VOLUME 3 - ISSUE 11 LEGAL UPDATE
- Dealing with the Gas Grill
- How to Handle the Honest Mistake
- Termination of Management by the Property Owner
- How A Complaint Is Investigated
DEALING WITH THE GAS GRILL
by Harry Anthony Heist, Attorney at Law
Each year thousands of explosions and accidental fires occur due to the use and misuse of gas grills, resulting in of thousands of injuries, millions of dollars in property damage and approximately 20 deaths. Gas grills are dangerous and are usually prohibited in multi-family housing and condominiums, either due to company policy or fire code. Should a property manager prohibit gas grills in all rental housing including single family homes? You may want to give this some thought and read on.
The Mechanics of the Gas Grill Danger
1. Failure to use proper ventilation. Many tenants fail to realize that gas grills emit carbon monoxide, an odorless gas which can kill. Tenant sometimes will use a gas grill in an enclosed patio due to inclement weather or actually use a gas grill completely inside the premises.
2. Explosion of gas when during ignition. Most gas grill users at one time or another turned on the gas, had trouble lighting the grill, had the grill top down and experienced the mini-startling explosion when the grill finally lit. Usually the result is embarrassment and some singed hair. This explosion can be far greater if the grill user forgets the gas is still on and running, and a significant delay occurs between turning on the valve and eventual ignition. A larger explosion can injure a user or cause fire to flammable materials which may be near the grill.
3. Venting. Propane tanks have a pressure relief valve which allows the propane to vent in the event the pressure inside the tank exceeds a manufacturers pre-set PSI (pounds per square inch). This is a safety mechanism to prevent the entire tank from rupturing in the event the pressure becomes too high. Pressure in a tank can become too high if the temperature around the tank is high, such as when the tank is sitting in the trunk of a vehicle, in the sun or in a very hot car. Propane has a chemical additive called ethyl mercaptan which is use to give the propane a distinct odor, but often this odor dissipates or is not detected by a user. The propane can be steadily venting, and a simple spark or lit cigarette can spell disaster.
4. Defective valves and hoses Any long time user of a gas grill will experience the gas grill falling apart in time. The first thing to go is the igniter, the burner on the side goes shortly thereafter, and with time, the hoses can deteriorate. Leaks can and do occur, and a build up of undetected propane can result in a major explosion and often a resulting fire.
So, do you really want that grill on the rental property?
It is completely up to the landlord whether or not gas grills are allowed on the premises. A tenant has no inherent right to use a gas grill on or near the premises, and the lease can simply prohibit its use.
“No gas (propane or any other flammable gas or liquid) grill or tank or tanks containing any flammable gas or liquid shall be used or stored on or rental premises. The premises for the purpose of this section includes the interior of the premises, the exterior, any common areas, balconies, hallways, lanais, storage areas or garages.”
Dealing with the Tenant Noncompliance
Some tenants believe rules governing grills are meant to be broken. The landlord needs to take swift, firm action against the tenant to get compliance. Failure to take action will increase the landlord’s liability and may result in a violation of the state or local fire codes. A prohibited gas grill is a violation of a curable nature. The tenant needs to be served a “Seven Day Notice of Noncompliance With Opportunity to Cure. This gives the tenant seven full days to remove the grill. Failure by the tenant to remove the grill is a continuing noncompliance, and the landlord then needs to document the presence of the grill after the seven day cure period has expired by way of photos, videos and witnesses. The landlord should also consult with an attorney, who will probably recommend that the tenant be served a Seven Day Notice of Noncompliance, Notice of Termination. Failure to vacate the premises will then result in an eviction action.
Suppose rent is due while the tenant has the grill and is noncompliance?
Our office recommends that you do not accept rent from the tenant if the tenant is in noncompliance. Accepting rent is tantamount to giving the tenant a green light for the month in which rent was accepted and can cause your notice to be voided out.
Self-Help Grill Removal
Our office never recommends that the landlord conducts self-help by removing a tenant’s personal property, and this could include a gas grill. The tenant could accuse the landlord of civil theft or even criminal theft. But, what if the Fire Marshall is demanding that the grill is removed and is ready to fine the landlord, or the landlord is aware that the tenant has the grill inside the rental unit? Possibly it will be permissible for the landlord to remove the grill or at least the propane tank in such emergency circumstances, BUT we advise that you give your attorney a call before taking any self-help measures. Our office is always available for any questions at 1-800-253-8428
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HOW TO HANDLE THE HONEST MISTAKE
by Harry Anthony Heist, Attorney at Law
There will invariably come a time when a landlord simply makes an honest mistake. How the landlord handles the mistake can have a great effect on the outcome and resolution of the matter. The tenant is the consumer, and consumers often feel that they are entitled to some sort of compensation from the landlord. Whether they truly are entitled to compensation is really not the issue; the bottom line is that they feel that they are. Making the wrong statements or taking the wrong actions can turn a small problem into a tremendous time consuming and expensive proposition. This article will examine some of the common mistakes made by landlords and some suggested courses of action.
You thought the tenant vacated
This is a common mistake. The lease is up or almost up, the landlord checks the unit, the electricity is off, and all appearances seem to indicate that the tenant is indeed gone. There are a few items left behind, but the landlord does not feel they are of any value, and the landlord throws the items away and changes the locks. The tenant returns furious and is demanding the items back, and then compensation when he realizes they are gone.
Recommendation :Keep the tenant as calm as possible, make him understand that you were under the impression that he had vacated, and give him an “Incident Report” to fill out. Once this is filled out and firmly in your control, you can decide to come to an agreement with the tenant for compensation. It is crucial that you do not act excited or scared, as the goal is to have the tenant tell the truth and to accept a fair settlement. Once you agree on an amount, we recommend strongly that you have the tenant sign a release if money exchanges hands.
You served a Three Day Notice but the tenant had already paid the rent
This seemingly innocent mistake can enrage a tenant and potentially have legal ramifications, especially if you served the notice in a fashion where neighbors could see the notice. The tenant is embarrassed and enraged.
Recommendation : Keep the tenant as calm as possible, downplay the notice, and tell her it simply was a mistake. Profuse apology is not necessary. Use the opportunity to change the subject, and ask her if there are any maintenance requests or problems.
You accidentally filed an eviction but the tenant had paid the rent
You would be amazed how often this occurs. An accounting error results in an eviction being accidentally filed, or you forget to cancel the eviction with your attorney. The tenant will most assuredly call you or storm into the office with eviction papers in hand.
Recommendation :Call your attorney immediately, have him or her prepare and file a Voluntary Dismissal immediately, and give a copy to the tenant. Your attorney can do this immediately while the tenant is fuming in your office. If the tenant asks whether this will show up on the credit record, you may have to admit that the eviction filing will be a matter of public record, and you will be happy to provide a letter that the tenant can use showing that the eviction was simply filed in error. If you don’t immediately dismiss the case, or the tenant gets an attorney, you could end up paying hundreds if not thousands of dollars in attorney’s fees. Take action fast, and again downplay the situation
You engaged in some sort of self-help personal property removal
Your tenant has an old couch in the yard, a rusty bike and a car transmission on the front lawn. Code enforcement is citing the property, and you send your maintenance staff to remove the items and take them to the trash heap. The tenant is furious at you and now wants you to pay for his valuable items.
Recommendation:Keep the tenant calm, do not let the tenant know you may have committed a crime, or at the bare minimum, civil theft, have the tenant fill out an “Incident Report”, and try to settle. As with any settlement, use a General Release. You do not want to involve police or lawyers in this matter.
You told the tenant “You should have purchased “renters insurance”
Many casualties can occur in a rental unit that are through no fault of the tenant. A few examples are pipe breaks, water heater breaks, water intrusion due to a roof leak, and power surges due to a faulty wire. Are these the tenant’s responsibility or the owner’s responsibility? No one is sure. Many landlords rely on the clause in the lease that states that the landlord is not responsible for the tenant’s personal property. Will this clause be upheld in court? Maybe not, if a judge believes the tenant receives an implied warranty of habitability, or if the disclaimer clause is overreaching. One of the worst things a landlord can say when the tenant asks for reimbursement for a damaged item is, “You should have renter’s insurance.” This infuriates the tenant, and instead of the tenant wanting $500.00, the tenant goes to an attorney, and the amount now goes up to $5000.00.
The next time casualty occurs to a tenant’s personal property, get them to fill out an “Incident Report” immediately, and DO NOT immediately tell them that you are not going to pay for the damage. You may later refuse to pay or you may settle, but in the meantime, you want the tenant to memorialize the amount in writing to avoid future problems.
The “Incident Report”
Below is the Incident Report we recommend you use. This can be downloaded by going to FORMS DOWNLOAD
TO BE FILLED OUT BY TENANT Tenant Name _____________________________________
Apartment number ________________ Date: _______/_______/______
Date of incident____/____/_____
_____PERSONAL PROPERTY DAMAGE OR LOSS
_____INJURY TO PERSON(S)
Detailed description of event, loss etc: BR>
Cost estimate of damage/loss $________________
Witnesses to damage/loss:
Name: ________________________ Phone_____________________
I hereby swear that the statement I have made regarding the aforementioned incident is true.
SIGNATURE OF TENANT
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TERMINATION OF MANAGEMENT BY THE PROPERTY OWNER
by Harry Anthony Heist, Attorney at Law
You have been diligently managing the rental property, dealt with all the repairs, tenant complaints, collected rents, remitted payments to the owner and followed all laws. The property owner then notifies you that you are fired. The owner either wants to manage the property himself or herself, or has decided to hire a new property manager. You first reaction is usually anger and infuriation, unless of course you had been hoping for this moment, but now you need to take certain steps. The owner will invariably want you to transfer the funds, security deposit moneys and file to him or his new property manager. Can you do this? Is the owner entitled to the documents you are holding? Is it legal to transfer the security deposit to the owner? Many questions will arise when dealing with the firing process, and a simple mistake or poor judgment call can result in a FREC complaint. This article will deal with the recommended steps to take when terminated by a property owner. It will not deal with the whether or not you are entitled to commissions or the legal ramifications of what is potentially a breach of contract. These items will be dealt with in another article and are governed in large part by the applicable Property Management Agreement.
How does the owner terminate you?
Many owners will simply call you up and terminate you verbally. They will inform you that your services are no longer needed. The property manager should immediately ask the owner to put this termination in writing and get it to you by mail, fax or email. The owner may decide later that it was a mistake to terminate you, litigation may occur, and you do not want the owner to change the story and potentially DENY that you were terminated. If the property owner fails to get this to you within a couple days, we recommend that you send the owner a “confirmatory letter”.
“Sample Confirmatory Letter”
Dear Property Owner:
This letter that confirm our phone conversation of May 15, 2006 at 2 PM EST when you indicated that you no longer desire that we manage your property. According to the Property Management Agreement, you are to give us 30 days’ notice in the event of termination of management. We will continue managing the premises for 30 days from this date, unless we receive something in writing from you indicating that we cease managing the premises earlier. If we do not receive any written communication from you, our management services shall cease as of June 15, 2006. Please note that although we will cease management as per your request, our company may continue to hold you liable for commissions and amounts due under the terms of the management agreement, which document remains a legally binding contract”.
Turning the file over to the owner or new company
Upon termination, you will be holding the complete file of the tenant. This will most likely include the application and credit report. Our office does not recommend that you turn this information over to the property owner or new management company, as this is private information, the tenant did not authorize you to disclose this information to any other person or company, and the credit report provider most likely has a prohibition on disclosing the information to any person other than the original requestor, which is your company. Most property owners will not like hearing this, and it may take a quick note from your attorney to convince them that this is in fact the law, and you are not just trying to give the property owner a difficult time. As for the information that is not private, you should make a complete copy of every single document in the file and turn this over to the new management company or owner, along with an accurate accounting. You should not turn over anything to a new management company unless the owner specifically tells you to do so in writing. A request by a management company is not enough, as this is simply a request and not authorization by the property owner.
Holding back the file
Once you have written instructions by the owner to transfer the file to the owner or to a new property management company, do so immediately. We seem many cases where a property manager is angry at being fired and delays the transition. This type of action can result in a FREC complaint against you. No matter how angry you are at the property owner or no mater how much money is owed to you, do not try to use the file transfer as any type of leverage to get what you want.
You will usually be holding a security deposit, possibly a last month’s rent and owners repair funds. It is crucial that these funds be transferred out of your account, but caution must be taken. Remember that the property owner will want you to do this immediately, but you need to understand the law and your obligations under the law and obligations to the tenant.
1. Security Deposit, Last Month’s rent or other “deposits”:
a. These funds cannot be transferred to the property owner UNLESS you get written permission from the tenant. You cannot simply take funds out of your escrow account and transfer them to an owner’s bank account.
b. These funds can be transferred to the new management company as long as that management company is an active Florida real estate brokerage. The tenant’s permission is not needed in this case.
2. Repair deposits: These can be transferred to the property owner or new management company without tenant’s permission, as they are not the tenant’s funds.
3. Collected rent: If you are holding current rent that the tenant has paid, the rent can be disbursed to the property owner or new management company, minus your commission or other fees. The tenant’s permission is not needed.
Suppose the owner is out of state and does not have a Florida Bank Account?
No escrow funds are allowed to be transferred to any bank unless it is a Florida Banking institution. Since most banks now operate in multiple states, the property owner will most likely be able to open up an account at a bank in their state that also operates in Florida.
For a detailed discussion of the money transfer process Click Here
Self-Help Collection of Commissions
One of the hardest things for a property manager to do once fired is to send money to an owner or a new property management company when money is owed to the fired property manager by the property owner, but this is when a serious danger lies. Just because the property management agreement is clear on what is owed to the property manager, engaging in self-help collection of funds will increase the chance of litigation dramatically and will increase the risk of a FREC complaint and possible audit. That same owner who fired you for “no reason” will come up with many reasons why you were fired. These reasons may be true, false or gross exaggerations of the facts. In any event, getting to the bottom of the mess will be costly and risky. The owner may be able to lie more convincingly than you can tell the truth, or the owner may file a lawsuit or hire an attorney, which will cause you to spend a significant amount of money in attorney’s fees. Even if you eventually “win”, you will be the loser, as you have to pay your attorney to get to the finish line. In the meantime, the property owner sells the property, and you have no way of collecting the commission owed or your attorney’s fees, in the event the judge awards them to you.
Should you simply walk away from your commission?
This is indeed a business decision, and your attorney may be able to guide you in making the decision to walk away or proceed. Often a demand letter from your attorney can result in a settlement, so you are able to receive at least part of the commission which may be owed to you. These matters need to be handled on a case by case basis and in a calm manner.
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HOW A COMPLAINT IS INVESTIGATED
by Cathy L. Lucrezi, Attorney at Law
Who handles the Complaint?
Administrative complaints of fair housing violations are handled by government agencies and, in some rare situations, nonprofit organizations. An administrative complaint is not the same as a lawsuit, even though it can have the same consequences as a lawsuit. Whether it’s HUD or the Commission on Human Relations or a local agency, the process is pretty much the same.
What will the investigator want?
1. Documentation: As part of its investigation, the agency will ask for copies of various documents, including the tenant’s (or applicant’s) file, copies of notices, the property’s ads and brochures, policies related to reasonable accommodation, applicant criteria, and just about anything else that might shed some light on the complainant’s situation.
2. Position Statement
The agency will request a position statement from you. It wants to know your side of the story. The statement should be reviewed carefully by your attorney to make sure every word is accurate. NEVER send a position statement to an investigator unless it is reviewed by your attorney.
3. An Interview
Often, the agency will want to interview you and other staff members at the property site. This is done informally, but is nonetheless important. The investigator may ask to see files, including those of other tenants. The investigator also notes the environment – whether the fair housing logo is posted, whether staff is pleasant to all who enter, etc.
The Complainant’s side of the story
At the same time the agency is obtaining all this data from you, it is getting data from the complainant. When all the information is in, the agency issues a determination.
The Agency’s Determination
The determination can be any one of the following: “probable cause”, “no probable cause”, or “no determination can be made”. If the agency concludes there is “probable cause” to believe a violation of fair housing law occurred, the government has the opportunity to file a lawsuit against you.
The Determination is “No Probable Cause”: Are you safe now?
Keep in mind that all of the above is about administrative complaints. The complainant always has the option of filing a lawsuit in court, even if the administrative complaint was unsuccessful and a determination came back as No Probable Cause”.
Is it necessary to hire an attorney?
Although there is no legal requirement that you be represented by a lawyer, it is nonetheless imperative to have one. The lawyer can help formulate responses in a way that most effectively communicate your position.
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