VOLUME 8 - ISSUE 2 LEGAL UPDATE

- When a Court Appearance becomes Necessary
- Military Personnel
- Lease Execution Procedures

 

 

 

MILITARY PERSONNEL
By Michael Geo. F. Davis, Attorney at Law

 

 

1. Statutes Federal and Florida statutes control the early termination of a lease by a tenant who is a military servicemember, who in this article we shall refer to as the "servicemember". These statutes permit the early termination of a servicemember's lease under certain conditions. Only federal statutes impose additional requirements on the eviction of a servicemember or his dependents. Federal law is codified in the Federal U.S. Servicemembers Civil Relief Act (SCRA), and state law is contained under Florida Statute 83.682.

2. Covered Servicemembers The SCRA applies to federal (army, navy, air force, marine corps or coast guard) active duty or state (national guard) active duty or Public Health Service or National Oceanic & Administration commissioned officer active service personnel. The state statute applies to federal or state active duty personnel. The statutes do not apply to military reservists, unless called to active duty, or retired servicemembers, with a couple exceptions regarding recently retired servicemembers. The statutes apply to early terminations and evictions. Certain federal statutory rights can be waived in writing with a very explicit disclaimer, and state statutory rights cannot be waived. If a lease termination is permitted under the statutes, any lease penalties for early termination cannot be invoked.

3. Refusing to Rent A landlord may not avoid the limitations and restrictions of the statutes by refusing to rent to servicemembers. Discriminating against a servicemember in offering to rent or in the terms of the lease is forbidden by Florida Statute 83.67 as a prohibited practice.

4. Termination of Lease
a) Federal Statutes - SCRA
If a lease signor after executing a lease: i) enters the military, or ii) receives orders for a permanent change of station or to deploy for 90 days or more, then the SCRA permits a servicemember to terminate a lease the servicemember has executed for housing for either himself or his dependents without penalty with written notice effective 30 days after the next rent due date. Loosely translated, it would be the end of the next month after notice (e.g., if notice was provided on March 15, lease obligations will terminate as of April 30).

b) State Statute If the lease signor: i) receives orders for a permanent change of station 35 miles or more away, ii) is prematurely or involuntarily discharged or released from active duty, iii) after renting the premises while on active duty, is released from active duty and the prior home of record is 35 miles or more away, iv) after renting the premises, receives orders requiring a move to or becomes eligible and opts to move to government quarters, v) receives orders for temporary duty, temporary change of station or state active duty to an area 35 miles or more away for more than 60 days, vi) prior to taking possession of the rental, receives a change of orders to an area 35 miles or more away from the rental, or viii) dies during active duty, then the state statute permits a servicemember (or an adult family member in case of death) to terminate the lease without penalty with written notice effective 30 days after notice (e.g., if notice is provided on March 15, lease will terminate as of April 14).

c) Notice The SCRA allows termination 30 days after the next rent due date. The state statute is more generous to the servicemember than the SCRA, as the state statute allows termination 30 straight days from the date of notice. Written notice must be accompanied by a copy of the orders or a verification signed by the servicemember's commanding officer. A court would likely consider a notice effective as of the day notice is given, if the orders followed thereafter.

d) Dependents While a literal interpretation of the federal and state statutes would indicate the servicemember himself or herself has to be a signor on the lease, there are no cases holding that the statutes are inapplicable to dependent-only leases. Given the deference Congress and the state legislature have shown to servicemembers, it is likely that a court would apply the statutes to leases signed only by dependents in an effort to effectuate the intent of Congress and the state legislature.

e) Co-tenants A servicemember doesn't need a co-tenant's permission or consent to terminate. It is a right given by the statutes. Whether or not the co-tenant remains liable on the lease is an unanswered legal question. The federal and state statutes permit the servicemember to terminate the lease. That may mean only the servicemember's liability is terminated under the lease. It may also mean the entire lease is cancelled. While the co-tenant may be liable for the entire rent, there is no case law so holding, and the possibility exists that a judge may allow the entire lease to be terminated with a finding that it is unconscionable to hold the co-tenant liable. To avoid the real risk of an adverse court holding, the landlord should consider offering to terminate the lease for the co-tenant as well. If the landlord decides to hold the co-tenant to the lease, the landlord should consider offering the co-tenant a transfer to a cheaper rental. The court would be less likely to find for the co-tenant where the co-tenant had been offered a financially viable alternative. Note that the co-tenant has the right to complete the lease, remain in the rental, and pay the entire rent. It is unlikely that a judge would allow the landlord to use the military termination against the co-tenant to involuntarily terminate the co-tenant as long as the co-tenant complies with the lease.

f) Damages and the Security Deposit Again, the federal and state statutes do not specifically address the return of the security deposit. Since the servicemember has terminated the lease, at least as it applies to the servicemember, it can be argued that the deposit has to be returned. There is no authority under the law for the landlord to allocate or divide the deposit without the written consent of both tenants. If the remaining tenant continues to reside on the premises, the courts will likely split on whether some immediate accounting to the servicemember is due with regard to the security deposit. This is another practical reason to offer to terminate the lease for the co-tenant.

5. Eviction
a) Federal Statutes - SCRA The SCRA provides protections to a servicemember or his dependents in instances of a default judgment or the need for additional time in an eviction. (There is no corresponding state statute.) The SCRA applies to any eviction in which the monthly rent does not exceed a statutory amount, which currently is $2,900, and the defendant does not make an appearance. The service of the summons and complaint on the defendant is not enough to constitute an appearance. A filing or appearance of a co-tenant/defendant or someone holding a power of attorney is not enough. Each defendant who is a servicemember or a dependent of a servicemember, must file something with the clerk of courts or appear in court, either personally or through an attorney.

b) Dependents The SCRA specifically applies to dependents in case of eviction. The definition of dependents is much broader than just the immediate family. It includes not only the servicemember's spouse and children, but also anyone for whom he has provided over half the support for the last 6 months. Thus, parents, other relatives and even non-relatives can be dependents and be covered.

c) Default It is critical that the landlord fully disclose to his attorney the possible military status of a tenant involved in the potential eviction as early as possible. It is a federal crime to obtain a default judgment against a servicemember without revealing the military status of that servicemember. Normally if a defendant doesn't file something or appear in an eviction case, the landlord files a verification of non-military status. The SCRA requires this form in an eviction case if a default is entered. It advises the court that the defendant is not active military. A default is entered against the defendant, a judgment of eviction is signed, and if requested, a writ of possession is issued. The SCRA prohibits the entry of a default against a servicemember or his dependents without an attorney being appointed to act on his behalf. The court appoints an attorney ("the attorney ad litem"), who attempts to contact the defendant. The attorney ad litem also reviews the eviction filings to ascertain if the case is legally sufficient, and if the defendant has any obvious defenses. The attorney ad litem files a report with the court. Based on the report the court can then enter a judgment of eviction. However, if the court feels that the defendant's military service has adversely affected his ability to timely pay his rent, the court has broad discretion to grant the defendant a stay of 90 days or more, or even refuse to enter a judgment (this is true even if the servicemember himself or herself files a response with the court). The landlord must pay the attorney ad litem's fee, since he is unlikely to accept appointment by the court unless his fees are guaranteed.

d) Stipulations If the landlord has to file an eviction, he should make every effort to enter into a stipulation in the case. Since the defendant signs the stipulation and it is filed with the clerk of courts and approved by the court, it constitutes the defendant's appearance in the case. If the defendant fails to abide by the stipulation, a judgment based on the stipulation noncompliance can normally be obtained without the necessity of an attorney ad litem appointment. The stipulation should contain a clause in which certain SCRA protections are waived.

e) Voluntary Vacating Evicting an active duty servicemember or his dependents is time consuming and expensive. Contacting the servicemember's military superiors is not advised, as that may be construed as the illegal contacting of his employer to collect a debt, as well as a breach of his privacy. It is well worth the time, effort and money to obtain a voluntary vacating date, even if it requires the landlord to consider foregoing past or current rent, returning the security deposit, and releasing the servicemember from any liability for termination fees or future rent.

 

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WHEN A COURT APPEARANCE BECOMES NECESSARY
by Brian P. Wolk, Attorney at Law

 

A successful property manager will often follow company procedures to make sure that evictions are lawfully filed against residents who are not complying with the terms of their lease. Even so, a responsible property manager has no authority to prevent a resident under eviction from responding to his eviction lawsuit. In fact, when the resident receives the eviction complaint and summons, the Clerk of the Court outlines in writing the procedure for the resident to follow if the resident intends to dispute the eviction or otherwise request a court hearing. Therefore, just as the property manager needs to properly prepare the initial paperwork before sending it over to their eviction attorney, the property manager must be adequately prepared to face the resident in court once the eviction action has commenced in court.

When is Court Necessary?

In the ideal scenario, the attorney representing the landlord will obtain a final judgment for possession of the rental premises because the resident never responded to the eviction complaint. This is referred to as an uncontested eviction. In the case of an uncontested eviction, the resident is served with the summons and complaint by the sheriff or private process server, but does not respond to the Court in writing within the required five business day time period, which entitles the landlord to request the Clerk of the Court to enter a default against the resident. Once the default is entered, the judge is authorized to sign the final judgment of eviction without the need to examine the merits of the case. However, even if a resident does timely respond to the eviction complaint, she will not necessarily be afforded her day in court. If the judge believes that the resident's answer to the eviction complaint justifies a court hearing, then the property manager has no choice but to appear. In less common cases, if the eviction complaint submitted to the court appears to have obvious errors, then the Clerk of the Court will elect not to enter the default and will instead bring the matter to the attention of the judge, who may in turn set a hearing.

Explanation of the Mediation Process

Many judges prefer to order the landlord to attend mediation once a tenant contests an eviction prior to conducting a final hearing. Mediation is not a voluntary process. If the property manager fails to attend, then the Court may dismiss the landlord's eviction action. The mediation can last for varying time periods, but most will take an hour or less to complete. Mediation is a process in which a person who does not have an interest in the outcome of a case, the mediator, attempts to encourage a settlement of the case. The mediator has no power to force the resident and landlord to resolve their differences. In fact, many mediators are not lawyers and may not have much experience in property management. Even so, you must be respectful, as you do not want the mediator to portray to the resident that your case is weak. The mediator will give both parties the opportunity to present their side of the case and will ask both parties questions. Do not interrupt the resident while he is talking, as that will surely antagonize both the mediator and the resident, which is counterproductive. During some mediations, the mediator will choose to caucus with the parties. That simply means that the mediator will talk in private with the resident or landlord.

Turning the Mediation into a Positive for the Landlord

It is essential that the property manager be prepared for mediation, so that the mediator can deflate the resident's hope of winning the case. It is often a wise strategy to explain to the resident that by settling the case and vacating the premises in a short period of time, the resident can avoid a final judgment of eviction from appearing on her record, which would adversely impact her ability to rent an apartment home in the future. Resolving your case at mediation can also be highly beneficial, because you are able to control your destiny, eliminating the uncertainty of a judicial determination. With proper stipulation wording, you may also obtain money that has been deposited in the court registry quicker then waiting weeks for a final hearing, and that is assuming the judge rules in your favor and orders disbursement of registry funds to the landlord.

What is a Stipulation?

An important tool for the property manager, not only at mediation, but during all stages of the eviction process prior to the execution of the writ of possession by the sheriff, is the stipulation. A stipulation is an agreement signed by the parties of an eviction action which sets forth payment arrangements and/or the date the resident shall vacate the premises. A stipulation also specifies that the landlord will be entitled to a final judgment of eviction and a writ of possession should the resident fail to comply with the Stipulation. The stipulation is then submitted to the judge for signature. One of the many positive benefits of the stipulation is that the landlord can continue to accept money without ending the eviction action. With no stipulation in place, the landlord will likely be waiving the ability to complete the eviction under section 83.56 (5) of the Florida Statutes, because rent is being accepted with knowledge of the lease noncompliance, which in this case would be nonpayment of rent. It is important to note that a property manager may not enter into a stipulation unless an eviction has been filed with the Court. By using a blank stipulation form prior to an eviction action, the property manager may be illegally attempting to simulate process of a nonexistent eviction proceeding.

Drafting the Stipulation

It is vital that the stipulation be filled out correctly. If not, then considerable confusion and possible additional delays in the eviction process will ensue. Make sure all residents on the lease sign the stipulation, and at least with regard to the initial payment made under the stipulation, require payment by money orders or certified funds. If the stipulation was signed at your management office, then you should quickly mail the original executed stipulation to your attorney so that it can be filed with the Court. If one of the residents is in the armed forces, then you must obtain a special stipulation from your attorney in order for that stipulation to be fully enforceable. Finally, if the resident fails to comply with the stipulation, the judge will in most cases enter a final judgment authorizing the Clerk of the Court to issue the writ of possession to the sheriff without a hearing, upon the submission of an affidavit of noncompliance signed by your attorney.

Attending Court

If a property manager has been unable to settle the case prior to the court hearing phase of the eviction process, then she must conduct herself in an appropriate manner by following established courtroom etiquette and procedures. The court hearing is your chance to either win or lose your case. It is that simple. Accordingly, the stakes are high, so the hearing must be taken seriously. Therefore, there should be no joking, as the hearing is considered a formal proceeding. Some judges might appear to be less formal then others, but that is no excuse for the property manager to not act professionally during the hearing. First, the property manager and all witnesses who must testify must appear at the hearing. Depending on the nature of the hearing, you might need only one or two witnesses, as is usually the case in a simple eviction for nonpayment of rent. On the other hand, an eviction for noise disturbances and disruptions to neighbors probably will require multiple witnesses. Your attorney will advise you with regard to the witnesses who must attend, and your attorney will possibly subpoena certain witnesses in an effort to ensure attendance. At the very minimum, the property manager will need to bring the resident's file along with the original lease, and any three or seven day notices that were served, as well as a detailed payment ledger. The property manager must arrive on time. Make sure you have obtained directions, and possibly drive by the courthouse prior to your court date so you know for sure where to go. Bring your cell phone so that you can contact your attorney in case there is a true emergency, such as a traffic accident that is delaying your arrival. That will give your attorney the opportunity to delay the beginning of the hearing, or possibly even attempt to reschedule the hearing for a later date. If the property manager fails to attend the hearing, then the resident will often win the case, and to make matters worse, if the residents had obtained an attorney, then the landlord may be liable for the resident's attorney's fees and court costs.

Court Etiquette

When the hearing starts, you can expect the judge to ask you to raise your right hand and swear to tell the truth before your testify. Always address the judge as, "your honor". Anything other than that may be viewed by the judge as disrespectful. Never interrupt the judge, and only speak if the judge or your attorney has invited you to do so. Do not laugh, roll your eyes or accuse the resident of being deceitful. Let your attorney prove that the resident is being untruthful. If you are being cross-examined by the resident, then simply answer the question to the best of your knowledge without displaying emotion. No cell phones, blackberries or other electronic devices should be taken into the courtroom. Once the judge has announced her decision, there should be no display of pleasure or displeasure. Simply allow your attorney to thank the judge, and leave the courtroom no matter the outcome.

 

 

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LEASE SIGNING PROCEDURES
by Harry A. Heist, Attorney at Law

 

Once your applicant is approved, you are only part of the way there. You want the applicant to become an actual resident. This is accomplished through the signing of the lease and the addenda to the lease by all parties. While this is a simple process, errors are made which can result in the lease not being fully or properly executed, and this could enable the resident to get out of the lease obligations, or could present even greater problems if all the residents do not sign the lease, with possession being granted without all signatures on the lease documents. Following a checklist and carefully consummating the "deal" in the lease and addenda signing process is essential. There will be ample time later for mistakes to be made; the lease signing is not that time.

Who Signs the Lease?

All adult occupants should be lease signatories. Unless an adult occupant is somehow incapacitated and incompetent to be a lease signer, all adults living in the unit should sign the lease as "residents". They will be named in the body of the lease, usually at the beginning and also in the signatory section, if this differs than the beginning of the lease.

Suppose the Applicant does not meet your Resident Selection Criteria?

Your company may have a policy that both parties (assuming 2 residents) must meet the company's resident selection criteria and/or be approved by the screening company in order to qualify for occupancy. Some companies only require one party to meet the criteria. Regardless of your company policy, all adults need to be signatories, even if one does not meet your company's criteria and your company still allows both residents to move in. A serious, common mistake is to allow the party that meets the resident selection criteria, or who is approved by the screening company, sign the lease as a resident, and not make the one who fails to independently qualify sign anything, with the lease only referring to this individual as an occupant.

Possible consequences of having an adult listed as an occupant only

An occupant who is not a lease signer has the best of both worlds. She has the benefits of the lease but have no written legal obligation to the landlord. Further, situations occur when the resident who signs the lease vacates, leaving the occupant behind in the unit, who may or may not pay the rent. If the occupant pays the rent, she establishes a potential separate tenancy with you, and this further confuses matters. If the occupant violates the lease terms, the landlord must pursue the resident who signed the lease, and this person could be long gone.

All spaces, sections and initial areas must be completed by all parties

Many leases unfortunately have too many spaces for the parties to sign. This can and often does result in parties not signing all the sections or failing to initial all the sections where initials are required. The more spaces to sign or initial, the greater the risk of a space being missed. The resident can argue that since she did not sign or initial a designated space, she did not agree to it. Try to see if your company can revise you lease to reduce the number of spaces for the parties to sign or initial, and take great care in your current lease to make sure no space is missed by any party. Take your time and look at each and every page to see if they have all been initialed and signed by all parties before you as the manager put your signature on the lease and addenda. Make sure that where signature lines appear, the residents use their signatures, not their printed names or initials.

Verifying Identity and Identification Copying

If your company has a policy to not copy identification, including but not limited to the driver's license, state ID card, passport or Social Security card, during the application process, all these items should be copied for the file at lease signing. There is no law prohibiting the copying of these items, and they may be needed later for identification purposes, collections and bad check prosecution. If one or both of the lease signers do not have the identification in their possession for signing, the process needs to STOP, and the lease should not be signed by anyone or possession granted, until all the lease signers bring in their identification. Property managers should never let their guard down or fall for the, "I forgot my ID and will bring it to you later" excuse. NO ID, NO lease signing. It does not matter if the applicant has his driver's license or Social Security number memorized. Demand to see the documents. Failure of management to look at the documents is the primary cause of identity theft in the leasing process.

All parties to lease must sign lease before possession is granted

A common mistake is made when one approved applicant signs the lease, but the other is not available for whatever reason at that time to sign. While many property managers claim they will not give out the keys until all parties sign, our office commonly sees the situation when only one approved applicant has signed. The typical scenario is that one of the parties comes to the office, signs, and the other party is to come at a later time or for some reason is unavailable, due to an emergency or other reason. The move-in date is the next day or sooner, the keys are given to the resident who has signed the lease, and the other approved applicant who is to sign the lease never comes in. The file is placed in the filing cabinet and forgotten. The party who is supposed to come in and sign the lease never does, and this is all discovered later when there is a noncompliance, skip or eviction. The party who has not signed the lease has no legal obligations to the landlord. Sometimes, the party who did sign the lease will attempt to break the lease by saying that since all parties did not sign, the document is incomplete and therefore not legally binding on anyone. Your strict rule should be simple. All parties sign the lease, or no one gets any keys.

Requests for Lease Modifications

Occasionally an applicant will want your company's lease to be reviewed by her attorney prior to her signing the lease. We recommend that you do not give an applicant the actual lease, but only a sample lease and a separate sheet detailing the money issues, such as the rent, security deposit, fees, etc. Allowing an unsigned lease to leave your office could result in forgeries or alterations that may not be noticed. Situations have occurred when leases were scanned by the applicant, and using Optical Character Recognition (OCR) technology, reproduced and altered, with the alterations going unnoticed by management. If the applicant wants to make alterations to the lease agreement prior to signing, this should be fiercely resisted, and your company policy should be to use one standard lease. This serves may purposes, including more protection against an accusation of a fair housing law violation. If you allow one person but not another to have an alteration in a lease, this can result in you being accused of discrimination. When an applicant or his attorney wants the lease modified, it is a frequent sign of trouble later, and should be a red flag for the property manager.

Order of Lease Signing

Until an applicant is approved, the lease should NEVER be signed. Having an applicant who has not even been approved sign the lease may seem convenient and efficient, but creates unreasonable expectations on the part of the applicant. The approved applicant should always sign the lease first. Once this is done, the property manager should carefully review the lease for errors or omissions prior to signing the lease. Possession should never be granted until such time as the lease has been thoroughly reviewed and signed by all approved applicants and the property manager. The lease should never sit in the file or around the office signed only by the residents. Often we see unsigned leases or leases which are signed by the property manager after possession is granted, rather than before. This is wrong.

Lease/Addenda copy to residents prior to possession being granted

The original lease or "original duplicates" should never be given to the residents. Original duplicates occur when 2 or more originals are created, and the resident receives a signed original for his records. We recommend that you never use this system; the one signed original should stay in your possession, in your file. You never want a resident to have an original of anything in his hands which can later be modified, resulting in a legal battle over what original document is the actual, original agreement. Once the lease and all addenda have been fully signed by all parties, the lease and addenda should be copied and provided to the residents prior to move in. All copies of the lease, addenda including any rules and regulations or Resident Policies, should be given to each resident if there are multiple residents. Do not take a shortcut and give a copy only to one resident, or just the husband or just the wife. Some companies have an acknowledgement sheet listing the lease, addenda, rules and regulations and separately have the resident sign this, under which it is acknowledged by the resident that everything has been received prior to taking possession. Failure to provide all residents with a fully executed lease and addenda packet can open the door to the resident claiming that since he never received the full lease and addenda, there is no lease in effect, and that he can thus vacate with no penalty or ramifications. Although most judges would probably reject this argument, why open the door?

All monies owed to be collected prior to lease execution

The approved applicants must pay all money that is owed prior to the lease being signed by management. An even better policy is to have all money owed in hand prior to ANYONE signing the lease. No possession should be granted, and management should never sign the lease, unless all required money has been paid. Often the approved applicant will be short on money, with the possession date quickly looming. Many managers are tempted to allow possession to be granted, relying on the promise that the resident will pay at a fixed later time. We strongly recommend against this practice, but if it is going to happen, we urge you to first speak with your attorney, who will provide you with a special "payment plan form" that will define any money owned as rent, clearly state the due dates, and have an acceleration clause in the document which will make all the money owed under the payment plan immediately owed in full, minus any money already paid. Best practice is to never allow possession without all required money paid in full. All money paid should have cleared your company's bank, but as a practical matter, this is usually not done. We strongly recommend a cashier's check or money order for the initial funds, with our warning to you that even these items can be forged or payment can be stopped on them, rendering them worthless. For personal safety, cash should never be accepted. A resident who has cash to tender can easily go to the local convenience store and obtain a money order.

Leases for greater than one year - Witnesses are necessary

A written lease greater than a year requires witnesses. Note that the lease must be greater than one year. A lease of exactly one year or less than a year doesn't need witnesses. Two witnesses are required for each signature: the landlord and/or his agent and each of the residents. A person obviously cannot witness his/her own signature. Any competent adult 18 years of age or older can witness a signature. There are no citizenship requirements for a witness, so a non-citizen can act as a witness. Witnesses do not have to be neutral or independent of or strangers to either or both the landlord or resident. The witnesses can be related to the parties or employees of the parties. Other leasing agents or staff in the office can witness the signatures. The same two individuals can witness more than one signature. Witnesses should sign for each signature that they witness. Although the law governing lease witnesses is open to interpretation, we recommend that parties to the lease not witness other signatures.

Approved Applicant delaying lease signing

Often an applicant is approved and perpetually delays the signing of the lease agreement. If the manager has a large number of vacancies, and the unit is not a special, desirable unit for some reason, delays like this really do not have much significance and are simply more of an inconvenience. This delay becomes more than inconvenience when you are turning away other qualified applicants. To put an end to the delay in lease signing, the application should provide that if the applicant is approved, the anticipated lease needs to be executed within so many days of the applicant being notified of the approval. The application acceptance letter should reiterate this policy, giving the approved applicant a deadline to sign the lease, or indicating that the unit may be rented to another interested party. Failure to include the proper wording in your application and following up with an application approval letter could result in the approved applicant holding you hostage, resulting in you potentially turning away other qualified applicants, while the approved applicant ultimately decides not to sign the lease.

 

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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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