offer a renewal, even though there are outstanding late charges, past due water bills, a security deposit that was never fully paid off and some monies owed for a repair that was due to the negligence of the tenant. You prepare a lease, but none of these delinquencies are reflected in the new lease. The tenant signs the renewal lease and continues to pay rent, but refuses to pay the past money owed. The problem now is collecting the money owed on the prior lease.

The Prior Lease

The prior lease represents a tenancy. It is a specific contract for the rental of the premises for a specific period of time. The lease obligations began with this lease and ended upon the termination of this lease, pursuant to the lease terms. The lease represents the "bundle of rights" bestowed upon the tenant in exchange for payment under the terms of the lease agreement. The lease is specific to the property, the landlord and the tenant.

Money owed under the lease terms

During a tenancy, money may be owed and not paid. There may be accumulated late charges, bad check fees, unpaid utility charges, unpaid deposits, charges for damage to the premises or unpaid rent, among many other things that may be owed under the lease or Florida law. The tenant is often allowed to live on the premises without paying these sums, as the landlord is satisfied in just receiving the monthly rent. The landlord has a hope of someday receiving the full amount owed and may even periodically demand payment from the tenant, getting hollow promises in return. The landlord then continues to accept rent and "work with" the tenant.

Why renew the lease?

Landlords will often renew a lease agreement, even though the tenant is technically in default of the current lease terms. Rather than lose the tenant, the landlord decides that it is beneficial to retain the tenant and try to collect the past amount owed at a later time. The problem is the inability of the landlord now to collect the past amount owed.

Collecting money owed

The only real leverage a landlord has for collection of money is the threat of eviction. During the tenancy, if the tenant fails to pay amounts due under the terms of the lease agreement or Florida law, a proper notice is given to the tenant, and if the tenant fails to comply, an eviction may be started. An eviction action is a strong, effective collection tool, as failure to comply with payment of the sums owed can and usually does result in the tenant being removed from the premises. However, it becomes problematic when the money owed is from a past lease agreement, not the current lease agreement. Many judges will take the position that a landlord can only evict the tenant for money which is owed under the current lease agreement. Does the tenant still owe the money from the prior lease? Yes, but the eviction leverage may now be gone. The prior amount owed may simply be a debt that the tenant owes, not a debt for which the landlord can evict. Sending a current tenant to collections is certainly not practical or suggested.

The New Lease Solution

Since a landlord's ability to evict a tenant for money owed under a prior lease agreement may be seriously compromised, the landlord simply needs to address the prior money owed as one of the monetary obligations of the new lease. The new lease should clearly indicate the amount owed by the tenant, define this amount as additional rent, and provide how this amount is to be paid by the tenant. The payment may be required in a lump sum, added to the monthly rent or paid according to a schedule. If a schedule is made, it is imperative that the verbiage clearly states that in the event a payment is missed, the entire balance is due and payable as rent. Should a landlord renew a lease when there is a balance owed on a prior lease? We don't recommend it, but we know that it will happen. If you are the landlord or managing the property for the landlord, make certain that you tie in the past amount owed into the new lease to avoid any unpleasant surprises.

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The Importance Of Accuracy
by Harry Anthony Heist, Attorney at Law

With the increase in eviction filings by pro se landlords, judges are seeing more problems than ever before. Pro se of course means "without an attorney". In an attempt to save money, many private landlords decide to file their own evictions and in the process make huge mistakes. The large number of mistakes have resulted in many judges being more cautious, so as not to evict tenants where the Three Day Notice, summons or complaint is improper. Whereas in the past some judges would have signed Final Judgments without a rigorous look at the Court file, now these same judges are scrutinizing the paperwork. In order to avoid the most common mistakes, the landlord needs to know how to spot them. Knowledge of the law combined with a checklist procedure will minimize costly mistakes. The key is getting the Three Day Notice correct.

Common notice problems

The notice required as a prerequisite to an eviction action must be done properly and accurately. While a judge will not read a lease in its entirely in most cases, the notice is often reviewed. Judges are fully aware of the legal requirements of the notices and know how to spot the common mistakes.

Form of notice: Some landlords insist on using the FAR/BAR notices, which do not have a spot for the date the notice is being served. We recommend that the FAR/BAR notices are avoided whenever possible, and that the landlord use the notice provided by us. Some notices are titled improperly. For instance, in a nonpayment of rent situation, the tenant is to be given a Three Day Notice to Pay or Vacate", not a "Notice to Vacate", "Notice to Quit" or other variation.

Service of Notices: Notices should be served by posting on the premises in the absence of the tenant, or by hand delivery to the tenant or occupant. Notices should not be sent by overnight mail or other delivery method. If a notice is mailed, there are timing issues which affect the form and expiration date of the notice. If you must mail a Three Day Notice, contact your attorney first.

Handwriting: Avoid writing notices by hand. Whenever possible, generate them from your computer to insure legibility. Any ambiguity in a notice is construed in favor of the tenant.

Paper color: While a bright orange notice may get the tenant's attention, it will not fax well. Stick to plain white paper and black print.

Making corrections: Often a notice is prepared but served on a different day, requiring the landlord to make a correction on the notice. Making corrections on a notice by scratching out the old date or amount and changing a date makes a notice look suspicious, and a judge may think that the notice was altered after it was served.

Spelling errors: If the tenant's name or property address does not exactly match up to that on the lease, questions arise. What is the correct name or address? While a lease may be incorrect, it is important that the notice is correct. In preparing the correct notice, it is advisable to use an AKA when stating the tenant's name. If a name or address has changed during the tenancy, it must be clear on the notice.

Omission of a tenant's name on the notice: All tenants that are lease signers should be listed on the notice. Never just put "John Smith and all others", if you know who the others are.

Incorrect amounts: An incorrect amount can result in an eviction being dismissed and an attorney's fee award to the tenant's attorney. If there is any question as to the amount owed or the amount that should be put on a notice, your attorney should be consulted.

Inconsistent rent demands: The Three Day Notice should be clear as to the amount owed. When looking at the notice, there should not be any question as to the exact amount owed. Putting statements that increase the amount owed per day due to a late charge or writing conflicting amounts on the notice can render the notice defective.

Incorrect dates: Incorrect dates will cause a notice to be defective. While a notice given in January with the prior year incorrectly stated is an obvious scrivener's error, it will open the door to a defective notice defense.

Incorrect or missing county: Many landlords have properties in multiple counties with resulting incorrect notices listing the wrong county. Some city boundaries are in 2 counties. These errors have sometimes resulted in an eviction actually being filed in the wrong county with the error being detected at the end of the eviction when the sheriff cannot serve the Writ of Possession, and the case must be dismissed and filed all over from the beginning.

Failure to list landlord's phone number: The Three Day Notice provided for in Florida Statutes states the landlord's phone number. As your notice must be substantially the same as that in the statute, the phone number should be listed on the notice.

Extraneous writing on the notice:Messages or notes should never be written on the notice. The notice should be limited to the rent due. Non-rent items should never appear on a Three Day Notice.

Demands for legal fees or costs: A tenant cannot be assessed past, present or future legal fees on a Three Day Notice, even if the lease considers such sums as additional rent.

Demands for payment by cashier's check, money order or certified funds: Once a landlord receives a bad check, there is a hesitancy to accept checks anymore. Many landlords have a policy that if the rent is late, it must be paid by cashier's check or money order. While this certainly is a good policy and highly recommended, the lease agreement must state the landlord's ability to demand this form of payment. Never demand a particular form of payment unless specifically allowed by the lease.

Using the words" See Attached" on the notice:Nothing should be attached to a Three Day Notice. It should not refer to any other document or schedule. Any attachment or separate notice may void out the Three Day Notice completely.

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Inheriting the Bad Lease
by Harry A. Heist, Attorney at Law

A landlord or property manger will often inherit leases from the prior landlord or manager. These leases are usually store bought leases, a lease out of a self help guide or something the landlord printed out from an internet site. Then landlord files an eviction a month later only to realize that the lease required all notices to be sent by certified mail. Surprise! The landlord now has to start over again. Can this have been avoided? Yes, but it takes some work and knowledge of what to look for. An odd notice service clause is just one of many things to look for when inheriting a lease agreement. Many leases are from other states or written by Florida attorneys who do not concentrate in landlord/tenant law. The first thing a landlord should do upon inheriting a lease is to sit down and examine the lease line by line. While no one likes to read a lease agreement, this is a necessity, not an option. The clauses in a lease agreement often conflict with Florida law or can impose additional burdensome obligations.

Who are the tenants? Confirm who the tenants are in the property. While the lease may list one party, a completely different party may be living on the premises and paying rent. They may indeed be your tenants. An eviction cannot be filed unless the names of the tenants are known.

Notice serving: Under the Landlord/Tenant Act, the usual default notices, such as the Three Day Notice and Seven Day Notices, do not need to be served by certified mail or any form of mailing for that matter. The only notice which must be sent certified mail is the Notice of Intention to Impose Claim on Security Deposit as per Florida Statutes 83.49. Some leases have clauses requiring the mailing of notices by regular or certified mail. A typical landlord is accustomed to serving a notice by posting on the premises or hand delivery as allowed by Florida law and does not think to mail a notice. An eviction is filed, only to have the case dismissed, and if there is an attorney representing the tenant, a substantial attorney's fee award may be given to the tenant. How did this silly mailing requirement even get in the lease in the first place? Most likely because it seemed like a good idea to the lease drafter. Many attorneys feel that certified mail is the proper way to get an important notice to an individual, but the experienced landlord knows that this is probably the worst way, as we have no control over when or even if the tenant picks the notice up. Look at the inherited lease carefully before serving any notices.

How long to cure a default?: A common clause in many leases deals with the amount of time the tenant has to cure a default. Often there is a spot for the landlord to fill in the number of days. While sometimes the section is left completely blank, other times bizarre numbers of days are inserted in the default section. We routinely see 7 to 30 days as being the amount of time given the tenant to cure a default. What does this mean? The tenant may have 7 to 30 days to pay rent, and the landlord cannot give the tenant a traditional Three Day Notice. The default clause is often buried in the inherited lease and can be missed.

Arbitration or Mediation Clauses: Florida law does not require arbitration or mediation in landlord/tenant law cases, but a clause inserted in a lease could trigger these procedures. While this might not be such a bad thing for a security deposit dispute, does this mean that potentially you will have to go to arbitration or mediation for an eviction case? These potentially dangerous clauses are sometimes found in the store bought, out of state or even Florida attorney prepared lease!

Security Deposit Timing Procedures: Many old leases state that the landlord has 15 days to make a claim on a security deposit but we all know that the law now says we have 30 days. So, what is it, 15 days per the lease contract or 30 days per present law? We recommend that if the lease references the old statute and requires the claim letter to be sent in 15 days, make the claim in 15 days. A clause like this is easy to overlook.

Abandoned Property: Prior to the Florida law change, a landlord was required to follow Florida Statutes 715 when dealing with a tenant's abandoned personal property. This statute requires that the tenant be sent a notice and property held by the landlord for a specific period of time before disposition. Disposition procedures under this statute depends upon the value of the property. This burdensome procedure can be avoided if the lease has certain specific wording regarding the non-liability of the landlord as it pertains to abandoned property. Without this specific wording, the landlord must follow the abandoned property procedures as outlined in Florida Statutes 715. A landlord can easily run afoul of the law if the inherited lease does not have the abandoned property wording provided in Florida Statute 83.67.

General lease clauses: Is the rent on the lease the same as what the tenant is paying? Are there other agreements out there? Is the lease old and expired? Are there blanks in important sections of the lease? Take your time and examine every clause thoroughly.

The Expired Lease: You inherited an expired lease. Can you force the tenant to sign a new one? No, but you can give the tenant a Notice of Non-Renewal as a way to either make them leave or sign a new lease. If they refuse to leave or sign, you simply evict them. How many days' notice do you need to give to non-renew the tenant? Who knows? You must look at the lease!!

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The Lease Break by the Tenant
by Harry Anthony Heist, Attorney at Law

Your tenants have just informed you that they are breaking the lease agreement and moving out. A job transfer, sickness, home purchase or any other reason may be given. They may call you on the phone and then inform you in writing, sending you their new address where they expect you to send the security deposit. They may simply send you a letter telling you their intentions. Most likely you will not agree with the tenant's desires or plans, but you need to decide whether to ignore the letter or respond.

Do you need to respond?

There is nothing in the law that requires you to respond to the tenants. A letter from tenants indicating their intention to break a lease does not have any effect upon the lease agreement or the tenancy. Legally, it is called an anticipatory breach of contract. Will the tenants be breaching the contract? Yes, and you do not need to respond. However, when you do not respond, the tenants feel they are entitled to break the lease, and they assume your failure to respond indicates acceptance with their intentions. We feel you should respond, but in writing and with specific wording.

The tenants' expectations?

What are the tenants' expectations? As we can see in many lease break letters from tenants, many feel that a job transfer, sickness or home purchase somehow legally allows them to simply pack up and break the lease. During the sales boom, many real estate salespersons told tenants that in the event they purchased a home, the law allowed them to break the lease without penalty. We all know that this just is not the case, but the tenants think otherwise. If the tenants feel they can break the lease without penalty and send the landlord a letter indicating the same, and the landlord in no way responds to the tenants, the tenants may feel that everything is fine and that the landlord is in complete agreement.

How to respond

When tenants have already broken or will break a lease, the landlord must immediately become vigilant and communicate only in writing with the tenants. Remember, the tenants are attempting to get out of a serious contract, and anything can and will happen. The landlord may be caught off guard, the tenants may be desperate, and the parties begin a verbal communication which is subject to interpretation and misunderstanding. The act of tenants breaking a lease is a legally significant and dangerous situation (from the standpoint of the agent's potential liability), and nothing should be done unless it is in writing. Too often we see cases in which deals are made, conditions are set, and conversations ensue in which the landlord and the tenants each end up having a completely different understanding of the situation. This results in conflicting testimony in a later court case. Unfortunately, some people can lie more convincingly than others can tell the truth, so when the tenants go to court and claim the landlord said they could break the lease, no one has anything in writing other than the tenants who have a letter written to the landlord indicating they could break the lease. The judge is put in an unfortunate situation in which he or she must decide who to believe. You may be on the losing end that day.

Common landlord mistakes

Upon learning of a lease break or anticipatory lease break, the landlord may tell the tenants that if a new tenant is obtained, the departing tenants will not have to pay any further rent. This immediately creates an expectation on the part of the tenants that the landlord will mitigate his damages and suddenly get a new tenant. Under current market conditions, we all know that finding a new tenant may be a lot harder than it was two years ago. The landlord may make the mistake of agreeing that the departing tenants will find a replacement tenant. Often this happens, and the person the breaching tenants find does not meet the landlord's criteria and is not accepted, causing the breaching tenants to feel that the landlord does not want to rent the unit out. Another mistake is to make a payment arrangement with the tenants for money owed, but at that time no one really knows what is owed or how long the unit will be vacant. Lastly the landlord may find a new tenant, but at a lower rent amount. Does this mean the lease breaking tenants are now off the hook? All the foregoing mistakes are made by landlords, and often they are part and parcel of the verbal agreements with the tenants.

The proper response

Now that you are convinced that the landlord should never respond unless in writing, you need to know what to say. Simply put, the landlord should tell the tenants that the lease agreement stands, and that the tenants' vacating shall constitute a breach of the lease agreement. Since automatic forfeitures of security deposits, liquidated damages and accelerated rents are not expressly legal, this will not be discussed. The correspondence should be short and simple.

The tenants have left. Can you take possession?

If you do not agree with the tenants' intention to break the lease by vacating and the tenants vacate, how does the landlord know if he can take possession? Often tenants will wait to see if the landlord takes possession. They will have a neighbor watch the property and notify them if the landlord is seen going into the unit. Possibly, the rent will be current, and if so, the landlord cannot take possession unless the tenants have granted possession. If the tenants have indeed vacated and the unit is abandoned, meaning the unit has been vacant for 15 days and the rent is unpaid, the landlord may take possession. If the tenants have told the landlord in writing that they will be vacating on a particular date and in fact do so, the landlord will most likely have possession of the premises, but should be sure by inspecting the unit and running this by their attorney. By sending the tenants a proper response, the landlord can accomplish a number of things to help minimize a bad situation and dispel the uncertainty of whether possession is or is not granted.

Sample Response Letter to the Lease breaking Tenant

Dear Tenant,

We are in receipt of your letter (or phone call) in which you have indicated that you are vacating the premises on (month, day, year). Please note that under the terms of the lease agreement that you signed, your lease and rent obligations continue until the end of the lease term. We will expect you to continue paying the rent and all charges due under the terms of the lease until the earlier of the date we may be able to re-rent the unit, if we decide to do so, or the end of the lease agreement. If we are only able to rent the premises at a lower rental rate than the amount for which you are currently responsible, you will also be liable for that deficiency. Please inform us in writing when you have vacated the premises, and return all keys, garage door openers or any other property belonging to us at that time, so we can avoid filing a possible eviction action. Please note that by vacating prior to the end of your lease agreement, you are in breach of the lease agreement, and we shall exercise all our rights under the lease and Florida law.

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Are you Inspecting Enough
by Harry Anthony Heist, Attorney at Law

Your tenant moves out, and you discover massive damage that has been going on for months. Your A/C blower motor burns out because the filter never has been cleaned. You find serious pet related damage to the carpeting, walls and doors. There is a severe mold problem in the bathroom caused by the tenant. Could this damage have been avoided? If you are managing a single family home, can a property owner hold your company liable?

Common practice

Most property managers and landlords inspect the rental premises once a year. While the pest control professional may be in the unit more often than that, typically a condition inspection is only done once a year. In many situations, as long as the tenant is paying the rent, no complaints are coming from the unit and everything appears fine on the outside, no inspections are ever done.

The law and Inspections

Florida law places no obligations on a landlord to make any inspections of a unit. While the law places many obligations of maintaining the premises on the landlord, most of maintenance will be at the request of the tenant in response to a problem. Nothing in FS 475, which governs real estate licensees, places any requirements upon a property manager to inspect or otherwise preserve or protect the managed property.

What can happen inside a unit?

The short answer is "just about anything". You can have unauthorized occupants, unauthorized pets, unsanitary conditions, damage to the walls, damage to carpets, pest infestation, severe mold issues, water intrusion problems, plumbing problems, indoor drug cultivation, clogged air filters, severe smoke related damage or just about anything that can happen, which could result in the need for an expensive repair or replacement. A common item that is usually ignored by the tenant is the A/C filter, which eventually gets clogged up to the point where the blower motor is strained and eventually fails. Could any of the aforementioned problems been avoided? Possibly not completely, but most likely they could have been minimized by an inspection that was done earlier rather than later, or done more often than not.

Apartments

An apartment manager should be diligent about inspections. Units should be thoroughly inspected once every three months. Any problem should be dealt with immediately. If there are maintenance issues, they should be handled even if the tenant has not put in a work order. If a problem is caused by the tenant, the manager should serve the tenant with the appropriate notice, that notice usually being the Seven Day Notice of Noncompliance with Opportunity to Cure. Inspections are crucial to catching a problem early and taking action. In the event of unauthorized occupants or pets, a tenant often claims that the occupants or pets were there for a long time, that you had knowledge of this, and therefore that the pets or occupants are now allowed, since you have waived your rights to do anything about it. This is actually a compelling defense which can catch a manager off guard if the premises are not reinspected after the notice of noncompliance is given.

Managing Homes

This single family/duplex/triplex home manager has an even greater reason to inspect often. Besides having more items to inspect in most cases, the owner of the property can and sometimes does attempt to hold the property manager liable for the damage caused by the tenant. If the manager has not inspected often enough, a good argument can be made that the manager failed in her duty to protect the premises. The argument is as follows: the owner's attorney proves to the judge that had the manager inspected sooner, the damage could have been avoided or minimized. Since this did not occur, the manager should be held liable for the resulting damage. Many judges are apt to accept this reasoning. This scenario may also result in the manager getting reported to FREC, who due to its lack of experience in property management related issues, may feel the manager was negligent in his or her duties.

Inspections after Seven Day Notices

As we all know, just because a Seven Day Notice of Noncompliance with Opportunity to Cure has been served on the tenant, this does not mean the tenant will cure. You must perform an inspection after the notice expires to see if the desired results have been achieved. Many property managers serve notices, assume the noncompliance has been rectified, and then continue to accept rent from the tenant, who unbeknownst to the landlord is still in noncompliance and possibly will try to claim that he is now allowed to continue in the noncompliance because you kept taking rent for months after citing the noncompliance.

Inspections and Fair Housing

All tenants need to be treated similarly when it comes to inspections. What about situations in which there seems to be ongoing problems? A tenant may have children who have caused damages to the premises or are tearing up the yard. Will excessive inspections be looked upon as discriminatory or harassing?

If the inspection is justified, it will not be considered excessive or discriminatory or harassing. Fair housing laws do not absolve tenants of the responsibility to maintain the landlord's property.

To avoid the risk of having an inspection become fodder for a fair housing claim, develop a policy and follow it. If you must deviate from your inspection schedule, document the reasons for doing so. For example, if your policy is to inspect every three months, but you want to do an inspection in some intervening month because pest control reported a problem, fine. Do the "extra" inspection, and make notes to your file why you are doing it.

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Copying ID-Is it Legal?
by Harry Anthony Heist, Attorney at Law

Many landlords are reluctant to copy the tenant's identification due to a fear that this will trigger a Fair Housing violation. By not having a copy of the identification, the landlord is at a distinct disadvantage when this identification is needed later in the tenancy or for collection purposes. Should the identification be copied? Is it legal? Let's look at the risks and benefits of copying the ID and get some advice from our nation's Fair Housing Experts.

The Application Process

Most landlords have been advised that copying an applicant's identification and keeping it with the file can open you up to a Fair Housing complaint. The theory behind this is the fact that you can gather up numerous applications, sit down and review them, look at the photos of the applicant and decide to discriminate against the applicant based on race, religion, color, nationality or anything else you may be able to determine by viewing the image of the applicant. Possibly, the applications are gathered and sent to a third party in your company who makes the ultimate decision as to accepting or rejecting the applicant. This person can easily sort through the applications and make decision based on what they see on the applications. In the event of a Fair Housing complaint, the investigator may and probably will want to see all your applicants' files, and in the event there appears to be a pattern of discrimination against someone based upon a protected class that can be determined by the ID copies, you will have a lot of explaining to do. Is it illegal to make copies of the ID at the time of application? Nadeen Green, a nationally respected Fair Housing expert and Senior Counsel with For Rent Media Solutions says this :"If you feel a need to have a copy of the applicant's photo prior to them being approved, (1) know the risk, (2) be consistent within the policy, and (3) be sure you can absolutely justify the decision making procedures and process as to why one person got an apartment and another did not. Otherwise there could easily be the illusion that decisions were based on factors about the people, with those factors being identified through the photos." Let's look at what she is saying.

1. Know the risk. The risk is that you will be accused of discrimination, as you can often easily identify a person of a protected class by the photo on the ID. Will not having a copy of the photo ID keep you safe? Of course not, but having a copy certainly elevates this risk. 2. Consistency in your policy. If you are taking a copy of photo ID for the purposes of identification of the applicant, you must do this with all your applicants. Never pick and choose or make exceptions unless these exceptions are not based upon any discriminatory purpose. If you have a policy to copy photo ID, you will need to have a written policy for when a person does not have a photo ID. Note the emphasis on "written" when it comes to all your policies.

3. Justifying your application approval/rejection decision. All landlords need to have a written Resident Selection Criteria and/or other written policy which must be followed for the application acceptance or rejection. Careful file notes should be kept with the full reasons for which a tenant was denied.

Copying the ID at lease signing

While some landlords may be hesitant to copy ID during the application process, it is crucial that ID is copied at the lease signing. This gives the landlord another chance to look at the ID, compare it with the information provided, and have a firm way to identify the tenant at a future date. A copied ID often is useful in a tenant lock-out, pursuing a bad check, dealing with identity theft or in an unauthorized tenant matter. Both Doug Chasick of Call Souce and Fair Housing Trainer Nan Cavarretta agree that copying ID at lease signing is both legal and recommended, but feel that copying during the application process is risky.

Your decision?

When dealing with any potential fair housing issue, caution is key. If you have a good Resident Selection Criteria and detailed policy and procedures AND you follow them, documenting everything along the way, you will probably be safe copying the ID at application time. Short of that, we recommend you hold out until the lease signing. Finally, when it comes to copying the ID, no matter when you do it, as Doug Chasick of CallSource will tell you, "most copy machines at leasing offices don't make good copies of photographs anyway!"

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Foreclosure and Disclosure
by Cathy L. Lucrezi, Attorney at Law

Foreclosures seem more prevalent in Florida than oranges and "˜gators. There is a 97% increase in them in the last twelve months. So many of the investors who thought they could make some money as landlords are now letting the properties slip into foreclosure. As the property manager, you too can get mired in the mess. One dilemma may be deciding whether you must tell the tenant what is going on.

No foreclosure yet"¦

If the owner tells you that the property is about to go into foreclosure, or he says he is thinking of "letting the bank have it", there is no disclosure that needs to be made. After all, the information is speculative. You do not have to tell the tenant that the landlord is having financial difficulties.

Foreclosure is filed"¦

If a foreclosure has already been filed at the courthouse, there is no legal obligation to report it to the tenant. The tenant will soon enough be served with a copy of the complaint and a summons. However, you can cushion the surprise by calling the tenant and letting him know. You can remind the tenant that the filing of the foreclosure does not end the landlord's or the tenant's obligations to the lease.

Foreclosure is filed AND the lease is not yet signed"¦

A disclosure should be made to a new tenant that a foreclosure is pending. Because the new tenant is moving in after the foreclosure was filed, he may never be served with a copy of the complaint and a summons. He may not know about the foreclosure until the day a writ of possession is posted on the door.

For this situation, disclosure is essential. A sentence like this can be included in the lease: "Tenant acknowledges and understands the rental premises are part of a foreclosure lawsuit against the owner." That may result in the tenant choosing to walk away, but anything less could be considered a type of misrepresentation.

Remember, disaster is not a certainty.

The filing of a foreclosure suit does not mean the tenant has to vacate. A lot can happen between the day the foreclosure lawsuit is filed and the day a tenant must vacate. The owner could sell his property, in which case the lease would continue undisturbed. The owner could refinance and resolve the indebtedness on the mortgage. Even in the worst case scenario in which the tenant loses possession, a period of three to four months will likely pass after the foreclosure is filed.

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Properly Executing the Writ
by Harry Anthony Heist, Attorney at Law

The proper execution of the Writ of Possession is crucial to a successful and completed eviction action. The key word here is completed. Many landlords and property managers make serious mistakes at the end of the eviction action, increasing the liability to the landlord and potentially defeating the whole purpose of the eviction action. Most evictions result in the tenant vacating the premises within a week or two after the eviction action is filed with the court, and many landlords have never experienced the execution of the Writ of Possession.

The Mechanics

Issuance of the Writ: Once a final judgment of eviction is obtained, the landlord must decide if a Writ of Possession, hereinafter Writ, is necessary. If the landlord decides that a Writ is indeed necessary, the attorney submits the Writ to the Clerk of Court along with a check to the Sheriff's Department, usually in the amount of $70.00. The Clerk of Court then confirms that a final judgment has indeed been signed by the Judge and "issues" the Writ. The Writ then is taken to the Sheriff's Department where it is processed by staff of the Sheriff's Department.

Service of the Writ: Once processed, the Writ is assigned to a Deputy for service upon the tenant. The Deputy then takes the Writ and serves it upon the tenant, or in the absence of the tenant, tapes it to the tenant's door. The Writ informs the tenant that he must vacate the premises within 24 hours.

Notification of the landlord: The landlord is then called by the Deputy who served the Writ, and a date and time is set by the Deputy, at which time the Deputy will come and execute the Writ.

The Problem

The purpose of the Deputy's call to the landlord is really twofold. First, it is to inform the landlord that the Writ has been served and to schedule the time when the Deputy will meet the landlord at the property to give the landlord actual possession. Unfortunately, there is another part of the Deputy's conversation with the landlord that causes a problem, and this is the second part of the call. The Deputy, once the date and time for the meeting is set up, will ask the landlord if he or she "needs" the Deputy to execute the Writ. If the landlord says "no," the Deputy will return the Writ to the clerk as "unexecuted", meaning "incomplete".

Why does the Deputy ask the landlord if the Writ is wanted?

The Deputy has many Writs to serve on any given day. Often the Deputy's schedule will get backed up, as some Writs require more time to serve than others. Sometimes a landlord is late to meet the Deputy, and the Deputy will wait a small period of time, causing a ripple effect with the schedule. Occasionally the tenant must be physically removed from the premises, resulting in further delay. In some instances, serious disputes or altercations occur, and the Deputy must remain on the premises until the tenant is finally removed from the premises and no longer poses a danger to the landlord, the landlord's workers or the Deputy. The Deputy wants nothing more than to have the landlord tell him that the Writ is not needed. It is completely understandable; the Deputy is just trying to get the Writs served for the day. For each Writ that the Deputy can cancel or return unexecuted, this will free up more time for the Deputy to get to the next Writ that needs to be executed.

What does the Deputy say?

The Deputy will ask the landlord if the tenant is still in the rental unit. Often the landlord is not sure if the tenant is still in possession, and the Deputy gives the landlord his cell phone number to call. The landlord then goes and checks the property. If the property is empty or appears empty to the landlord, the landlord will notify the Deputy, and the Deputy will then ask the landlord if the Writ execution is "needed". Often the landlord will say "no", thinking that if the tenant is not there anymore, then it must be unnecessary to meet the Deputy.

The Consequences of telling the Deputy "NO"

If the Deputy is told by the landlord that the Writ is not needed, the Deputy returns the Writ to the Clerk's Office as unexecuted, and it is docketed as such. The tenant now officially has NOT been evicted. Yes, an eviction was filed on the tenant, BUT the eviction was never completed. The tenant has NOT been evicted from the property, even though he may in fact have vacated the premises and will never be seen again.

The tenant may return: If the tenant were to return, he could simply move right back into the unit, and the landlord would need to file additional paperwork with the court seeking a new writ of possession, or possibly even be forced into filing a brand new eviction, starting all over again from scratch. The returning tenant would not be considered a trespasser, and the Deputy will do nothing to remove the tenant without further order from a Judge.

The tenant may return looking for personal property: If the tenant comes back to the premises and the landlord has disposed of her personal property, she could hold the landlord civilly and possibly criminally liable for the loss of the property. The tenant could say just about anything as to what was taken and its alleged value, and it would often be difficult to counter these allegations. When the landlord fully executes the Writ and subsequently removes the personal property to the property line, the landlord's liability to the tenant for her personal property is negated. When the writ is not executed, the potential liability for improper personal property disposition can be very high.

The tenant may use the common areas of the property : The landlord may observe a former tenant using the community pool, exercise room or laundry room. A Deputy may be more reluctant to trespass the "former" tenant if the eviction was never completed.

You have wasted $70.00 A Writ costs $70.00 and was paid for by your attorney. You will be billed by your attorney for that Writ. By canceling the Writ, you increased your liability, failed to formally complete the eviction, increased the chance of a big problem and wasted $70.00.

When the Deputy calls, what should you say?

When the Deputy calls you to set up the Writ execution time and day, if you are asked if the tenant is still there or if you still need the Writ, simply say "YES". Never quit short of the finish line. It is a sure way to lose the race.

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Importance of Updated Contact Information
by Harry Anthony Heist, Attorney at Law

A major repair must be made to the property you are managing, and this repair requires authorization from the property owner, as it exceeds the amount you can spend according to your management agreement. The air conditioning has ceased to work, and the inside temperature is exceeding 100 degrees. You try to contact the property owner, but there is no answer on the phone number you call. Do you go ahead, take a chance and get the repair done? You are not sure if your tenant has vacated and want to avoid a potential wasted eviction action, so you try to contact the tenant. His phone number is disconnected, he no longer works at the job he had at application, and the emergency number is out of service. Do you file the eviction or take a chance and take possession? The problem in both of these scenarios is that you simply cannot communicate because the information you have is insufficient.

Initial Information

The Tenant: Typically through the application process, the landlord will ask for the tenant"˜s phone number and an emergency contact. After a few months, there is a good chance that the tenant has defaulted on his cell phone contract and/or has acquired a different phone number. The emergency contact was a friend who has moved and who also has a new number which you do not know. The property manager may have a work number for the tenant, but when this number is called, the tenant no longer works at that job, and no one there wants to give out any information. This is the reality of tenants in Florida. We are a transient population here in Florida, and information and addresses change fast and furiously.

The Landlord: When a property is managed by a local property manager, that manager will get the landlord's information at the time the Property Management Agreement is entered into. This information is often the out-of-state landlord's address, home phone number and nothing more. If the landlord is not home, the property manager simply does not have any ability to make contact and communicate.

Email: Most tenants and landlords have email addresses. A few years ago this may not have been the case, but the reality today is that most individuals have email addresses, and many check them on a frequent basis. With multiple tenants you will have multiple email addresses, and often you will have work and personal email addresses. The same will apply to the landlord. Never assume that if a tenant or landlord is elderly that they are not computer savvy or do not have email. Often people give an incorrect email address by accident. We recommend that you send a confirmatory email after the tenant moves in or after the property owner has signed a management agreement, just to be sure you have not been given incorrect information.

Home and Cell Phone Numbers: While a land line in the past has been the main contact number for most landlords and tenants, many are now opting to do away with the cost of the land line for cell phones or phone service provided by the local cable company. The property manager may be the last person to find out that the landlord or tenant no longer has a land line. Cell numbers of all the tenants should be acquired at the time of move-in, or in the case of the landlord, at the time the property management agreement is signed. The key is to get all the numbers, not simply one person as a contact. The more numbers you have, the greater chance you will be able to make contact.

Work Numbers: Acquiring the work numbers of both the landlord and the tenant is crucial. In the event you are having difficulty with all other numbers you may have, the work number may provide you with the information needed to track down the party. Most of the time we see the work number of the tenant on an application, but in our experience, the property manager often does not have the landlord's work number. In the event the landlord or tenant is on vacation, you may be able to get information by simply calling and listening to a recording the party has left, or if you must speak to a co-worker, you may find the party. Be extremely careful never to use this method to transmit private information or imply that you are attempting collect rent. When calling a work number, how you identify yourself and the fact that the person you are calling may have caller ID could result in an accusation by the tenant that you spoke to a co-worker about the tenant's rent obligation. A desperate tenant will make up a story that you called and harassed her boss or spoke to a co-worker about private information.

Fax numbers: A large number of tenants and landlords have separate fax numbers due to home offices. Make sure that if you acquire a work fax number, care is taken that other employees of the fax recipient will not be viewing private information, and that express written authorization is obtained to transmit private information.

Keeping the information up to date

All information can and does change. Your information may have been accurate at the time it was acquired, but after a few months or sometimes years, this information is useless. It is crucial that the property manager has a system in place to regularly check this information for accuracy; we recommend at least every six months. Sending out requests for information in the owner's statement or periodically to the tenant may achieve the desired results, but if not, property managers need to affirmatively take the time to go through their records and update everything. Updated information will reduce liability, decrease evictions and make property management easier.

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Surrender of the Premises
by Harry Anthony Heist, Attorney at Law

Two tenants are on the lease agreement. One of the tenants stops by your office and throws a set of keys on your desk proclaiming, "We are outta here", and rushes out of your office. You decide to check the unit out, and it appears vacant. The electric is off, the unit is relatively clean, and the only personal property that you see is a box of books, an old television, bag of clothes and computer monitor. Looks surrendered for sure. Within a few days you have your maintenance staff do a full cleaning of the unit, including touch up painting and a trashing out of the remaining property. The locks are changed, as this is your usual procedure. A week later, one of your tenants appears in your office claiming that she could not get into the unit. You inform the tenant that her roommate turned in keys the prior week, and that the unit has been cleaned out and locks changed. Surprised and shocked, the tenant in your office demands to know where all her personal possessions are, including a computer, CD collection, valuable antiques, expensive mountain bike and designer clothes. You state that there were no such items in the unit, and the tenant storms out. You then get a letter from a lawyer, or possibly the police pay a visit to your office. Did you do something improper?

What is Surrender?

The term surrender is not specifically defined under the Florida Landlord/Tenant Act. Many managers assume that act or turning in keys constitutes a surrender, and in many cases, a judge would be satisfied that surrender occurs with the turning in of keys. However, it should be clear to the property manager that all tenants on the lease have indicated in unequivocal terms that they have vacated the premises and are turning possession over to the landlord. A writing signed by all tenants is preferable, and no human beings should still be living in, using or sleeping in the unit. The property manager has to review very carefully the circumstances of keys being turned in; unless the keys are clearly being turned in as a consensual act by all tenants on the lease, it can be very dangerous to presume surrender has occurred. Even if there is only one tenant on the lease, if keys show up in the property manager's dropbox with no note, it may not have been the tenant dropping the keys off.

The property is "surrendered" but not vacant

Your tenants, all of them on the lease, may have given you the keys and indicated to you that they have surrendered the premises. You go out to the premises, and someone appears to be living there. You see clear and convincing evidence that the premises are being occupied by someone other than the tenants who were just in your office yesterday. The premises are not surrendered, and if you think the occupant in the unit is a trespasser, think again. If that person claims he is there with the permission of your tenants who just gave you the keys, you will be forced to file an eviction against your tenants, as they have not completely surrendered the premises. The fact that the tenants came to your office, turned in keys and said they were out, is not sufficient.

One tenant surrenders

One tenant on a two tenant lease comes into your office and hands you the keys announcing "they" have vacated. This is a common occurrence. You will then check the premises, and if it appears there is little to no personal property on the premises, the usual assumption is that all the tenants have vacated. The problem is that only the tenant who has given you the keys has in fact vacated, but the other tenant has no idea this has occurred, as she may have been staying at her boyfriend's house. This tenant then appears in your office after locks have been changed and wants to know why she has been locked out. You reply that possession was turned over by the other tenant the week before. Unbeknownst to you, the tenant who surrendered the keys to you sold all the other tenant's personal belongings and threw the rest in the trash. They were not getting along. Now the other tenant is attempting to hold you responsible for all the missing items. What happened? Only one tenant gave up the right of possession, and that was not complete surrender.

Written notification of surrender

There will be times when you do not receive the keys but receive a letter from the tenant or tenants stating that they have indeed vacated the premises. This would seem to constitute surrender, but again, the unit must be examined to see if this is truly the case.

Some final words

As you can see, receiving keys or a letter from the tenant or tenants may indicate that the tenants have vacated the premises, but if anyone is left behind, you do not have a surrender; if you do not have clear confirmation from all tenants on the lease that the right of possession has been given up, it can be dangerous to presume a surrender. Never assume you have complete surrender and right to possession of the premises until you examine the premises and consider all the underlying details of the case; if you have any doubts, consult your attorney.

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The Owner's Official Address
by Harry Anthony Heist, Attorney at Law

You are managing a home or apartment community for an out-of-state investor or investment group that just recently purchased the property. You are not on-site, but manage the property from your local office. The property owner calls you, stating that he is being fined $250.00 per day for a code violation on the property, and the owner wants you to rectify the situation immediately. It turns out that these fines now are substantial, and the property has been in noncompliance for months. The problem was discovered when the owner attempted to refinance a loan on the property, and a lien showed up on the public records. How could something like this happen? Should not the owner be notified by the local government before such drastic measures are taken? The problem we often see is that the governmental authority, condo association or homeowner's association does not have the proper address, and the tenant receives the correspondence meant for the property owner. Most property managers have been contacted by tenants at some time stating that they have received mail meant for the owner.

The Problem

Governmental entities, such as the tax appraiser, code enforcement office or any other regulatory authorities may only have the property address as the contact address. Alternatively, if correspondence is sent to the owner's address on file, and it is returned undeliverable, it will then be sent to the property address. This may occur due to a mistake, or simply that when the property was purchased, no other address was given to local authorities or the condo or homeowner's association. When a notice needs to be sent out, it will then go to the property, and dire consequences can result.

The Tax Appraiser

Make sure that the tax bills go to the owner of the property, not the actual property. A tenant receiving such a bill will simply discard the bill, and a property manager, knowing that the manager is not responsible for the bill, may ignore it. A delay in receiving a tax bill could result in the owner not being able to take advantage of an early payment discount on the taxes. Check with the Tax Appraiser to see what mailing address is on record.

Code Enforcement

Code enforcement may have the property address listed as the mailing address, or in the absence of the owner's actual mailing address, will simply use the property address. This can result in a citation being sent to the property and not the property owner. Take the time to check with the county or city to see what address is on file.

Occupational Licenses

Many counties and cities require that an owner obtain an occupational license in order to conduct the rentals. While the license application asks for the mailing address, often the physical address of the rental property is mistakenly put down as the mailing address, and this is used by the governing authorities to send the renewals out or any delinquency notices. If an occupational license is required, make sure it is up to date with the owner's current mailing address.

The Condo or Homeowner's Association

Your owner just purchased the property a few months ago and failed to give the condo or homeowner's association his current mailing address. What address will the association use when they need to send a violation notice out? The address of the property. If notification of a violation is sent and is received by the tenant, rest assured that the tenant will not notify you or the owner.

The owner's change of address

If the property owner notifies you of a change of address, assume the owner has forgotten to notify everyone else. The owner may even think that you will take the steps to notify everyone related to the property that the address has changed. Make address verifications part of your property management procedural checklist.

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HB 1489: FAA's Early Lease Termination Bill Enacted Into Law
by Jeff Rogo, Florida Apartment Association Governmental Affairs Director

For over 20 years, many lease agreements had clauses which imposed a penalty in the form of a flat amount in the event the tenant skipped. This flat amount was variously known as an early termination fee, re-let fee, or liquidated damages charge. The purpose of these charges was to help compensate the landlord for damages, including the additional turnover costs.

A Circuit Court's decision in the Yates vs. Equity case in Palm Beach County brought these charges into question. The Circuit Court held that when a tenant broke the lease, only the specific remedies provided in Florida Statute 83.595 could be used by the landlord against the tenant. These remedies included holding the tenant responsible for rent until the unit was rerented, but did not include charging a flat amount. The Court's decision was based in large part upon the market conditions at that time. Vacancy was extremely low, and units were rented as fast as they became available. The Court failed to take into account the non-rent damages incurred by the landlord. The Court reasoned that if the unit was re-rented quickly, the liquidated damages or termination fee was a "double rent" windfall. We know this is not true, but when case law is established, the industry has to be mindful of such decisions.

Since the Equity decision and the many lawsuits that followed, landlords have stopped charging a flat amount. Landlords simply hold the tenant liable for rent until the earlier of the lease expiration date or until the date the unit is re-rented. The unit may be re-rented quickly, and the tenant is responsible for only a small amount of lost rent. The unit could stay vacant for a long period, at which point the tenant may be responsible for a significant amount of lost rent.

The Florida Apartment Association Jumps Into Action

In response to the needs and wishes of its members, the Florida Apartment Association in 2005 began advocating for a change in the Landlord/Tenant act which would clearly permit this common industry practice. The change would allow the landlord and the tenant to agree to a flat amount in the form of "liquidated damages" or a "termination fee". This flat amount could be charged to the tenant if he skipped ("liquidated damages") or if he honored the lease, gave the required notice and paid a fee ("termination fee"). The goal was two-fold: (1) to permit the tenant to terminate lease obligations early if he gave the required notice and paid the required termination fee, and (2) to permit the landlord to recover as liquidated damages some of the many costs incurred if the tenant skips, even if the landlord was able to quickly re-rent the unit. Even if a unit was quickly re-rented in a very strong market, the non-rent expenses such as marketing, apartment preparation, and administration were still being incurred by the landlord.

In 2007 the Florida Legislature passed a bill which would have accomplished the apartment industry's goals, but the bill was vetoed by Governor Crist. The FAA persevered and reintroduced the bill in 2008. By necessity, the bill underwent some changes, and compromises were made in order to gain the support of the Governor's office. The result? House Bill 1489 was passed unanimously in both legislative chambers. Governor Crist signed the bill into law on June 10. Now, the landlord can use a separate addendum at lease signing that will give the tenant a choice: either pay liquidated damages or a termination fee amount of up to two months' rent in the event of a skip or tenant early termination, OR pay rent until the unit is re-rented, and gamble that the unit will be re-rented quickly. The tenant must make the choice. The landlord does not have to use such an addendum. It is an optional new remedy available to a landlord if he wishes to take advantage of the new law.

How does this affect leasing practices?

If the landlord does not wish to make the liquidated damages or termination fee option available to the tenant, the landlord may simply choose not to offer this addendum to the tenant. If the tenant vacates prior to lease end, the landlord can continue to charge the tenant rent until the unit is re-rented, as the landlord did under prior law. If the landlord wishes to charge liquidated damages or a termination fee, the landlord MUST use the addendum and present this to the tenant at the time of lease signing. The tenant will then have to CHOOSE the liquidated damages or termination fee option. The following wording must be placed in a separate addendum and must be in substantially the following form, with the tenant signing the addendum and checking or initialing the choice that is made.

Sample wording:
_______I agree, as provided in the rental agreement, to pay $__________ (an amount that does not exceed 2 months' rent) as liquidated damages or an early termination fee, if I elect to terminate the rental agreement, and the landlord waives the right to seek additional rent beyond the month in which the landlord retakes possession.

_______I do not agree to liquidated damages or an early termination fee, and I acknowledge that the landlord may seek damages as provided by law.

What did the law change accomplish?

The law change allows the landlord to give the tenant an option of 1) limiting his damages if he skips (liquidated damages) or giving the required notice and paying a fee to terminate early (termination fee) OR 2) paying rent until the unit is re-rented or the end of the lease, whichever occurs first. The landlord benefits, because if the tenant skips, the landlord can charge the liquidated damages. The tenant benefits, because if he gives the required notice and pays the termination fee, he can leave without breaching the lease.

If I offer this addendum to the tenant and the tenant chooses the liquidated damages or termination fee option "¦ What can I charge?

You can charge:
a) the liquidated damages or the termination fee,

b) any rent through the end of the month when you retake possession, and

c) any accrued charges through the end of the month when you retake possession, for example, any utilities through the end of the month.

Can I require notice from the tenant?

You may require the tenant to give you up to 60 days' notice in cases where the tenant wishes to terminate the lease early and pay the early termination fee. Your lease or addendum must clearly state this notice requirement. If the tenant gives you notice but fails to remain on the premises and pay the rent through the notice period, the tenant is in breach of the lease, and you can charge the tenant the liquidated damages amount.

Can I charge a penalty for failure to give notice if the tenant leaves BEFORE THE END OF THE LEASE?

You cannot charge a penalty for any failure to give notice if the tenant leaves before the end of the lease. Liquidated damages are the total damages that have been set for the breach of the lease. You cannot charge any other additional penalties.

Can I charge a penalty for failure to give notice if the tenant doesn't give the required notice AT THE END OF THE LEASE?

Failing to give the required notice at the end of the lease is governed by a separate Florida Statute (FS Β§83.575).

What about damage to the property at the time the landlord retakes possession? The tenant will still owe these amounts regardless of the law change.

Action Plan:

If you wish to take advantage of the law change, you MUST place the "choice" language (see Sample wording: above) in an addendum and present it to the tenant upon lease signing. When explaining the choice to the tenant, you can tell the tenant about market conditions if you wish. This will better allow the tenant to make an educated decision as to whether he should choose the liquidated damages or early termination option.

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Dealing With The Chronic Late Payer
by Harry Anthony Heist, Attorney at Law

It is inevitable that you will have a chronic late payer. Every excuse in the book is given by the tenant for the tardy payment, but the payment always comes, sometimes with the late fees, sometimes without. You may inherit a later payer from a self-managed property or a prior management company. Is a tenant always allowed to pay late? Can you evict a late payer? Is there any way to tell a tenant to shape up or ship out, or will you be destined to always accept late payments?

Is a tenant allowed to pay late?

The short answer is "yes". There is nothing in Florida law that allows you to evict tenants because they pay late. You can evict a tenant if she does not pay at all, but paying late is not prohibited. Regardless of what your lease may provide, if a tenant wishes to pay late, she may. There is a built in grace period under Florida law of three days, not including Saturdays, Sundays or legal holidays. If a tenant fails to pay the rent according to the due date of your lease, you must serve the tenant with a Three Day Notice which gives the tenant the opportunity to pay you within that period of three days. This is in essence a "grace period". Without serving the tenant that Three Day Notice, there is nothing you can do to terminate the tenancy for nonpayment of rent. No provision in your lease can override the fact that a tenant is entitled by law to receive a Three Day Notice from you, and is allowed by law to pay you the rent if the notice has not yet expired.

We want to get the chronic late payer out!

My usual response to this request is to tell the landlord to be glad to have a tenant who pays, albeit somewhat late. Times are tough right now, and anything a landlord can do to keep a tenant is advisable. However, there will be times when the landlord does not want the uncertainty of getting the rent late, or is tired of having to serve a Three Day Notice on the tenant every single month, and wants the tenant out. If the tenant pays the rent within the Three Day Notice timeframe, no matter how angry or frustrated the landlord is, the tenant can stay and pay as long as the notice has not expired. The landlord's only recourse is to non-renew the tenant at the end of the lease, or if the lease is currently month to month, non-renew the month to month tenancy.

The tenant does not pay within the Three Day Notice period

This is a different story. If the tenant does not pay within the Three Day Notice time frame, Florida law allows the landlord to terminate the tenancy. This sounds easy enough. The tenant is given a Three Day Notice and fails to pay within the time frame allotted. The landlord then files an eviction, and the tenant is evicted from the premises. It would seem perfectly legal. The tenant is chronically late, the landlord has had it, the tenant does not pay and therefore is evicted. If the tenant is in "new territory" by finally failing to pay within the three-day notice period, the landlord will have a strong case. However, it is often not that simple. The fact that the tenant has paid rent late so many times actually put the tenant in better standing in court, if the landlord has accepted rent after the expiration date of prior Three Day Notices. The landlord could also have problems in court if the Three Day Notice that finally "snares the tenant" is delivered earlier in the month than normal.

The tenant beats an eviction because he has always paid late?

While some judges are extremely strict and will evict a tenant if the tenant fails to pay within the Three Day Notice period no matter what the tenant's excuse may be or the tenant's past payment history, be it prompt or tardy, if a tenant can prove to a judge that he has been paying the rent late, after the expiration of the Three Day Notice, and the landlord has been accepting the rent late, the tenant may be able to prevail in court. This seems to go against logic. A tenant who pays the rent late is certainly not a good tenant. That tenant has blatantly violated the lease terms and caused extra work and worry for the landlord. The issue here is waiver. The landlord, by accepting the rent late time and time again has potentially waived his rights to enforce the terms of the lease. By his own actions, the landlord has modified the terms of the lease.

What is waiver?

If you know that a tenant has a pet in violation of your no pet policy, but you do absolutely nothing about it for months, you will have possibly "waived" your rights. The same would apply if there were unauthorized occupants in the unit and the landlord did nothing. Any noncompliance that the landlord ignores or "tolerates" for some time can result in the landlord waiving his rights. The exact same waiver can occur with late rent payment. The landlord thinks his case is better because the tenant looks "bad" in court, but actually it will be the landlord who will be at a disadvantage in court.

Can "waiver" be overcome?

If the tenant has been chronically late, does this mean you can never evict or must tolerate this late payment forever? Probably not, but you must notify the tenant that late payments, although accepted in the past, will not be tolerated in the future, and the tenant can be subject to eviction if the payments are not made within the Three Day Notice time period. Essentially it is a "shape up or ship out" type of notification. We recommend this type of notification is done in writing, by regular mail and certified mail, and at least 30 days before the next monthly rent payment is due.

Sample Wording

LATE RENT PAYMENTPOLICY, WARNING AND NOTIFICATION

DATE ________________

TO __________________________
ADDRESS ____________________ Dear Resident:

According to our records, you have not been paying your rent according to the due date which is ________________ (insert date).

While we may have accepted these late payments in the past, this letter shall serve as notification that in the event you do not pay according to the stated due date on your lease, you may be subject to receiving a Statutory Three Day Notice. If the rent is not paid within that notice period, we may opt to refuse your late rent and file for eviction ANY time thereafter. In the event we file an eviction, we may elect not to stop the eviction, or if we decide to do so, you will incur additional attorney's fees, late fees and costs.

It is imperative that you pay your rent according to the lease terms from this point on.

Please feel free to contact us should you have any questions.

Very truly yours _______________________

Name of apartment community, management company etc.

Will this "shape up or ship out" letter work?

There is a good chance that this type of letter can overcome a waiver defense by a tenant. There is no solid guarantee, but it is better than nothing. Remember that in order for the tenant to raise a defense of waiver, the tenant first must know that he has this defense, and in most cases must place the rent into the court registry. This minimizes the risk you have, but if you are managing property for others, you will often be inheriting tenants with inconsistent and late rent payments.

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Computer Disaster Preparedness
by Harry Anthony Heist, Attorney at Law

Every property management company should have a plan to deal with man-made or natural disasters. Having a business continuity plan in place is crucial for any business, and especially important in property management. Property managers are asset managers who manage many millions of dollars in assets for other people with little regulation or legal requirements. The property owner hands over an asset which is of substantial value to a property manager who is not required to have any experience or property management knowledge. This property manager then places tenants in this valuable asset, collects rent, remits funds and deals with repairs. It is somewhat scary how unregulated property management really is. A mutual fund manager or any type of money manager has to undergo vigorous training, education, bonding and licensing, but a property manager does not even need a license to manage property. The only time a license is necessary is if the manager is engaged in leasing, and even then, a real estate broker's or sales person's license suffices. Needless to say, the responsibility is huge, and potential liability is great for a property manager and the broker of the property management company. All property managers should immediately begin planning for a natural or manmade disaster, and there is something they can and must do immediately to reduce their liability, protect their business, and protect the information concerning the asset that they manage. This first step is protection of computer data.

The typical property manager

The typical property manager does engage in some sort of data protection, be it an external back up hard drive, tape drive, CD or DVD burner, or some sort of simple means to copy data from a computer to something else for later use. Some managers take the tape or CD home, some place it in a safe in the office or simply on a shelf. In most instances, if there is data loss on a server or a desktop, the property manager has a back up available and can be up and running quickly with little to no downtime. Is that back up recent? Probably not. Most property managers who engage in some sort of backing up only do so once a week if that. Since backing up often requires the computer file not to be in use at the time of back up, you would most likely need to be the last person working in the office in order to back up that important data file in your property management or accounting software.

The problems

What happens if your office burns to the ground, is swept away in a flood or a thief decides he want to take all your computers, your safe and your server? None of this happens in Florida, right? Well, many property managers have insurance for their equipment. Computers can be easily replaced, and you will probably end up with better equipment than you did before the incident. The problem though is your data. Your financial data, move in and move out inspections, photos, file notes and everything pertaining to the relationship between the tenant, owner and you may have disappeared or been destroyed. Sure, you can reconstruct all the financial records to a large extent, as your bank certainly has the information, but at what cost in time and money? How can you replace the file notes? What about all your digital photos of the properties you manage? They may all be gone.

The simple solution

Off-site back up, also known as remote data storage, is the simplest and most economical solution to these problems and the first step in a disaster recovery plan. Hundreds of companies exist now that provide safe, inexpensive storage of all your data in a remote safe location. Your computer is simply hooked up to them through the internet, and they keep all the data that you send them safe, secure and accessible to you when you need it.

What to back up?

Have your technical support person help you with deciding what information should be backed up. Most programs are useless when backed up, plus take a load of space in the back up, but data, scans of your file, photos, property inspection reports, emails and anything you can think of that you would need to refer back to should be backed up. You should have a plan for safekeeping of your program files, because many programs can only be installed once in one computer to avoid piracy problems. Convincing your software company that your office burned down and you need to reinstall the programs is possible, but can take hours on the phone.

How often do you back up?

Your first back up will be your largest, and then you back up changed and new files on a regular basis. Our office backs up data every single night. Since the nightly back ups are new and changed files, each nightly back up is fairly quick. It is set to back up at a specific time, and nothing is necessary on our end to accomplish the back up. The back up occurs when the office is closed, and no one is using any of the databases or computers.

Making sure you are really backing up

It is easy to assume that you are backing up each night and that the information is going to the offsite data storage company. After all, you set it up, tested it, and it worked. The problem is that often there are network, internet, software or hardware problems which could result in your back up never occurring. Installing a firewall, changing a setting or installing that new anti-virus software could result in your back up not working. Some companies email you a report each morning showing that your back up was successful, but many do not. Remember that you only need to retrieve backed up data when you really NEED it. That is when you might find out that you have not really been backing up for weeks or months. Always confirm that your off-site back ups are in fact occurring as you expect. When restoring data, always call your technical support person if you have any doubts. You may have a corrupted data base and then restore another corrupted database, or ruin files in the restoration process.

Should you discontinue your usual in-house back ups?

We don't. We back up to an external hard drive connected to the network on a regular basis just to have that one additional back up. This back up is done once a week on the weekends. Paranoia is a good thing when it comes to data!!

Let your owners know how you safeguard data!

One of the selling points of a property management company is to have a disaster recovery plan which includes off-site data back up. Your owners know the risks of operating a business in Florida, and data loss will be one less thing that you and they have to worry about. Let your owners know that you have joined the ranks of the successful professional property management companies who ALWAYS back up their data off-site.

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Exclusions from the Tenancy
by Harry A. Heist, Attorney at Law

The garbage disposal breaks, and of course it must be replaced or repaired, as this type of item is the landlord's responsibility, unless the landlord can prove that the repair need is due to the tenant's negligence or intentional misuse. Can it simply be removed and replaced with a straight pipe? Yes, if the lease specifically states this. Tenants have successfully lived for years without a garbage disposal, and in these tough economic times, a landlord just may choose to not have to replace one if it breaks. The key is the lease wording. Garbage disposals are not the only items which can be excluded from a tenancy, and a successful property manager knows what, when and how to exclude items.

Why would you want to exclude items?

Unless excluded from the lease agreement, just about everything in a rental unit is the landlord's responsibility to repair, replace or maintain. When a tenant rents a unit, there is an expectation that the appliances work and will be the responsibility of the landlord. These appliances may be new, old or just about ready to break. The landlord then is constantly spending money to fix these items and suffering a greater economic hardship. If the unit is being managed by a property manager, the property manager is faced with having to make that dreaded call to the landlord, telling him that the washing machine must be replaced. This is the landlord who already is on the brink of foreclosure and is buried in tax and insurance payments. The property manager gets the repairs made, and at the end of the year, the landlord fires the property manager, because "too much money was spent". The next property manager ends up looking great, because you have replaced everything that broke.

What items should not be excluded?

The air/conditioning system, heating system, water heater, pool pumps, plumbing and electrical systems, generally are not the type of items which would be excluded. Clearly these will be the responsibility of the landlord, and should be maintained, replaced or repaired immediately in the event there is a problem. The last thing you would want is the tenant attempting to repair or replace a major system in the home.

What can be excluded?

Many items in a home can be excluded. The most obvious would be appliances. There is absolutely nothing wrong with the tenant agreeing in the lease that the appliances will not be guaranteed, repaired or replaced by the tenant. Instead of the owner taking the gamble that the appliances will continue to work properly throughout the tenancy, the tenant takes that gamble. Why would the tenant take the gamble? If the landlord tells the tenant that this is why the rent is less than what it could be if the landlord were responsible for maintaining all the appliances, the tenant will often decide to take on the risk of having to pay himself for the repair or replacement, or possibly forgo making the repair or replacement. A tenant whose clothes dryer breaks, may just decide to hang dry the clothes rather than make a repair or replacement.

Washer/Dryer: Many tenants will agree to take a home when the washer and dryer are not the owner's responsibility. If the item fails, the tenant can decide whether to replace, repair or go without.

Garbage Disposal : People have lived for years without garbage disposals, and they certainly are not a necessity of life. They will eventually break, sometime due to age, defect or some foreign object that the tenant puts in the disposal (but will adamantly deny once the disposal breaks, with the foreign object conveniently disappearing). Many landlords are now choosing to not have the responsibility of fixing the garbage disposal, or agreeing with the tenant that in the event of a garbage disposal failure, the landlord can remove the disposal and replace it with a straight pipe.

Ice Makers: Besides being a major cause of flood damage when the water supply line breaks, an ice maker is not a necessity of life and does eventually fail. When they break, the expense is often prohibitive and could result in the landlord having to replace the entire refrigerator. This item can and should be excluded. Remember ice cube trays?.

Ceiling Fans: With time, a ceiling fan will fail or become annoyingly noisy. These can be excluded, but you may want to consider the risk that a tenant will be injured when attempting to fix the ceiling fan or installing a replacement improperly, increasing the risk or injury to themselves or others.

Jet type tubs or hot tubs: Jet water type tubs or hot tubs, commonly referred to as Jacuzzis or Jacuzzi tubs, are not extremely expensive to purchase. The expense is usually in the tile work that surrounds the tub, which will invariably have to be removed and replaced in the event of a repair. The plumbing and tiling costs can easily exceed the cost of the repair to the tub itself. A Jacuzzi type tub can be used without turning the tub on and using the jets; therefore, it can be excluded.

All other appliances: The stove, dishwasher, microwave, refrigerator and just about any other appliance can be excluded in the lease, and the owner will not be required to repair or replace any of them in the event they fail. A landlord or property manager needs to examine these items and make the decision if they are going to be the landlord's responsibility or left up to the tenant.

Is it the tenant's responsibility to repair?

Excluding certain items can get tricky. It is one thing about stating in the lease that the owner will not repair or replace and another to say that the tenant MUST repair or replace. Making the repair or replacement mandatory on the tenant can often result in shoddy repairs, no repairs at all, or most commonly, the tenant will replace an item and then take remove it from the premises upon vacating.

The disappearing appliance

If a lease states that the landlord is not responsible for repairing a washing machine and the washing machine breaks, there is a good chance the tenant will go ahead and purchase a new or used washing machine. What happens at the end of the tenancy? The tenant takes the washing machine with them, leaving you with nothing. Did the original washing machine really break? Could it have been repaired? Did the tenant simply steal the washing machine? No one will know. When deciding to exclude items, always keep in mind the possibility and high probability of the tenant taking the replacement item.

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Exclusions from the Tenancy
by Harry A. Heist, Attorney at Law

The garbage disposal breaks, and of course it must be replaced or repaired, as this type of item is the landlord's responsibility, unless the landlord can prove that the repair need is due to the tenant's negligence or intentional misuse. Can it simply be removed and replaced with a straight pipe? Yes, if the lease specifically states this. Tenants have successfully lived for years without a garbage disposal, and in these tough economic times, a landlord just may choose to not have to replace one if it breaks. The key is the lease wording. Garbage disposals are not the only items which can be excluded from a tenancy, and a successful property manager knows what, when and how to exclude items.

Why would you want to exclude items?

Unless excluded from the lease agreement, just about everything in a rental unit is the landlord's responsibility to repair, replace or maintain. When a tenant rents a unit, there is an expectation that the appliances work and will be the responsibility of the landlord. These appliances may be new, old or just about ready to break. The landlord then is constantly spending money to fix these items and suffering a greater economic hardship. If the unit is being managed by a property manager, the property manager is faced with having to make that dreaded call to the landlord, telling him that the washing machine must be replaced. This is the landlord who already is on the brink of foreclosure and is buried in tax and insurance payments. The property manager gets the repairs made, and at the end of the year, the landlord fires the property manager, because "too much money was spent". The next property manager ends up looking great, because you have replaced everything that broke.

What items should not be excluded?

The air/conditioning system, heating system, water heater, pool pumps, plumbing and electrical systems, generally are not the type of items which would be excluded. Clearly these will be the responsibility of the landlord, and should be maintained, replaced or repaired immediately in the event there is a problem. The last thing you would want is the tenant attempting to repair or replace a major system in the home.

What can be excluded?

Many items in a home can be excluded. The most obvious would be appliances. There is absolutely nothing wrong with the tenant agreeing in the lease that the appliances will not be guaranteed, repaired or replaced by the tenant. Instead of the owner taking the gamble that the appliances will continue to work properly throughout the tenancy, the tenant takes that gamble. Why would the tenant take the gamble? If the landlord tells the tenant that this is why the rent is less than what it could be if the landlord were responsible for maintaining all the appliances, the tenant will often decide to take on the risk of having to pay himself for the repair or replacement, or possibly forgo making the repair or replacement. A tenant whose clothes dryer breaks, may just decide to hang dry the clothes rather than make a repair or replacement.

Washer/Dryer: Many tenants will agree to take a home when the washer and dryer are not the owner's responsibility. If the item fails, the tenant can decide whether to replace, repair or go without.

Garbage Disposal : People have lived for years without garbage disposals, and they certainly are not a necessity of life. They will eventually break, sometime due to age, defect or some foreign object that the tenant puts in the disposal (but will adamantly deny once the disposal breaks, with the foreign object conveniently disappearing). Many landlords are now choosing to not have the responsibility of fixing the garbage disposal, or agreeing with the tenant that in the event of a garbage disposal failure, the landlord can remove the disposal and replace it with a straight pipe.

Ice Makers: Besides being a major cause of flood damage when the water supply line breaks, an ice maker is not a necessity of life and does eventually fail. When they break, the expense is often prohibitive and could result in the landlord having to replace the entire refrigerator. This item can and should be excluded. Remember ice cube trays?.

Ceiling Fans: With time, a ceiling fan will fail or become annoyingly noisy. These can be excluded, but you may want to consider the risk that a tenant will be injured when attempting to fix the ceiling fan or installing a replacement improperly, increasing the risk or injury to themselves or others.

Jet type tubs or hot tubs: Jet water type tubs or hot tubs, commonly referred to as Jacuzzis or Jacuzzi tubs, are not extremely expensive to purchase. The expense is usually in the tile work that surrounds the tub, which will invariably have to be removed and replaced in the event of a repair. The plumbing and tiling costs can easily exceed the cost of the repair to the tub itself. A Jacuzzi type tub can be used without turning the tub on and using the jets; therefore, it can be excluded.

All other appliances: The stove, dishwasher, microwave, refrigerator and just about any other appliance can be excluded in the lease, and the owner will not be required to repair or replace any of them in the event they fail. A landlord or property manager needs to examine these items and make the decision if they are going to be the landlord's responsibility or left up to the tenant.

Is it the tenant's responsibility to repair?

Excluding certain items can get tricky. It is one thing about stating in the lease that the owner will not repair or replace and another to say that the tenant MUST repair or replace. Making the repair or replacement mandatory on the tenant can often result in shoddy repairs, no repairs at all, or most commonly, the tenant will replace an item and then take remove it from the premises upon vacating.

The disappearing appliance

If a lease states that the landlord is not responsible for repairing a washing machine and the washing machine breaks, there is a good chance the tenant will go ahead and purchase a new or used washing machine. What happens at the end of the tenancy? The tenant takes the washing machine with them, leaving you with nothing. Did the original washing machine really break? Could it have been repaired? Did the tenant simply steal the washing machine? No one will know. When deciding to exclude items, always keep in mind the possibility and high probability of the tenant taking the replacement item.

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Understanding The New Early Termination Law
by Harry Anthony Heist, Attorney at Law

Before the law change

Before the recent change to Florida Statute 83.595, when a tenant chose to break a lease by vacating before the end of the lease, commonly called "skipping" or vacating early, the landlord was only allowed to charge the tenant rent through the earlier of the lease expiration date or the date a replacement tenant took occupancy. In addition, many companies also charged a Termination Fee, Termination Penalty or Liquidated Damages charge, BUT in a major Florida class action lawsuit, the judge in that particular case ruled that these various practices were unlawful and inconsistent with Florida Statute 83.595.

The New Law

A common misconception is that under the new law, when a tenant vacates early, you can NOW charge the tenant a Liquidated Damages or Early Termination Fee. This is only partially correct, and it is crucial that you understand the law.

Under the new law, you can give the tenant a CHOICE to either owe a flat fee "Liquidated Damages/Early Termination Fee" OR owe rent until the unit is re-rented. The TENANT makes the choice, NOT you. If you do not want to give the tenant this choice, you will not use the Addendum, and you can ONLY charge the tenant your rent loss, as has been the law.

Suppose you want to hold the tenant to all the rent due under the lease?

If this is what you want to do, then simply do it. The law still allows you to do this. You will not give tenants a choice in the matter, and if a particular tenant vacates early, you will charge rent as it becomes due under the terms of the lease until the unit is re-rented. In a soft market, when it may take a while to re-rent a unit, this is your best bet; you really do not need to read any further, AND you will NOT use the Addendum.

Suppose you want to charge the tenant a "Liquidated Damages/Early Termination Fee" when they vacate early?

You CAN if and only if 2 things occur:

A. You present the attached Addendum to the Tenant AT THE TIME OF LEASE SIGNING

AND

B. The tenant picks Choice #1

What happens if the tenant picks Choice #1?

You can charge the tenant a flat "Liquidated Damages/Early Termination Fee" of a maximum of 2 months' rent when they vacate early and NOTHING more other than rent, and charges they may owe at the time of vacating early. The tenant may or not pay it, but if not paid, this 2 months' rent can be sent to collections.

What happens if the tenant picks Choice #2?

You can charge the tenant rent that he owes at the time he vacates and rent as it becomes due until the unit is re-rented or the end of the lease, whichever occurs first, just like you have been doing or should have been doing all along.

Can you charge the tenant a Concession payback?

The law does not clearly provide that you can or you cannot. If the tenant picks Choice #1, it may be dangerous to charge a concession payback, because some judges are apt to consider a liquidated damages charge as exclusive.

Now for some Q&A:

Q- Do I have to use the Addendum?

A- Absolutely not. It is your choice. If you don't provide the Addendum to the tenant to sign, the tenant will owe rent that is owed at the time the tenant leaves early PLUS all rent as it becomes due until the unit is re-rented or the end of the lease, whichever occurs first.

Q- Can I have current residents come in and sign the Addendum?

A- No. You can only use the Addendum at lease or renewal signing.

Q- Do I need to fill in all the amounts on the addendum before I give it to the tenant?

A- Yes, do not leave anything blank.

Q--Suppose I use the Addendum and the tenant picks Choice #1?

A"”If the tenant chooses to vacate early, you can only charge the tenant 2 months' rent plus whatever they already owed you for rent or other amounts under the terms of the lease. NOTHING MORE.

Q"”Suppose I use the Addendum and the tenant picks Choice #2?

You can charge the tenant rent that is owed at the time the tenant leaves early PLUS all rent as it becomes due until the unit is re-rented or the end of the lease, whichever occurs first.

Q- Can I force the tenant to sign the Addendum?

A-- No. If the tenant refuses to sign, they simply will owe rent that is owed at the time the tenant leaves early PLUS all rent as it becomes due until the unit is re-rented or the end of the lease, whichever occurs first.

Q- Should I utilize the new law and use the Addendum?

A- It is purely a business decision. In a soft market, it would be better not to utilize the new law and the Addendum. If you feel you will rent out the unit in less than 2 months, it would be better to use the Addendum IF the tenant picked Choice #1. There is no guarantee what the tenant will choose.

Q- Can I force the tenant to pick a particular Choice, #1 or #2?

A- No. If you use the Addendum, you are at the mercy of the tenant and his choice.

Q - Can we require the tenant to give notice before he vacates early if he picks Choice #1?

A-- Yes, but if he does not, you can only charge the 2 months' rent amount as if he simply walked out on you tomorrow.

Q- If the tenant picks Choice #1 and gives us notice, can we charge the tenant through the notice period PLUS the 2 months' rent?

A- NO. You can ask the tenant to give you notice, BUT you cannot hold him to it.

Q- If I decide to use the Addendum, must I offer it to everyone?

A- For Fair Housing purposes if you use it for one, you should use it for all, at least in a given time frame.

Q- Why does the tenant get to make a choice? Why can't we just charge them liquidated damages?

A- The tenant only gets to make a choice if you decide to use the Addendum. The Governor said he would not sign the bill into law unless the tenant was given a choice, so the bill was amended late in session to get it passed.

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Evictions Now That Filing Fees Have Exploded
by Harry Anthony Heist, Attorney at Law

On July 1, 2008, the costs of filing a tenant eviction increased dramatically. For many years, county filing fees ranged from under $50.00 to over $160.00, depending on which county the property was located, but many counties charged less than $100.00. On July 1, 2004, all eviction filing fees became uniform at $80.00. As of July 1, 2008, all eviction filing fees are now $270.00, but there is even more that must be paid. Whether managing an apartment community or a single family home, it is important to know what your eviction will cost and where the money is going. Ironically, attorneys' fees for most evictions now make up a small part of the actual eviction price. The rest are the "costs".

The Filing Fee

The Filing Fee is the base charge the Clerk of Court collects to file the case in county court. This is now $270.00. This amount does not change, regardless of the number of tenants you are attempting to evict from the premises in a given case.

Summons Issuance Fee

The Clerk of Court NOW can charge a fee to issue each summons in the eviction. This is indeed a brand new fee never charged before. The summons is the document which must be served upon the tenant either by Private Process server or the Sheriff's Deputy depending upon how your attorney operates in a particular county. You will always have one summons per tenant. This charge is $10.00 per tenant.

The Writ of Possession

1. A New Clerk's fee

Many County Clerks are now charging a fee to "issue" the Writ of Possession, just as they are now charging to "issue" summonses. Fortunately at this point, this charge is $2.00 per Writ of Possession, not per Defendant. If you do not need a Writ of Possession because you have full legal possession of the premises, you will not incur this charge.

2. The Sheriff's Department Charge

At the end of the eviction, if it is necessary to finish up the eviction and get full possession of the premises, the Sheriff charges $70 to serve and execute the Writ of Possession. In a few counties, the Sheriff has charged an extra $20.00 per additional tenant named in the lawsuit. This fee is unchanged, but we don't know if it will remain this way for long.

What does this all mean?

1. Try to avoid having to file an eviction. Work with the tenant within the boundaries of your company procedures and policies, but never let it go too far. Never hold off on filing an eviction for a single family homeowner, unless the homeowner gives you permission to hold off. Your "working with the tenant"could result in a charge of negligence against you by the property owner.

2. Make sure if you file an eviction, there are no potential problems. Now with the higher costs, you do not want to have to dismiss a case and re-file an eviction. Take your time, use the Eviction Checklist we provide, and do it right. Many of our clients get annoyed when we point out mistakes in their notices. Some judges are picky, so it pays to redo a Three day Notice rather than have a judge dismiss the case or otherwise deny the eviction.

3. Use stipulations whenever possible. Stipulations allow you to accept rent during the eviction and hold the eviction open. Most judges will sign stipulations for future rent of up to 6 months. This may avoid you having to refile an eviction. If you have never done a stipulation, we will walk you through the process.

4. When preparing your budgets, look at your eviction expenses, and add approximately $210.00 to each eviction.

5. If managing a single family home for another, make sure you have the money to pay for the eviction and that the property owner is made aware of the substantial price jump. Many property managers get fired by the owners of single family homes if there is an eviction. This results in your attorney having to now chase after the owner of the property, often with no success.

Can we save money by having less tenants on the lease?

Great question! There are many property management associations, groups, organizations and self-help books, and often "trying to save money" is a topic of much discussion. Theoretically, if you had 2 people living in a rental unit and only one was on the lease, you might be able to get away with just evicting the tenant who signed the lease. What would you save? After taking into account the additional service of process charge, about $30.00 - 40.00. This would be the worst $30.00 - 40.00 you ever saved. First of all, we know that all adult occupants should be lease signers, and second, if someone is an occupant, they often become a tenant in the eyes of the law over time. You are allowing that person to live there, you know he or she lives there, and often rent is accepted from that occupant. In the event of an eviction against only the lease signer, the occupant is capable of submitting a third party affidavit late in the eviction process, which can lead to hearings, substantial expense and delay, and can possibly even completely derail the eviction. Additionally, if you only had one person on the lease, you have cut your chance of collection down as well. NEVER try to save a little money by making such a serious mistake as not having all the adult occupants sign the lease.

Will evictions go faster now that it costs so much more?

Now that was a funny one!!!

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A Security Deposit Primer - Part 1 Holding The Funds
by Cathy Lucrezi, Attorney at Law

A hundred years ago, a landlord had few obligations in how he handled the security deposit. There was no statute telling him to keep it separate from his other funds. There was no obligation to make a "claim" on the deposit. He did not have to tell the tenant where the deposit was being held. That was then, this is now.

What does the statute cover?

All security deposits are governed by Florida Statute Section 83.49. The statute defines a security deposit as all funds that are "deposited or advanced by a tenant on a rental agreement as security for performance of the rental agreement or as advance rent for other than the next immediate rental period." That means that any money held for some future event, like future rent coming due or repairing damages after the tenant moves out, is covered by the statute.

Three ways to hold the funds.

The landlord is obligated to hold the security deposit and advance rent in one of three ways.

The first option is to hold it in a separate non-interest-bearing account in a Florida banking institution. The landlord cannot commingle the money with any other funds of his or otherwise make use of the funds, until the funds are actually due the landlord.

The second option is to hold the security deposit in a separate interest-bearing account in a Florida banking institution. If this option is used, the tenant is entitled to receive interest. The amount of interest shall either be 75 percent of the annualized average interest rate payable on the account OR 5 percent per year, simple interest. The landlord chooses. As with the first option, the landlord cannot commingle the money with any other funds of his or otherwise make use of the funds, until the funds are actually due the landlord.

The third option is to post a surety bond. The bond must be in an amount equal to the total amount of the security deposits and advance rent or $50,000, whichever is less. This option is so rarely used that this article will skip the remaining details.

Keeping the deposit in a Florida bank.

Any security deposit account, whether interest bearing or not, MUST be kept in a Florida bank.

The account must be in a bank that is chartered to do business in Florida. Most, but not all, banks that are physically located within the state fit into this category. [Not sure about your bank? Ask them if they are chartered in Florida. They easily know the answer.] If an out-of-state owner wants to hold the deposit in his own account, it needs to meet this criteria. It is not sufficient for the owner to place the deposit in a national bank located in his home state which has branches in Florida.

Keeping deposit funds separate.

The deposit and advance rent must be kept separate from other funds.

If an agent collects the funds on behalf of the landlord, the agent should either deposit them into the escrow account that is set up in the agent's office, OR send the funds to the Florida bank account that the landlord has set up. It is not proper to send them directly to the landlord.

If an owner is holding a deposit, it must be in an account that is set up for the purpose of holding the deposit. It cannot be mixed in with the owner's other funds in a checking or saving account.

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The Early Termination Law And The Single Family Home Manager
by Harry A. Heist, Attorney at Law

NOTE: Before reading this article, we urge you to read Understanding The New Early Termination Law so you fully understand the new law before examining how it may apply to single family home management.

Should the new law be used in Single Family Management?

As you can see, if the new law is to be used, the tenant must be given an addendum at the time of lease signing which will give the tenant a choice of what they will owe if they vacate the premises before the expiration of the lease. The tenant can choose to owe a fixed sum of money not to exceed 2 months' rent or can choose to owe the rent due under the terms of the lease as it becomes due until the unit is re-rented or the end of the lease, whatever occurs first. Let us assume that you decide to use the new law, you provide the tenant with the addendum at lease signing, and he tenant chooses to owe the 2 months' rent if she vacates the lease early. What happens?

1. Just because the tenant made the choice to owe the 2 months' rent, it by no means that she will ever pay it. She simply will owe it.

2. The unit may stay vacant for more than 2 months, and the property owner may wish to go after the tenant to collect. When the owner finds out that he is limited to only going after the tenant for 2 months' rent, he will be surprised and angry, wondering what happened, and now will be looking to you for redress.

Full disclosure and permission is needed

If you wish to use the new law and are prepared to present the tenant with the addendum at lease signing, you MUST get prior permission from the property owner to do this, and fully explain to the owner that if the tenant chooses liquidated damages, you will not be able to charge the tenant ANYTHING other than the liquidated damages of up to 2 months' rent plus the rent that was owed to you, if any, at the time the tenant vacated. If you have a clause in your lease which states that the tenant is liable to pay a commission or any other non- physical premises damages, you probably CANNOT charge this to the tenant. A good argument can be made that a liquidated damages charge is a fixed amount, and that you cannot add other amounts to it.

Permission in writing

If you wish to use the new law, the property owner should give you this permission in writing. No verbal agreement should be allowed in this situation, as the use of the addendum and the tenant picking the liquidated damages choice can seriously infringe upon the rights of the property owner to pursue the tenant. Many property owners will not understand the new law. You do not want to give the property owner any idea or expectation that just because the tenant may pick the liquidated damages choice that the tenant will ever pay the money. More likely, the tenant will not pay the money.

When is the new law advantageous?

The new law is only advantageous to the property owner if the following occurs:

1. The unit is able to be re-rented within 2 months.
2. The tenant picks the liquidated damages choice.
3. The tenant actually pays the money he or she owes.

These three things must all occur for the new law to have any real benefit to the property owner. If you are in a situation under which it usually takes more than 2 months to re-rent a unit, you would definitely not want to use the new law.

Conclusion

Unfortunately the new law is not as useful as it may seem to the single family home manager. While it started out good, it had to be amended to appease the Governor, and now gives the tenant a choice in the matter. We have no control over that choice. The new law is more beneficial in the multi-family management situation, when there is one property owner who has decided that being able to charge liquidated damages, if the tenant so chooses, is a wise business decision. For now, we do not recommend its use in single family management.

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Revising the Security Deposit Claim
by Harry Anthony Heist, Attorney at Law

The tenant vacated, and you did an inspection and made the claim on the security deposit by certified mail as the law provides. Your maintenance staff then discovers some serious problems that you missed in your inspection, including fleas, bad touch up paint by the tenant and a hidden rug burn. Can you go back and send out a revised claim? Have you waived your rights to making an additional claim?. This situation will arise at some point when managing property, and timing is crucial. Simply put, if you are outside the 30 day window as required by Florida law, you will not be able to claim the damages from the security deposit. While this is the bad news, the good news if that the tenant still may owe you the money, and you may not have waived your rights to go after the tenant for this additional money.

Florida law provides that you have 30 days from the date that the tenant vacates the premises to send out the Notice of intention to Impose Claim on Security Deposit; for the purposes of this article, we will just call it the Notice. Years ago, Florida law only allowed 15 days to make a claim, but now there is some more time to examine the premises and make a decision as to what is owed. Keep in mind that we are dealing with making a claim against a security deposit, not figuring out what a tenant will or may ultimately owe you.

When should you send out the claim letter?

Waiting until the 29th day is always risky, as you open yourself up to a tenant claiming they left on one day and you claiming they left on another. A dispute subsequently arises which could result in you having to return the entire security deposit to the tenant, if a judge felt you were outside the 30 day window. We never want this to happen, so you should not wait until the 30 days are about to expire.

Get in the unit as soon as possible!

It is important that as soon as you get possession from the tenant, be it from surrender, eviction or abandonment, you get into the unit quickly. The purpose of this is not to make the claim as soon as possible, but to document the condition of the unit quickly, so a tenant does not later say that the property was damaged by someone else AFTER they turned over possession to you. A property could indeed be damaged by someone breaking into that unit some time after your tenant has vacated. If you attempt to charge the tenant for this damage, he may object and successfully convince a judge that the damage occurred after he vacated. Should you make the claim on the security deposit right away? No. If you are certain that you are going to make a claim, this is the time to pause and carefully begin documenting the damages and comparing the condition reflected in the move-in inspection report that hopefully you have.

You sent out the claim letter but discover more damages

Some property damage is not immediately evident at the time of the tenant moves out. Tenants sometimes successfully hide damages, paint over poorly filled holes in walls, mask odors with spray deodorants, or the unit may all of a sudden be infested with fleas two weeks after the tenant moves out! A unit that is heavily cooled by air conditioning may not reveal the true smell of the years of cigarette smoking or urine damage to a carpet. Some damages are simply missed in error by the landlord and later caught by the maintenance technician, who is more experienced in these matters and finds tenant damage at a later time. Occasionally, you may be managing the property for an owner who decides to find damages that you did not find.

You are within the 30 day window

If you have sent out the Notice already but are still within your 30 day window, you can simply prepare another one and send it out again to the tenant in the same fashion as the first Notice, being sure to again comply with the certified mail requirement. The tenant will of course be upset about the bad news, but you are within your rights to do this. Remember that the tenant does not have to receive the notice within 30 days; you simply must send the notice within 30 days.

You are outside the 30 day window

If you are outside the 30 day window and do not fall under any exception to the requirement to send the notice out within the 30 days, you will not be able to claim anything more from the security deposit than referenced in the initial Notice. The tenant should receive the "balance due tenant" indicated in the initial Notice. Even if the tenant owes you the money, the tenant should receive this balance back.

Does the tenant owe you the money?

The tenant will still owe you the money, but you will not be able to retain it from the security deposit. You will be able to send it to collections, try to get the tenant to pay or sue the tenant if you wish. The main issue is that the funds you are holding cannot be used for the amounts owed.

Suppose the original amount and the revised amount owed both exceed the security deposit?

Let us assume you are holding a $1000 security deposit and originally claimed damages of $1200 within the 30 day period. After the 30 day period expires, you discover another $500 in damages. You may feel that there is a need to send a revised Notice, but this is not necessary, and besides, it is too late to send an amended Notice. You already have claimed the entire security deposit, so this intent has already been established. Remember, a Notice is not a bill or a final accounting you are sending the tenant. It is simply a notice stating how much you will be taking from the security deposit as required by law. However, to cite the above example, if you discover more damages within the 30 day period, it is good practice to send an amended Notice, since some of the items claimed in your initial Notice may not hold up in court, if a dispute leads to deposit litigation.

Avoiding a possible waiver issue

There is a possibility of a tenant claiming that since you sent the Notice of Intention to impose Claim with a particular amount stated, you are now stuck with it and cannot now charge the tenant any more. For example, if a tenant breaks a lease owing you one month's rent and you make a claim for this one month's rent, more months of rent may become due if the unit remains vacant. You certainly do not want the tenant to think that just because one month was subtracted from the security deposit, this is all the tenant is liable to you for. The standard notice wording as stated in Florida Statute 83.49 does not address this, so we recommend that the following wording be placed on the bottom of your Notice just to be extra safe:

This notice does not waive or limit any of landlord's rights to damages or amounts due which may exceed the security deposit or the amounts listed on this form.

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Accepting Rent and The Seven Day Notice
by Harry Anthony Heist, Attorney at Law

The most common lease noncompliance is of course nonpayment of rent. Most landlords are quite familiar with this problem and know to serve a Three Day Notice in accordance with the law. If the rent is not paid within the three day time period excluding Saturdays, Sundays and legal holidays, an eviction can be filed, and the tenant most likely will be evicted. Life though is just not that simple. Many tenants engage in other non-rent noncompliances, such as having the unauthorized occupant, unauthorized pet, excessive noise disturbances or simply having a grill on the balcony which violates the fire code. There are many noncompliances that the tenant will engage in, necessitating the landlord to serve the Seven Day Notice to Cure. This notice gives the tenant seven days to either start doing something he is supposed to do, or stop doing something he is not supposed to be doing, or else the landlord may have a right to terminate the tenancy and begin an eviction if the tenant fails to vacate. The situation becomes complicated when the tenant is out of compliance with a lease provision unrelated to rent AND rent becomes due in the meantime. Timing of the notices and the actions of the landlord can determine whether or not the notices will remain valid and support an eviction.

The Continuing Noncompliance

Examples of noncompliances that would be considered "continuing in nature" include an unauthorized occupant or unauthorized pet. Here we have knowledge that the tenant is in noncompliance, and the tenant is served a Seven Day Notice to Cure. Let us assume the tenant is served this notice on the 27th of May and on June 1, rent becomes due. The landlord goes out to the property on June 5th, presumably to serve a Three Day Notice, as no rent has been received for June. She sees the unauthorized occupant's vehicle, serves the Three Day Notice and leaves. The tenant then comes into the landlord's office and hands the landlord the rent check. The landlord takes the check and deposits the money. Five days later, which is 13 days after the landlord has served the Seven Day Notice to Cure for the unauthorized occupant, the landlord again sees the occupant's truck in the driveway. It is clear that the tenant has not cured the noncompliance. Can the landlord terminate the tenancy? Quite possibly not. Florida law provides that if rent is accepted with knowledge of a noncompliance, the right to terminate the tenancy is waived, but not for any subsequent or continuing noncompliance. Under the above fact pattern, some judges will interpret the statute to mean that the landlord has waived its right to terminate until July. Some judges may also rule that a permanent waiver has occurred, although this does not seem to be a correct reading of the statute.

Should a landlord accept rent when there is a continuing noncompliance?

From the preceding example, it appears clear that the landlord should NOT accept rent or serve any type of demand for rent, i.e., the Three Day Notice , if a Seven Day Notice to Cure has already been served and the noncompliance has not been remedied.

Noncompliances which are not of a continuing nature

Unlike the unauthorized pet or occupant situation that is most likely a continuing noncompliance, the landlord will encounter situations in which the tenant is in noncompliance and then cures the noncompliance, only to go into noncompliance at a later time. Examples might include a gas grill on the balcony or the tenant who sporadically plays very loud music. The Fire Marshall may prohibit gas grills, or it may be in violation of the lease or condominium rules and regulations. The landlord serves the tenant with a Seven Day Notice of Noncompliance with Opportunity to Cure, and the tenant removes the grill from the balcony, hopefully not into the unit where it can be a fire hazard. Rent becomes due, a Three Day Notice is served, and the landlord accepts rent. Two weeks later, the grill reappears. Since the noncompliance was cured at the time the Three Day notice was served and rent accepted, the landlord's acceptance of rent should NOT jeopardize the ability to terminate the tenancy due to the reappearing grill.

Is a Noncompliance sporadic or continuing?

Sometimes we hear landlords say that they thought the tenant had cured the noncompliance because the tenant had received the notice. Did the landlord actually check to see if it was cured, or did the landlord just assume it was cured? Did the landlord make sure the grill was removed from the balcony? Once a Seven Day Notice of Noncompliance is served, it is incumbent on the landlord to investigate to see if the problem was solved before serving the Three Day Notice. If not, it is possible what was assumed to be a sporadic or easily cured noncompliance was not cured.

The tenancy has been terminated by a Seven Day Notice to Terminate

If the tenant fails to cure a noncompliance, the landlord should contact his attorney and seek guidance on whether the tenancy can in fact be terminated. If so, and at last resort, the tenant is served a Seven Day Notice of Termination. This is a very powerful notice boldly proclaiming that tenancy has been terminated. A Seven Day Notice to Cure is a warning, while a Seven Day Notice to Terminate says "get out within 7 days". But wait. Rent is now due, and the landlord needs the money. The tenant drops off the rent check, and the owner who desperately needs the money deposits the check. Yes. You are correct. The Seven Day Notice of Termination is now null and void. The owner now cannot terminate the tenancy because he has accepted the rent.

Conclusion

Your best bet is always to have your attorney walk you through the Seven Day Notice procedure and guide you along the way. Always remember that if your have served a Seven Day Notice to Cure or a Seven Day Notice to Terminate, you may or may not be able to accept rent. The next time the situation arises, just remember the slogan, "you cannot have your cake and eat it to", when you get the urge to accept rent after a seven Day Notice has been served. If you have an office with employees, allow tenants to direct deposit or pay by credit card, be sure you have a mechanism in place to prevent a rent check from being inadvertently accepted from the tenant in noncompliance.

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Know the Lease
by Cathy L. Lucrezi, Attorney at Law

Most landlords read the lease once. From then on, the landlord relies on memory and what he thinks it says. As time goes by, the landlord might read the lease, looking for a particular paragraph, but he skims over the details. Some landlords are so complacent about the lease they think they know so well, the landlords don't notice that it has grown illegible!

It is a basic premise of all landlord tenant law: the lease defines the agreement of the parties. Aside from the basics of rent amount, address of the premises, and term of lease, the lease describes what each party should expect from the other in a myriad of circumstances.

Anytime a landlord is unsure of what must be done in response to a question or demand from the tenant, the first step must be to look at the lease. Often, the answer is right there, in black and white. Sometimes, an interpretation must be made.

If you ask an attorney to do that interpretation, you will likely hear "I need to see the lease". The reason? The language (or even the punctuation!) of the lease often determines the answer to the question. If the attorney has your "basic" lease form, or has drafted your lease, the attorney will still want to look at the executed lease. That is because it is so easy for a lease to be changed while it is being signed. Or, the way the lease was signed may affect its enforceability.

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Revising the Security Deposit Claim
by Harry Anthony Heist, Attorney at Law

The tenant vacated, and you did an inspection and made the claim on the security deposit by certified mail as the law provides. Your maintenance staff then discovers some serious problems that you missed in your inspection, including fleas, bad touch up paint by the tenant and a hidden rug burn. Can you go back and send out a revised claim? Have you waived your rights to making an additional claim?. This situation will arise at some point when managing property, and timing is crucial. Simply put, if you are outside the 30 day window as required by Florida law, you will not be able to claim the damages from the security deposit. While this is the bad news, the good news if that the tenant still may owe you the money, and you may not have waived your rights to go after the tenant for this additional money.

Florida law provides that you have 30 days from the date that the tenant vacates the premises to send out the Notice of intention to Impose Claim on Security Deposit; for the purposes of this article, we will just call it the Notice. Years ago, Florida law only allowed 15 days to make a claim, but now there is some more time to examine the premises and make a decision as to what is owed. Keep in mind that we are dealing with making a claim against a security deposit, not figuring out what a tenant will or may ultimately owe you.

When should you send out the claim letter?

Waiting until the 29th day is always risky, as you open yourself up to a tenant claiming they left on one day and you claiming they left on another. A dispute subsequently arises which could result in you having to return the entire security deposit to the tenant, if a judge felt you were outside the 30 day window. We never want this to happen, so you should not wait until the 30 days are about to expire.

Get in the unit as soon as possible!

It is important that as soon as you get possession from the tenant, be it from surrender, eviction or abandonment, you get into the unit quickly. The purpose of this is not to make the claim as soon as possible, but to document the condition of the unit quickly, so a tenant does not later say that the property was damaged by someone else AFTER they turned over possession to you. A property could indeed be damaged by someone breaking into that unit some time after your tenant has vacated. If you attempt to charge the tenant for this damage, he may object and successfully convince a judge that the damage occurred after he vacated. Should you make the claim on the security deposit right away? No. If you are certain that you are going to make a claim, this is the time to pause and carefully begin documenting the damages and comparing the condition reflected in the move-in inspection report that hopefully you have.

You sent out the claim letter but discover more damages

Some property damage is not immediately evident at the time of the tenant moves out. Tenants sometimes successfully hide damages, paint over poorly filled holes in walls, mask odors with spray deodorants, or the unit may all of a sudden be infested with fleas two weeks after the tenant moves out! A unit that is heavily cooled by air conditioning may not reveal the true smell of the years of cigarette smoking or urine damage to a carpet. Some damages are simply missed in error by the landlord and later caught by the maintenance technician, who is more experienced in these matters and finds tenant damage at a later time. Occasionally, you may be managing the property for an owner who decides to find damages that you did not find.

You are within the 30 day window

If you have sent out the Notice already but are still within your 30 day window, you can simply prepare another one and send it out again to the tenant in the same fashion as the first Notice, being sure to again comply with the certified mail requirement. The tenant will of course be upset about the bad news, but you are within your rights to do this. Remember that the tenant does not have to receive the notice within 30 days; you simply must send the notice within 30 days.

You are outside the 30 day window

If you are outside the 30 day window and do not fall under any exception to the requirement to send the notice out within the 30 days, you will not be able to claim anything more from the security deposit than referenced in the initial Notice. The tenant should receive the "balance due tenant" indicated in the initial Notice. Even if the tenant owes you the money, the tenant should receive this balance back.

Does the tenant owe you the money?

The tenant will still owe you the money, but you will not be able to retain it from the security deposit. You will be able to send it to collections, try to get the tenant to pay or sue the tenant if you wish. The main issue is that the funds you are holding cannot be used for the amounts owed.

Suppose the original amount and the revised amount owed both exceed the security deposit?

Let us assume you are holding a $1000 security deposit and originally claimed damages of $1200 within the 30 day period. After the 30 day period expires, you discover another $500 in damages. You may feel that there is a need to send a revised Notice, but this is not necessary, and besides, it is too late to send an amended Notice. You already have claimed the entire security deposit, so this intent has already been established. Remember, a Notice is not a bill or a final accounting you are sending the tenant. It is simply a notice stating how much you will be taking from the security deposit as required by law. However, to cite the above example, if you discover more damages within the 30 day period, it is good practice to send an amended Notice, since some of the items claimed in your initial Notice may not hold up in court, if a dispute leads to deposit litigation.

Avoiding a possible waiver issue

There is a possibility of a tenant claiming that since you sent the Notice of Intention to impose Claim with a particular amount stated, you are now stuck with it and cannot now charge the tenant any more. For example, if a tenant breaks a lease owing you one month's rent and you make a claim for this one month's rent, more months of rent may become due if the unit remains vacant. You certainly do not want the tenant to think that just because one month was subtracted from the security deposit, this is all the tenant is liable to you for. The standard notice wording as stated in Florida Statute 83.49 does not address this, so we recommend that the following wording be placed on the bottom of your Notice just to be extra safe:

This notice does not waive or limit any of landlord's rights to damages or amounts due which may exceed the security deposit or the amounts listed on this form.

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Accepting Rent and The Seven Day Notice
by Harry Anthony Heist, Attorney at Law

The most common lease noncompliance is of course nonpayment of rent. Most landlords are quite familiar with this problem and know to serve a Three Day Notice in accordance with the law. If the rent is not paid within the three day time period excluding Saturdays, Sundays and legal holidays, an eviction can be filed, and the tenant most likely will be evicted. Life though is just not that simple. Many tenants engage in other non-rent noncompliances, such as having the unauthorized occupant, unauthorized pet, excessive noise disturbances or simply having a grill on the balcony which violates the fire code. There are many noncompliances that the tenant will engage in, necessitating the landlord to serve the Seven Day Notice to Cure. This notice gives the tenant seven days to either start doing something he is supposed to do, or stop doing something he is not supposed to be doing, or else the landlord may have a right to terminate the tenancy and begin an eviction if the tenant fails to vacate. The situation becomes complicated when the tenant is out of compliance with a lease provision unrelated to rent AND rent becomes due in the meantime. Timing of the notices and the actions of the landlord can determine whether or not the notices will remain valid and support an eviction.

The Continuing Noncompliance

Examples of noncompliances that would be considered "continuing in nature" include an unauthorized occupant or unauthorized pet. Here we have knowledge that the tenant is in noncompliance, and the tenant is served a Seven Day Notice to Cure. Let us assume the tenant is served this notice on the 27th of May and on June 1, rent becomes due. The landlord goes out to the property on June 5th, presumably to serve a Three Day Notice, as no rent has been received for June. She sees the unauthorized occupant's vehicle, serves the Three Day Notice and leaves. The tenant then comes into the landlord's office and hands the landlord the rent check. The landlord takes the check and deposits the money. Five days later, which is 13 days after the landlord has served the Seven Day Notice to Cure for the unauthorized occupant, the landlord again sees the occupant's truck in the driveway. It is clear that the tenant has not cured the noncompliance. Can the landlord terminate the tenancy? Quite possibly not. Florida law provides that if rent is accepted with knowledge of a noncompliance, the right to terminate the tenancy is waived, but not for any subsequent or continuing noncompliance. Under the above fact pattern, some judges will interpret the statute to mean that the landlord has waived its right to terminate until July. Some judges may also rule that a permanent waiver has occurred, although this does not seem to be a correct reading of the statute.

Should a landlord accept rent when there is a continuing noncompliance?

From the preceding example, it appears clear that the landlord should NOT accept rent or serve any type of demand for rent, i.e., the Three Day Notice , if a Seven Day Notice to Cure has already been served and the noncompliance has not been remedied.

Noncompliances which are not of a continuing nature

Unlike the unauthorized pet or occupant situation that is most likely a continuing noncompliance, the landlord will encounter situations in which the tenant is in noncompliance and then cures the noncompliance, only to go into noncompliance at a later time. Examples might include a gas grill on the balcony or the tenant who sporadically plays very loud music. The Fire Marshall may prohibit gas grills, or it may be in violation of the lease or condominium rules and regulations. The landlord serves the tenant with a Seven Day Notice of Noncompliance with Opportunity to Cure, and the tenant removes the grill from the balcony, hopefully not into the unit where it can be a fire hazard. Rent becomes due, a Three Day Notice is served, and the landlord accepts rent. Two weeks later, the grill reappears. Since the noncompliance was cured at the time the Three Day notice was served and rent accepted, the landlord's acceptance of rent should NOT jeopardize the ability to terminate the tenancy due to the reappearing grill.

Is a Noncompliance sporadic or continuing?

Sometimes we hear landlords say that they thought the tenant had cured the noncompliance because the tenant had received the notice. Did the landlord actually check to see if it was cured, or did the landlord just assume it was cured? Did the landlord make sure the grill was removed from the balcony? Once a Seven Day Notice of Noncompliance is served, it is incumbent on the landlord to investigate to see if the problem was solved before serving the Three Day Notice. If not, it is possible what was assumed to be a sporadic or easily cured noncompliance was not cured.

The tenancy has been terminated by a Seven Day Notice to Terminate

If the tenant fails to cure a noncompliance, the landlord should contact his attorney and seek guidance on whether the tenancy can in fact be terminated. If so, and at last resort, the tenant is served a Seven Day Notice of Termination. This is a very powerful notice boldly proclaiming that tenancy has been terminated. A Seven Day Notice to Cure is a warning, while a Seven Day Notice to Terminate says "get out within 7 days". But wait. Rent is now due, and the landlord needs the money. The tenant drops off the rent check, and the owner who desperately needs the money deposits the check. Yes. You are correct. The Seven Day Notice of Termination is now null and void. The owner now cannot terminate the tenancy because he has accepted the rent.

Conclusion

Your best bet is always to have your attorney walk you through the Seven Day Notice procedure and guide you along the way. Always remember that if your have served a Seven Day Notice to Cure or a Seven Day Notice to Terminate, you may or may not be able to accept rent. The next time the situation arises, just remember the slogan, "you cannot have your cake and eat it to", when you get the urge to accept rent after a seven Day Notice has been served. If you have an office with employees, allow tenants to direct deposit or pay by credit card, be sure you have a mechanism in place to prevent a rent check from being inadvertently accepted from the tenant in noncompliance.

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One Tenant Vacating
by David R. Weisse, Attorney at Law

When a lease is signed by two or more tenants, what happens at the end of the lease when one tenant gives notice to the landlord that he or she will be vacating, and in fact does subsequently vacate? What if no notice is provided by one of the original tenants, but it appears that a particular tenant has clearly abandoned the premises some time during the original lease period? In either case, is the departing tenant still responsible for lease obligations beyond the original lease term? Is the landlord able to enter into a new lease with the remaining tenant(s) and/or replacement tenant(s)? What happens to the security deposit?

The Landlord/Tenant Act neither contains any specific provisions governing a change in parties after the original lease period, nor does the statute specifically indicate that the security deposit "stays with the property".

If a month-to-month tenancy is created after the lease expiration date, a good argument can be made that all the original tenants are still financially responsible for the ongoing tenancy. However, some judges may not hold this view, particularly if the departing tenant gave written notice of vacating, and in fact vacated, prior to the original lease expiring. If a new lease is entered into with the remaining tenant(s) and/or possibly even additional tenant(s), then a change of parties from the original lease has occurred, and this is not a true "renewal" lease. If one of the original tenants has apparently vacated for good but never provided any notice, we advise landlords to be very careful before adding new parties to a subsequent lease. The landlord should be very clear that the original tenant is gone for good, and that none of that tenant's personal property is still on the premises.

At the point where the landlord contemplates a new lease involving a change of parties from the original lease, we recommend that a new security deposit be collected from the tenant(s) on the new lease, and that an accounting take place on the original security deposit consistent with Florida Statute 83.49, with any refund check made payable to all original tenants. If no new lease has been signed, but one or more of the departing tenant(s) from the original lease demand a return of the security deposit, we recommend trying to collect a new deposit from the remaining tenant(s) and making the accounting as described above. If the remaining tenant(s) are unwilling or unable to put up a new deposit, then we recommend non-renewing the existing month-to-month tenancy, and to then make an accounting for the deposit by following the provisions of Florida Statute 83.49 with regard to all tenants on the original lease.

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Mandatory Inclusionary Housing Ordinance Rejected
by Jeff Rogo, Government Affairs Director, Florida Apartment Association

On October 7, the Pinellas County Board of County Commissioners, by a 4-1 vote, rejected a proposed inclusionary housing ordinance. At the same time, the commissioners committed to identifying other methods which will encourage the development of affordable, workforce housing.

Bay Area Apartment Association board member Mike Davis of AIMCO expressed the reasons why the ordinance was opposed by multi-family owners and managers. His concerns were supported by representatives of the Pinellas Realtor Organization, Tampa Bay Builders Association, and Tampa Bay Regional Coalition.

The ordinance would have mandated the developers of new apartment communities and single-family housing communities to incorporate a percentage of affordable units. The proposed ordinance would have also affected any apartment community planning a major renovation. Apartment owners and managers would have been required to verify resident income on an annual basis to confirm their eligibility for the affordable unit.

The majority of the commission voted against the proposed ordinance for three key reasons:

1.) There are many, vacant, affordable apartments and homes on the market today that need to be "absorbed".

2.) It would appear that the great majority of Pinellas County's 24 cities would have "opted out" of the program. Several have voluntary programs with incentives for housing developers.

3.) The County Attorney was unsure if the ordinance would be upheld if challenged in court.

On behalf of the Bay Area Apartment Association, Government Affairs Director Jeff Rogo pledged to the commissioners that the apartment industry would continue to work with the county to encourage development of affordable, workforce housing.

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Who is the Landlord on the Lease
by Harry A. Heist, Attorney at Law

What is a landlord? Who is the landlord? Well, if you own a piece of property and rent it out, you obviously are a landlord. Suppose though you are managing property for another? As far as the tenant is concerned, you will be the landlord, as you are the person leasing the property to the tenant, but are you really the landlord, or are you just the agent of the landlord? While it may not seem to make any difference, it may to a judge. Recently we had a case dismissed by a judge who felt that the way the lease read rendered the cause of action defective, as the lease identified the real estate management company as the landlord, even though the identity of the owner was disclosed in a different section of the lease..

The law. Florida statutes 83.43(3) defines a landlord as the "owner or lessor of a dwelling unit." This would encompass the property owner, a property manager, if the property manager was the lessor, and could even be the tenant, if the tenant was subleasing to another tenant. A tenant can become a landlord by virtue of subleasing to another.

The lease

The beginning of the lease agreement usually is the place where the landlord and the tenant are listed. If you are in fact the owner of the home, your name would be listed as the landlord, and it should be the name of the entity that owns the home. If the home is owned in a corporate name, a trust, partnership, estate or other entity, this should be listed as the landlord. The person signing the lease as the landlord will be a natural person or the person authorized to act for the entity. If you are not the owner of the home, but are acting as an agent for the homeowner, as would be the case in most property management settings, it is crucial that there is no confusion as to whom the landlord is.

A problem could occur when a property manager decides to use the name of his property management company as the "landlord", rather than placing the owner's name on the lease as the landlord. You might ask why the property manager would put their company's name as the landlord rather than the owner. To some, is seems like the easy way to do it. Some property owners do not want the tenant to know who they are for whatever reason, so this accomplishes that goal. Other property managers like to do this, as the tenant will know to make the check out to the property management company. Some property managers want to send a delinquent account to collections and then be the contact person for the collection agency to call in the event the tenant wishes to pay a debt. Some even do this so that when a tenant vacates and owes money, the money gets paid to the property management company without the owner ever finding out. This is highly illegal, but it happens.

Do you want to be the landlord?

Unless you are the owner of the property, you do not want to be considered the "landlord". If you are the "landlord", you are responsible to the tenant for all obligations created by the lease agreement and by Florida law. The tenant can more easily hold you responsible in the event there is a dispute; the tenant can even sue you, as you are the "landlord". You are not getting paid enough managing the property to even want to stand in the shoes of the landlord.

Who are you?

If you are managing the property for the owner, you are the owner's agent. The owner is the landlord, and you are the agent of the landlord. On the lease, if you are signing the lease on behalf of the property owner, you simply should state that the lease is between John Smith and Mary Smith, Tenant(s) and Bill Jones and Sally Jones, Landlord, through its agent XYZ Management Company. This way, you clearly state who the owner is and who you are as agent. While it is not necessary to state your company name in the beginning, there is no harm in doing so. If you are not signing the lease, the lease will state John Smith and Mary Smith, Tenant(s) and Bill Jones and Sally Jones, Landlord

The law of undisclosed principal

It is important to understand a longstanding rule of law which states that if an agent (the property manager) acts on behalf of an undisclosed principal (the owner), the agent could end up standing in the shoes of the owner in the event of a lawsuit. While it should seem obvious to the tenant that the property manager does not own the property, if the property manager is stated on the lease as a landlord, collects the security deposit and rent, and performs all the normal functions of an owner, many courts will hold the property management company liable as if they were the owner of the property in the event of litigation. Never hide your owner. If an owner wants you to hide their identity, you might want to reconsider taking such an account.

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Fire Dangers at Move In
by Harry A. Heist, Attorney at Law

The electricity is off in the house or apartment, and the new tenant is to have it turned on in his name according to the lease. While moving in, boxes are placed on the counter and electric stove top. Children love to play with knobs of course, and the tenant's child turns the stove burner on. No harm done. The electricity is off. The next afternoon, the tenant has the electric put in her name, and it is turned on. You guessed it. The unit burns to the ground. Could this have been avoided by the actions of the property manager? To a large extent, yes.

Electric Issues

Ideally, a home can just sit there vacant with the electricity off. Due to the need for air conditioning to continue to run to avoid mold growth or to keep a pool pump going, this is impractical at times. It is important that the property manager coordinates the electric issues along with the tenant to avoid confusion, and to avoid situations in which the tenants will stay in a unit where the electricity is on in the owner's name and fail to put it in their name. Failing to follow up to see if in fact the electricity has been put in the tenant's name is a recipe for disaster, and you will find that out 2 months after the tenant takes possession when the owner in Minnesota gets a $400.00 electric bill.

Should the electricity be shut off before occupancy?

If the electricity is shut off or the order placed for shut off is done prior to the tenant's occupancy, you run the risk that the tenant will begin moving into the unit while there is no electric service on. As a force of habit, the tenant will switch on light switches or turn on knobs and realize that the electricity is off. The problem is that the switch or knob is not always turned back to the off position. Frequently, children will play with the stove knobs, and since the electric is off, it will go unnoticed if the knob is left in the "on" position. Items such as boxes and fragile goods are often placed on the countertop and stove top during the move-in process, as the furniture has not arrived, and the counter is the only handy or convenient place to put the items. Upon the tenant having the electricity turned on, disastrous results can occur.

Requiring electric to be on before keys are given to tenant

One possible way to avoid the fire problem is to withhold the keys until such time as the tenant has paid the deposit and the electricity is now on in the tenant's name. This is a sure way to avoid an accidental fire, but could be met with resistance by the tenant who may be insistent upon gaining access immediately. We would not want this strategy to be construed as any type of breach of contract by the landlord or allow a tenant to say that possession was not granted. If you choose this route, we recommend that the tenant agrees to this in writing.

Precautionary steps

If the possession of the unit will be granted to the tenant without the requirement that the electricity is turned on or a confirmation thereof, the knobs should be removed and placed in a cabinet out of the reach of children. If possible, place tape over the knobs with a warning that the electric is not on and items should not be placed on the stovetop. Warnings should always be given to the tenant regarding electrical safety with instructions not to place items on the stove. We recommend that you prepare a warning notice right away, and make this a part of your move-in procedures. When the keys are given to the tenant, the warning should be given as well.

Liability issues.

When managing property, if the property manager orders the electricity to be turned on, as is often the case after a tenant vacates or a unit has been vacant, it is crucial that an inspection is done first to assure that the stove is in fact off and nothing is placed on the stove. Often when units are being rehabbed between tenants, workers will put a tarp on the counter or otherwise use the counter and stovetop for flammable items. It is bad enough that a fire can be caused by a tenant who possibly did not know the dangers. Now that you know, you have a responsibility to make sure you are never the one at fault.

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Law Offices of Heist, Weisse & Wolk, P.A.
Phone: 1-800-253-8428 Fax: 1-800-367-9038

Serving Florida's Property Managers with main office in Fort Myers Beach. Available by appointment in Orlando and Clearwater


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