VOLUME 5 - ISSUE 10 LEGAL UPDATE

- Changes at the Firm!
- One Tenant Vacating
- Inclusionary Zoning Ordinance Defeated
- Who is the Landlord?
- Minimizing Fire Dangers at Move in
- Housing for Older Persons

 

 

Changes at the Firm
by Harry A. Heist, Attorney at Law

 

We are pleased to announce a new partner to our firm, Michael (Mike) Geo. F. Davis. Mike graduated from the University of Notre Dame in Notre Dame, Indiana in 1970 with a Bachelor of Science in premedical studies. Accepted to both the University of Cincinnati Schools of Medicine and Law, he attended the School of Law, graduating in 1974 with his Juris Doctorate and the school prizes in Contracts, Appellate Advocacy and Legal Aid. He received his Master of Laws in Taxation from New York University School of Law in 1975. Mike is admitted to the Ohio Bar (1974) and the Florida Bar (1977).

Mike serves on the board of directors and the Legislative Committee of the Florida Apartment Association and the Bay Area Apartment Association and is a frequent speaker at association seminars. He sits on the Tampa Bay Regional Planning Coalition and is president of his homeowners association.

Mike's breadth of experience includes associate in a top Cincinnati law firm, general counsel to both private and public corporations, and appearances before numerous state and federal courts and administrative agencies. Since the mid- 1990s Mike has focused his private practice on landlord/tenant issues. From 2003 through 2008 he served as counsel for evictions and other tenant related matters for the north and central Florida operations of Apartment Investment Management Company, (AIMCO) one of the largest residential REITs in the world.

Mike's experience with AIMCO makes him particularly well suited to the representation of our large owners and management companies, and he brings to the firm the experience of dealing with and knowing the workings of large entities, what they want, what they need, and how best to serve them.

Where's Cathy? After more than five years with the firm, Cathy has decided to take a few months off to travel, and will be entering the field of elder law, primarily assisting lower income individuals. We will miss Cathy!

 

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

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

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

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

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

 

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

 

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

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

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

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

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

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

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

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

 

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

 

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

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

The lease

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

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

Do you want to be the landlord?

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

Who are you?

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

The law of undisclosed principal

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

 

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

 

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

Electric Issues

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

Should the electricity be shut off before occupancy?

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

Requiring electric to be on before keys are given to tenant

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

Precautionary steps

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

Liability issues.

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

 

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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.

 

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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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