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.

 

(Back to Top)

 

 

 

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.

 

(Back to Top)

 

 

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.

 

(Back to Top)

 

 

Housing for Older Persons
by Cathy L. Lucrezi, Attorney at Law

 

HOUSING FOR OLDER PERSONS

Although Fair Housing laws prohibit discrimination on the basis of familial status, they also allow for housing specifically designed to meet the needs of senior citizens. If the rental unit meets the definition of "housing for older persons", the landlord is exempt from the law's familial status requirements.

Types of HOP

There are three types of HOP:

1. The complex or community is part of a government program specifically designed for and occupied by elderly persons;

2.The complex or community is occupied solely by persons who are 62 or older; or,

3. There is at least one person who is 55 or older in at least 80 percent of the occupied units in the complex or community, and the landlord adheres to a policy that demonstrates intent to house persons who are 55 or older.

Of the three, a property manager is most likely to encounter the third one "“ the 55+ category. If the complex or housing community satisfies the legal definition housing for older persons, it can legally exclude families with children.

Is your rental unit part of HOP 55 ?

Fitting the definition is not easy. To qualify, the housing provider must keep excellent records showing that each household in the complex has at least one person who is over the age of 55. The "census" records must be regularly updated and maintained in a format that can be easily reviewed by HUD.

The housing provider must establish a written policy showing that it is HOP 55 . Furthermore, the housing provider must show he follows that written policy. It has to be put into practice, not selectively enforced.

All of the advertising for the property should state that the place is housing for older persons. Saying "adults only" is bad. Saying "a 55 community" or "housing for 55 " is ok.

Effects of the exemption

Once the community fits the definition, the community can refuse to rent to children. It can insist that all members of the household be over the age of 55 even though the statute allows a bit of a cushion. If the housing is truly HOP 55 , the landlord can impose restrictions on children playing in the community that could never be done in other housing.

The HOP 55 exception is very narrow. It lets the landlord "off the hook" in regards to families with children, but with no other protected class. The landlord is still obligated to offer housing without regard to a tenant's race, color, religion, sex, national origin, and handicap.

 

(Back to Top)

 

 

Foreclosures Revisited
by Harry A. Heist and David R. Weisse, Attorneys at Law

 

Your tenant received papers either in the mail or served by a process server showing that the property owner is being foreclosed on. What do you do now? Our office gets this question every single day and will try to answer most of the common questions and answers in one place.

Why is the tenant served with foreclosure papers?

It is standard practice for the lawyer who is handling a foreclosure to name the tenant as a defendant in the lawsuit and to serve the tenant with a copy of the summons and complaint. This is done so that at the end of the foreclosure, the new owner of the property is able to take possession quickly. Since the tenant has a property right when she enters into a lease, this right is affected by the foreclosure and can be extinguished by the foreclosure.

The foreclosure is based on the owner's mortgage or a lien of some sort, such as for failure to pay condo maintenance fees. It almost never involves any money owed by the tenant to the owner. Even though the tenant was served with a copy of the foreclosure lawsuit, it does not mean that the plaintiff is trying to make the tenant responsible for the debt. The tenant is not responsible for the debt of the owner and the foreclosure action will not affect the tenant's credit.

Does the foreclosure affect the lease?

The simple filing of the foreclosure lawsuit does not mean the lease is ended. The owner still fully owns the property until it is sold at a foreclosure sale. Both the landlord and the tenant remain obligated to perform the lease. The lease will stay in effect until a foreclosure judgment is entered by a judge and the sale occurs. That can be two months after the tenant received the foreclosure lawsuit or two years. There is absolutely no way of knowing how long it will take.

The tenant's obligation to pay rent continues even though there is a foreclosure lawsuit. Thus, if the tenant fails to pay rent, you should serve a three day notice. The tenant is not necessarily entitled to break the lease due to the foreclosure, but the tenant often will. In some cases, a judge may allow the tenant to break the lease based on the theory that the tenant"˜s peaceful enjoyment of the premises has been seriously compromised.

Can I be sued as a property manager?

There is nothing in Florida law that makes you liable to a tenant in the event the owner of the property is foreclosed upon. An argument can be made though, that if you knew the property owner was on the verge of foreclosure or actually in foreclosure at the time of lease signing, you possibly should have disclosed this to the tenant. There is no law that requires disclosure to the tenant. We strongly recommend you do not manage a property if you know that the owner is in financial difficulty. Would you rent a home if you thought it may become uninhabitable due to a collapsing roof? Of course not, and if you did, you could potentially be held liable. In a foreclosure situation, if you know the owner is near or in foreclosure, you now have knowledge that possibly this tenant may not be able to stay for the full term of the lease.

Can I transfer the tenant to another home?

Unless the owner gives you express written permission to find the tenant another home, you cannot do so. Your fiduciary duty is to the property owner, and helping the tenant without the owner's permission is a complete violation of that duty. Resist the temptation to feel sorry for the tenant or take the tenant's side. Remember that this property owner could potentially get out of the foreclosure, so just because the owner is in a foreclosure now does NOT mean that the property will eventually be foreclosed on. The foreclosure may be dismissed, the owner may work out a restructuring with the bank, or the property may be sold in a short sale. You never can tell at the beginning of a foreclosure what will eventually occur.

What should I say to the tenant?

Simply tell the tenant that you cannot give any legal advice. Do not try to explain anything to the tenant. The tenant has the court paperwork to read and can consider consulting with an attorney. It is tempting to help the tenant figure out what to do with the foreclosure papers. Do not advise him concerning what he should do in response to the lawsuit. You are not an attorney and should avoid the quicksand of offering "a bit of advice". If the tenant wants advice, he will need to consult with an attorney on his own.

What do I do with the Security Deposit?

The security deposit stays in your escrow account during the foreclosure. You cannot give this deposit to the tenant unless the owner specifically authorizes you to do this in writing. Some owners will authorize you to do this. If the tenant vacates during the foreclosure, process the claim on the security deposit as you normally would in accordance with Florida Statute 83.49. If the tenant is entitled to a return of all or part of the money, send it, if the owner is entitled to a return of all or part of the money, send it to the owner. Nothing changes. Process the damage claim as normal.

I am terminating Management or I have been fired "“ What do I do with the Security Deposit?

If you and the owner are severing the management relationship, either by you being terminated by the owner, or you terminating the management agreement, inevitably the issues of the security deposit and any advance rent held in your escrow account will become an problem. Often the owner will demand that you send this money to him. You simply cannot UNLESS the tenant agrees to this in writing, AND it is sent to a Florida bank account and held in the usual fashion for security deposits, last month's rent or any other escrow presumably belonging to the tenant. If the owner and the tenant cannot agree to this, DO NOT send the money to the owner or the tenant. You now have an escrow dispute on your hands and may need to have FREC make the decision for you.

Can I still collect rent during the foreclosure?

Until such time as you cease managing the property, either by getting terminated by the owner or if you terminate the management agreement, you must continue to collect rent, serve your Three day Notices if you do not receive the rent, and perform all your normal tasks and functions as a property manager. The fact that the owner is in foreclosure has no effect on the duties and responsibilities outlined in your management agreement.

Can the tenant put the rent into escrow?

Although there is no legal authority for the tenant to place rent into the court registry in the foreclosure action, some judges will allow this upon motion and order by the tenant's attorney. There is nothing that allows a tenant to place the rent money in "escrow" into her own bank account or her attorney's account. A tenant will often say she is doing this, but most of the time, it is not true.

What should I do with the rent?

Continue to remit the rent collected to the property owner until such time as you are ordered by a court to stop, or your management ceases. If you do not receive the rent, get direction immediately in writing from the property owner. The owner may want to file an eviction, offer the tenant out of the lease or just walk away from the whole situation. You must communicate in writing with the owner. Never take it upon yourself to hold the rent money because you feel the owner does not deserve it or you somehow feel the owner is not entitled to it.

If the tenant does not pay rent can I evict?

An eviction can be filed if the tenant does not pay rent. Never send us an eviction if you know that the property is in foreclosure without telling us. We take these evictions on a case by case basis.

Does the tenant have to move during or at then end of the foreclosure?

Although the lease will end as of the day the foreclosure judgment is entered, the tenant will be able to occupy the premises until the day the property is sold at a foreclosure sale. The new owner will be entitled to get a writ of possession on the eleventh day after the sale. Once the new owner gets a writ of possession, this must be served and executed just like a regular writ of possession in an eviction action.

As mentioned previously, many things can happen between the day the foreclosure papers are served to the tenant and the foreclosure sale date if it actually occurs.

Will the tenant be evicted?

In most cases, at the end of the foreclosure, the attorney representing the bank will apply to the court for issuance of a writ of possession, and the tenant will be evicted.

Should I continue managing the property during the foreclosure?

Your property management agreement should have a clause allowing you to cease management if you wish in the event there is a foreclosure. If not, you must carefully look at your management agreement and see if there is any legal way for you to terminate the agreement. We recommend that you include a clause in all future management agreements allowing you to cease management immediately if the owner goes into foreclosure

Can the bank change the locks?

A bank cannot legally change the locks on a home before the foreclosure is completed if there is a tenant in the property, but they sometimes will.

Could this all have been avoided?

You need to investigate your owner before taking on the management of a property. A property manager who finds out upon taking over management that the owner is already in foreclosure or has a lis pendens filed simply has not done her homework. The property manager should always have the owner sign a solvency statement, and the court records in the county in which the property is located should be checked for the filing of a lis pendens or a foreclosure action.

Is there more?

All kinds of situations can arise in a foreclosure so we recommend that you always call your attorney for direction. Some property managers have ways of dealing with foreclosures that are illegal and could subject them to litigation or FREC disciplinary action. For many property managers, this will be the first foreclosure they are dealing with. Questions? Call us at 1 800 253 8428 but read this article first!!

 

(Back to Top)

 

 

Partial Rent Acceptance
by Harry A. Heist, Attorney at Law

 

In the current economic situation, landlords are beginning to get desperate for the rent. Any rent. Tenants are in financial hardships. and rather than choosing not to pay rent at all, many will tender a partial payment of rent with possibly a promise to pay the rest at a later date. Many landlords faced with this scenario will accept the partial payment and may or may not receive the rest of the rent at a later date. Other tenants will pay partial rent for reasons that have nothing to do with their ability to pay, but rather due to some complaint they have concerning the premises that has not been rectified by the landlord. This form of self-help on the part of the tenant manifests itself in the tenant sending the landlord a partial payment, possibly accompanied by a letter indicating why the payment is partial and demanding some sort of repair. In either case, the landlord is forced to make a choice to accept the partial rent or return the rent.

The Financial Hardship

Most commonly, the partial rent payment tender is due to a financial hardship the tenant is suffering. The tenant feels that by paying some rent to the landlord, the landlord will be appeased enough to hold off on filing an eviction action. This partial payment may or may not be accompanied by an explanation and a promise to pay the rest of the money at a future set date. Is it legal to accept a partial payment? Absolutely. Can you simply accept the partial payment and then give the tenant a Three Day Notice for nonpayment of the balance? Yes, in most counties. The more important question is whether you should accept a partial payment due to other ramifications with the potential to cause future legal problems.

The "lone" partial payment

There are usually two types of partial payments given in the financial hardship setting. One is the payment accompanied by a letter promising the rest of the money at a later fixed date, and the other is what we call the "lone" partial payment, which is simply the check or money order in the envelope for less than the full amount of rent. If you accept the lone partial payment, you can and should serve the tenant with a Three Day Notice for the balance of the rent in most counties. If the balance is not received by the expiration date, you can then file an eviction against the tenant.

The partial payment and "letter"

If the partial payment is tendered to you and is accompanied by a letter in which the tenant states when the next payment will be made to you on the balance, it is a bit more risky to accept the payment. While no real contract between you and the tenant is created by such a letter or promise to pay, an inference can be made that by accepting the partial payment, you are accepting it under the terms laid out by the tenant. In other words, by taking the money, you have agreed to the payment arrangements. Unless you are agreeing to the proposed payment arrangement, we do not recommend accepting the partial payment by the tenant in this situation.

The law and the partial payment

Florida law does not address the legal ramifications of accepting a partial payment and then giving a Three Day Notice to the tenant and filing an eviction. Most Florida judges have no problem whatsoever with you accepting a partial, serving the notice and proceeding as usual. Some, and fortunately very few, judges feel that by accepting a partial payment form the tenant, you waive your right to file an eviction in the month that the payment was made. Always check with your attorney to see if the judge or judges in your county have this view on partial payments. You would not want to be in a position where accepting a partial payment could result in tying your hands for the rest of the month.

The Waiver issue

One of the big issues in Florida law is the "waiver issue". Simply put, this means that by engaging in a course of action contrary to the terms of your lease, you have created a new payment method, and that you have possibly waived your rights to enforce the lease as it is written. Your course of conduct in allowing partial payments may be used by the tenant to show that since partial payments were made a few times, this has now become a permissible way to make payment, and you as the landlord are "stuck" with is. The waiver argument can be compelling in court, and judges are often unsympathetic to the landlord who does not enforce the lease terms on multiple occasions and then suddenly decides that partial payments will not be accepted. The landlord may have "waived their rights" and are then "estopped" from enforcing the lease terms. Many leases have clauses which clearly provide that the landlord's deviation from the lease terms will not create a waiver, but these clauses can become meaningless if the tenant can show that the landlord has a pattern of not enforcing the lease.

Should you accept partial payments at all?

In a financial hardship situation, this is purely a business decision. Refuse them, and possibly you will get nothing, the tenant will skip out on you, or you will have to evict. Accept them, and live with the consequences.

The "Non-financial Hardship" partial rent payment

While non-financial hardship partial rent payments are often financial hardship cases in disguise, there are many times when a tenant feels that for some reason he should not have to pay the full amount of rent. There may be completely legitimate reasons, and the reasons can be many. The tenant has a huge water bill and feels that there is a leak. The a/c has been out for days. The electric bill is excessive, possibly due to an a/c problem. A toilet is broken. A stove is broken. The list can be endless.

Can a tenant withhold rent?

The short answer is yes, under limited circumstances. This article will not address how, why and the mechanics of a proper tenant rent withholding, but rather what to do when the tenant simply takes it upon himself to deduct an amount from the rent.

The tenant has been making complaints

Although every situation is unique, you may deal with the tenant making complaints about an alleged problem that is not addressed for whatever reason, and when the rent check arrives, it is a partial payment of rent. In a situation such as this, your acceptance of a partial rent can be governed by the aforementioned information in this article, but the chance that the rest of the rent will be paid later in the month is diminished greatly, as the tenant feels that the value of the rental has been diminished and has taken matters into his own hands. We recommend that you do not accept this partial rent payment, and you address the tenant's issues immediately, asking your attorney for an opinion as to whether the tenant has a right to withhold rent, or that allowing a reduced rent is the proper route to take. Remember that if you allow a tenant to pay you a partial rent payment just one time because she is not satisfied with something in the unit, you open yourself up to the tenant continuing to make partial rent payments in the months that follow under similar pretenses.

The tenant gives you complaint letter along with the partial payment

Along with the partial rent payment, the tenant provides you with a letter stating why the rent is only being partially paid and outlines the complaints the tenant may have, or even attaches bills for out of pocket expenses the tenant may have incurred in repairing something. This is probably the most dangerous time to ever accept a partial rent payment. By accepting the partial payment along with the tenant's letter, a good argument can be made that you have agreed to accept the amount paid by the tenant as full settlement of the outstanding rent balance. By accepting the money, you are arguably accepting it in accordance with the tenant's terms, and you have also potentially opened the door to the tenant doing future repairs. In such cases we recommend that you not accept the partial rent payment and return it immediately. Again, if there are items that need to be addressed, they certainly should be to avoid later problems or litigation.

 

(Back to Top)

 

 

When Tenants Deny Access
by Harry A. Heist, Attorney at Law

 

You are in the process of making your periodic inspections of units; you have given written notice and find out that your key does not work in the door. Apparently the tenant has changed the locks without your permission and has failed to give you the keys. In another situation, the tenant has called in and requested that a repair be made in the unit. You send your maintenance staff over, and the tenant refuses to let your staff in to make a repair, saying it is not a convenient time. Your tenant requests a repair to be made, you call to schedule the repair, and the tenant states that you can only send the maintenance staff in if the tenant is home, which happens to be after 7:00 p.m. Do these scenarios happen? You bet. This article will address the situation in which the tenant is playing the "denial of access game"

The law on access

Florida law specifically addresses access rights by the landlord, and your lease agreement may further address the issue.

83.53 Landlord's access to dwelling unit.--
(1) The tenant shall not unreasonably withhold consent to the landlord to enter the dwelling unit from time to time in order to inspect the premises; make necessary or agreed repairs, decorations, alterations, or improvements; supply agreed services; or exhibit the dwelling unit to prospective or actual purchasers, mortgagees, tenants, workers, or contractors.
(2) The landlord may enter the dwelling unit at any time for the protection or preservation of the premises. The landlord may enter the dwelling unit upon reasonable notice to the tenant and at a reasonable time for the purpose of repair of the premises. "Reasonable notice" for the purpose of repair is notice given at least 12 hours prior to the entry, and reasonable time for the purpose of repair shall be between the hours of 7:30 a.m. and 8:00 p.m. The landlord may enter the dwelling unit when necessary for the further purposes set forth in subsection (1) under any of the following circumstances:
(a) With the consent of the tenant;
(b) In case of emergency;
(c) When the tenant unreasonably withholds consent; or
(d) If the tenant is absent from the premises for a period of time equal to one-half the time for periodic rental payments. If the rent is current and the tenant notifies the landlord of an intended absence, then the landlord may enter only with the consent of the tenant or for the protection or preservation of the premises.

The tenant lock change

If the tenant changes the locks on the premises, this may be in violation of the lease agreement, if there is a clause providing that the tenant is forbidden to change the locks. The tenant is not necessarily in violation of Florida law though, unless he fails to deny you access by virtue of this lock change. If it is determined that the tenant has changed the locks and is in violation of the lease, he must be served a Seven Day Notice of Noncompliance with Opportunity to Cure. The unauthorized tenant lock change really is the easy case and does not pose too many problems if the tenant complies and gives you a key. There are many reasons why a tenant may have changed the locks, and as long as the landlord has access, this is usually not a real problem.

The Denial of Access "Game"

If your tenant has requested a repair and then denies you or your maintenance staff access, or makes it unreasonably difficult or impossible to make repairs by telling you that she must be present, or requiring you to come after business hours, you must jump into action. Tenants will use the request for repairs as a way to either set up a lease break scenario or put themselves into a rent withholding posture. If the tenant ends up breaking the lease or withholding the rent with an eviction ensuing, the tenant may try to claim that numerous requests for repairs went unmet. You may then need to establish to a judge that you were denied access. The tenant will have a wonderful story of how numerous repair calls were made, work orders were turned in, and no one was ever sent to make the repair. You will be flabbergasted and tell the judge that you made several attempts, and eventually gave up as the tenant was making it nearly impossible to get the repairs accomplished. Now you are at the mercy of the judge to either believe you or the tenant, who may be able to lie more convincingly than you can tell the truth. This is bad position to be in.

Repair requests and strategy

The moment a repair request is made by the tenant, it should be dealt with quickly. Can you simply go to a unit and make a repair after a phone call from the tenant? Yes, but it is a bit risky if the tenant did not expect you to come when you did, and you and your maintenance staff can be accused of theft or trespass when the tenant is surprised. If you go to the unit without any notice and the tenant is home, the tenant may deny you access, and it could be looked on as legitimate by a judge. Your lease or resident handbook should clearly lay out the procedures for repair requests, but as we know, many landlords fail to do so.

Once the repair request is made, if it is something that needs immediate attention, the tenant should be called and told that you or your maintenance staff will be out within a specific time window. The tenant may have a pet that needs to be secured, and it is just a matter of courtesy to coordinate something like this with the tenant. At this point in time, the tenant may begin to deny you access. If the tenant insists that she be home for the repair, this should be accommodated if possible. However, if the repair need is of an emergency nature, do the repair without accommodating this request, if need be. If the tenant demands that you come after normal business hours, this may be construed as a denial of access, especially if your resident handbook or lease clearly states the hours that repairs will be made. The resident may verbally agree to you coming to the premise for the repair, and upon arrival the tenant informs you that you cannot make the repair at that time. This is when you must jump into action.

The tenant refuses you access

If the tenant has already stated when you can or cannot come to make a repair, or has made it clear that your staff or repair person cannot come during regular business hours, you must immediately begin to document the steps you are taking to get the repair accomplished and the roadblocks that the tenant is putting up. All phone calls, work orders, responses and witnesses need to be documented for later use. If you go out to make the repair and the tenant flat out denies you access, you will preferably have a witness and should document this carefully. At the same time, inform the tenant when you will be back using a written notice. If the tenant refuses access again, attempt to have the tenant sign your notice proving that she refused the repair. You can also consider giving a Seven Day Notice of Noncompliance with Opportunity to Cure at this time based upon the tenant unreasonably denying access after have been provided notice of repair. Now it is time to try again. You have given the tenant a WRITTEN notice of when you will be returning to effectuate the repair; honor the notice. If the tenant again refuses you access, document everything all over again. If you don't expect cooperation by the tenant, always have a witness with you to show that the tenant has refused the repair. You see, you are now part of the game, and you want to give yourself the best chance to win this game if you end up in court. Everything must be done in writing, and every denial of access must be documented.

How far do you go?

You may wonder how may times you must try to make a repair and be denied; there is no firm number. Ask your attorney if you have enough proof that you could potentially present into court to prove your attempts and the tenant's actions. Remember that your word in court will not go too far in this game. Your clear documentation and persistence at attempting a repair, and the tenant's thwarting of same, will be the key to success in winning an eviction in which the rent was withheld, or attempting to collect rent from a tenant who has breached the lease by complaining about repairs and vacating prior to lease end.

 

(Back to Top)

 

 

Barking Dogs and Common Sense
by Michael Geo F. Davis, Attorney at Law

 

You are trying to take someone's home away because his dog barks too much. Said like that, it puts your case in perspective from a judge's viewpoint. You know that the barking dog is keeping the neighbors awake at 2:00 a.m., or that the unattended, whining dog on the balcony is interfering with the neighbors' quiet enjoyment of their apartments. You know that because you have the irate phone calls, the complaining notes and even a neighbor's letter refusing to renew. The means to turn what you know into a successful eviction is called evidence.

 

Do you want to win in court? Then you have to use your common sense.

Common sense:
A dog barking too much occasionally isn't that unreasonable.
If it isn't important enough to come to court, it's not that important.
If someone can't remember when it happened, it wasn't that serious.
If someone waits a week to do anything, it wasn't that bothersome.
If only one family is complaining, it may be an overreaction.

Witnesses. The earlier they're on board, the better. Speak to them personally. Tell them your lawyer said (always blame it on the lawyer) no witnesses, no case. Witnesses need to write it down "“ keep a log: date, time, duration, how loud. This also calms the angry neighbors, because now someone is doing something to address their problem. You have a plan.

Your staff and courtesy officer can testify to barking. Have them complete incident reports. You still need neighbors to testify. It's the neighbors whose quiet enjoyment of their apartments is being disturbed. Unless your staff is on-site at night, they can't help with night barking, because they must actually hear the barking. You need at least two witnesses, each from a different apartment. The more witnesses, the better your case will be. One witness alone is subject to a tie in testimony. He said, she said. You lose all ties.

Continuing. All notices should be within 90 days to show the barking is a continuing disturbance and not an infrequent lapse. Immediately serve a Seven Day Notice of Noncompliance with Opportunity to Cure (the 7-Day Cure). If the barking continues after the Notice expires, a termination notice can theoretically be served, but you need to seriously consider serving another 7-Day Cure notice. If the barking continues after the second cure notice expires, check with your witnesses. Did they keep logs? Will they testify? If yes, then contact your attorney about the Seven Day Notice of Noncompliance without Opportunity to Cure (the 7-Day to Terminate).

Attorney. Involve your attorney early. Have your attorney do all the 7-Day Notices. The Law Offices of Heist, Weisse & Davis, P.A. provides a free "Seven Day Wording Service" to all clients. Please do not hesitate to take advantage of this.

 

SOME PROOF THAT IS NECESSARY PRIOR TO TERMINATING THE TENANT FOR THE BARKING DOG

1. Witnesses who will testify in court that they heard the barking AFTER the 7-Day Cure expired and are prepared to show the judge proof (logs and/or incident reports). 2. Police reports where the police indicate in the reports that they heard the barking and it was unreasonably loud AFTER the 7-Day Cure expired. 3. Animal control reports in which the animal control warden indicates in the report that the dog was unattended and/or barking loudly AFTER the 7-Day Cure expired. 4. Tape recordings of the dog barking AFTER the 7-Day Cure expires. 5. Written admissions by the dog owner that the barking is unreasonable, i.e. an apology note from him. 6. Multiple 7-Day Cures to show that you gave several chances for the tenant to save his home. 7.Notices within a reasonably close span of time to show this was a not several, isolated incidents in an entire year. This barking was a continuing, serious, unreasonable disturbance of the neighbors. 8. Do not accept money after learning the dogs are still barking, if you are going to give a 7-Day Termination notice for that particular barking. Accepting money after learning of a noncompliance is a waiver of that noncompliance. Remember in accepting money the key is when you LEARN of the noncompliance, not when you serve the 7-Day to Terminate. 9. Do not accept money after serving a 7-Day Terminate.

IF YOU DO NOT HAVE A STRONG CASE, YOU WILL LOSE. EXPECT THE TENANT TO DENY THE BARKING IS FREQUENT OR LOUD AND TO HAVE HIS FAMILY OR FRIENDS TESTIFY TO THAT. REMEMBER THE JUDGE WILL NEED TO BE CONVINCED THAT THE DOG BARKING IS SO UNREASONABLE THAT HE WILL TAKE THE TENANT'S HOME AWAY.

 

(Back to Top)

 

 

Forgetting to Send the Security Deposit Claim
by Harry Anthony Heist, Attorney at Law

Did you ever get that horrible feeling when you realized that you forgot to send the "Notice of Intention to Impose Claim on the Security Deposit" out to the tenant. For years we have drilled into our clients' heads the importance of sending the Notice (we will call it that from this point on) out within 30 days of the tenant vacating, but sometimes it just gets forgotten. You may have evicted the tenant, and the last thing on your mind is returning any money to the tenant as the tenant owes so much to you. The tenant may have skipped out in the middle of the night owing 3 months' rent, and again you would not think of returning any money to him, or you realize the tenant is gone and there is $5000.00 worth of damage to the unit. Unfortunately, the fact that the tenant owes you and will not be getting a dime back does not excuse you from sending out the Notice. Your failure to send out the notice within the time period as required by law could result in you having to return the entire security deposit to the tenant. This could be a devastating occurrence. especially if the security deposit was a significant amount of money. So, you forgot to send the Notice out within 30 days of the tenant vacating. Is it over now? Do you have to return the money to the tenant? Possibly NOT. Florida law has carved out an exception to the 30 day rule which MAY be able to save you.

The General Rule

The general rule which almost every property manager knows, is found in Florida Statutes 83.49, the security deposit statute. The statute provides that upon the "vacating of the premises for termination of the lease", the landlord shall have 30 days from that date to send out the Notice to the tenant's last known address, which of course is the unit the tenant was renting unless they gave you a new address. The law used to be 15 days, but through the efforts of the Florida Apartment Association in getting the law changed, the landlord has 30 days to send out this Notice. The confusing part of the statute has to do with the wording "vacating the premise for termination of the lease". This wording is open to more than one interpretation. Obviously it would apply to the tenant leaving at the end of the lease, but what about an eviction? Does an eviction terminate the "lease", or does it terminate the "tenancy"? A good argument can be made that if a tenant does not fulfill the lease term, whether by abandonment, surrender, or eviction, and the landlord tries to rerent the unit on the tenants' account under Florida Statute 83.595, the 30-day counting period should not start until the lease expiration date or the date a replacement tenant takes occupancy, whichever occurs earlier. Under this statutory interpretation, the date under which the tenant loses the right of possession and the date under which the lease obligations are terminated can be two very different dates. However, some judges may not accept this argument, and will start the 30-day counting period strictly from when the unit was physically vacated. Therefore, the safe approach is to remember to send the Notice out within 30 days from the date the tenant physically vacates. If you know when the tenant vacates, as in an eviction being finalized with the sheriff, or at the end of a lease, you know when to begin counting your 30 days. But wait. We forgot to send the notice out, and this is what this article is all about!!!!

The penalty for not following the rule

If you fail to send the Notice out within 30 days, you forfeit the right to impose a claim on the security deposit. In other words, you must return the full security deposit to the tenant.

The Exception to the Rule

There is an exception to the rule that you must send out the Notice within 30 days. We are going to tell it to you, but after you read this article, we want you to forget you ever heard about the exception, and we want you to ALWAYS get the Notice mailed within 30 days.

 

FS 83.49 (5) Except when otherwise provided by the terms of a written lease, any tenant who vacates or abandons the premises prior to the expiration of the term specified in the written lease, or any tenant who vacates or abandons premises which are the subject of a tenancy from week to week, month to month, quarter to quarter, or year to year, shall give at least 7 days' written notice by certified mail or personal delivery to the landlord prior to vacating or abandoning the premises, which notice shall include the address where the tenant may be reached. Failure to give such notice shall relieve the landlord of the notice requirement of paragraph (3)(a) but shall not waive any right the tenant may have to the security deposit or any part of it.

An Examination of this Exception

As you can see under FS 83.49(5), if a tenant abandons or vacates before the end of the lease, the tenant is required to give at least 7 days' written notice by certified mail or personal delivery, telling you he is vacating and giving you a forwarding address. AHA! Many tenants do not do this. They simply skip out in the middle of the night, or tell you they are leaving and then leave. In this case YOU DO NOT have to send out the NOTICE within 30 days! If the tenant is not on a lease but the tenancy is now month to month or week to week, the same rule applies. If the tenant fails to give you the notice of vacating and a forwarding address at least 7 days before they vacate, you DO NOT have to send out the Notice to them. Here is a recap.

1. The tenant must give you at least 7 days' written notice before they vacate, advising you that she is vacating.
2. The notice from the tenant must be hand delivered or sent to you by certified mail.

Why does the law provide this exception?

The reason this exception exists is so that you are not under the 30-day requirement when you have no idea if the tenant has in fact vacated. Often you do not know the date the tenant vacates, so you should not be held to a timetable when you do not know when that time period starts. This is a landlord protection exception.

The Danger of using the Exception

In all the years of training property managers, we frequently avoid talking about the exception to the rule that you must send the Notice out within 30 days, and you might have wondered why. The reason is simple. People are dishonest, and when the tenant finds out that he was supposed to give you at least seven days' written notice by hand delivery or certified mail stating when he was leaving and giving you his new forwarding address, a copy of this notice can miraculously appear, and the tenant will tell the judge that he in fact DID give you this notice. Now you are faced with having to explain to a judge that you did not receive the notice, and the tenant will try to convince the judge that he did give you the notice. Who will the judge believe? You or the tenant? Never underestimate how convincingly someone can lie to a judge.

You know the Exception, Now What?

Now that you know the exception to the rule, forget about it. Always get the Notice out within the 30-day time period as required by law. Assume the tenant will lie and say that he DID give you at least 7 days' notice before he left, and that he DID give you a forwarding address. Only use the exception to the rule if you are in a bind and have forgotten to send out the Notice within the 30 days; possibly the exception will be there to help you. If you do forget to send out the Notice, go ahead and do it anyway even if you are outside the 30-day window. There is no need to alert the tenant to the fact that they did not give you the required 7 day notice, because this will give the tenant ample opportunity to fabricate the notice after the fact. A number of years ago, one of our clients was being sued by an attorney who argued to the judge that our client failed to send the Notice out within 30 days. It was true. Our client did not send the Notice out. We turned to the tenant and asked if he had given our client a notice at least 7 days prior to vacating with his new forwarding address. The tenant said "no", and we won the case. Let this limited, technical exception work in your favor when needed; don't open yourself up unnecessarily to having to use it. As soon as you think the tenant has vacated, begin counting your days and get your Notice out!!! Whether it be a skip, an eviction or the natural ending of the lease, get the Notice out.

 

(Back to Top)

 

 

Modifying the Rent Amount
by Harry A. Heist, Attorney at Law

 

Unfortunately these days landlords are often having to lower rent rather than raise rent each year. With the huge surplus of vacant homes and condos in the rental market at the moment, tenants are balking at paying the same amount of rent at renewal time, and are even asking the landlord to lower the rent during the tenancy, knowing they can find cheaper accommodations. Out of desperation, many landlords are agreeing to lower the rent rather than have a vacant unit. Usually the tenant initiates contact with the owner during the lease or at renewal time to discuss the rental rate, and the usual threat is made that if the rent is not lowered, the tenant will be moving.

Owner issues

If the tenant is dealing directly with the property owner or agent in an apartment setting, the negotiations can be done directly with the tenant. It is crucial that the landlord does not imply a particular rent amount will be owed unless this has been decided. Any promise or implication that the rent will be lowered will be latched onto by the tenant and relied upon. It must be made clear that no deal will be consummated unless it is done in writing and signed by all the parties involved.

Managed units

In the event the unit is being managed by a property manager for an owner in the single family home setting for example, the owner must be contacted and the new rent amount agreed upon. It is imperative that this new rent amount is agreed to in writing by the owner, and that no representation can be made to the tenant that the rent will decrease without the owner giving this authorization in writing, either by fax, letter or email. The owner may verbally agree, but this cannot be relied upon. Most owners are currently losing money on their homes. With a lower rent they will be losing more. All the owners of the particular unit need to agree to any rent decrease. Never rely on just a writing from the husband or wife. All the owners must agree, and you must be certain of this.

Mid-lease modifications

A mid-lease modification can be handled by a simple addendum stating the new rent amount and signed by all parties. This may present a good opportunity for the property manager to have the tenant sign a brand new lease, thus extending the tenancy, but some tenants may wish only to stay until the natural expiration of the lease, and an addendum will be the appropriate vehicle. If the tenant also pays other amounts in addition to the rent, it is imperative that this addendum wording does not end up inadvertently reducing the rent further than what the landlord expected. Often there is "base" rent plus other items making up the "entire" rent. The tenant may currently be paying a rent amount of $700 plus $50 for the garage and $25 for cable. In the tenant's mind, rent is $775, because that is what he pays each month. In your mind, "rent" is the base amount of $700 plus the other charges, and you are lowering it to $650. Putting a clause in an addendum that states that the parties simply agree that the rent shall be lowered to $650 will cause an ambiguity. Is the total rent now $650 as the tenant may assert, or is it now $725 as you will assert? Any ambiguity in the agreement is construed against the party creating the document (most often the landlord), so the ambiguity will almost always work in the tenant's favor; this presents a clear danger to the landlord.

An early payment option

As an incentive for the tenant to pay the now reduced rent, it is possibly to place a clause in your addendum stating that the rent shall be $X amount if paid by a certain date and $Y amount if paid by a later date. Many managers are already familiar with early payment discounts, but this is structured a bit differently and has 2 distinct rent amounts. Problems occur when the tenant pays the lower amount at the later date; this can cause disputes, so care and thought should go into making such an addendum.

New lease rent modifications

The parties may agree to a lower rent amount in a new lease. We recommend that any negotiations be memorialized in writing prior to lease signing and that all parties execute the new lease before the beginning date. In lease execution, care should be taken to have all tenants sign the new lease, never allowing just one tenant to sign if other tenants are listed on the lease.

What about prepaid last month's rent?

The tenant may have paid a last month's rent upon moving into the unit. How is this affected by the rent modification? The tenant of course will want to be refunded any amount to the extent that the last month's rent exceeds the new rent amount. When will this occur? Now? At the beginning of the last month? We recommend that this refund is done at the time of vacating the premises, and this can be addressed in the addendum to the lease. Another option is that the excess in the last month's rent shall be added to the security deposit, which will give the landlord a larger sum to use in the event of damages or other money owed. Anything can be done, it is all in the addendum wording.

Fair Housing Considerations

In the multi-family setting, if you reduce a tenant's rent, word will spread like wild fire throughout the apartment community. You should expect other residents to come into your office asking for a rent reduction. Is everyone entitled to a rent reduction? Should you only reduce rent where you know a tenant has lost her job? It is imperative that a written policy is in place before you ever begin negotiating rent with a current tenant. It is bad enough when new tenants are getting concessions and lower rents, and now you have to deal with the irate tenant who has been with you for 5 years. Failure to give a rent reduction to someone of a protected class could result in a discrimination complaint that you may have difficulty overcoming.

 

(Back to Top)

 

 

The Skipping Tenant
by Harry A. Heist, Attorney at Law

 

Tenants are "skipping" at a record rate. Skipping of course is the common name given to the act of simply walking out on a lease. The lease is signed, the tenants move in, live in the unit for a while, and then for whatever reason, decide to pack up and move. Can you stop them? Of course not. Just like you cannot force a person to pay the rent or prevent them from moving in unauthorized occupants or getting those 5 pit bulls, a tenant who is desirous of leaving will do so. It is that simple. Since the tenant has decided to leave and does, you are now faced with the dilemma of an empty unit and rent owed to you. What can you do? Suppose you are managing a unit for another. The property owner who is often out of state is baffled and cannot understand how this can be. Often we hear them say, "But they have a lease!" or, "Why did we even have a lease? It is worth nothing". What do you tell this angry and baffled property owner? How do you handle it when it happens to you? This article will examine some of the harsh realities of the tenant "skip" and how you can deal with the problem. Notice I said, "deal with the problem", not solve the problem. If anyone knows how to solve the problem of the tenant skip, you call me right away! This article will examine the three simple paths you can take when a tenant skips out on you.

Sue the Tenant

When a tenant skips before the end of the lease term, the tenant will owe rent until the unit is re-rented or until the end of the lease, whichever occurs first. This statement assumes that no other document is in place, or the tenant has not signed an early termination addendum which may liquidate the amount owed. What does the tenant owe? You will not know until the unit is re-rented or the lease expiration date.

Now the big question: should you sue the tenant? In most cases we will advise you to do a careful cost/benefit and risk analysis when deciding whether to sue the tenant. Before you can even think about suing, you must know where the tenant is, so he can be served with the lawsuit. In many skips, the tenant disappears and cannot be found. If you cannot find him, you cannot sue him.

a. Cost: Unless you can find an attorney who will file a lawsuit on a contingency basis where you pay nothing unless or until you win, using an attorney to file a lawsuit is often cost prohibitive. Many landlords are under the impression that the tenant will be responsible for their attorney's fees and costs, and this is true in most cases, but just because you "win" in court does not mean you will collect a dime. Most attorneys will not take a case like this on a contingency basis.

b. Benefit: By suing the tenant you may be able to get a judgment against the tenant, allowing you to lien any real property the tenant owns, and also may be used in attempting to garnish wages, another expensive, cumbersome process full of exemptions. Will you collect your money even if you win? Probably not. People who skip do not care much about getting sued, because if they did, they would not have skipped in the first place. They are usually what we call "judgment proof".

c. Risk: The risk involved in filing a lawsuit against a tenant may come as a real surprise. Why would there be risk? The tenant owes you money after all. The risk arises when the tenant claims there was a "legitimate reason" why she skipped out. She may claim you failed to maintain the property, felt unsafe, was told she could leave early, you name it. There are a thousand reasons that a tenant who is being sued can come up with to justify why she broke the lease, and the judge in the case might believe the early departure was justified. If the judge finds for the tenant, YOU will have to pay the tenant's attorney's fees PLUS your attorney's fees, if you hired a lawyer to fight the case.

If the property owner has a lot of time on his hands and wants to file a small claims case without a lawyer, there is probably nothing wrong in giving it a try, UNLESS an attorney pops into the picture and defends the tenant. If you are managing the property and the owner asks you to do it, just say NO. Property management agents should not be acting as the attorney for the owner.

Settle with the Tenant

Once you know how much the tenant owes, if you are able to get in touch with the tenant, writing a demand letter or having your lawyer write a demand letter at minimal cost is not a bad idea. A demand letter may open up some dialogue and result in an offer by the tenant to pay all, something or possibly set up a payment plan. Settlement is not a bad word. It is often the smart thing to do. Your attorney can provide you with the proper form to use when settling with the tenant, as everything should be in writing.

Forget about the whole thing and move on

Your final option is to do nothing. Direct your energies into getting the unit rerented. You can always decide to sue at a later time, and you have up to 5 years to do this.

Conclusion : If you are a seasoned property manager or landlord, you probably understand everything you have just read. The problem is your out of state owners who just doesn't understand how Florida law works, and that Florida is what is known as a "debtor" state. If you are managing property for them, you will often get unreasonable demands about collecting the money. In many states, the creditor has significantly greater rights in pursuing the debtor. Florida is known for its lenient laws as they pertain to collecting money from a debtor. There are head of household exemptions, personal property exemptions and although not unique to Florida, bankruptcy protection. Does this mean that it is impossible to collect a debt? Absolutely not. In many cases people will pay. Most cases? Probably not. The best approach is to have your lawyer take a look at your the situation or send your property owner to the lawyer for a quick look, and have the lawyer give the advice necessary for you or the owner to make an informed decision. Exercise care in what lawyer you may send the owner to as some lawyers may not be completely honest and will choose to take a case AND you or your owner's money knowing full well that the chances of collection are slim.

 

(Back to Top)

 

 

Identity Theft Part 1
by Michael Geo. F. Davis, Attorney at Law

 

IDENTITY THEFT PART 1 "“ PROTECTING YOUR RESIDENT PAPER INFORMATION

Identity theft occurs when someone uses another individual's personal identifying information, such as name, Social Security number, or credit card number, without that individual's permission, to commit fraud or other crimes.

Public awareness on this issue is high. When you ask your applicants to complete the rental application, you should be prepared to answer some basic questions:

1. Why do you need this information? Is the answer that you need it to run the credit and criminal background checks and to contact prior landlords the whole answer? Do you use the information for anything else? Statistical analysis of your resident profile? Marketing? Do you need all the information? Many applications ask for more information than is truly needed. Review your application.

2. Who will use this information? You give this information to your background service. Do you or your staff run any background checks (sexual predator website) or contact the prior landlord? Do you do follow-up criminal checks periodically during the lease? At time of renewal?

3. How will you protect this information? Be careful here. The temptation is to overpromise with broad, reassuring statements like, "We keep everything under lock and key with tight security." Yet in reality you give all your staff access to the tenant files. People may legally rely on your statements. When those statements are false, they may be entitled to compensation for their damages.

4. Is there an alternative to giving you this information? Some people are trying to hide their disqualifying past. Others are concerned about the widespread abuse of private information.

Personal information is everywhere in your office. The obvious places are the file cabinets, the computers, and the mail. However, what about the less obvious places like the pad with the name, apartment and credit card number of the tenant who called because he has to extend his vacation to deal with a family emergency? The half completed application in the trash can?

Dispose of all trash properly. Your leasing office trash is a gold mine for identity thieves. Paperwork bagged and placed in the dumpster doesn't protect against dumpster diving. There's no excuse for not having a paper shredder. The shredder is worthless without a shredding policy. The policy is worthless without enforcement.

Protect your paper files. Are they kept in a secure filing cabinet? Who has keys? Access to keys? A secure cabinet is not much protection for the files left on your desk overnight or for the week because you're busy or have given keys to staff for follow-up who keep them in their unlocked desk drawers.

Protect your mail. Does it sit in an "Outgoing" box accessible to anyone coming into the leasing office? Is the incoming mail left on an unoccupied desk until you can get to it?

Protect you tenant payments. How secure is your drop box? How hard is it to reach the payments inside? We get calls from landlords who have drop box break-ins. If the landlord permitted payments through a drop box, then the loss is on the landlord. Why do you think bank night payment drops are so secure? In a drop box break-in situation it is impossible to disprove the claims of the many tenants who allege deposit of cash payments into the drop box. Your drop box should have a prominent notice stating that its use is at the risk of the payer.

Protecting the tenant's payments includes protecting the information on any payments that you are returning. For instance, the tenant makes a partial payment of rent by check in the drop box. You don't permit partial payments. How do you return the check? Never post it on his door, even if it is in an envelope. Void the check and return it to him in a letter to protect the privacy of his bank information. Post a copy of the letter in an envelope on his door, so he will know immediately that his payment was refused.

Insist that an information release accompany any rental verification request. Best practice is to confirm with the tenant before answering any such requests.

 

(Back to Top)

 

 

Eviction Avoidance Techniques
by Harry A. Heist, Attorney at Law

 

Over almost 20 years now, we have been able to observe the habits and traits of property managers. Some of these habits and traits are good, and some are just plain bad. One interesting aspect has stood out above the rest and is readily apparent in our firm, since we file so many evictions for so many property managers. Some property managers seem to be able to decrease the number of evictions they have when they begin managing a particular property or portfolio of properties. How do they do it? This article will examine some of the habits or procedures of property managers who seem to have found the trick to reducing evictions. Reducing evictions is crucial to the bottom line. Not only are you avoiding the costs of an eviction, the headaches, the uncertainty and all that goes with evicting, you are also minimizing damage to the property. Tenants who are evicted generally do not clean the unit upon move out, and worse yet, many maliciously damage or destroy the premises and take off with the appliances, resulting in thousands of dollars in expenses.

Communication is the Key

Many tenants are already preparing to move from the premises, so when you file the eviction, it is actually a waste of money. Often the tenant vacates immediately upon getting served with eviction papers. Is this because they got the papers? Often the answer is no; they were planning on moving anyway, but you did not know it. The result is that you wasted the money. Some tenants need to be reminded to pay the rent. Funny how the tenant all of a sudden pays right after you spoke with them. Some tenants are simply late payers and pay on their own schedule. You file an eviction, and they come running into your office, but are now unable to get caught up because of the attorney's fees and costs you incurred

1. Notice serving: A Three Day Notice or any other notice for that matter, unless the statute or your lease requires otherwise, should never be served by posting (taping) on the door unless the tenant is not home. You are allowed by law to post a Three Day Notice "in the absence of the tenant". Common practice by many property managers is to "tiptoe, tape and take off". The manager puts the tape on the notice ahead of time, creeps up to the door and lightly places the notice on the door, then gets out of there before the tenants' unauthorized dog begins to bark. Why? Because the property manager does not want to confront the tenant. The result is that the tenant will look at the notice, throw it in the trash and maybe pay the rent. No communication has occurred, except for the property manager serving the notice, and even that service was legally improper because the manager failed to knock on the door. Knock on that door! If you feel uncomfortable doing it, have someone come with you, or delegate it to someone else.

2. Face to face communication : Speaking with the tenant face to face is the best way to communicate and see what the tenant's intentions are. When serving the Three Day Notice or at any time thereafter, the manager should knock and try to engage the tenant in conversation. The manager may find out information from the tenant at that time which could avoid an eviction: a. The tenant may pay the rent. This is the best and desired result.
b. The tenant may tell you they are going to pay tomorrow or give you a fixed date which may be soon after the expiration of the Three Day Notice. This will then affect your decision whether to hold off a couple days or go straight to eviction after the expiration of the Three Day Notice.
c. The tenant may indicate he is moving. You look in, see a bunch of boxes and over the weekend the tenant moves out. By making the decision to hold off, you have averted an eviction and saved some time and money.

3. Past Due Amount Workout Agreement: Upon being able to make the face to face communication happen, the tenant may indicate that they do not have all the rent due but can pay you at a future date. Not wanting to lose the tenant, you may decide to agree to the payment on a fixed date or date and in a particular fashion. It is a payment plan. By using the Past Due Amount Workout Agreement, this memorializes the agreement and prevents a situation in which the tenant claims you gave a verbal extension.

4. The Agreement to Vacate :: The tenant may ask for a few more days and the property manager, hoping the tenant will live by his word agrees. If the property manager agrees, the tenant can sign an Agreement to Vacate giving a fixed vacating date. We have found that most tenants who sign an Agreement to vacate will indeed do as they say. Another eviction not filed!

5. Phone or email communications: The next best thing to face to face communication is to speak to the tenant on the phone or email them. Generally regular mail is not the preferred method, as mail can take up to 5 days, and each day without rent is lost money. The problem is that many managers fail to have the up to date information necessary to contact the tenant and find out his or her intentions. We highly recommend you read this article as soon as possible Importance of Updated Contact Information

6. The 24 Hour Notice: Many property managers give a final "24 hour Notice" to the tenant after the Three day Notice has expired. This notice tells that that they have one last chance to pay the rent before their file is sent to the attorney for eviction. Payment demand notices that are given to the tenant after the Three Day Notice can compromise the eviction, but that said, use your own judgment as to whether or not you are going to do this. While some judges have ruled that such a notice invalidates the prior Three Day Notice, it can be very effective! We cannot tell you to do this, but we know it is done all the time. If you do decide to send a final notice or 24 hour notice, if a dollar amount is referenced on the reminder notice, it should not conflict with the amount cited on the prior Three Day Notice.

 

(Back to Top)

 

 

Refusing Electronic Payments
by Michael Geo. F. Davis, Attorney at Law

 

Acceptance of Payment. The landlord's acceptance of payment from the tenant waives the pursuit of any other lease noncompliance known to the landlord at the time of acceptance. The landlord's acceptance of tenant payment after a failure to pay waives that payment noncompliance as a basis for terminating the lease. If a 3-Day Notice has been delivered, the acceptance voids the Notice and requires the service of a new 3-Day Notice. The landlord's acceptance of tenant payment after learning of a noncompliance other than nonpayment (such as illegal parking or the assault on another tenant) waives that noncompliance, no matter how serious the noncompliance. If a 7-Day Termination Notice has been delivered, the payment acceptance voids the Notice.

The Gray Area. The basis of waiving the noncompliance is "acceptance" of the tenant payment. Within the two clear boundaries of an accepted payment and a refused payment is the gray area. In this gray area are electronic payments: the on-line payment by credit or debit card, the electronic check, and the automatic charge to a credit card or debit to an account.

The obvious answer is to avoid the gray area altogether. Terminate the ability to pay on-line. Establish procedures and checklists to insure that electronic payment authorization is withdrawn or blocked. That being said, mistakes will happen. The size and complexity of landlord organizations, the shifting of staff and plain human error are among the factors contributing to mistakes.

Judicial Discretion. In any legal gray area judicial discretion is paramount. In the exercise of its discretion a court will consider the intent of the parties, their business sophistication and any mitigating factors. The more sophisticated the landlord, the less the court will be inclined to understand mistakes from failure to follow established policy, lack of adequate staff training, and disorganization. The presence of mitigating factors can be important. A tenant following his established practice of paying on-line has a better chance of claiming acceptance than a tenant that used the electronic payment to circumvent an in-person refusal.

Speed and Documentation. The most important factor evidencing the landlord's intent to refuse an electronic payment is the speed with which it is returned. The moment a landlord discovers the payment, it should be credited back. The landlord should document the file with the date and time of payment, when and how it came to the landlord's attention, and when and how it was returned. Written, dated and initialed notes are more persuasive in court then a hazy recollection.

A cautionary note to landlords: while notice of an electronic payment may be nearly instantaneous the payment itself doesn't clear instantaneously. The dilemma is that waiting for the funds to clear may be construed as acceptance, while issuing an immediate credit may result in an overpayment if the electronic payment is rejected and doesn't clear.

The 3-Day Notice. Given the uncertainty of the judicial response, I advise some common sense guidelines can be followed. If it's a 3-Day Notice, the landlord should accept the payment even if it's a prohibited partial payment, including the $25 on-line payment designed solely to buy three more days. The landlord should accept that the tenant took advantage of the mistake, serve a new 3-Day Notice and notify the tenant that electronic payment privileges are withdrawn. Note that if the lease has delivery method and timing requirements for the notice regarding withdrawal of electronic payment privileges, these must be followed.

The 7-Day Termination Notice. If it's a reoccurring noncompliance, such as loud music late at night, the landlord should accept the payment and wait for the next noncompliance. If the landlord has sent a 7-Day Termination Notice, he should send a letter noting the payment, withdrawing the Notice in view of the payment and stating that electronic payment privileges will be withdrawn in the case of any future termination for noncompliance. If the current noncompliance is of such a serious nature that the landlord does not wish to waive it, then the landlord must accept the risk of an adverse litigation result. This includes paying the tenant's attorney's fees, which can be substantial, and facing a fair housing complaint arising from the unsuccessful litigation.

Eviction Proceedings. If eviction has been filed, the above analysis can only be competently made by the eviction attorney. The attorney should be consulted immediately upon discovering the electronic payment. The attorney is in the best position to draw upon his experience in the particular county before the particular judge.

The Law Offices of Heist, Weisse & Davis, P.A. has filed tens of thousands of evictions throughout Florida and can help the landlord assess the risks in payment situations both before and after filing eviction.

 

(Back to Top)

 

 

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.

(Back to Top)

 

 

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.

(Back to Top)

 

 

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.

(Back to Top)

 

 

Common Screening Mistakes
by Cathy L. Lucrezi, Attorney at Law

 

Every property manager has the task of screening applicants. The property manager wants to find good tenants who will pay rent on time, not disturb the neighbors, and take good care of the property. The flip side of that is the property manager wants to weed out applicants who will fail to pay rent, have keg parties, or choose to remodel the unit. The decision will be easier if you avoid these mistakes.

"The screening criteria are in my noggin, not on paper."

Every property management team should have a clear, written screening policy. All staff who deal with the leasing process should be aware of the policy and have her own copy at her desk. Management must train staff, so they are aware of and follow the policy consistently with all applicants.

"I never tell the screening criteria to anyone."

A property manager's best tool to prevent potential fair housing complaints is a paper that tells prospective tenants about the criteria that will be used in evaluating the application. It does not have to be a copy of the policy itself. Rather, it can be an inviting document that lets a prospect know about the rental property.

"Once denied, I never talk to the applicant again."

If a property manager declines an application, or puts extra monetary conditions on acceptance, an "adverse action" letter must be sent to the person. That adverse action letter, if completed properly, tells the applicant everything he is entitled to know. It allows the property manager to communicate the decision to the applicant honestly and quickly.

If the applicant demands to more information or explanation, he should diplomatically be referred to the adverse action letter and the paper he initially received about the criteria that would be used. Details not contained within the adverse action notice should not be volunteered.

"I rely on my gut reaction in choosing a tenant."

While experience is invaluable, it is important to make sure one's experience is not influenced by biases that could be discriminatory. Every landlord has had the experience of the tenant who "looked" okay and then turned out to be a bad tenant. That, as well as fair housing complaints, can be avoided by having a written screening policy. Working on assumptions and experience alone just doesn't cut it.

"I choose the best applicant from a pool." Where there are several people competing for the same unit, it is best to treat them on a first-come, first-serve basis. When you reach a qualified applicant who meets your screening criteria, stop screening and offer the unit to that applicant.

Property managers should date and time stamp applications so there is no confusion about who was first. If an application is not complete (for example, when a tenant needs to bring in a paycheck stub), date and time stamp it when it is complete.

 

(Back to Top)

 

 


  The Incarcerated Tenant

by Harry Anthony Heist, Attorney at Law

 

 


You have not received rent for the month, go out to the property to serve your Three Day Notice, and the next door neighbor informs you that the tenant is in county jail. The property is full of belongings, and the tenant's car is parked in the driveway. Can you evict? Should you post the Three Day Notice on the door? Do you want your tenant to come out of jail and find he has been evicted and everything he owns is gone? This situation will occur if you manage property long enough, and you need to know how to deal with it properly to avoid liability and/or a serious dispute.


Where is the tenant?


You may or may not know if in fact the tenant is incarcerated. If you were lucky enough to have your property on the news the night before when they did the grow house bust at your rental home, you can be fairly sure that the tenant is in the county jail. In other situations, you were simply told the tenant was in jail by a neighbor or someone you may have contacted on your emergency number list. To confirm the tenant is in jail, you need to call the county jail system and ask for inmate information. This is public record in most cases, and you will be able to find out if the tenant is in jail and where, as some counties have more than one location for their jails. If you are unsuccessful, look up the arrest report from the sheriff's department website and give them a call if necessary.


Do you need to locate the tenant?


There is nothing in Florida law that provides you must hunt down a tenant in order to serve a Three Day Notice. The law states that you can serve the tenant in person or post the notice on the premises in the tenant's absence. In an incarceration situation, clearly the tenant is absent; therefore, you could legally post the notice on the door and thus satisfy the requirements of  Florida law as far as notice goes. The question then is, "should you locate the tenant?" We feel that you should make an attempt.


Why bother locating the tenant?


If you post a Three day Notice on the door of the home, you will eventually file an eviction, and at the end of the eviction, you will remove all the tenant"˜s personal belongings to the street, where the neighbors and passerbys will rummage through everything and take anything of value. Personal items will be taken as well, some with sentimental value. Your tenant may get out of jail only to find out that his key no longer works in the door. Your tenant then contacts you, only to find out that he has been evicted and everything he owns is now gone. What can happen? The tenant can go ballistic and cause you great harm, or decide to destroy or damage your property or the home. A surprised, evicted tenant is an extremely dangerous and volatile person. While you may have done everything according to the law, this will not matter with the recently released tenant.


You have tried to locate the tenant but cannot


At this point you need to jump into action, review the file, and begin calling your emergency numbers, contact numbers and employers. Do not give any information, other than you are the landlord and just need to contact the tenant. Do not tell anyone you know or heard the tenant is in jail. Simply work hard to track the tenant's information down. If you cannot locate the tenant or get any information that will help you, serve your notice to the property; knock first, and if there is no response, serve the Three Day Notice by posting on the premises. If you do not receive the rent, file an eviction as you would with any other tenant.


You locate the tenant


Now that you have located the tenant and know what jail he is in, you can serve your Three Day Notice to him in jail or have a process server do this. Better yet,  you can possibly avoid an eviction altogether! Many incarcerated tenants do not want to deal with an eviction and would just rather surrender possession to you, if they feel they will be incarcerated for some time. If you are able to call the tenant in jail or have the tenant call you collect, the tenant may tell you to give access to a friend or relative. While this is great, you must get something in writing from the tenant under which he is giving possession to you, who is allowed access to the unit, and when you will have possession. We recommend getting the following form signed by the tenant while he is in jail. You must be sure that the tenant did in fact sign the form, and make sure that no other people are living in the rental unit. You can often make an appointment with the jail's social worker and visit the tenant directly in jail.



ACKNOWLEDGMENT OF VACATING AND DIRECTION AS TO DISPOSITION OF PERSONAL PROPERTY FROM INCARCERATED TENANT




I  _________________  hereby agree that I have completely vacated the premises located at___________________________________________. 


I agree that any personal property that is left behind in the unit or on the premises may be disposed of by Management and/or Owner without notice, and I agree to hold Management, the owners of the premises and any agents or employees harmless for such disposal of personal property.


I agree that this document and my vacating shall have no effect upon any financial obligations under the lease or Florida law unless otherwise agreed to in writing by Management. I agree that my Notice of Intention to Impose Claim on Security Deposit if any shall be sent to the address of my former unit, and I am responsible for putting a forwarding order in with the US Postal Service.



ADD IN SIGNATURE LINE FOR TENANT AND 2 LINES FOR WITNESSES

 


Can you take possession of the unit by "abandonment"?


Under Florida law, there is a presumption that a unit is considered "abandoned" if it is vacant for one half of the payment period (usually this is 15 days on a monthly payment period), the rent is unpaid, and, the tenant has not given you anything in writing telling you that he would be back at some later time. While it may appear that an incommunicado, incarcerated tenant would qualify as having abandoned the unit, we do not recommend that you take this route. If you are unable to get possession from the tenant in writing by the above form or through an eviction, taking the "abandonment" route is just too dangerous.


Conclusion


It is not every day that you must deal with an incarcerated tenant. While this is a good thing, it underscores that you most likely do not have much experience in handling such a situation. In these odd types of situations, we always recommend that you call your attorney for advice before you take any action.
There is just no reason to go it alone.



(Back to Top)



THE TENANT AND THE ELECTRIC BILL
by Harry Anthony Heist, Attorney at
Law

 

In most annual rentals, the tenant is responsible for paying the electric bill. In addition to being responsible for paying the bill, the tenant is often given instructions by the landlord and agrees in the lease agreement to place the electric bill into her name upon move-in. This requires the tenant to make a call into the electric company and/or go to the electric company office to give the relevant information and pay a utility deposit, which varies by company providing the electric. In a perfect world, the tenant does just that. Prior to
move-in she gets the electric placed into their name and pay the bill. What happens when she does not pay the bill? In many places, the electricity is simply shut off, and the tenant is without electricity. This is the tenant's problem, and no liability to the landlord occurs. The tenant may then pay the bill and have it reconnected, steal the electricity from an adjoining tenant, put jumper wires on the electric meter, or completely live without electricity. In some areas of Florida and in many apartment communities, the electric will revert back into to the name of the apartment community, and the apartment community will later be notified that this has occurred, sometimes weeks later. This is to prevent a unit from being without electricity. While we cannot control what the tenant is "supposed" to do, we can take action, but must be careful that we do not fun afoul of the law.

Florida Law and the Electric Bill

Florida law specifically states that a landlord shall not directly or indirectly cause interruption in the tenant's electric service.

FS 83.67 Prohibited practices. (1) No landlord of any dwelling unit governed by this part shall cause, directly or indirectly, the termination or interruption of any utility service furnished the tenant, including, but not limited to, water, heat, light, electricity, gas, elevator, garbage collection, or refrigeration, whether or not the utility service is under the control of, or payment is made by, the landlord.

Direct Interruption

Direct interruption would be when the landlord shuts the electric off by actually disconnecting it from the rental unit (this is rarely done but happens!), or more commonly instructs the electric company to shut the electric off. A landlord who discovers that the tenant has not placed the electric in the tenant's name could easily feel that it is correct to tell the electric company that the electricity is not to be in the name of the landlord, but rather that it must be in the name of the tenant. However, this can lead to a direct shut off. Further, the landlord may have had the electric bill revert back into the landlord's name, as is often the case in apartment communities; notifying the electric company that this is not proper and that it should be in the tenant's name will result in a direct shut off to the tenant. In the single family home setting, sometimes the property owner who lives out of state receives an electric bill, becomes furious, and calls the electric company for a shut off. Does it seem fair to the landlord who now is stuck paying the bill? No, but we never said the law was always fair.

Indirect Interruption

An example of indirect interruption occurs if the landlord receives an electric bill on an account that should have been in the tenant's name, and the landlord simply fails to pay it. Here the landlord has full knowledge that the tenant failed to place the account in his or her name, and by the landlord not paying it, the account will get shut off. Again, this seems unfair to the landlord, but it is the law.

Steps to take if it is discovered that the tenant is not paying the electric

Once it is discovered that the tenant is not paying the electric bill, the tenant needs to be notified immediately by the use of a 7 Day Notice of Noncompliance with Opportunity to Cure. The notice may state the following:

You have failed to place the electric utility service account into your name as required by your lease agreement, and you owe the landlord the sum of
$__________ at this time for outstanding electric bill(s).

Steps the Landlord can take

While it is beyond the landlord's immediate control if the tenant steals electric, or in the event of reversion of the account back to the landlord, there is one thing that often occurs which is indeed completely in control of the landlord, but is often missed, because of the landlord's forgetfulness or misplaced trust that the tenant will do what the tenant is "supposed" to do. Due to the need for electric to operate pools and a/c units, most landlords do not wish to have a time period when the electric is off. The result is that the
electric is in the landlord's name until such time as either the landlord directly has it shut off, OR the tenant directly has it placed in the tenant's name. When a tenant moves into a rental unit and the electric is on, they will often happily sit there until the electric is shut off. But wait. How can the landlord have it shut off? Did not we just say that was illegal? The answer lies in timing. If the tenant is notified in writing that the landlord will be taking the electric out of his or her name no later than a fixed date, and the landlord does indeed do this, it is doubtful that a prohibited practice or indirect termination as envisioned by the statute will occur. We recommend the following wording in a notification to be given to the tenant prior to move-in. This can be placed directly on the INFO SHEET that the tenant should receive from the landlord, stating the names, phone numbers and addresses of the utility company,
garbage pick up days, etc. Here is some recommended wording:

Tenant understands and agrees that the electric service is currently on
in the Landlord's name. Tenant agrees that the Landlord shall order the electric
service be taken out of the name of the Landlord within 3 days, and Tenant shall
place the electric service in Tenant's name and pay all necessary deposits.

So you notified the tenant prior to move-in. Now, don't forget to notify
the electric company immediately in writing, and get a confirmation from them!!
Property managers who use checklists rarely if ever forget to do this. As a
friendly reminder, if you shut off someone's electric after they have taken
occupancy in violation of the law, WE WILL NOT REPRESENT YOU!!

(Back to
Top)

 

 


Risks of Increasing Revenue from Tenant Charges

by Harry Anthony Heist, Attorney at Law

 

 


Landlords and property managers are always trying to increase revenue. There is absolutely nothing wrong with this. Being a landlord is a tough business, profits have decreased, and liability is always on the rise. Unfortunately, many landlords and property managers are doing things now which may or may not be considered illegal by some courts. Word spreads quickly among associations, landlord groups, and from training classes, and a novel idea that one company has implemented often spreads like wildfire. Are these new charges or practices legal, or can they result in serious and expensive lawsuits? Is it legal just because "everyone is doing it", or you were "told" it was legal by a non-lawyer?
This article will examine some of these charges just for the purposes of making you think and then making an informed decision, hopefully with legal counsel, whether or not to take a particular course of action with your tenant.


Excessive late fees


Florida Statutes does not address late fees. Nowhere in the Landlord/Tenant Act are late fees mentioned. How much can you charge the tenant? No one knows. You can place late charges on your Three Day Notice in most counties if they are considered additional rent, you can evict a tenant for failure to pay rent and late charges, and you most likely can deduct unpaid late charges from the security deposit if they are owed when a tenant vacates. The key is that your late charge correlates to the damages you are suffering due to the tenant paying the rent late. How is this figured out? No one knows. Sometimes judges will see excessive late charges and rule that a Three Day Notice is invalid. What is excessive? Can late charges be considered usurious?  Under Florida law, there are specific interest limits on what a creditor can charge for interest on a loan. Some attorneys are trying to expand the idea of a loan to delinquent rent. If delinquent rent was considered a loan, then the usury laws would apply, and the result in most cases would be that the late charges were usurious or over the legal interest rate limit.


Lease Renewal Fees


Some landlords charge the tenant a fee upon lease renewal.  This is justified by reasoning that the fee is for the renewal lease, the negotiations, and any extra inspections or work involved in renewing the lease. Most likely this fee is legal.  It is not addressed in Florida law, and the tenant will pay it, but did you tell the tenant about this fee in the beginning of the lease when the tenant was asking whether he might be able to renew if he needed to stay another year?  If you are going to charge a renewal fee, full disclosure of this charge should be made at the time the lease is signed or as soon as you decide to implement this type of a fee.


Notice posting or delivery fees


The tenant has not paid the rent, and you now have to prepare and serve a Three Day Notice. The property is 30 minutes away, and gas prices are going through the roof. Can you charge the tenant a notice serving fee? Clearly if you are going to do this, the tenant would have had to agree to it in the lease agreement, so let us assume your lease addresses this fee. You are charging the tenant for a notice that the tenant is entitled to receive and you are required to give by Florida law.  Is this legal? We definitely are not  sure. It is not specifically "illegal", as it is not mentioned at all in Florida Statutes, and you can argue that the tenant has contractually agreed to it, but will this go over well with a judge? Unless the case is contested, many judges will not even notice the fee, and many of our clients do in fact charge this fee. We don't recommend it though. 


Administrative Fees


In order to get a tenant into a unit, you have do some work for sure. You must coordinate  credit checking, call references, call utility companies, input information into the computer, make phone calls, send emails, engage in negotiations, make sure the property is ready, travel to the property, and do many other tasks in order to get your tenant into the unit. Many property managers have decided that by charging the tenant an "Administrative Fee" or "Move-In Fee", this can recoup some of the expenses involved.  When you received a call from a person who saw the house advertised for rent in the newspaper, did you disclose the administrative charge to them? If not, you can find yourself in serious trouble. If you decide to charge administrative charges, you need to understand they may not be legal at all, and your failure to disclose them in your advertising and upon first contact with the prospective tenant could be considered illegal.


Redecorating Fees


As a condition of moving in, you charge the tenant a nonrefundable "redecorating fee". What is this for? It is to cover some of the damages that the tenant may cause to the property. But aren't you going to charge the tenant for those damages anyway when the tenant moves out?  In the old days, landlords collected first month's rent, last month's rent and a security deposit. Now that this is not the norm, landlords have looked to other ways to cover the damages tenants may do to the unit which they will most likely not pay for. The problem with redecorating fees is that this could be construed as an attempt to make the tenant pay for someone else's damages or to pay for ordinary wear and tear. Again, Florida law does not specifically address such charges, but there could be dangers lurking in charging them.


Upcharges for Credit Checking


A property manager may charge $50.00 for conducting the credit check, but only is charged $8.00 by the company providing the credit report. Is the $42.00 a profit? Is it fair to the tenant? The property manager will point out that getting a credit report is just one aspect of the tenant qualification process; however, some states have placed limitations on how much the property manager can charge. Will Florida be next?  You don't want to be the test case, so it is advisable to have your credit checking procedures clearly laid out in detail for possibly future use in a court case.
 


Conclusion


Unless a particular charge is clearly illegal, the property manager must make an informed  business decision before implementation. Some companies will make a risk/benefit analysis and decide it is worth taking a risk. Other companies will implement procedures under which these charges are clearly disclosed ahead of time to avoid being accused of bait and switch tactics or a potential unfair and deceptive trade practice. In the end, excessive or additional charges increase the risk of litigation. Increasing profits can be construed as greed, and the farther property managers go, the greater the risk that there will be litigation that will adversely affect all property managers. We urge you to speak with your attorney regarding any charges before you make the decision of implementation. If your attorney will not give you a written opinion as to the legality of a particular charge, you just might want to avoid that charge. Many property managers have been getting caught up in the latest "revenue generating technique". Never assume that because the property management company down the street charges something or has done so for years makes it legal or advisable.

 

   
(Back to Top)

 

 


A Security Deposit Primer "“ Part 2 Initial Disclosures 

by Cathy L. Lucrezi, Attorney at Law

 

 


 All security deposits and advanced rents are governed by Florida Statute Section 83.49.  The statute obligates the landlord to inform the tenant of particular information whenever a security deposit or advance rent is held.


When disclosures must be made.


No later than 30 days after a landlord receives advance rent or a security deposit, the landlord must make the disclosures to the tenant.  The notification must be in writing and given in person or mailed to the tenant.


Many times, the disclosure is in the lease itself.  This is the best way to present the information, because later, there can be no dispute that the disclosure was made. 


What must be disclosed.


The landlord must disclose where and how the security deposit and advance rent is being held.  The disclosure must tell the tenant the rate of interest, if any, the tenant is to receive and when the interest payments are to be paid to the tenant.


The written disclosure must show:


-- The name and address of the depository where the advance rent or security deposit is being held;


It is best to use the whole street address of the bank, not just the name of the City. However, the complete name of the bank and the name of the City is likely to be considered adequate.


-- Whether the advance rent or security deposit is being held in a separate account for the benefit of the tenant or is commingled with other funds of the landlord;


t does NOT mean that it is ok to commingle the funds.


-- Whether the funds are deposited in an interest-bearing or non-interest bearing account.
If the account is interest-bearing, the disclosure must state when the interest payments will be made to the tenant.


-- Include a copy of the provisions of Florida Statute 83.49 (3).


a copy appears at the end of this article.


Subsequent disclosures.


After the landlord makes the initial disclosures, circumstances can change "“ a bank closes, a new owner takes over, etc.  If the landlord changes the manner or location in which the funds are being held, the landlord must notify the tenant, in writing, within 30 days of the change.


Consequences of non-disclosure.


Unlike other portions of the security deposit statute, there is no clearly defined "penalty" to be applied to a landlord who fails to make the disclosures.  Thus, a tenant who sues a landlord for failing to make the required disclosures must prove that the non-disclosure resulted in losses suffered by the tenant.


For licensed real estate professionals, the failure to make the disclosures can be a violation of FREC rules. 


Even if there is no lawsuit or FREC complaint, the failure to disclose marks a very sloppy lease-up procedure.  It tends to cast the landlord in a very poor light, which can be problematic if the landlord has to defend himself before a judge. 


(Back to Top)

 

 


  Welcoming Disabled Applicants


by Cathy L. Lucrezi, Attorney at Law

 

 


 A disabled applicant should be treated just as any other applicant.  The process of accepting an application, showing available units, doing a credit and background check, and executing a lease should be the same as you it would be for a non-disabled person.  There are a few exceptions, described later in this article.


The business office.


Make sure that your leasing office meets accessibility standards. This includes being sure there is an accessible route from the parking area to your leasing office.   This may mean adding a ramp or curb cut, or outfitting at least one restroom that is accessible.

   
Reasonable accommodations.


If the disabled applicant needs an accommodation in order to apply for housing, make it.  Examples include allowing a vision-impaired applicant to have his friend complete the forms, or allowing a service animal to enter the business office.  Another example would be to allow the disabled person's guardian do the paperwork and sign the lease.

The applicant may say she wants the unit, but will need a modification or accommodation.  You can ask the applicant to put the request in writing and provide you with verification of disability.  (Hopefully, you already have a policy in place for handling this type of request.)


Question "Do's"


Generally, a landlord should only ask a person with a disability questions that are asked of all applicants or tenants.  It's OKAY to ask questions such as:
-- Can you pay the rent?

-- Do you have references regarding your tenant history?

--Who will be living in the unit?

-- Do you have a criminal history?
 


If ours is an apartment community designated for people with disabilities, you can ask the applicant if he or she qualifies for the housing.  


Question "Don'ts"


It is NOT ok to ask the following:

--Do you have a disability? 

--Do you take medication?

--How severe is your disability?
 
--Why are you getting SSI?

--Can I see your medical records?

--Have you ever been hospitalized for mental illness?

--Have you ever been in drug or alcohol rehab?

--Are you capable of living independently?
 


A few more "Don'ts".


Do not presume to know what is best for the disabled applicant.  If a person with a mobility impairment wants a unit on the second floor, do not try to talk him into a first floor unit.  You would be presuming to know better what the applicant needs, than the applicant himself!  It would be a violation of fair housing laws, no matter that you acted with good intentions.


Do not offer a particular accommodation.  Don't suggest: "Will you need a handicapped parking space since you are in a wheelchair?"  Instead, respond positively if the individual in the wheelchair asks for a handicapped parking space.  The request for such an accommodation should come from the tenant, not you.  You can let applicants know you welcome requests for reasonable accommodations and modifications, by noting it in your application materials.

 


 (Back to Top)

 

 

Court Etiquette and Procedures
by Harry A. Heist, Attorney at Law

 

Most landlords or property managers will at some time in their career end up in court. Despite the best efforts to settle cases, sometimes court is inevitable and unavoidable. The case may be a simple three minute Motion to Dismiss or a complicated and convoluted eviction with a counterclaim and many witnesses. In some cases the judge will take complete control of the proceedings from the start and simply start asking questions. Some judges closely follow the rules of civil procedure, and court is conducted in a very formal fashion. Some judges do not even hold open court and prefer to deal with the cases in their chambers where the parties all sit around a large conference table. In all cases, the judge is in charge and must be afforded absolute respect. Even if the judge seems relaxed, joking and casual, the parties should remember that the judge will be making a decision, and all court is a serious matter. Sometime court is like what you may see on the daytime court shows, but most of the time, it is NOT like Judge Judy or the People's Court. Someone may leave that courtroom very unhappy.

Who must go to court

The parties and witnesses who should or must come to court will depend upon the type of case. In an eviction action for nonpayment of rent, the person who is most familiar with the rent records and receipts will need to be in court. This is usually just the property manager or the landlord, but it can get far more complicated if the tenant brings up a defense that he did not receive a Three Day Notice, or that he had made an agreement with your leasing agent, assistant or someone else employed by your company. If other people are involved or had contact with the tenant, bring them to court. You can never have too many witnesses with you in court, but failing to bring a necessary witness can doom a case. In a security deposit dispute case, you may have to being in vendors, experts, people who did the work on a unit and all your physical evidence and documentation. Your attorney will tell you who must come to court, what you need, and witnesses may be subpoenaed to try to make sure they actually come to court.

Arriving to court

We strongly urge you to carefully map out the courthouse and get good directions if you are not familiar with the court location. Many counties have built new or additional courthouses, and it is quite possible that you are assuming you are going to the same courthouse that was there 5 years ago when you last had court. Once you get directions, ARRIVE EARLY. We almost always arrive 30 minutes before court. Many courthouses have severe parking problems and tight security which could result in you being late. Some small courthouses have one x-ray machine and metal detector; others have high tech systems that surpass airport security. You don't want to accidentally go to the wrong courthouse that is a 35 minute drive from the correct one.

What to bring and NOT to bring

Your attorney will tell you exactly what to bring to court. Most likely it will be the tenant's actual file if it is a nonpayment of rent case and copies of the lease and notices. You should organize the file so you can easily take out original documents in the event the judge wants to see something in your file, or if there is a dispute about the authenticity of a copy. There are certain things you should leave at home. Knives, guns, mace, pepper spray and other prohibited items have been brought to court by our clients. They were in a pocket book (or sock) and forgotten. Clear out anything from your pockets, purse or pocketbook before you leave for court and imagine you will be going through an airport screening checkpoint. Leave your switchblade and 9MM at home.

What to Wear

Don't wear shorts! Even if shorts are part of your work uniform, they should NEVER be worn in court. Females can sometimes get away with it, but why take a chance? Some judges are so strict about this that the bailiff, a sheriff's deputy, will make you leave the courtroom if you dare to wear shorts. Dress respectfully. A jacket and tie is not necessary unless you are the attorney, but a well dressed client is nice to have by our side.

Preparation

Many of our clients expect that we will testify for them and do all the talking. While that would be nice and easy, and we try to keep you from having to say too much, our client usually must testify. You will need to know the date you gave the Three Day Notice, how it was delivered, who served it, how much rent was on the Three Day Notice, what the amount on the Three Day Notice represents, when the lease was entered into, when it expires or expired, when you last accepted rent, how much is the total amount owed and just about any other fact regarding the case. If you come across as confused or uncertain, the judge may get angry FAST. You need to prepare before court. Your attorney can be 100% prepared, but if you don't know the facts of your case, the judge may be unsympathetic or even angry at you. Don't give the judge an excuse to let the tenant win a case or continue or delay the case to a later date. Your attorney will most likely have a sheet with all the information on it in one place. You should do this as well and create your own "cheat sheet" you can look at rather than fumbling through the file. No matter how organized you are, when the judge starts talking, everyone will get nervous, and the most organized person might instantly become disorganized.

Addressing the Court

One of the first things that will happen at the start of the case will be for the judge to ask all parties who will testify to raise their right hand and "swear to tell the truth, the whole truth and nothing but the truth". Raise your right hand and clearly say "I will" or whatever the judge asks you to say. There is no need to shout this, but failure to say it loud enough for the judge to hear will sometimes anger the judge. You and any witnesses who might testify need to do this, even if you are not sure you will be called as a witness. The judge will often not know whether you are the tenant or the landlord, so when asked your name, clearly state "Mary Smith "“ manager of Mountain View Apartments". Whenever you speak to the judge, refer to him or her as "your honor": "Yes, your honor", "No, your honor", "I do not know, your honor". Practice this a bit before you go to court.

Behavior during the proceeding

Speak only when you are asked to speak. Even if the tenant says something completely bizarre or tells an outright lie, you must stay quiet, not roll your eyes, laugh, shake your head or act out in any way. There is a strong tendency to want to respond when someone is lying about you or saying something utterly outrageous. Don't do it. You or your attorney will address the issue. While the tenant may be lying, never call the tenant a liar. Your attorney will do that for you in the "attorney sort of way".

Cell phones

Do you want your phone confiscated by the bailiff or really annoy the judge? Then leave your phone on. Despite verbal requests and signs in the courtroom to put the phones on "vibrate" or "silent", they end up going off and disturbing the judge. We ask that you turn your phones or Blackberry off completely. You can survive an hour without it. Turn it off and hope the tenant forgets to turn his or hers off.

Testifying

The judge may go straight to you and ask you questions or allow the attorney to proceed in a more formal manner with an opening statement. You never know for sure, but usually your attorney will know how a judge generally will proceed and will prepare you accordingly. After your attorney gives an opening statement, you will usually be the first witness, and your attorney will ask you things like your name, where you are employed and if you are familiar with the rent records and receipts. Short and clear answers are all you need to give. Let your attorney direct the questioning. Speak loudly enough so the judge can hear you. Never annoy the judge.

Cross-examination

Just as your attorney can take testimony from the tenant and cross-examine the tenant, the tenant can cross-examine you. The tenant may question you on something you said in response to your attorney's question to you. This is where a hearing or trial can get completely out of control. This is not time for a conversation or argument with the tenant. Just answer the tenant's questions, and if the question is improper, you can pause and your attorney will object. The judge will then direct you to either answer or ignore the question.

Post-Ruling Behavior

If you win the case, which is frequently the case in eviction actions, do not smile and thank the judge. Just put away your papers and follow your attorney out the door. The tenant may be angry and make a scene; ignore it all. Your attorney will simply say, "Thank you for your time, your honor" and walk out the door. The judge is not "happy" the tenant is being evicted, although you may be, and the judge does not need you to thank him or her for evicting the tenant. Try to allow the tenant to walk ahead of you, so you do not end up in the elevator with the tenant you just evicted, or end up in an altercation outside of the courtroom. If the Judge gives an adverse ruling, do not argue with the Judge or in any way show disdain for the ruling.

Failing to show up for court

As hard as this may be to believe, sometimes our clients decide not to show up for court. Something comes up at the last minute or for some reason our client decides it is not necessary to come to court. A lesser issue is when our client decides to send someone else in his or her place that has little to no knowledge about the case. Is this fatal? It sure can be. We often are able to use the tenant's testimony to win the case, but if the tenant"˜s testimony is adverse on a key factual issue, there is often no way for the attorney to refute the tenant's distortions or lies. If you have a real emergency, call your attorney immediately, and often the case can be re-set. Always take court seriously. A judge can dismiss a case or worse yet, find for the tenant if you do not show up. If the tenant has an attorney, you may and most likely will be liable for the tenant's attorney's fees if you lose.

Communication

It is always advisable for the attorney to have your cell number and for you to have your attorney's cell number in case there is some reason you will be late to court. Communication is the key, and the judge will usually be willing to hold the case off or take other cases before you in the event you are having a problem getting to the courthouse.

 

(Back to Top)

 

 

Identity Theft Part 2- Protecting Your Resident Electronic Information
by Michael Geo. F. Davis, Attorney at Law

 

You're very careful about your resident paper files. They are kept secure under lock and key with very limited access. You have a paper shredder and use it faithfully for any disposed documents with resident personal information. Your mail and drop box are secure. You've done your part to protect your residents' information. Maybe not. What about the electronic files?

Password protection.

Your security is only as good as your password protection. The craftiest password is worthless when it is stored on slip of paper inside your desk drawer. Worse is the practice of keeping all your passwords on a list in your desk. We are required to have a password in so many programs and websites that keeping them all straight almost requires a list. Many software experts suggest only two or three passwords, one each for minimum and maximum security to be used according to your assessment of the site or program. One separate password should be used for your banking.

Update your computer software.

Most software vendors are constantly updating their software to counter the developing threats against it. In this day and age of unwanted extra programs in the automatic update, you don't have to necessarily automatically update. You can set you computer to notify you of the update for your review before downloading. Use antivirus software, and it should update automatically. Use a firewall as a guard to monitor outside attempts to access your system.

Spyware infection.

Know the warning signs of spyware infection. Emails are sent that you didn't originate. Check your sent emails regularly. Your computer inexplicably slows down. It doesn't function properly and reports unexplained error messages. It serves pop ups repeatedly, especially if you aren't on the web. You find web pages that you aren't visiting opening; they seem to self-generate. It fails to shut down or it won't restart.

Attachments, downloads, websites

Exercise judgment in opening file attachments. Free software may be tempting but costly in the long run when unwanted programs, spyware or viruses come as hidden extras. Bad software (malware) can be found in many free games, file sharing programs and customized toolbars. If you send an attachment, include a text message in the email to explain the attachment or, at least, to notify the recipient that you generated the email. The immense popularity of social networking sites is irresistible to those who would harm your computer programs or files for fun or profit. An internet usage policy is a must, and to be effective it must be enforced. One staff member in the wrong place can compromise the computer files of everyone on a poorly protected network.

Report violators.

Report suspected hacking or viruses to you internet service provider (ISP) and to the hacker's ISP. Reputable internet service providers will use your report to prevent further abuse. You can contact the IC3 at www.ic3.gov. The Internet Crime Complaint Center (IC3) is a partnership between the Federal Bureau of Investigation (FBI), the National White Collar Crime Center (NW3C), and the Bureau of Justice Assistance (BJA). The IC3 website has comprehensive information on internet threats and the methods to protect you files.

 

(Back to Top)

 

 

The Pet Application
by Harry A. Heist, Attorney at Law

 

Pets can be a real nuisance and liability for the landlord or property manager. Beside the higher chances of damage to the premises, each year pet related injuries cost landlords millions of dollars, some of which is not covered by insurance. Many insurance companies now simply disallow pets on the insured premises, and the landlord must sign an agreement that pets are not allowed and if there is a pet related injury, the insurance company will not cover the claim. Most landlords require the tenant to sign a pet addendum or agreement which details the terms and conditions of the pet on the premises, and requires the tenant to pay either a non-refundable pet fee or a pet deposit.

Ironically, the applicant for a rental is made to go through a vigorous application procedure under which the applicant's credit, criminal background, and prior landlord references are carefully checked, while the tenant simply has to fill out a pet addendum and pay the required sum of money for a pet. The tenant gets approved, the pet sums are paid, and the tenant and his pet move into the premises. Three months into the rental, you inspect the property or have to repair a maintenance issue and you discover that the 25 pound Terrier on the application is indeed now a 40 pound Pit Bull Terrier. You were expecting this cute little dog and now are completely surprised to see this fierce and dangerous dog on the premises. Of course the tenant assures you that the pet never bites, is great with children and is adorable, but you don't agree, and if your insurance company found out, your coverage might be cut off FAST.

What did the landlord do wrong?

The landlord's surprise is due solely to the fact that the pet was not shown to the landlord prior to taking the tenant's pet fee or deposit and signing the pet addendum or agreement. Had the landlord actually seen the pet at the application process, this never would be happening. This is purely an example of a problem that was completely avoidable if the landlord simply interviewed not only the applicant, but was able to see the applicant's pet BEFORE approval. Whose fault is it really that the tenant now has a 40 pound Pit Bull? It is the landlord or the property manager's fault. It is quite possible that the tenant was telling the truth about her pet at the time of application. After all, a Pit Bull Terrier is a terrier and it could have gained 15 pounds in 3 months.

The Easy Solution

The easy solution that has been discovered by the savvy landlord and property manager in Florida is to have the tenant fill out a pet application. The pet application deals with a number of issues, and the tenant can be required to pay a fee for the pet application. The pet application is not to be confused or substituted for a properly executed pet addendum. This is the application for the pet. Like an application and approval is the prerequisite for a tenant signing a lease, the pet application and approval is the prerequisite for the tenant executing the pet addendum.

What does the pet application accomplish?

The pet application is the applicant's request for permission to have the pet. The tenant is not simply filling out a pet addendum and paying a fee; this is a permission based process. The pet application makes it clear that the fee for the pet application is an administrative fee and is NOT to compensate the owner for any pet damage which may occur. It is an application fee, pure and simple. The pet application makes it clear that the landlord does not have to approve a pet, just like in most cases a landlord does not have to approve a tenant for residency. Information about the pet is provided, and most importantly, the applicant is required to bring the pet to the management office (or parking area) so the landlord can observe the pet, take a photo and observe the demeanor of the pet. If the breed looks suspect, management can ask for further verification, just as with a tenant. Finally, the applicant is asked about the pet's history in an attempt to reduce liability for management. In the below sample, the pet application fee is refundable if the pet is not approved. You can modify this to make it non-refundable whether the pet is approved or not. This is up to you.

 

SAMPLE PET APPLICATION

This Pet Application is made as a part of the rental application for the property located at: _________________________________, Florida. I do hereby request that my pet be approved to reside with me during the term of my lease agreement. If my pet is a "Service Animal" or a "medically necessary pet" I will notify management in writing and this Pet Application will not be applicable.

NOTE: This is a Pet Application only and not approval for a pet unless approved by Management , a Pet Addendum is executed by all parties and all sums and fees are paid according to the Pet Addendum. In order for the pet to be permitted on the premises, the pet must be fully approved by Management, a Pet Addendum signed by Tenants and Management and all fees paid including but not limited to an additional security deposit, pet deposit, pet fee or additional rent as required by Management.

I understand that Management is under no obligation to approve my pet for occupancy. The following pets will not be accepted under any circumstances: German Shepherds, Dobermans, Pit Bulls, Chows or Rotweillers, any mix of the aforementioned or any other breed or mixture thereof which Management decides to not approve.

In consideration of having a pet go through this application process, I agree to pay a Pet Application fee of $__________ to Management. I further understand that the Application Fee is strictly an administrative fee paid to Management and is not considered a security deposit or pet deposit. Management requires a photo of the pet for Management's files, a copy of the pets vaccination information from the veternarian and the pet must be brought to the parking area of the Management office for inspection by a representative of Management.

The Pet Application Fee will be refunded if Management does not approve the pet.

Breed: ___________________ Name: ___________________

Weight: ________________ lbs. Sex __M ___F Age: _______

Estimated Pet weight at maturity ______________ lbs.

I do hereby certify the following:

My pet is well trained, is not dangerous to others and does not have a propensity to be vicious. My pet has never bitten, clawed or caused harm to another person or other pet, and it does not bark excessively when I am home or not home. No other landlord or person has ever complained about my pet or its behavior.

My pet is not pregnant and will not become pregnant while we are residing on the premises. If my pet becomes pregnant, I will be in violation of this agreement and the pet and any offspring must be immediately removed from the premises

I agree that there shall be no other pets, other then listed above on the premises without the express written approval of Management. Should I desire additional pets, I agree to apply to Management for approval, submit another Pet Application and obtain approval prior to pet occupancy.

In the event that my pet causes damage or destruction to persons or property, I agree that all costs of said damage or destruction shall come out of our Security Deposit and/or Pet Deposit. Should the Security Deposit or Pet Deposit be insufficient to cover the cost of any pet damage or destruction, then I agree to be financially responsible for damages above and beyond the amount of my security deposit.

If the pet becomes a nuisance or causes damage or destruction to the premises or otherwise violates the terms of this pet application, Management may terminate the pet's right of occupancy and/or my lease agreement subjecting me to eviction.

I hereby agree to the terms and conditions of this Pet Application form this _____ day of __________________, 20____.

 

___________________________ Applicant

____________________________Applicant

____________________________Management

_____PET IS HEREBY APPROVED ___/____/____

______________________________ Management

 

(Back to Top)

 

 

Application Deposits
by Michael Geo. F. Davis, Attorney at Law

 

Managers and leasing teams invest their time and effort in guiding an applicant through the application process. They may even turn other applicants away or hold the rental for him. After a successful application process (completed application, credit check, criminal background) the applicant informs you that he won't be renting. He wants his application deposit back. Under what circumstances can you keep it?

Any actual damages?

At the outset please note we advise that the application deposit be returned unless the landlord can show actual damages, that is a financial loss, such as holding the unit while turning away other qualified applicants. An apartment community with an inventory of similar apartments may have difficulty showing this type of financial loss. A residential property manager with distinct single family homes would be more likely to have a held-off-the-market loss of rent.

Penalties and forfeitures are disfavored.

Our analysis begins with the recognition that Florida law in general does not look favorably upon contract penalties or forfeitures. Penalties and forfeitures are not enforceable in numerous areas of Florida law, either by express statutory prohibition or by judicial interpretation relying on such concepts as unconscionable provisions.

The documents.

With that caution in mind we turn to an examination of the application and any other documents relied upon for the right to retain the deposit. The wording both to avoid the forfeiture and to authorize forfeiture must be clear and unambiguous: the grace period, the time and method of the landlord's application acceptance, the time and method of the applicant's cancellation, the amount of forfeiture, etc. The burden of proof will be on the landlord. Not only will the lack of strict compliance, but also the inability to prove strict compliance, with the terms of the forfeiture be fatal. If the amount to be retained on the application form is left blank, or other sections of the application addressing deposit forfeiture are left blank, this is often a fatal error.

The oral contradiction.

Even a clearly written, unambiguous document can be contradicted by the oral misrepresentations of the landlord's representatives. The applicant will often state that the leasing staff assured him that his application deposit would be returned without mentioning any conditions. A good counter to this claim is a leasing checklist, checked-off and signed by the leasing agent, which includes the disclosure of the application deposit policy. A separate applicant signature line or initial space is often placed next to the forfeiture language for emphasis.

Is there an agreement to lease?

Has the applicant, who has not reviewed the leasing documents before signing the application, entered into any agreement to rent, regardless of a signed deposit forfeiture? The point of the transaction is the rental of a unit. A rental is not accomplished when the application is accepted, but only when the applicant signs the lease. An accepted applicant who in good faith rejects certain lease provisions or any other leasing document provisions (community rules and regulations) has never agreed to rent, but only agreed to enter into negotiations to rent. Rather it is the landlord who by refusing to negotiate the lease terms is refusing to rent. The application deposit should be returned.

Is the application deposit a security deposit?

Is the application deposit a security deposit under the Chapter 83, The Florida Residential Landlord Tenant Act? Neither the statutes themselves nor the case law answers this question directly. We can postulate that at the application stage we don't have a rental agreement yet. Without a rental agreement, we don't have a landlord/tenant relationship. Without a landlord/tenant relationship, Chapter 83 doesn't apply. Further, FS 83.43(7) defines a rental agreement as providing for the use and occupancy of premises. FS 83.49 addresses money deposited on a rental agreement. A good argument can be made that with no lease agreement, the deposit is not subject to the bank deposit and notice of claim requirements of FS 83.49.

Florida Real Estate Commission rules

For residential property managers there is one more consideration, the Florida Real Estate Commission, FREC has not taken a clear position on whether section FS 83.49 applies. To be on the safe side, assume it does, and if you are going to keep the deposit, follow the normal claim upon the security deposit as outlined in FS 83.49, even though it may not in fact be a security deposit.

The risk of litigation.

As you can see from this article the pitfalls in keeping an application deposit are many. For this reason we advise our clients that the application deposit should be returned unless the client can show actual monetary loss. The time, effort and expense to defend a small claims case will outweigh any income derived from tenuous application deposit forfeiture, not to mention the potential for a class action claim.

 

(Back to Top)

 

 

Accumulated Utility Bills, Late Charges and The Tenant
by Harry A. Heist, Attorney at Law

 

You just took over a property that has had 3 managers in the last 6 months. Needless to say things are a mess, and each day you find more money owed by tenants and inconsistencies in the rent records, receipts and especially the utility accounts and late charges. It is pretty clear that collection of these amounts was the last thing on the prior manager's priority list, but your company is now faced with thousands of dollars in unpaid utilities and growing ledgers full of late charges and other unpaid sums. Can you simply bill the tenant and get paid? Not so fast. Collecting this money will be a "process". Can you put the full amount of 4 months of uncollected utility bills and late charges on the on the Three Day Notice and expect to prevail in court? We certainly will not file the case.

With the economic downturn, the focus has been on collecting the base rent money. It is hard to turn away a payment of $900 because the $50 late charge was not included. While the tenant may be responsible for the payment of late charges, NSF fees and utility bills when they tender the base rent alone, the base rent alone is being accepted. The result is a build up in the other charges, including unpaid late charges building on top of other unpaid charges. Eventually the tenant's ledger is a complete mess and nearly impossible to distinguish. When the next month comes along the tenant is given a Three Day Notice with the full amount owed, and again the resident simply pays the base rent which is accepted. If this occurs multiple times, the chances of collection diminishes, and the principle of law referred to as waiver may come into play. Some judges rule that prior uncollected late fees will be waived if base rent is subsequently accepted. Lease clauses indicating that all payments will first be applied to outstanding balances may or may not matter to this type of judge, particularly if there is a clear pattern of the tenant paying the exact base rent amount late.

Preventing the problem

What is a partial payment? Many managers will tell us that it is their company policy not to accept "partial payments", but what they mean is that they don't accept partial "base rent" payments but do in fact accept the base rent, even if a late charge or a utility charge is not included.

It is far easier to prevent the problem than to fix the problem. All a property manager needs to do is refuse any payment that is not the full payment amount under the lease terms and demand full payment only with no partial payment accepted. If the lease defines late charges and utility charges as additional rent, all of it goes on the Three Day Notice, and if the resident makes a partial payment, and it is the first time this is occurring, it should be returned to the resident immediately with the resident told in writing and in person if possible that no partial payments are accepted. Property managers who are most successful with collecting the full amounts owed all follow this method, and it sends a clear message to the tenant that the terms of the lease will be upheld and enforced by the manager.

Solving the Problem

Not so fast! The problem of accepting partial amounts cannot be solved overnight. You must first determine what is owed and create a collection strategy. Determining what actually is owed can be difficult in and of itself. If you have inherited a property and it has been mismanaged, often the records of amounts owed are not accurate, or they are difficult to sort out, because when money was received it was applied by the manager's computer accounting software to monies owed with the balance being "rent" on the computer ledger, but the tenant intended for rent to be paid. We recommend that unless the tenant has been given a receipt and a balance due statement each time a partial payment was accepted, if the rent is $700 and the tenant pays $700, it should be assumed that the tenant is paying base rent. Getting a tenant in line is a process that cannot be accomplished overnight and should not be attempted through the eviction process unless all else has failed.

1. Notify the tenant in writing that NO partial payments will be accepted in the future. Explain that the payment the tenant makes must include any utilities for the period used and any late charges for that period.

2. Demand the base rent and the late charge for that month's payment on the Three Day Notice. We do not recommend you put the full amount the tenant owes on the Three Day Notice if it is a large accumulation of late charges and utility bills.

3. At the same time the Three Day Notice is served, prepare and Serve a Seven Day Notice of Noncompliance with Opportunity to Cure, and on that notice you will clearly state the balance owed to you for the past amounts of late charges and utilities. If it is confusing or you think the tenant may dispute the amount because of the past partial amount acceptance actions, attach a ledger to the Seven Day Notice. Make sure your ledger is accurate, because if it is not, you will really have a dispute later.

What will occur?

a. The tenant may attempt to pay the base rent as before. We feel this should be refused and returned to the tenant. Accepting this amount does absolutely nothing to solve your problem.

b. The tenant may attempt to pay the full amount owed on the Three Day Notice but not the amount on the Seven Day Notice. If you have also given the Seven Day Notice of Noncompliance with Opportunity to Cure for the other past due amounts, and your company is insisting that all these amounts be aggressively pursued, you would need to refuse the amount tendered pursuant to the Three Day Notice, because the tenant is still in noncompliance by not paying the amounts demanded on the Seven Day Notice of Noncompliance. However, now you are locked into filing a questionable Seven Day case. At the time the money tendered is returned, use this opportunity to explain to the tenant that the amounts must be paid in full and you will not accept anything less than the full amount or, if your company permits, enter into a payment plan with the tenant using the Past Due Amounts Workout Agreement.

c. The tenant may pay everything that is owed, but we doubt this will happen if the accumulated amount is high. If you get the full amount, congratulations.

Why use the Past Due Amounts Workout Agreement?

The Past Due Amounts Workout Agreement is like a promissory note, but it is used during a tenancy rather than after a tenancy. It allows you and the tenant to come up with a plan to pay the past due monies owed in a fashion that hopefully the tenant will be able to pay by converting any past due amounts into "rent", and it makes the entire balance due and owing as "rent" if the tenant fails to pay per the agreement. This will allow you to place the entire balance owed on a Three Day Notice in the event the tenant fails to pay.

Best practices when accepting a partial amount

While it is easy for us to tell you to refuse a base rent payment or base rent including a current late charge that does not include the accumulated utilities or past accumulated late charges, we know acceptance of such payment will happen, and it may be your company policy. If you do this, we urge you to always immediately give the tenant an accounting showing exactly how the monies the tenant paid were applied. If they are applied to utilities and late charges first, make this perfectly clear, as the tenant will often use the defense in court that she has "paid the rent". You want to be able to tell the judge that money was accepted and applied first to the other amounts owed and second to the rent, AND that the tenant completely knew it and understood it.

Not sure how to proceed?

If you are not certain how you should go about cleaning up seriously delinquent accounts, we recommend you call your attorney as ask for advice. Certain fact situations may require differing strategies. Always resist the temptation to simply put the full past due accumulated amount on the Three Day Notice.

Renewing a lease?

Never renew a lease unless all the past amounts are paid or you have asked your attorney for advice on how to address the amounts owed on the new lease. Failure to do this correctly could result in you completely losing any ability to collect the accumulated past due amounts.

 

(Back to Top)

 

 

Statistically Measuring the Risk Of Lease Default
By Michael Brown, Regional Sales Director, First Advantage SafeRent, Inc.

 

 

In a Slow Year, Best Practices for Managing Renter Credit Quality to Maximize Occupancy and Rents

It is nearly impossible to go a day without being reminded of the economic stress that is shaking the nation "” as job losses increase and apartment living alternatives become cheaper, the multifamily industry is feeling the pinch. In 2008, apartment applicant traffic on a national, same-store basis was down 8% against the prior year.

Properties of each class showed similar decline rates in their same-store applicant volume: Class A properties were down 7.2%, Class B were down 7.9%, and Class C properties declined 8.1%. Our anylitics reveal that, at the market and portfolio level, resident demographics and operating performance varied widely.

In the year ahead, for many properties in many markets, apartment demand is expected to shrink further. It would not be surprising to see same-store demand off 10-15% by the end of 2009 over 2008's low levels. Negative short-term drivers include;

1. An increase in unemployment rates throughout 2009, to levels not seen in the apartment industry in a generation. 25-34 year olds "“ the demographic group with one of the highest propensities to rent "“ are expected to have the highest unemployment rate.

2. Increasingly affordable home purchase terms, helped by falling home prices, low mortgage interest rates, and a new housing tax credit that reduces home purchase costs.

3. A historically large number of single-family homes for rent, still held by motivated owners.

These negatives will be mitigated by two familiar, longer-term apartment demand drivers: continuing immigration growth and the large number of "echo boom" consumers coming into their prime renting years. Also, demand for apartments may benefit from federal stimulus spending and related efforts to strengthen the housing, commercial credit and securities, and commercial banking sectors.

In the face of shrinking demand and greater industry attention to property operations, well-run operators and asset-managers are deploying these five industry best practices to maximize portfolio value.

Don't Guess "“ Statistically Measure the Risk of Lease Default

Many companies maximize property value and net operating income (NOI) by using rank-ordered risk scores to accept those applicants that are the best qualified candidates to meet their lease obligations and renewals. Companies using statistical lease modeling benefit by using a tool that incorporates deeper data and can better predict the unique payment behaviors of renters.

Without a thorough picture of applicant history, operators needlessly admit those applicants that drive up skips and bad debt. Use of a screening company which offers landlord-tenant records and a statistical model that provides a validated risk score, presents a far more complete picture of an applicant's overall likelihood to fulfill their lease obligations than using just credit by itself.

Without a statistically validated scoring model, properties are forced to make decisions on applicant risk that are more intuitive. This leaves companies in a position of guessing exactly which elements of their applicant selection criteria to change when the market changes "“ without having a way to measure the effect of such a change. For instance, in this currently soft market what do you change within your screening criteria to increase occupancy? Do you change the income-to-rent ratio? Or the number of trade lines?

More importantly, besides determining what to modify, you would have to determine how much to modify each element. It is important to understand that the impact of those changes is difficult if not impossible to gauge "“ until it appears as bad debt and delinquency increases in the portfolio's financial statement.

Accept Only the Credit Risk Needed to Meet Operating Goals

Using a statistically validated score as a constant measure of applicant risk is essential to managing renter credit quality. When companies have the ability to rank order risk and differentiate among marginal applicants, owners and operators have an operating advantage, especially in a down market.

With a statistical model, you don't have to change how you evaluate an applicant to react to a declining market. What does change is your ability to proactively increase your risk tolerance. With a statistical model you have the ability to rank order applicants by risk enabling you to move the risk tolerance "bar" just far enough to capture enough "next risk tier" applicants to meet your properties leasing and occupancy goals. Taking the best-qualified applicants from available demand ensures that management has maximized its ability to push rents and minimized its exposure to skips and defaults.

In contrast, modifying individual criteria within a rule of thumb model creates uncertainty about the outcome "“ will tweaking a few rules lead a property to admit too many defaulting applicants? Will it inadvertently screen out those applicants that would have performed well if their likelihood of lease default had first been statistically verified?

Actively Manage Risk Tolerance Levels and Utilize a Conditional Range

It is very important to actively manage risk tolerance levels and utilize a conditional acceptance range at every property to maximize occupancy and performance. Maximizing additional risk tolerance strategies (increased deposit requirements, additional co-signer, and shorter lease terms) will help offset any additional financial risk that the property may incur. Additionally, utilizing the conditional range effectively can allow properties to expand their risk tolerance thresholds further than they normally would while achieving bad debt and occupancy goals. It has been demonstrated that imposing additional conditions on applicants will help improve resident performance.

Conversely, actively managing risk tolerance levels at properties that do not see a decline in demand is also important. If the demand is high relative to supply, properties can begin to tighten levels and focus on filling vacant units with the best, most highly qualified available traffic. Improving renter credit quality by tightening risk tolerance levels will help improve property performance by reducing bad debt and increasing lease fulfillment. Furthermore, we expect that residents with higher credit quality are more likely to accept increases in rent.

Forecast Demand Against Supply to Develop Marketing, Closing and Retention Strategies

Property- and portfolio-specific trends in renter credit quality, volume, and acceptance criteria are more important to operators than general national trends. In our experience, apartment properties that forecast upcoming expirations against projected demand are the exception, not the rule. Yet this data is readily available.

By applying the following simple calculations from your resident screening history, properties can yield valuable insight and pricing power when handling applicant traffic in 2009:

(a) Track a property's volume and credit quality of applicant demand against historical levels. Look at the overall number of applicants in the same quarter one and two years ago. Anticipate that demand this year may be off 10-15% from last year's volume, all else equal. Also, adjust for any differences in marketing (e.g., higher/lower budgets, improved online presence, improved prospect targeting) that impacted the numbers in one quarter but not the other.

Keep in mind that in most markets and property classes seasonality is a key reality of resident traffic. Your second quarter sees the greatest number and the best-qualified applicants, while quarters one and four show the least and weakest credit quality traffic. Thus, don't expect the next 90 days to match the last 90 days. Instead, match the upcoming quarter against the same quarter a year ago.

(b) Forecast your upcoming available unit supply, based on current levels of expirations, renewals, and skips. Well-run properties today are going the extra mile to retain residents in the face of the slow year ahead "“ even at the cost of offering concessions under certain conditions.

(c) Subtracting demand (a) from supply (b). Do you anticipate a surplus of units or applicants in the quarter ahead? A substantial shortfall in applicants suggests you can/should take steps now to retain residents. An excess of projected applicants over available units should be considered with caution "” after all, skips may go higher in 2009 given the anticipated increase in unemployment. But if you expect excess demand even under conservative assumptions, you may have a rare spot of pricing power at that property in the quarter ahead.

(d) Run your model to "stress-test" your assumptions with less demand than you originally anticipated. At the extremes, we have seen swings in qualified demand of /- 30-50% in 2008 vs. the same quarter a year before.

Review Marketing and Resident Applicant Demographics

An ongoing and thorough review of marketing efforts, closing effectiveness and target marketing spend is crucial. Make sure you are reviewing the originating zip codes of your applicants and compare the acceptance percentage and risk scores from each area. You'll also want to look at acceptance rates by marketing source to make sure the media bringing in the most qualified leases are getting an adequate marketing spend. Cross-reference this information to target the highest yielding zip codes with the most effective marketing communications to ensure you are driving in the most qualified applicants while practicing efficient marketing spending.

Also evaluate whether the scores, incomes, and prior rent trends of your applicant base is experiencing significant change. Are your properties attracting the same credit quality of applicants, just fewer of them? Or are scores and incomes of your resident population falling off compared to prior measures at the same time your applicant volume is on the decline? The latter case may suggest more significant repositioning, target marketing, curb appeal, and site-level management efforts are needed.

Conclusion

Property operators and asset managers can expect extra time in the spotlight in what promises to be a rocky year ahead. To respond, well-run companies are rank-ordering applicant risk, actively managing credit criteria in response to market conditions, and using property-specific operating history to inform key operating decisions. Using these simple but powerful best practices, strategic operators can attract the best and largest share of a diminishing pool of qualified applicants, meet operating goals, and position properties to weather the economic uncertainty ahead.

About the Author: Michael Brown is Regional Sales Director for First Advantage SafeRent, Inc. He can be reached at mbrown@FADVSaferent.com. For questions about this article, please contact First Advantage SafeRent, 1 888 881 3400(Back to Top)

 

 

The Deceased Property Owner
by Harry A. Heist, Attorney at Law

 

You have been managing the property for a single or widowed elderly out of state investor, when suddenly you receive word that your owner is deceased. The rent checks are still coming in, and normally you would deposit the checks, take out your commission and send the balance to the owner. The owner's son asks you to send the checks to his bank account. Knowing it is the owner's only child, you oblige. To your surprise, 4 months later someone claiming to be an heir is demanding you send her the money. Conflicting demands? You may be in trouble now. As our population ages and so many people have invested in rental property, the chances of this happening increase each year. How you deal with the situation could mean avoiding a lawsuit or being pulled into a probate case. Obviously if the owner is married or there are multiple owners on your property management agreement, this will most likely not be an issue.

You were not aware of the owner's death

Some property managers have gone many months without any contact with the property owner. If the rent is coming in and the manager is doing their job, often there is no need to contact the property owner. If you have been remitting payment to the owner and were not aware of his death, there would be no liability.

You have been notified of the owner's death

As soon as you are notified of the death of the owner, you can either cease sending the money as before and hold the money in your escrow account, or you can make the check out to the "Estate of ___________" and continue managing and sending the payments.

Who to take direction from

It is a natural reaction to feel that you can take direction from someone who you know to be the sole heir of the deceased. It is possible that you knew your owner was ill for some time, and the son or daughter had been dealing with you and handling the parent's affairs. Once the owner dies, the son or daughter that you had been dealing with has absolutely no authority by law to act on behalf of the deceased parent. A probate estate must be opened, and someone, probably the son or daughter, will be designated by the court as the Personal Representative or Executor. Different states have different names for the same thing. You will need to get a court document showing who this person is, and when that time comes, you can comfortably disburse the escrowed money to "the Estate of _____" The personal representative may want you to continue managing, but more often will wish to sell the home. This is a good opportunity to try to get the listing, or if you are not involved in sales at all, refer it to an associate.

Are there other owners?

If a person properly planned to avoid probate prior to death, they may have placed a child or children on the deed to the Florida property, but you were not aware of this. In this case, you can continue to sent the rent proceeds to the living person on the deed and can avoid sending it to an estate or holding the funds in escrow.

CAUTION in the event of a dispute

If you are notified of any dispute between people claiming to be heirs of the deceased, the first thing you should do is call your attorney. He or she may advise that the money should be kept in escrow, as probate battles sometimes do occur, and you would not want to be in a position in which you disbursed to the wrong party and possibly have to disburse again, this time out of your own pocket to the correct party, leaving you only with the alternative to sue a party who is most likely out of state. If in doubt, don't disburse, BUT if there are conflicting demands, we recommend you notify FREC and get guidance. Although notifying FREC is not always desired, your license is crucial, and sometimes a slip up ends up being classified as "failure to account and deliver", which looks far worse that it may be in reality, but has penalties that can be severe.

 

(Back to Top)

 

 

The Missing Lease
by Michael Geo. F. Davis, Attorney at Law and David R. Weisse, Attorney at Law

 

Missing leases are a fact of life, whether through negligence or theft. Whenever a business deals in as much paperwork as the apartment or home rental business does, misfiled, mislabeled or mistakenly destroyed paperwork, including leases, are bound to happen. Not to mention that the lease, and often the entire file, are taken by an employee for his benefit or the benefit of a friend. How do you deal with these situations? For purposes of this article I will assume that the tenant's rent is due on the first of the month.

Other documents

While there may be evidence that a lease once existed - applications, signed addendums, move-in inventory, your computer entries "“ none of it is conclusive. The burden of proof in court is on you, because you are claiming that the lease once existed and what the lease terms were. The tenant can dispute that he ever signed the lease. He can claim that, despite your company policy against changing the preprinted form, his particular leasing agent agreed to changes. It is an uphill battle, and you are better advised to accept that there is no lease than try to prove one existed.

Eviction cases

The simple answer in the eviction case is that the tenant is month-to-month, but this may not really be an accurate assessment, particularly since oral leases of up to a year can be enforceable. If you are sure that a written lease did exist, and you know the duration of the lease, the attorney can allege in the eviction complaint that the lease is lost, and what the rent amount was under that lease. The monthly rent will typically be the amount that that tenant has been paying and which you have been accepting. It is important that you tell your attorney that this is a lost lease case.

Non-eviction missing leases

Often you will discover a missing lease during your own examination of the files. You will have to investigate carefully whether it appears that the lost lease has already expired, at which point the tenancy has become month to month. Florida Statutes require that the tenant give fifteen days notice before the end of a monthly payment period in order to terminate a month-to-month tenancy. When you cannot produce the lease, and the tenant attempts to non-renew during the apparent lease period, we would recommend not challenging the tenant's non-renewal notice in most cases, unless you have clear evidence of theft. Accordingly, the tenant should not be charged any rent beyond the non-renewal date. The tenant can be charged for damages in excess of ordinary wear and tear. The security deposit claim and return procedure 15-day (deposit returned in full) or 30-day (claim against deposit) clock starts when the apartment is vacated at the end of the month.

An operations decision

The tenant may have his copy of the signed lease. Since you want the tenant on a lease but your occupancy doesn't afford you the luxury of losing a tenant, you have to make an operational decision to tip your hand or not. If you do nothing, the best case scenario is that the tenant performs as required under the written contract and pays rent until the end of the lease term. If a skip occurs, your ability to charge rent beyond the month the tenant vacated early will be seriously compromised.

A lease is a must

If you want a lease signed, see the tenant in person. Nothing replaces face-to-face contact in assessing the tenant's intentions. If he decides to stay but is reluctant to re-sign the old lease or sign a new lease, we don't recommend trying to force the issue by sending a notice of non-renewal or a notice increasing the monthly rent, unless you are very confident that the missing lease has already expired.

LIHTC

A missing lease discovered during an audit can be critical in the low income tax credit property. As a rule a lease is always required. You can attempt to address this missing lease with a Seven Day Notice of Noncompliance with Opportunity to Cure, requesting that the tenant produce his copy of the lease or re-sign the old lease. If the time period runs, I suggest a second Seven Day Cure. If the second time period runs, then you can send a Seven Day Termination notice, but a judge may be unsympathetic to the management office's perceived incompetence, and without a signed lease showing the tenant's agreement to comply with LIHTC regulations, the eviction could fail for that reason.

Month to month fees

When you cannot produce a lease, late charges should not be assessed on a Three Day Notice, and your ability to enforce other terms and conditions can also be seriously compromised, such as repayment of concessions, or clauses addressing unauthorized pets or unauthorized occupants. If the lease is missing but one or more addendums is intact, the value of these addendums may be seriously diminished, but they may help in proving the intended duration of the tenancy. We still recommend that the landlord adhere to the obligations created under the standard written lease, such as providing 30 or 60 days' notice of non-renewal prior to the suspected lease expiration date.

Re-signing

I'll close with one last word on re-signing. A lease is a form of a contract. There is no requirement that a lease can only be signed at the beginning of the term. It is permissible for you and the tenant to reprint and re-sign his old lease and date your signatures with the current date. This may be particularly helpful when the tenant won't sign a new replacement lease for an increased lease term.

 

(Back to Top)

 

 

Tenant Death And The Obsolete Lease
by Harry A. Heist, Attorney at Law

 

Prior to the law change almost 2 years ago, if the last remaining tenant in a dwelling unit died leaving personal property behind in the unit, serious problems were created for the property manager. Upon the tenant's death, relatives often would request keys or access to the unit to retrieve personal belongings of the deceased. If the property manager provided such access to the relatives or friend of the deceased, massive liability was potentially created, as heirs could later appear claiming a property interest in something that they said was or indeed was willed to them by the deceased. Since the property manager was not allowed to provide access, the result was that the relatives of the deceased would need to open up a probate estate so a personal representative, referred to in some states as an executor, could be appointed, and the property manager could then deal with the executor directly, possibly get possession of the rental unit from the executor, or even serve notice on the executor and file an eviction if necessary. Since more often than not an estate was never opened, the property manager was left in a legal limbo, and would frequently have to consider hiring an attorney to open up an estate at significant expense and delay.

Florida Statutes Section 83.67 solves the problem of the deceased tenant and the abandoned property, BUT it only will be effective and applicable if the proper wording is in the lease agreement.

 

The wording which MUST be in the lease is as follows:

BY SIGNING THIS RENTAL AGREEMENT, THE TENANT AGREES THAT UPON SURRENDER, ABANDONMENT, OR RECOVERY OF POSSESSION OF THE DWELLING UNIT DUE TO THE DEATH OF THE LAST REMAINING TENANT, AS PROVIDED BY CHAPTER 83, FLORIDA STATUTES, THE LANDLORD SHALL NOT BE LIABLE OR RESPONSIBLE FOR STORAGE OR DISPOSITION OF THE TENANT'S PERSONAL PROPERTY.

Is this wording in your lease? Really? Are you sure?

Take another look and see if these words: OR RECOVERY OF POSSESSION OF THE DWELLING UNIT DUE TO THE DEATH OF THE LAST REMAINING TENANT are in your abandoned property clause. Chances are the words are not there. Fix it now!!! Failure to fix this clause can mean the difference between getting possession 60 days after a tenant's death or having to wait many months and spending thousands of dollars in attorneys fees. Here is some suggested reading: Tenant Death "“ The New Law

 

(Back to Top)

 

 

Concession Paybacks and the Early Termination Law
by Harry A. Heist, Attorney at Law

 

Approximately 30% of apartment communities are utilizing the new Early Termination Addendum which gives the resident a choice of "damages" upon breaking the lease before the natural end of the lease. If the resident chooses Option 1, the tenant will owe a fixed amount, usually one or two months' rent to the apartment community, in addition to any past or current rent owed and physical premises damages which may be attributable to the tenant. Most tenants, when they are given the explanation of the choices, choose Option 1, as it is in their best interest, since the apartment they vacate may stay vacant for quite some time, making Option 2 a much more risky venture. A large amount of confusion occurs when the tenant has been given a rent concession, chooses Option 1 and then breaks the lease. An equal amount of confusion has to do with the "notice" requirements imposed upon the tenant in Option 1.

Concession Chargebacks

Most concession addendums or clauses have some form of chargeback provision in the event the tenant defaults on the lease agreement by vacating before the end of the lease, either voluntarily or through an eviction. One would assume that if the tenant chooses Option 1, receives a rent concession and then breaks a lease, the concession payback can be charged in addition to the Liquidated Damages amount provided for in Option 1. This is INCORRECT. If the tenant chooses Option 1, the liquidated damages amount is fixed to the one or two months' rent that have inserted in Option 1. YOU CANNOT also charge the tenant a concession payback. Now you may be wondering why this is the case. The law is not clear on its face regarding this, BUT the legislative history of the law will show that the legislative intent of the bill passing process dealt with this. In attempting to get the Early Termination Law passed, early drafts and versions of the bill before it was enacted into law INCLUDED a concession chargeback. Through negotiations with the legislators and the Governor, it became clear that the Governor wanted concession chargebacks removed from the bill, or else he was going to veto the bill. The concession chargeback language was removed from the bill, and therefore it is fairly clear now that the liquidated damages are limited exclusively to the one or two months' rent in Option 1. While this does not seem fair for a tenant to receive a generous concession, break a lease and then only be required to pay liquidated damages, the landlord must understand that providing rent concessions are done at the risk of the apartment community. Give the gift, but don't expect anything in return.

Requiring Notice from the Tenant

Under the Early Termination Law, the tenant can be required to give notice to the landlord of up to 60 days in addition to being charged liquidated damages of up to 60 days' rent. It would appear to the average reader that this means you can ask a tenant to give you notice, charge the tenant through the notice period and then ALSO charge the tenant up to 60 days additional rent as a liquidated damages. For example: a tenant walks into your office, pays the rent and gives you 60 days' notice. The tenant then leaves after 30 days. What does the tenant owe you if they chose Option 1? The tenant only owes you the 2 months' liquidated damages. Now suppose the tenant gives you 60 days notice and stays and pays for the 60 days and then vacates. What does the tenant owe you? The exact same thing: 2 months' rent as liquidated damages. As you can see, the notice requirement of Option 1 is really quite hollow. You want them to give you notice, BUT if they do not, the penalty is exactly the same. We caution you to never charge the tenant through the notice period PLUS the liquidated damages, because that is how all the lawsuits and the need for the law change begin in the first place. If the tenant gives you 60 days' notice and lives there for 60 days, great. If they give you 60 days' notice and pack up and leave or do not give you notice at all, you can STILL only charge the liquidated damages amount. If you have any doubts as to what you can charge the tenant, call your attorney ASAP.

 

(Back to Top)

 

 

Mid-America's Open Arms Program
by Harry A. Heist, Attorney at Law

 

A couple weeks ago, I had the opportunity to visit an apartment in South Carolina. Although I have represented hundreds of apartment communities for close to 20 years, rarely if ever have I been inside any of my client's apartment units. It just usually is not necessary. Most of the time, our job is to remove residents from apartments, and occasionally I will go on-site to put on an in-house seminar or have a meeting with a client. I have seen plenty of apartment pictures of move-in and move-out conditions, the marketing brochures and websites, but living in a house for so many years, the inside of a Florida apartment was just not something I had seen in a long time.

The apartment I visited in South Carolina was special and indeed unique. I pulled into the entrance driveway, and it looked like your typical Florida apartment community. The nice landscaping, the "Welcome Home" sign, the access gate, the office near the entrance, the speed bumps. Nothing out of the ordinary. I parked the car and proceeded to Unit 167, which was the last door in the breezeway of one of the three story buildings. Upon entering the apartment, I observed what was probably the typical apartment unit you would find in Florida. The living room and dining areas were off of the entrance, there was a kitchen and a countertop through to the dining room, 2 bedrooms, 2 bathrooms and a room off of one of the bathrooms with a full size washer and dryer. There was a lanai off of the living room looking out onto a landscaped hill. While I am sure it looked like a typical apartment, there was a striking difference; the unit was fully furnished like a seasonal rental you would have in Florida: move-in ready with everything you would need to take up residence. All the usual furniture, TV, phone, fully stocked kitchen, towels, sheets, pillows, paper products, dinnerware on the dining room table: everything you would need besides your food. It was as if I stepped into someone's occupied apartment.

You may be wondering where this story is going. Well, this was no ordinary furnished apartment. No, it did not have granite countertops, no in"“door icemaker, no stainless steel appliances, no huge flat screen TV, no fine art on the walls, no high end furniture, and no concierge service. It was a fully functioning, furnished, clean and welcoming apartment which was the temporary home and place of comfort to my good friend Nan Cavarretta, whose husband Donnie has been in a nearby hospital gravely ill for almost 2 months. You see, Nan lives over an hour away in North Carolina and Donnie's condition was such that he could have died any day. Nan needed to be at the hospital every single day to help out, make decisions and be with the one she loves so dearly. Nan could possibly have stayed at a hotel nearby the hospital, but the cost of a hotel would have been prohibitive, not to mention having to go out to eat each day. With massive medical bills already and being out of work due to Donnie's hospitalization, it would have been nearly impossible for Nan to be near Donnie, and driving over 2 hours each day would have taken a serious toll on Nan physically, financially and emotionally. How did it come about that Nan was able to have such a wonderful gift given to her? Where did this apartment come from?

Mid-America Apartment Communities, one of our clients who owns and manages many apartment communities in Florida and many more throughout the country, provided this apartment to Nan. Did Mid-America do this because Nan was so "well known" in the industry or "special"? Well, we all know and love Nan, and she is indeed special to hundreds if not thousands of people in the industry, but Mid-America does this for hundreds of people in the same situation as Nan through their Open Arms Foundation. The Open Arms Foundation was developed by employees of Mid-America to provide a safe, comfortable place for individuals or out of town families to stay when a family member is hospitalized. Truly a home away from home. Like Nan, many times friends and family members live far from the hospital or must come in from another state for a period of time to be with their loved ones, some who may even be afflicted with a terminal illness and be in their last days of life. A situation like this could be devastating and exacerbate an already bad situation. Mid-America started this program in 1994 and now has 38 Open Arms Apartments through the United States, funded through employee donations, fundraisers, payroll deduction plans, and others who wish to help out.

Interested? What can you do to help?

First off, the Open Arms Foundation does accept donations to support the program, and we urge you to read more about their award winning program at Open Arms Foundation and donate if you can. If you really want to take this idea to another personal level, think about using one of your vacant units and possibly starting your own program. We all know most properties have vacant units! So many companies and individuals in the industry would be willing to help out. The furniture rental companies may donate the furnishings, your local stores may donate linens, the supermarket may even donate gift cards, you can have a fundraiser on your property or through your local apartment association, you can even hit the thrift stores for sundry items. The possibilities are endless for you to make a huge difference in the lives of people in need. While Mid-America took this program and made it into a non-profit charitable foundation, you can start smaller and start immediately. I hope the Open Arms Foundation which the employees of Mid-America created will inspire you and your company to give this a try. Thank you Mid-America for your efforts, commitment, generosity and inspiration.

 

(Back to Top)

 

 

Authorizing the Unauthorized Pet
by Michael Geo. F. Davis, Attorney at Law

 

Much to the chagrin of many a manager, the unauthorized pet that she wants removed has somehow become authorized. This is particularly distressing when the unauthorized pet is an aggressive pit bull or a 100 pound Labrador. How did this happen? Note that this article does not apply to service animals, as they are statutorily authorized by the various fair housing laws, regardless of any lease provisions to the contrary.

The correct procedure

As everyone knows, the correct procedure for an unauthorized pet is to send a 7-day cure notice. Seven days after service of the notice, you gather the evidence that will be needed to support a 7-day termination notice and then serve it. A good practice is to offer an agreement to vacate to the tenant responding to the notice. The agreement serves the best interests of both the landlord and tenant. The landlord avoids the expense of filing an eviction and the prohibition against accepting payment from the tenant while the 7-day termination notice is outstanding. The tenant avoids the stigma of an eviction. Whether the tenant is released from any further financial obligations under the lease (rent until relet) is a separate matter of negotiation. If the landlord does not want to force the issue of lease termination, it is legally permissible to serve another 7-day cure notice to give the tenant additional time to dispose of or apply for authorization of the pet.

Waiver and estoppel

Every landlord should be mindful of two legal concepts: "waiver" and "estoppel". Waiver is a legal concept under which a party is found to have foregone his legal right by his actions. The lease gives the landlord the right to demand that an unauthorized pet be removed. However, his actions are so inconsistent with enforcing that legal right that he is deemed to have "waived" that right. The most obvious example of a waiver is renewing a lease when he knows that the tenant has an unauthorized pet.

Estoppel is a legal principle holding that if a party makes a legal representation to another party and the other party relies on that representation, the first party is prohibited from taking an action contrary to that representation to the detriment of the other party. He is "estopped" from taking legal action that takes unfair advantage of the other party's trust in his representation. For example, the lease prohibits pets, but the landlord's agent indicates that the provision is not enforced as long as the pet causes no problems. The tenant with the pet relies on that representation and signs the lease. The landlord cannot enforce the no pet policy against that tenant, because the tenant relied upon the agent's statement in signing the lease. It does not matter that at the time the agent made the statement it was the truth, and that the landlord has recently decided to enforce the no pet policy.

A continuing breach?

Florida Statutes provide that, if the landlord has knowledge of the tenant's breach of the lease and accepts payment from the tenant, the landlord waives that breach. ("Acceptance of money is forgiveness"). This prevents landlords from dredging up old lease violations to suit their needs.

The unauthorized pet is thought to be a continuing lease violation, because the unauthorized pet breach continues after payment. A county court judge may not agree. His opinion may be that it was the act of obtaining the unauthorized pet that was the lease breach. Acceptance of payment without objection from the landlord, after the landlord has knowledge of that lease breach, is a statutory waiver of that breach forever. The 7-day cure helps to refute this argument, since it indicates the landlord's objection.

When does the landlord know?

The landlord's knowledge of the unauthorized pet is the trigger which subjects him to the tenant defenses outlined above. The landlord is imputed to have the knowledge of all of his past and present agents. This means that even the best, new manager is stuck with whatever the old manager and staff knew.

This concept makes it advisable for a new manager to examine all the tenant files for evidence that there are known unauthorized pets. The most obvious evidence will probably be complaints from other resident about unauthorized pets. The manager should interview each staff member for any known lease violations, including unauthorized pets. Perhaps a maintenance person knows of a harmless cat owned by a nice resident and in a mistaken act of kindness has said nothing.

Pet Addendum

Having found yourself with a deemed authorized pet, what about demanding that the tenant sign a pet addendum and pay a pet fee, pet deposit or pet rent? It can be argued that the landlord has also waived these. I believe the better argument is that the landlord has waived objecting to the pet but has not waived that the tenant's compliance with the process of authorizing the pet.

Demand can be made to fill out a pet application and sign a pet addendum. The tenant is subject to the standard rules and regulations regarding pets. Likewise, I think the tenant has to pay the standard pet fee (the fee for the privilege of having a pet on premises) and the standard pet deposit or increase in the security deposit, whichever is the landlord's policy, and the standard monthly pet rent prospectively. It is unclear if past pet rent would be collectible. The failure to charge it at the time the landlord knew of the pet probably resulted in its waiver.

A word of caution about implementing your standard pet procedures: this is just my opinion, and many county court judges may feel that the pet fee, deposit and/or rent have been waived completely. Lastly, my opinion changes if a renewal is involved and the pet is known at the time of renewal. Renewing a tenant with a known pet operates as a waiver of all pet associated fees, deposits and rent. The landlord may not even be able to demand that the tenant sign the pet addendum, which was ignored at the time of lease renewal.

I hope this article makes clear that a delay in addressing the unauthorized pet may in effect authorize that pet. It may even operate to waive the ability to collect a pet fee, pet deposit and pet rent.

 

(Back to Top)

 

 

Move-In Inspection Procedures
by Harry A. Heist, Attorney at Law

 

One of the biggest mistakes a landlord makes often occurs at the time the tenant moves into the unit, and this mistake has major ramifications when the tenant moves out. The condition of a rental unit must be documented when a tenant moves in. This is crucial, as when the tenant moves out and there are damages found in the unit, the landlord needs to prove that the damages were not pre-existing and were indeed caused by the tenant. Tenants routinely say, "It was like that when I moved in", and often, "I left it better than when I moved in". Every landlord has heard these comments made by the tenant. When the tenant makes these allegations, the landlord must be able to prove that the damages did not exist at the time the tenant moved in to prevail. How does the landlord do this? A really thorough landlord will have taken pictures and maybe even a video tape of the unit prior to or at the time of move in. While this may seem excessive to some landlords, it is indeed the best approach, but unfortunately, we all know this is only done by a small percentage of landlords. The usual method of documenting the move in condition is the Move In Inspection Form or Condition Report, and for this article we will call it the Condition Report. A thorough landlord will have a detailed Condition Report which lists just about anything inside and outside of the unit that the tenant could be responsible for or potentially damage. Now here is the big question: who completes the Condition Report? The landlord or the tenant?

The Tenant completes the Condition Report?

Probably 50% of all landlords, especially those who manage multifamily housing units, give the tenant the Condition Report and ask them to take the report, write down anything that is wrong with the unit, and get the report back to the landlord. The landlord then tells the tenant that if they don't get the Condition Report back to the landlord, it will be assumed that there is no pre-existing damage to the unit. Sounds reasonable enough right? Wrong. It is not only the lazy way to get the unit inspected, but it can have grave legal consequences.

What will the typical Tenant do with the Condition Report

1. The Picky Tenant Some tenants will take the condition report and go over the unit with a fine tooth comb, marking down every possible little thing wrong with the unit. When you receive it back, you would think the unit was in terrible condition, and your receipt of the Condition Report from the tenant has put you on legal notice of deficiencies. All you wanted the tenant to do was mark down any cosmetic issues, but NOW you have a report from the tenant which you requested that makes your unit look awful.

2. The Wish List Tenant Some units are not perfect, but are legally sufficient to rent out. The carpet may not be perfect, and there may be cosmetic issues in the unit. No big deal to the landlord, but the "wish list" tenant uses the Condition Report to not only tell you about the damages in great detail, but expects you to deal with everything on the list. The tenant's assumption is that you are giving them the Condition Report to fill out, so YOU will know what to fix or change. You have no intention whatsoever to replace the carpet or the countertop, but now the tenant feels you should, and by filling out the Condition Report has made the request. Now the tenant has an expectation that you are going to have the carpet cleaned again, replace the carpet or give them a new counter top.

3. The Sloppy Tenant Possibly the carpet has a couple small stains, the walls have a few scuff marks, there is a chip in the countertop and some deep knife grooves when the last tenant used the counter top to chop vegetables with his Ginsu Knives. This is how the "sloppy tenant" writes it up on the Condition Report. "Carpeting Stained","Marks on walls", "Chipped Countertops" "Damaged Countertops". This sounds reasonable to the tenant and is in fact true. Now, let us suppose when this tenant moves out that there are severely stained carpets, the walls have been marked up so badly that they must be repainted, and that the tenant has completely destroyed the countertops. You want to charge the tenant for the damage. The landlord then goes ahead and charges the tenant on the Notice of Intention to Impose Claim on Security Deposit. The departed tenant NOW responds back and says, "It was like that when I moved in! Just look at my Condition Report! I told you about these problems a year ago!" The landlord is dumbfounded, because while it was true that there was some damage to the carpets, walls and the countertop when the tenant moved in, it certainly wasn't THAT bad. The tenant takes the landlord to court, the tenant shows the judge the Condition Report, and the landlord LOSES.

The Forgetful Tenant The tenant is in a hurry to move in and the last thing on his mind is to complete a Condition Report. He throws it into the kitchen drawer and it sits there for the next year. The landlord never receives the Condition Report. Now the tenant moves out, there are damages, and the landlord has absolutely no Condition Report to form the baseline as to the condition of the unit. The landlord charges the tenant for damages, the tenant objects, disputing the charges, and maybe the tenant claims he did indeed fill out the condition report and get it back to the landlord by giving it to your leasing agent who was fired 3 months ago. Worse yet, the dishonest tenant finds the blank Condition Report in his kitchen drawer upon move out and decides to fill in the CURRENT damages that he caused during the tenancy, keeps a copy and claims he gave you the original 2 days after he moved in! This tenant's claim, "It was like that when I moved in," will be hard to beat in court when you don't have the Condition Report.

The Solution

As you can see by the examples above, giving the tenant the Condition Report is just plain wrong, silly, lazy, and the list goes on and on. The landlord should be the one who inspects the unit and fills out the Condition Report. You cannot give control over such an important aspect of property management to a person who is not skilled in or has no knowledge of inspecting a unit. The landlord knows or should know how to do this properly and will go through the unit marking down preexisting cosmetic damages. Ideally, the inspection and Condition Report will be accomplished with the tenant present, but if not, it will be done before the tenant moves into the unit along with the video taping of the unit and plenty of digital pictures. Our office has been dealing with security deposit disputes for almost 20 years. Many of our clients, especially the large multifamily ones, insist on allowing the tenant to complete the Condition Report. We can assure you that when our client performs the move in inspection and completes the Condition Report, the chance of a security deposit dispute, or in the worse case scenario, losing a dispute in court, is diminished greatly. It is simply the right way to do YOUR job.

 

(Back to Top)

 

 

Click2Mail Certified Mail
by Michael Geo. F. Davis, Attorney at Law

 

The United States Post Office is offering a new online service called Click2Mail. This service offers users the ability to upload or create a document online and mail it online. Users can send the document certified mail without leaving their computer. Since the mail is certified, it fulfills the statutory requirement of certified mail for notices of claims against security deposits.

Mail date and costs

The mailing date is the next business day for entries before 2pm EST. For those of us who wait until the last day of the thirty-day notice period, it's too late to use the online service. Off we go to the post office. The cost is the postage plus a service charge (the "production cost") with a $2.00 minimum. Until the May 11th postage increase, the cost for one certified letter was $5.07 ($3.07 postage plus $2.00 minimum service charge).

How does it work?

I just couldn't resist driving it around to see how it worked. I start by creating an account. Unlike many online vendors, no payment information is needed at sign-up. This is great. I can go through the entire process, and if I find it doesn't work for me, I leave behind an unused account without my credit card information.

Build the template and enter the information.

Next I choose a layout or upload my own form. The system will upload Word and Adobe documents with relative ease. Other file formats can be uploaded by following special instructions. I upload the Notice of Intent to Impose Claim on Security Deposit in Word format. Unfortunately, the USPS online editor is not a word processing program. I have to add text boxes to the Notice to prepare it for entry of the information: tenant name, address, security deposit amount, deductions, etc. That's a lot of text boxes. Once the form is complete, I save it as a template, and it is available in my account for future use.

Enter the tenant information, deposit and deduction information, etc. Preview the information. Enter the recipient's name and address into the address book, which saves them for future use. Since it is unlikely that I will ever need this tenant's name and address again for certified mail, saving the name/address in an address book serves no purpose, but is required to use them for mailing. For volume mailers there is an upload mailing list and mail merge option.

Check, confirm, charge, return receipts

Check off that I have proofed everything, and the payment screen is next. Select a return address. The payment address and return address default to the account address. Payment options are prepaid credit account or credit card. Review the charges and the mail date. Confirm my order, and I'm done. My receipt is saved in my account, and a hard copy can be printed out. I can track delivery online.

If I desire a return receipt, two types are available: electronic and the standard green card for additional postage charges of $1 and $2.20 respectively. Note that a return receipt isn't required by Florida Statutes for the Notice of Claim.

Help

There's an online knowledgebase, program specific help menus and phone support. The phone help line was a pleasant surprise. I called it twice for assistance, pressed 2 (support), pressed 3 (documents), and real people answered immediately. When was the last time that ever happened?

Summary

My review of the service indicates that the lack of a word processing editor makes the online entry of data difficult. It was quicker to complete the Notice on my computer and upload the completed form each time then to complete the saved template online each time. However, I can see that a template saved on the USPS website, which can be accessed anywhere anytime, could be useful in a pinch. The saving of addresses is unnecessary.

This service is targeted toward mass mailers who will upload a brochure or letter, or design a mail-out postcard online, and mail merge their customer list. That's food for thought for the marketing people who are tired of lugging mail to the post office. For the rest of us, if we don't have immediate access to a printer, envelopes, certified stickers or postage, sometimes it's worth $2.00 to finish that Notice and get it mailed.

 

(Back to Top)

 

 

Chinese Drywall and the Landlord
by Harry A. Heist, Attorney at Law

 

It is estimated that over 40,000 homes have Chinese made drywall used in the construction of the wall and ceilings. For this article we wil refer to it as CD. If a home was built from approximately 2001 to 2007, there is a possibility that CD is present, with a higher probability if the home was built from 2004 and after. Initially the problem came to light when residents began complaining about a rotten egg or sulfur smell in the units, and air conditioner repair personnel began reporting that the copper coils in the air handlers were turning black, indicating a chemical reaction with gases in the air. Lucky us, the largest portion of the CD is present in homes built in Florida, with many of these homes now rental units that are being managed by property managers. It is still not clear if the gases emitted from the CD are in fact dangerous to a person's health, but some evidence has been put forth that the gases do in fact aggravate asthma. Many lawsuits have been filed already, both individually and in class actions against the builders, importers, seller and makers of the CD. Since there is potential liability to a property manager who knows or should have known of the presence of CD, the issues need to be examined. Unfortunately, there is no clear direction in the matter, and property manager and landlords will need to decide what actions to take to avoid potential liability. Each property manager should speak with their broker/owner and insurance company to see if in fact there is coverage in the event of litigation.

Do you have CD?

In some cases you will know for sure that CD is present, based on the markings on the back of the drywall. However, not all of the drywall is marked as to origin, and some US suppliers put their own stamps on the imported drywall, making it difficult to determine the origin. If your a/c coils are already black, or the exposed copper wires in the electrical outlets are black, there is a high probability that CD is present. Finally, a strong sulfur smell is indicative of a problem, but should not be confused with a possible sewer gas back up or improper plumbing venting.

Testing

A number of companies are now testing the drywall, using a combination of methods including gas testing, visual inspection of the drywall and inspection of any copper present in the a/c coils and copper wiring. If you suspect that you have a problem, notify your owner in writing, and encourage the owner to have the unit inspected. At this time, there are no "certified" inspectors or standards for checking for CD.

You test positive for CD

If you receive a positive test, we recommend that you notify the tenant in writing after you have notified the owner and with the permission of the property owner, allow the tenants to break their lease if they wish with no penalty. We feel that the liability is too great and that there are too many unknowns to try to hold a tenant to a lease if there is a possible health hazard.

Should you manage homes with CD?

It is possible that the tenant will wish to remain on the premises or the owner will decide to replace the departing tenant with a new tenant. Should you continue to manage the home or cease management? You will need to check with your corporate attorney and insurance company, but in our opinion, since there MAY be a health hazard, we do not recommend managing a home if you have knowledge of the presence of the CD. If you find out there is CD present, it may be time to decide whether you wish to continue with the risk.

Can you force a tenant to vacate?

If your lease has a clause such as the one below, you would be able to terminate the tenancy based upon the presence of the CD drywall, if you needed the tenant to vacate in order to replace the drywall.

CONDEMNATION, DAMAGE TO PREMISES, ACTS OF GOD and TERMINATION: If for any reason the premises are condemned by any governmental authority, destroyed, rendered uninhabitable, rendered dangerous to persons or property, and/or damaged through fire, water, smoke, wind, flood, act of God, nature or accident, or, if it becomes necessary, in the opinion of LANDLORD or its agent, that TENANT must vacate the premises in order for repairs to the premises to be undertaken, this lease shall, at LANDLORD'S option and upon 7 days written notice to TENANT, cease and shall terminate, TENANT agrees to and shall vacate and TENANT, if not in default of the lease, shall owe no further rent due under the terms of the lease.

Suppose the tenant does not wish to vacate and wants to stay and pay?

Some tenants will not wish to vacate the premises, and the issue will become whether they can give you or the owner something holding you harmless for possible health related injury or problems that they might suffer sometime in the future. While it is possible to create a hold harmless clause or agreement, whether such an agreement would later hold up in court is uncertain. If it is determined that you know or should have known that the unit was defective or dangerous to persons, no hold harmless agreement in this type of case will hold up. If you were renting a moped to a tourist, you would have him sign a hold harmless agreement, under which he acknowledges that operating mopeds can be dangerous. An agreement like this would hold up in court. On the other hand, if you knew the moped you were renting had or potentially had defective brakes or steering, and you had the renter sign the hold harmless agreement, this would NOT hold up in court. Do you know or should you know that CD is dangerous to a person's health? No one really knows right now.

Can a tenant break the lease if there is CD present?

There is no specific law on this, but if it can be proven that there is a health hazard or the unit is rendered uninhabitable for any reason, a tenant is able to break a lease under Florida law. We feel that in the current stage of uncertainty, most judges would allow the tenant to break the lease without penalty if they could show that there is CD in the unit.

Other homes nearby have CD "“ Do you need to inspect?

This is a tough one. If the home is in a development and you are aware that other homes constructed by the same builders have CD, you can probably assume the home you are managing has it as well. Does this create a duty to disclose? Is there a duty to test? Probably, but no one knows for sure. If the house next door was found to have a severe sink hole present or extremely high radon levels, you would probably be under a duty to test your house for the same. The same logic could be applied to the CD.

The sales arena and disclosures

As the CD is an issue with not just rentals of property but sales, there are a number of disclosures being created for buyers and sellers. A recent disclosure developed in Port Charlotte follows. Please note that our office does not endorse the disclosure, makes no representations as to whether it can or should be modified for rentals and we urge you to speak to your corporate attorney and insurance company. It is provided for informational purposes only.

 

CHINESE OR DEFECTIVE DRYWALL ADDENDUM TO PURCHASE AND SALE CONTRACT

The following provisions are made part of the Contract for Sale and Purchase or Residential Sale and Purchase Contract ("Contract") between ______________________("Seller") and _____________________________ ("Buyer") concerning Property located at _______________________________________________________________.

1. Defective Drywall Disclosure: If a residence or other improvement on the Property has been constructed or renovated after 2000, the Buyer is hereby notified that such Property may contain drywall containing certain alleged manufacturing defects which drywall reportedly has been primarily manufactured in China ("Defective Drywall"). The presence of Defective Drywall appears to coincide with and may cause corrosion and damage to structural systems in the residence or improvements and may corrode and destroy system components such as air conditioners and electrical wiring. The damages in some residences have been extensive enough to require replacement of damaged components and the Defective Drywall itself at substantial expense. Further, the Defective Drywall sometimes emits a sulphur-like odor or fumes which may cause the residents of the home to experience health problems. The presence of this odor and/or the aforementioned damages may indicate the presence of Defective Drywall, and the homeowner and any purchaser should investigate. The only known way to eliminate the fumes and the health problems and to stop the damage to the structural system and system components is to remove and replace all of the Defective Drywall in the improvements, which can be very costly. Finally, the presence of Defective Drywall, the fumes, and the damaged systems, if not remedied, can impact the value or salability of the property.

2. Drywall Inspection: In the event Buyer elects to conduct an inspection for existence of Defective Drywall or the extent of any remediation required by the presence of Defective Drywall, which inspections shall be done at Buyer's sole cost, Buyer must do so within the inspection period described in the Contract for other items relating to the Property ("Inspection Period"). Buyer and Seller both agree that if Seller has disclosed that the Property has Defective Drywall or if Defective Drywall is found during the Inspection Period, Buyer may, in Buyer's sole discretion, cancel the Contract by delivery to Seller of written notice of cancellation within three (3) business days after the Inspection Period and Buyer shall be entitled to the return of the deposit(s). Buyer's failure to conduct and inspection for Defective Drywall, or if conducted and Defective Drywall is found, Buyer's failure to cancel the Contract within the Inspection Period shall be deemed a waiver of the right to inspect and a waiver and release of all claims against Seller or Broker arising out of or related to the existence of Defective Drywall on the Property.

3. Seller's Disclosure: The Seller of the Property hereby provides the Buyer with the following information on the existence of Defective Drywall on the Property, and recommends that Buyer obtain an inspection for the presence of Defective Drywall on the Property prior to the end of the Inspection Period.

Seller's Disclosure (check one):

_____Defective Drywall is present on the Property, and Seller has provided buyer with all available records and reports relating to Defective Drywall on the Property as follows:

_______________________________________________________________

_______________________________________________________________

or

______Defective Drywall is present on the Property, and Seller has no reports or records pertaining to Defective Drywall on the Property;

or

______Seller has no knowledge of the existence of Defective Drywall on the Property or any reason to believe that it does.

4. Buyer's Acknowledgement (check one):

Buyer acknowledges receipt of said disclosure and recommendation and makes the election set forth below:

_____Buyer does not waive the right to inspect the Property for the presence of Defective Drywall during the Inspection Period and has received all information listed above, if any;

or

_____Buyer waives the right to inspect the Property for the presence of Defective Drywall during the Inspection Period and has received all information listed above, if any, and waives and releases all claims against Seller or Broker arising out of or related to the existence of Defective Drywall on the Property.

5. More Information: Further information on Defective Drywall may be obtained from the Florida Department of Health, 850-245-4250 (or search "drywall" at www.FloridasHealth.com ) or any of the county health departments:

IN WITNESS WHEREOF, the undersigned have set their hands on the date set forth below:

BUYER:_________________________________

SELLER:________________________________

____/____/_____
Date

 

(Back to Top)

 

 

Forfeiture Of The Security Deposit
by Michael Geo. F. Davis, Attorney at Law

 

A common misconception among landlords is that the tenant who breaches his lease automatically forfeits his security deposit as the minimum damages. Some landlords believe the forfeited security deposit is in addition to any other damages. Most landlords bolster their claim to the automatic forfeiture of the security deposit for breach of the lease with supporting lease language. As a general rule we advise that landlords avoid automatic security deposit forfeitures for breach of the lease. There are some exceptions to the general rule and I touch on them at the end of the article.

An invitation to litigation

The automatic security deposit forfeiture is an invitation to litigation. First, the fact that it is an automatic forfeiture doesn't relieve the landlord of the responsibility of timely sending the notice of claim on the security deposit. Second, the tenant receives a notice of claim that states the deposit is forfeited. It may or may not include additional itemized damages for the lease breach.

Most Florida county court judges will feel that the automatic security deposit forfeiture is inequitable. They will find the lease forfeiture clause unconscionable and refuse to enforce it, citing the Florida statute that permits them to do so. If that is the landlord's only reason on the notice for claiming the deposit, the landlord's reason is now invalid, and the notice of claim may be found to be statutorily insufficient. The landlord may lose at this point without any opportunity to present his case.

The judge may allow the landlord to present proof of the damages. Relying on the automatic forfeiture clause, the landlord may not have done an inspection of the premises or obtained any proof of the damage (pictures) or saved any evidence of the cost of repair. Even the fair claims of the landlord can fail for lack of proof.

The lawsuit scenario

Unfortunately for the landlord the scenario in which this happens is the tenant's lawsuit for return of his security deposit. If the tenant recovers any portion of his security deposit, he is generally entitled to his attorney fees. As we are all too well aware, attorney fees can be astronomical compared to the small amount of deposit money recovered.

A trap for the unwary

If the litigation risk wasn't enough, the automatic security deposit forfeiture is a trap for the unwary landlord. The legally unsophisticated landlord or the attorney inexperienced in landlord/tenant law may draft an automatic forfeiture clause that inadvertently limits the landlord to the security deposit as the only damages amount.

The rules of lease interpretation provide that ambiguities are decided against the lease drafter. Landlords commonly include lease provisions providing for other damages (rent until relet, cleaning charges, use beyond ordinary wear and tear) or for damages as provided under Florida law. These provisions are in addition to the automatic security deposit forfeiture for breach of the lease. Poorly drafted lease language can result in the court holding that the damages clauses are confusing, ambiguous or even contradictory. The security deposit forfeiture can become the landlord's exclusive remedy, in spite of actual damages exceeding the security deposit amount.

The exception

As I indicated above there are exceptions to the rule. Security deposit forfeiture clauses may be found valid when used as the damages for the failure to give notice at the end of the lease. This is treated in other articles. They are valid as part of well drafted vacate agreements.

Having read this article I hope landlords will see that the automatic security deposit forfeiture for breach of the lease is a risky method to collect a deposit. If the tenant's breach results in damages in excess of the security deposit, then the landlord should forego even mentioning any automatic forfeiture and apply the damages to the deposit. If they are less than the deposit, then the landlord should contemplate his explanation to a judge for keeping the "unearned" money, while the tenant's attorney smiles at his easy attorney fees.

 

(Back to Top)

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


|     Home Page     |     Firm Profile     |     Attorney Profiles     |     General Services     |     Apartment Communities     |     Residential Managers     |     Apartment Communities     |     Residential Managers     |     Homeowners/Investors     |     Eviction Q & A     |     Legal Articles     |     Training/Events     |     Contact Us     |