Question 1
Due to the economy, our community has been serving a large number of Three-Day Notices. The rent is due on the first of the month, and according to our lease, the late fee kicks in on the fifth of the month. We normally wait until the 15th of the month to file an eviction. One of our residents is allowing excess guest traffic in and out of his apartment home. We suspect that there is illegal drug activity, but we have absolutely no proof of this. We decided to catch this resident off guard and serve him a Three-Day Notice on the second of the month, instead of waiting until the fifth of the month like we do with our other residents. Sure enough, the resident did not pay the rent prior to the expiration of the Three-Day Notice, and our attorney filed the eviction. The resident retained an attorney, filed an answer with the court, and deposited the rent amount owed as alleged in the eviction complaint into the court registry. The resident's attorney is claiming that the Three-Day Notice was served prematurely. Do you believe that we will win this case, or should we try to settle, with each side paying their own legal fees?
Answer
First, you should never attempt to evict for nonpayment of rent if your reason for evicting is unrelated to the nonpayment of rent. Serving the resident a Three-Day Notice very early in the month is a hint to the judge that the nonpayment eviction may be a Seven-Day Notice eviction in disguise. Judges will pick up on this, and they will not be impressed. Judges expect property managers to use the Seven-Day Notice process if evicting for reasons other than nonpayment of rent. Also, since you are treating the resident differently by serving the Three-Day Notice so early, your company may become vulnerable to a fair housing lawsuit, if the resident is a member of a protected class, as on the surface it may appear that there has been discrimination.
Some judges may accept the resident's argument that the Three-Day Notice was served too early in the month. Although the lease requires rent to be paid on the first of the month, it also states that the late fee will not begin if the rent is paid no later than the fourth of the month. Some judges will interpret the lease language to mean that rent is not truly late until the fifth of the month. Judges are even more inclined to accept that argument when the resident, as in this case, deposits the required rent into the court registry.
You should definitely try and settle the case if you are in position now to be made whole with the rent amount owed, particularly if you can avoid liability for the resident's attorney's fees. With an attorney now involved, the potential stakes have escalated, and if the resident prevails in court, the landlord will be responsible for the resident's attorney's fees, which amount could be very substantial.
Never file an eviction for any reason other than what the actual problem is. Accepting rent late over and over, then trying to nail the resident with a nonpayment eviction can really cause a problem. Judges see right through it.
Question 2
Yesterday, I had a meeting in my office with my staff. We are trying to think outside the box with regard to the marketing of our property. Our regional manager would like for us to increase our occupancy. I would like for our office to offer our residents either a $100.00 rent discount or a gift certificate for that same amount if a resident refers another person to our apartment community, and that referred person then signs a lease. Is that legal? Are there any limits on the amounts we can give to our residents?
Answer
First, your idea is not legal! The Florida Statutes were amended over ten years ago to allow a property management company or apartment community owner to pay money to or give something of value not to exceed $50.00, such as a rent discount or gift certificate to a current resident who refers another person to the apartment community. Therefore your proposed $100.00 rent discount or gift certificate exceeds the legal limit. The applicable statute is F.S. 475.011 (13). You should also be aware that those who violate this statute are subject to criminal law penalties. On the other hand, if you are dealing with a licensed real estate broker, for example a local real estate company, there is no limit on the amounts paid to the broker. If you ultimately decide to institute a referral program, you should clearly state in writing the terms and conditions for receiving the rent concession or referral fee.
Referral fees, rent discounts or anything of value to current residents as a "reward" for referring a new resident to your apartment community is limited to $50. Another community next door to you does it all the time? Yes, and it is 100% illegal.
Question 3
I received a letter from a resident in yesterday's mail. The resident is threatening to sue my company, because she believes that her security deposit has not been returned in a timely manner. I am not sure if I did anything wrong. We inspected the apartment home after the resident vacated and found no problems. The resident left the apartment home in great condition. We sent out a Statement of Deposit Accounts "SODA" within 15 days by certified mail, stating that there was going to be no deduction from the security deposit. Our management company is located in Utah, and it takes about 30 days from the move-out date to process the final disposition paperwork, so this resident should receive her full deposit refund within another two to three weeks. I thought we had at least 30 days to refund the security deposit. Did our company follow the law?
Answer
Your company did not follow the law. Unfortunately, the mistake that was made is very common. It is crucial that your corporate office understand that if you are returning the full security deposit, you must do so within 15 days of the resident vacating the apartment home, according to Florida Statute 83.49. Also, a full refund technically does not have to be sent by certified mail. Many property managers mistakenly believe they have 30 days to send a full refund. However, if the apartment community is making some claim against the security deposit, the property manager must send out the "SODA" by certified mail within 30 days of the move-out date, and has another 30 days from the time the claim letter is sent to send the portion intended to be refunded.
If the resident is making a reasonable offer to settle the matter, it may make sense to work things out quickly, because if the resident litigates this matter and hires an attorney, the owner could be held liable for the resident's attorney's fees and courts cost under Florida law. Those amounts could be significant.
When refunding a resident's security deposit in full, there is NO excuse for not getting it to the former resident within 15 days of the resident vacating. None.
