Advertising the Property and Dealing with Prospects

When advertising the property in any media form, be it print, internet, radio or any other media, it is crucial to be honest and accurate. Advertising amenities that are no longer available or that are not yet available, or prices for units when none or only a few exist at the advertised price, or any other tactic used to draw a potential renter in that is not 100% accurate, could open up the management and owners to charges of false advertising and/or unfair and deceptive trade practices. Care must be taken to constantly check all advertising for accuracy, including advertising controlled by third parties.

Below Market Prices

A troublesome situation arises when units are advertised for a below market price, when the intention of the apartment community is to only have a few of these apartments at that price, but all other similar apartments at a higher price. At the time the ad was placed, these few below market apartments were available, but in no time, they now are no longer available. If below market apartments are to be set aside, the number of the apartments must be clearly indicated in the ad, shown as limited quantities, or at least be available to the public when the ad is published, no matter what media is used. Many of you may be familiar with the hotel advertisement magazines found in highway rest areas where extremely low prices are advertised. If you look closer though, you will see the fine print often limiting the number of these rooms. There is a reason for this fine print, and this is simply to avoid lawsuits for unfair and deceptive trade practices or false advertising.

Floorplans and Location

In the event there are multiple floorplans of varying square footage, design or both, it is crucial that the advertising is accurate. When the prospect is deciding on an apartment, if she has not seen the apartment that she will be occupying, due to it being occupied or because she is renting sight unseen from afar, the floorplan should be given to her, and you should have an affirmation from the prospect that she was provided with the floorplan and location of the unit. If a particular unit is NOT guaranteed to the prospect, the prospect must be told in writing that no particular unit or floorplan is guaranteed, and the applicant is agreeing to accept the unit that becomes available, even if it is not exactly the same in size, floorplan or view as the model unit previously viewed. If possible, provide the applicant with copies of all the floorplans. The key is not to create an expectation in the prospect that cannot be fulfilled.

Location is very important to many Tenants. There is a big difference between the apartment overlooking the serene lake or wildlife refuge, and the one that is next to the dumpster or overlooks the 24 hour convenience store and busy road. Needless to say, some floorplans and locations are far more desirable than others. Surprising the Tenant with a location or floorplan that is far different than expected could be met with a desire on the part of the new Tenant to break the lease, refusal to move in, and a demand for all funds previously paid. The apartment you think will be vacated next week could end up being the eviction for holdover, as the current Tenant refuses to vacate, or the apartment may be infested with bedbugs, or something else may occur which makes the expected apartment otherwise unavailable. We strongly recommend that unless you are certain that your prospect will get a particular apartment, the applicant should always sign a document, under which it is acknowledged and agreed that the apartment being requested may not be the one ultimately received, despite your best efforts.

Amenities

Often the advertising media of a new property under construction will show amenities that are not complete. Sometimes the AI or artist's digital renderings in the advertisements are nearly impossible to tell apart from actual photos. For instance, the prospect is told that a pool is not yet complete, with the lower price of the apartment reflecting that fact. Certain amenities simply may not yet be available for the use of the Tenants. Unfortunately, no one can ever guarantee when an amenity will in fact be complete, regardless of the contractor's promises. Your prospect becomes an applicant and then becomes your Tenant; six months later, the amenity or amenities are still not available for the use of the Tenant. This development can result in the Tenant attempting to withhold rent, banding together with other Tenants and hiring an attorney who may file a class action lawsuit, breaking his lease, or suing for breach of contract. While YOU fully intended the amenity to be complete by a certain date at the time of lease signing, the fact remains that the Tenant did not get what he bargained for. Your claims that the rent was lower and below market for the unit because an amenity or amenities were not yet complete will be met with an accusation by the Tenant that you TOLD him that an amenity or amenities will be completed by a certain time, and that he relied upon this. Whether or not the completion and availability of an amenity is in your control has no bearing on the matter. It is crucial that if certain amenities are not completed or otherwise unavailable, the Tenant signs a special “Amenities Addendum”, under which he acknowledges that an amenity is not yet complete, and the applicant has been notified before signing the lease that you made no guarantees whatsoever as to the date of the completion or availability of an amenity.

Construction or Improvements on the Property

If you expect to be making any major alterations, repairs or construction on the premises that could cause any possible inconvenience to the Tenant or disruption to the Tenant's peaceful quiet enjoyment of the premises, these need to be disclosed prior to lease signing and be reflected in an agreement between you and the Tenant. Often a Tenant will move into the unit, and a month later, construction begins on each building's roof or siding, when there is excessive construction noise, traffic, dust, debris and the usual nails in the tires. The Tenant you rented to just happens to work the night shift and sleeps during the day. A “Construction Addendum” explains and fully discloses to the Tenant that there may be construction, repairs or alterations occurring on the premises which may cause inconveniences, and the Tenant acknowledges and agrees that this has been disclosed. Failure to disclose the possibility of construction related disturbances or inconveniences, especially when management is fully aware that the work will begin shortly, could result in the Tenant looking to break the lease or seeking other legal recourse. Will the Tenant be able to break the lease without penalty? Quite possibly.

Watch: Quick Tip – On-Site Construction and Your Resident

Disclosure of All Fees

Administrative fees, resident benefit package fees and redecorating charges are routinely charged as a condition of occupancy. The legality of these charges is not certain. Florida law does not specifically prohibit or allow such charges, so we recommend you speak with your corporate and local counsel to decide if or what to charge. The main issue here is disclosure. The typical problematic scenario is as follows: an individual out apartment hunting calls the property inquiring about the price for a one bedroom unit. The leasing agent cheerfully tells the prospect that there are apartments available for $1500 a month. The prospect, calling from 2 hours away, jumps into his car and heads out to look at the apartment. The prospect comes to the apartment community, tours the property, and decides on a one bedroom unit. The application process begins, and the applicant is told that the application fee is $50, there is a key deposit for the tennis courts, a nonrefundable administrative fee of $250, and a security/damage deposit of $1000. The applicant immediately questions the administrative fee, inquiring as to its purpose and why it is mandatory. He asks that it be waived, and you refuse, as it is company policy to charge this to all Tenants. Frankly, it is the first time he has ever seen such a “fee”, and he has been renting at apartments for years. The leasing agent, at a loss for words to explain the purpose of the fee, simply says that it is a fee that the company requires to be paid by all Tenants, and that it is nonrefundable. What is the problem here? If the administrative fee is nonrefundable, then in actuality, the rent is not $1500 a month, but is really $1500 a month plus $250 more, as the $250 is being required to be paid prior to move in. The application fee, security/damage deposit, and key deposits are no problem, because the application fee is being used by the property to pay for the screening of the applicant through a third party, the key deposit will be returned if the key is returned, and the security/damage deposit will be returned if the Tenant vacates owing nothing and leaving the unit without any damage that exceeds ordinary wear and tear. The formerly cheerful individual who called the apartment community 2 hours previously now walks out of your office feeling cheated or misled. The problem was lack of “disclosure”, and the solution is “full disclosure” at first contact. It is imperative that the leasing agent, property manager or anyone who will be handling inquiries from any source, be it the internet, text messaging or phone, disclose any nonrefundable “fees” at the very first contact. The first contact for the individual in the above example may have been a print ad or internet ad. Disclose the nonrefundable fees in all your print ads and internet advertising. The next contact was the phone call. Disclose this fee in the phone call when the prospect is asking what the rent is. The next contact may be in person: before you even think of taking the prospect on a tour of the property, provide the prospect with a sheet detailing the prices, fees, deposits and any other monetary requirements necessary to apply for and obtain an apartment. But you exclaim that no one else discloses these fees! That is their problem, and they will be at a higher risk of a potential lawsuit by a disgruntled prospect.

Available Unit Lists

Every property manager should be able to know what exact units were available on a particular date in the past. Why would we need such seemingly useless information? The scenario is simple. A person or persons of a protected class status comes into your office asking if you have a 2 bedroom apartment or house available. You just got into the office late due to a massive traffic jam, your car broke down on the way to the office, it is the middle of summer, it has been raining solid and heavy since your day began, and you just dealt with an irate Tenant who has a roof leak. Let's just say it is not a good day. Appearing short or even rude, you hastily tell the prospects that you have no two bedroom units available. Stunned, they leave driving past your signs and banners offering great deals and concessions. Suspicious that they have been the subject of discrimination, they or an employee from the local fair housing office decide to test you. Two days later, they or the tester calls your office to see if a two bedroom unit is available, and your extremely friendly leasing agent says, “Yes, we have 2 available”. AHA. You were discriminating against them and lied to them about the availability of the two bedroom apartment on that awful day, so they think and so it appears! A year goes by, and you are hit with a discrimination complaint in which you and your company are accused of discrimination against the prospects because of their particular protected class status. Did you discriminate? No. On that day, you had no two bedroom units available, but two days later, because of an eviction and a skip, you did indeed have two two bedroom units available. How do you prove it? You simply use your “Available Unit List” that you have in electronic format or that you print out each day and carefully have filed and saved at the end of each day, to prove what units were available on what particular days. You don't produce and keep an “Available Unit List”? Beware of how difficult it will be to prove that you did not engage in illegal discrimination.

Watch: Quick Tip – The Brand New Property in Construction

Questions? Email us at info@evict.com or call the Law Offices of Heist, Weisse & Wolk at 1-800-253-8428.