VOLUME 4 - ISSUE 12 LEGAL UPDATE

- Rental Registration Fee Victory
- Lockout Procedures
- Releasing Credit Reports and Social Security Numbers
- Happy Holidays vs. Merry Christmas

 

 

RENTAL REGISTRATION FEE VICTORY
by Harry A. Heist, Attorney at Law

December 2007 was a victorious month for the many apartment communities in Collier County, Florida. Rental registration fees were slashed down from an absolutely absurd and unconscionable amount of $30.00 per unit for the first year and $20.00 per unit for each additional year to $30.00 per apartment community. It is hard to comprehend, but a typical 200 unit apartment community has been paying $6000.00 for the first year and $4000.00 for each additional year simply to register with Collier County. You may ask how these charges could have ever been imposed in the first place. Read on.

Florida has over 400 municipalities and 67 counties. Due to budget issues and monetary shortfalls, the apartment industry has become an easy target for the cash strapped counties and cities. County and city leaders have been deciding that in order to raise revenue, they can impose registration fees upon apartment communities, who in their opinion have plenty of money to pay. The imposition of fees is often under the guise of a county or city trying to deal with substandard housing. They attempt to justify the fees by saying that they will enable and pay for their staff to force apartment communities to comply with the local building codes. There is an assumption that building code violations are rampant in apartment communities and nowhere else. The reality of the matter is that most substandard housing, drug activity and code violations are found in single family homes, duplexes and triplexes owned by absentee landlords or managed by substandard management companies or unlicensed managers. Now comes the real zinger. The Division of Business and Professional Regulation (DBPR), a regulatory body of the State of Florida, regulates and inspects apartment communities each year. Every apartment community must register with them, get inspected and pay a fee each year in order to operate as a public lodging establishment; an apartment community is classified as a "public lodging establishment". To top it all off, Florida statutory law provides that the DBPR has preemption authority to regulate public lodging establishments, and this is clearly stated in FS 509.032(7). While FS 166.221 allows municipalities to levy regulatory fees, it restricts this authority to regulation that has not been preempted by the state. A single family home, duplex or triplex does not fall under the category of public lodging establishments; thus, a county or city could regulate them in any way they see fit, and many do.

What happened in Collier County"

A number of years ago, the Collier County Commission, based on staff recommendations, decided to implement a $30.00 per unit registration fee. Enforcement actions began, and being an easier and convenient target, apartment communities were served with citations and ordered to pay the fees. Many did in fact pay the fees, which amounted to hundreds of thousands of dollars. This was coming at a time when all rental housing was being hit with huge tax and insurance premium increases. Affordable housing was disappearing fast.

The Apartment Associations jump into action

The Naples Area Apartment Association and the Florida Apartment Association worked together to attempt to sway the county commissioners to no avail. Gary Scarboro, the Government Affairs Director for the Florida Apartment Association at that time, rallied a number of Collier County apartment managers and descended upon the commission chambers, but the commission turned a deaf ear to their cries. One commissioner at the time was in agreement that the rental registration fees were illegal, but the other four were not. An attorney who specializes in government law was hired to review the issue and advised that the only option was to file suit against the county. Due to Collier County's reputation of vigorously litigating cases, and the lack of money necessary to take on such litigation, the apartment managers continued to find allies in the affordable housing groups and continued to attempt to influence the commissioners. Years passed with the apartment managers refusing to give up. While other counties and municipalities were following the law and leaving registration of public lodging establishments to the DBPR, Collier County did not budge, and apartment communities continued to pay hundreds of thousands of dollars to fill out forms and send them into the county, while the thousands of owners of single family homes, duplexes and triplexes were not targeted and failed to pay the registration fees.

Fast forward to late 2007

In response to some issues regarding the code enforcement methods, the issue of the rental registration fees was put on the agenda and heard at a county commission meeting. Collier County members of the Southwest Florida Apartment Association each got up and passionately spoke about the harmful impact these fees had upon their company's ability to provide affordable housing to Collier County residents. The Commissioners heard their message loud and clear and decided to reduce the registration fees to $30.00 per apartment community if that apartment community is registered with the DBPR. While we still feel this may be not in compliance with Florida Statutes due to the preemption authority of the DBPR, we are not complaining! A very special thanks goes out to the Florida Apartment Association, the Southwest Apartment Association, Gary Scarboro, past FAA Government Affairs Director, Jeff Rogo, current FAA Government Affairs director, Collier County apartment managers Donna Langford, Angela Edison, Coleen Fernandez, Tammy Vidal, Susan Rathbun, the Collier County Commissioners and all those who helped out with the cause.

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LOCKOUT PROCEDURES
by Harry Anthony Heist, Attorney at Law

 

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

The Scenario

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

The Problem

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

Creating a Policy

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

Lock out access procedure

 

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

But, we know this tenant!

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

The inherent problems with lock out access

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

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

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

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

Charging the tenant for giving access

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

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

 

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

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

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

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

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

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

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

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

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

 

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

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

 

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HAPPY HOLIDAYS VS. MERRY CHRISTMAS
by Cathy L. Lucrezi, Attorney at Law

 

What's your choice of greeting at this time of year? Merry Christmas? Happy Hanukkah? Bah Humbug? Happy Generic Day of Gift Giving? The holiday season is a good excuse for many apartment communities and management offices to host parties and decorate the office.

There is nothing unlawful about putting up Christmas decorations. Festooning the office with evergreen and elves does not violate the law. However, housing providers must avoid displays that give the impression the landlord favors one religion over another.

Fair housing laws protect tenants from discrimination in housing based on the person's religion (or lack of religion). Religious decorations and displays on the common areas may suggest to tenants and guests that the landlord favors people with a particular religious affiliation.

An apartment community that sets up elaborate holiday decorations consisting of nativity scenes and references to Christ may communicate that the landlord favors Christians. The displays could make tenants and applicants who are not Christian feel that are not wanted at the complex.

So, does this mean that a landlord should avoid all red and green? No. Holiday decorations are definitely "ok". They should just be more general than religious.

For instance, it is generally accepted that the following decorations do not communicate a religious preference: lights, wreaths, Santa Claus images, candy canes, and decorated trees. The focus on the secular rather than the religious elements of Christmas, is certainly offensive to many devout Christians and to non-Christians who do not see other religions' holidays recognized. Nonetheless, the "generic" decorations and symbols of Christmas are generally considered acceptable.

If the landlord dislikes "Plan A" of the generic decorations and wants to go with "Plan B" to show the religious symbols of the holiday, then care should be taken to give equal treatment to all other religious affiliations. That means that if the landlord uses a Christian symbol in his decorations, there should also be a decoration that references Hanukkah or other religious holidays observed by the community.

So, put up the sparkly lights and hang your stockings. Put a star at the top of the tree. Your holiday "“ whatever it may be "“ will be wonderful. Happy Holidays and Peace on Earth.

 

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

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


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