THE BACKGROUND

Florida Statutes section 475 governs the ability or inability to receive or pay compensation when engaging in real estate related services. Real estate related services include things such as appraising, auctioning, selling, exchanging, buying, and most importantly for this article, renting of real property. Only a licensed broker, a person who holds a real estate broker’s license in Florida may receive and pay compensation for these services to other licensed brokers or salespersons. Certain exceptions to the requirement of licensure have been carved out by the legislature, which allows compensation to be paid and received for a real estate related service without the need for a license. For instance, FS 475.011 exempts any “salaried employee of an owner or of a registered broker for an owner, of an apartment community who works in an onsite rental office of the apartment community in a leasing capacity”. Note that the key word here is “salaried”. Through the efforts of the Florida Apartment Association, another exemption was added which allows a referral fee or finder’s fee to be paid in an amount up to $50.00 in cash, a rent reduction or something of value to a resident who refers another resident to the apartment community. Unfortunately, apartments are limited to paying their employees only a salary for leasing activities and paying residents the $50.00 referral fee cap. Many companies knowingly and unknowingly violate this law. There has been little to no enforcement by the Florida Real Estate Commission until very recently, and a number of apartment communities, in particular the licensed real estate brokers of those companies, have come under fire. The penalties are expensive and severe and there are criminal felony implications.

COMPENSATION WHICH AN UNLICENSED EMPLOYEE OF AN APARTMENT COMMUNITY CAN LEGALLY RECEIVE

FS 475.011 exempts on-site employees from the legal requirement of having a broker’s or sales person’s license to receive compensation for leasing. Specifically, it exempts any “salaried employee of an owner, or of a registered broker for an owner, of an apartment community who works in an onsite rental office of the apartment community in a leasing capacity.” From the language of this section, it would appear and has been interpreted by the Florida Real Estate Commission that nothing other than a “salary” can be paid to the property manager or leasing staff. Paying a bonus or giving anything extra of value to the employee when he or she leases an apartment is considered illegal and violative of FS 475. Can the property manager or leasing agent receive a performance bonus each week or month, just as in many other professions where the hard working employee can receive a bonus? It appears that the answer is no, if that bonus is based on the “leasing” or the number of leases which are consummated through the effort of that employee. It our opinion that this prohibition by FS 475 is ridiculous and the law needs to be changed. No harm is being done to the public by paying a leasing agent or property manager a “bonus”; many on-site property managers and leasing agents have far more experience then the majority of property managers who hold Florida real estate licenses, and almost no training or testing in property management is performed or required by Florida law in order to obtain either a sales person’s license or broker’s license. This is not a situation where unlicensed persons such as on-site property managers or leasing agents are in any way infringing upon the livelihood of a licensed person. With all that said, it is our firm’s view that if an apartment manager, leasing agent or any employee of an apartment community is paid anything other than a salary, they risk prosecution by the Florida Real Estate Commission. You have been forewarned and enforcement has begun.

REFERRAL OR FINDERS FEES TO CURRENT RESIDENTS

FS 475.011 specifically allows the payment of a referral fee or finder’s fee to a current resident for referring a new resident to the apartment community. The law exempts “Any property management firm or any owner of an apartment complex for the act of paying a finder's fee or referral fee to an unlicensed person who is a resident in such apartment complex, provided the value of the fee does not exceed $50.00 per transaction”. This means that no license is required by either party to give or receive this finder’s fee or referral fee. The amount given cannot exceed anything valuing more than $50.00 so a $100.00 reduction of rent off to the referring resident, a $100.00 gift certificate to a local restaurant or anything that exceeds $50.00 in value is clearly prohibited. Examples the law gives include a “fee paid, credit towards rent, or some other thing of value provided to a person for introducing or arranging an introduction between parties to a transaction involving the rental or lease of an apartment unit”. The penalty for paying a referral fee in excess of $50.00 is severe, and the person making the payment could be charged with a third degree felony, and the person or corporation making the payments fined up to $5000.00 per occurrence.

OUR RECOMMENDATIONS

You should immediately speak with your corporate attorney if your company has been paying employees anything other than salaries for leasing activities, or you have been giving resident referral or finder’s fees in excess of $50.00, and get advice on how to proceed. We urge you to actively get involved with the Florida Apartment Association, which is continuing its effort at trying to clarify the law and lobbying for the ability of the apartment community employee to be rewarded for a job well done.

 

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Given the huge amount of information that we are bombarded with, it’s amazing that we can keep as many things factually correct as we do. It’s not surprising that the three-day lease cancellation myth has become established in so many residents’ minds. While Florida law does not provide a cancellation period, the careless manager may provide the applicant with the ability to cancel the lease by failing to deliver the lease.

Rescission is the Correct Term

Technically, the legal term is “rescission”. A rescission is the unmaking of a contract. There is no contract. It is a nullity. A cancellation is the abandonment or repeal of a contract. Since the common usage is “cancellation”, I will use it in this article.

No Three-Day Cancellation Period

There is no three-day cancellation period for residential leases in Florida. It doesn’t matter whether the lease is for only one month’s duration or for a period of years, or for any term in between. It doesn’t matter what the monthly rent is or how it is payable. It doesn’t matter if it’s a single-family home, a duplex, a condominium or an apartment. It doesn’t matter if the property is in the city or outside city limits. It doesn’t matter. It can’t be cancelled within three days. Although there is no right to cancel residential leases, there is a right of cancellation that applies to certain other types of contracts, for example door to door sales or home equity mortgages. This is what probably led to its mistaken application to leases.

Giving the Resident a Copy of the Lease

We recommend personally giving a copy of the completely executed lease to the resident as soon as the manager or his agent signs the lease. This prevents any dispute as to whether the resident knows that there is a binding lease in effect. If the manager cannot give the lease to the resident personally, then other possible methods are an email attachment with a delivery receipt, fax with a delivery confirmation or a certified letter to track the receipt.

Bad Manager Practices

It is an all too common manager practice to hold the resident’s copy of the lease until move-in. A manager does this at her own risk. Another frequent manager excuse is that a copy of the lease was available for the resident to pick up or that the resident didn’t keep his appointment to pick up the copy. Judges are unimpressed with these excuses. That being said, a resident cannot intentionally frustrate delivery of the lease by such actions as refusing certified mail.

Partial Performance

If the manager has forgotten to give the resident a copy of the lease, but the manager and resident are performing under the lease, can the resident cancel? The resident’s performance may include, for example, accepting the keys, obtaining utilities in his name, moving in some personal items, or actually occupying the premises. The manager’s performance may include complying with the resident’s preparation requests (using paint of a requested color, installing new appliances, etc.) or actually giving possession. Resident cancellations after partial performance by either the resident or manager are legally problematic. Partial performance of a lease may make the lease binding. The more extensive the performance by the resident or the manager in reliance upon the lease, the less available the right of cancellation is to either the manager or the resident. The manager should consult her attorney for advice in such situations. (Note that partial performance applies to an unsigned lease also, but with significant differences not discussed here.)

I caution that it is dangerous to rely on partial performance, as it may not save the manager’s entire lease. A manager may be found entitled to only her out-of-pocket expenses as damages. "Out-of-pocket” expenses are her actual cash outlays, such as the costs to turn the apartment again, to re-advertise it, etc., as opposed to her "statutory or contract damages", such as rent to relet under Florida statutes or liquidated damages under an early termination addendum.

So much work is involved in guiding an applicant through the rental process to the signing of the lease; it is a shame to see it fail at the finish line. The final important step is the delivery of a copy of the completely executed lease.

 

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Every manager will eventually experience the situation in which the resident has a family, medical or work issue, and the resident desires to break the lease. Can the resident simply break the lease if something either in their control or out of their control occurs? Florida law does not give the resident any leeway in this area. Unless the lease specifically has a clause or clauses allowing a resident to be released from the lease obligations if a particular event occurs, the resident will be held to the lease. In reality, the resident will most likely walk out on the lease anyway, but may be still obligated to you under the terms of the lease agreement. The question then remains, what will a judge say in court?

The Medical Lease Break

Florida law does not allow a resident to break a lease due to a medical condition, either preexisting or new, although you may want to allow the resident to break the lease without penalty in certain circumstances. There are many elderly residents in Florida who cannot complete their lease terms due to having to be placed in an assisted care facility. Other residents may have a serious sickness which requires long term care or some condition which does not permit them to reside on the premises on their own. We recommend that with verification from a physician, you allow individuals to break their lease without penalty. If you were to treat the vacating resident as a typical lease break, and you decide to take the case to Small Claims Court, many judges would probably rule that due to the impossibility of the resident to perform the lease obligations, through the judge’s equitable powers, the resident will be allowed to break the lease without penalty.

Disabilities and Fair Housing laws

In a hypothetical situation, a resident tells you she can no longer climb the stairs in your building to her 2nd floor apartment due to a disability, and you have no 1st floor apartments available. Should you allow her to break the lease without penalty? The law requires that you make a “reasonable accommodation” for the resident. That might mean agreeing to let them transfer to a first floor unit when one becomes available, but it does not mean the resident can escape the lease obligations altogether. The resident is not entitled to break the lease because she has become disabled. Think of it this way: Breaking the lease is not a reasonable accommodation, because it does not aid the handicapped person in living at your property. It does just the opposite! Your decision to allow a lease break will decrease the possibility of potential litigation or a discrimination case being filed against you. Discrimination cases are most often decided in favor of the manager, but at what cost in wasted time and money?

Anticipatory Breaches

If a resident anticipates prior to lease signing that they may have to terminate their lease early due to a medical condition, wording can be placed in the lease dealing with the terms and conditions of what will be a mutual termination of the lease. We recommend that you ask your attorney to draw up a clause which can be placed in the special stipulation section of the lease to accomplish the wishes of all parties. Ambiguity will cause problems, misunderstanding and potentially litigation. A short statement like “Resident may terminate the lease early if they must go to an assisted care facility” is not specific enough, as it does not deal with monetary issues, notice issues and is open to interpretation.

The Mutual Termination of Lease

In the event the manager and resident agree on a mutual termination of the lease, all terms and conditions should be memorialized in writing and signed by all parties. The security deposit, last month’s rent and any other monetary sums should be completely dealt with to effectuate a clean break with no misunderstandings.  

 

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Your resident skipped out in the middle of the night 3 months into a 12 month lease. No notice given, not even the keys left behind. The only thing the resident left you with was a mess and a vacant apartment. Your owner or management company wants you to sue the resident for the money owed and collect this money. Can you sue? Should you sue? Is it worth it? Are there risks?

Residents break their leases on a regular basis. Sometimes they give you notice, but often they just get up and leave. While in some cases you are quite happy to be rid of a problem resident, in other cases the skip was unexpected, and the manager is upset at the loss of rental income and the prospect of a vacancy or having to retain a new resident.

The usual reaction by the manager is to want to sue the resident to recover the lost rent. Unfortunately, most managers are unsuccessful at collecting the rent in this fashion, and in our opinion, it is just not recommended.

For how much can you sue the resident? You can only sue the resident for the rent that you lost as it becomes due plus the damages to the property that exceed ordinary wear and tear, and these damages must be proven.

When can you sue the resident? You can sue at any time after the skip, but you will not know what is owed until you have the unit re-rented. You cannot calculate the rent owed for the remainder of the lease and sue for this amount, as acceleration is not allowed.

Where is the resident? In order to sue someone, you need to find them. If you cannot find them, you cannot sue them. It is that simple.

So you find the resident and sue the resident. Now what? The owner or the property manager will have to attend a pre-trial which could take hours of waiting. At the pre-trial the resident may not show up, and you will receive a default judgment. If the resident shows, the case might be settled, or if it is not settled, the case will be set for trial at a later date. This will require another trip to court where a full-fledged trial will be held and all witnesses must attend.

Can an attorney sue the resident for you? Sure, and you will be throwing good money after bad. A typical small claims suit handled properly will cost in between $500.00 to $2500.00, on average in attorney’s fees. You still will need the owner, the property manager and/or witnesses in court at the pre-trial and definitely at the trial.

Doesn’t the resident have to pay your attorney’s fees? If you win in court, the judge may award you attorney’s fee and costs based on the lease or Florida statute. Collecting them from the resident is a whole different story.

Can the resident win in court? A resident who breaks a lease will come up with all kinds of reasons why the lease was broken, most of these reasons pertaining to the condition of the property, repairs that they claim were not completed, safety issues, noise issues or just about anything under the sun. These can all be LIES, but you will have to defend yourself against these lies. Many residents can lie more convincingly than you can tell the truth. If the resident wins, YOU will have to pay the resident’s attorney’s fees. Many judges feel a lot of sympathy for a resident who breaks a lease, if the resident comes up with a good sob story.

The Counterclaim Risk Any time you file a lawsuit, you run the risk of the resident, with or without an attorney, filing a counterclaim against you. This means that the tables are turned, and now you are not only a plaintiff, but you are a defendant and must defend yourself against the resident’s alleged claims. This often will require you to hire an attorney and subject you to not only your attorney’s fees, but the resident’s attorney’s fees in the event he retains an attorney and prevails in court. A simple lawsuit you file against a resident for rent that he owes you can result in a complex counterclaim filed against you for damages the resident allegedly suffered due to your actions or inactions. The accusations the resident may make could be totally false and outrageous, but you will still be required to defend yourself.

ARE YOU CONVINCED YET? Our office does not recommend lawsuits against a resident unless it is an eviction. If the manager wishes to pursue a resident, we recommend that they do this on their own and recommend that the property manager does not file suit for the manager. Do some managers win and collect their money? Absolutely. Most do not. We recommend that you take the money you would have spent filing a lawsuit, pay for an extra ad in the newspaper, and re-rent the property as soon as possible.

 

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While we strongly recommend against having corporations as residents in residential leases, sometimes it is necessary and often actually works out fine. How the lease is executed with the corporation becomes a big problem, and rarely do we see leases with corporations executed correctly. The name of the corporation, who signs, the personal guarantee and how it is signed will determine if you will potentially have a successful lease or major problems later. This article will not address the dangers of the corporate resident, but will rather show you how to enter into a lease with the corporate resident in the proper legal fashion.

 

The “Corporation Only” as a Resident

 

There will be times when the resident will be the corporation. Granted, a human being will be the occupant in the residential property, but the lease named resident will be a corporation and nothing more. This means that the corporation as resident is responsible for paying the rent, is bound to the lease and incurs all the obligations and benefits as a leaseholder. If the leaseholder corporation is in default of the lease, the manager’s only recourse will be to sue the corporation as the resident, and the manager will be bound by all the legal requirements and procedures necessary to sue a corporation. No individual person is responsible for payment of the rent or liable for failure to pay the rent.

 

Why Would a Lease Only Be in the Corporate Resident’s Name?

 

 

In the case of a medium to large corporation, no one is going to personally sign or guarantee a corporate lease in most situations. Usually the corporation is placing employees, officers or directors in the rental unit. The manager deals directly with the employee, officer or director of the corporation. Neither the occupant nor the corporation, officers, employees of directors will have any individual being liable under the lease. The corporation is the only liable party.

 

Who Is the Corporation?

 

Before you can even think of entering into a lease with a corporation, it is crucial to know the exact legal entity’s name as it is registered with the Florida Secretary of State or the state in which it is incorporated. “Joe’s Painting Company” is not the proper corporate name, if in fact the corporate name filed with the Secretary of State indicates, “Joe’s Painting and Contracting, Incorporated”. We see a massive amount of sloppiness in how the name appears on the lease. We recommend you always get a printout from the internet, and even possibly get a copy of the Articles of Incorporation. While you may not think this is important, when it comes time for the corporation to break a lease, skip out on you or get evicted, this sloppiness can really cause serious complications. Never assume that the name of the corporation that is being provided to you is in fact the exact legal name of the corporation. Always investigate and confirm.

 

How Is the Pure Corporate Resident Lease Drafted?

 

The corporate resident should be on the lease exactly as it appears in the Secretary of State records. The lease should clearly state who the occupants will be, and if you routinely do criminal background checks on your residents, failing to do criminal background checks on the occupants could be a Fair Housing violation. Years ago, a client found out that one of the occupants in a unit rented under a corporate name was in fact a registered sexual offender. Since the occupant never filled out an application and the manager never did a criminal background check, the occupant could not be evicted.

How Does the Pure Corporate Resident Sign?

 

In the signature section of the lease, the corporate name needs to be listed as the resident along with the name of the person signing the lease on behalf of the corporation.

 

Example: XYZ Engineering and Surveying, Inc., by John Smith, President.

 

Is John Smith now liable at all if the corporation fails to pay the rent or gets evicted? No. John Smith is simply signing as his authorized capacity as president of the corporation.

 

Who is Authorized to Sign on Behalf of the Corporation?

 

This is not an easy question to answer. Someone may have apparent authority, but due to the bylaws of the corporation, only certain people or persons can actually bind the corporation. Your attorney can help you investigate this. Never assume that the person signing the lease is in fact authorized. You will sadly find out that he was not authorized to sign when the corporation is trying to get out of the lease, and the corporation’s attorneys can prove that this person had no actual authority.

 

The Corporate Resident and the Person With Individual Liability

 

Unless you are dealing with a solid corporation with a proven track record and know for sure that the person signing the lease has the absolute authority to bind the corporation, you will want to have someone sign “individually” in addition to signing in a corporate capacity. This person signing “individually” is actually bound to the terms, conditions and all obligations of the lease as if there were no corporation in the picture at all. This is the best possible way you can execute a corporate lease.

 

Example: In the beginning of the lease, it will state that something like “Bill Jones and Mary Jones, Manager and XYZ Engineering and Surveying Corporation, through its agent John Smith, President AND John Smith Individually”

 

At the signatory section of the lease, you will have a place for Bill and Mary Jones to sign (unless you are signing on their behalf with a Power of attorney) and 2 more places for signatures:

 

XYZ Engineering and Surveying Corporation, by John Smith President _______________________ (sign here)
and

 

John Smith, Individually ______________________ (sign here)

 

Common mistakes we see

 

1. The corporate name is incorrect or incomplete.

 

2. The lease is signed by a person in the corporation that has no authority.

 

3. The lease fails to include a signature line creating individual liability.

 

4. There is a signature line, but it fails to state whether the person signing is doing so individually or on behalf of the corporation, causing legal confusion.

 

Our Recommendation

Besides all the dangers of entering into corporate leases in residential units which we promised not to address in this article, we strongly recommend that unless you are sure you know how to enter into a corporate lease, give your attorney a call so that you will know how to draft the lease correctly.

 

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Many managers are reluctant to copy the resident’s identification due to a fear that this will trigger a Fair Housing violation. By not having a copy of the identification, the manager is at a distinct disadvantage when this identification is needed later in the tenancy or for collection purposes. Should the identification be copied? Is it legal? Let’s look at the risks and benefits of copying the ID and get some advice from our nation’s Fair Housing Experts.

The Application Process

Most managers have been advised that copying an applicant’s identification and keeping it with the file can open you up to a Fair Housing complaint. The theory behind this is the fact that you can gather up numerous applications, sit down and review them, look at the photos of the applicant and decide to discriminate against the applicant based on race, religion, color, nationality or anything else you may be able to determine by viewing the image of the applicant. Possibly, the applications are gathered and sent to a third party in your company who makes the ultimate decision as to accepting or rejecting the applicant. This person can easily sort through the applications and make decision based on what they see on the applications. In the event of a Fair Housing complaint, the investigator may and probably will want to see all your applicants’ files, and in the event there appears to be a pattern of discrimination against someone based upon a protected class that can be determined by the ID copies, you will have a lot of explaining to do. Is it illegal to make copies of the ID at the time of application? Nadeen Green, a nationally respected Fair Housing expert and Senior Counsel with For Rent Media Solutions says this:"If you feel a need to have a copy of the applicant’s photo prior to them being approved, (1) know the risk, (2) be consistent within the policy, and (3) be sure you can absolutely justify the decision making procedures and process as to why one person got an apartment and another did not. Otherwise there could easily be the illusion that decisions were based on factors about the people, with those factors being identified through the photos." Let’s look at what she is saying.

1. Know the risk. The risk is that you will be accused of discrimination, as you can often easily identify a person of a protected class by the photo on the ID. Will not having a copy of the photo ID keep you safe? Of course not, but having a copy certainly elevates this risk.

 

2. Consistency in your policy. If you are taking a copy of photo ID for the purposes of identification of the applicant, you must do this with all your applicants. Never pick and choose or make exceptions unless these exceptions are not based upon any discriminatory purpose. If you have a policy to copy photo ID, you will need to have a written policy for when a person does not have a photo ID. Note the emphasis on “written” when it comes to all your policies.

 

3. Justifying your application approval/rejection decision. All managers need to have a written Resident Selection Criteria and/or other written policy which must be followed for the application acceptance or rejection. Careful file notes should be kept with the full reasons for which a resident was denied.

Copying the ID at Lease Signing

While some managers may be hesitant to copy ID during the application process, it is crucial that ID is copied at the lease signing. This gives the manager another chance to look at the ID, compare it with the information provided, and have a firm way to identify the resident at a future date. A copied ID often is useful in a resident lock-out, pursuing a bad check, and dealing with identity theft or in an unauthorized resident matter. Both Doug Chasick of Call Source and Fair Housing Trainer Nan Cavarretta agree that copying ID at lease signing is both legal and recommended, but feel that copying during the application process is risky.

Your Decision?

When dealing with any potential fair housing issue, caution is key. If you have a good Resident Selection Criteria and detailed policy and procedures AND you follow them, documenting everything along the way, you will probably be safe copying the ID at application time. Short of that, we recommend you hold out until the lease signing. Finally, when it comes to copying the ID, no matter when you do it, as Doug Chasick of Call Source will tell you, "most copy machines at leasing offices don’t make good copies of photographs anyway!"

 

“Serving the Property Management Professional”

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        OFTEN THE TENANT WILL SUE A PROPERTY OWNER REGARDING A SECURITY DEPOSIT DISPUTE

 

1.   If the HWW Lease is used, the Tenant is to only sue the Property Owner rather than the Property Manager or Property Management company.  In some cases, the Tenant will sue the Property Owner.

 

2.   Tenants sometimes will sue the Property Owner if there is a unresolved security deposit dispute.

 

3.   If the Tenant sues the Property Owner, the Property Owner may expect you to handle the lawsuit.

 

4.   No lawsuit can ever be ignored.  If a lawsuit is ignored, the Plaintiff in the lawsuit will win by default.

 

5.   Some courts will require the Property Owner to hire an attorney and/or attend court while some will allow the Property Manager to stand in the Property Owner’s place and attend the Mediation and Trial if not settled in Mediation if the Property Manager has a Power of Attorney given to them by the Property Owner.  

 

6.   The Property Management Agreement should give the Property Manager the power to settle lawsuits.

 

7.  Settlement is often a wise path to avoid wasting additional time and money.

 

8.  If the Tenant is represented by an attorney, the stakes become high as if the Tenant wins even a small part of the lawsuit, ALL the attorney’s fees of the Tenant (whether they paid them or not) can be awarded to the Tenant and a Judgment for attorney’s fees will be assessed against the Property Owner.

 

9.  A judgment against a Property Owner will attach to the rental property and can result in serious expenses to the Property Owner.

 

ALWAYS CONTACT OUR OFFICE THE MOMENT YOUR PROPERTY OWNER IS SUED NO MATTER HOW UNFAIR OR RIDICULOUS THE LAWSUIT MAY SEEM. 

 

NEVER ATTEMPT TO ACT FOR THE PROPERTY OWNER IF THE TENANT HAS AN ATTORNEY.

 

EDUCATE YOUR PROPERTY OWNER ABOUT THE RISKS IF THE TENANT HAS AN ATTORNEY.

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                            OUR OFFICE MAKES YOUR EVICTION QUICK, EASY AND PAINLESS

 

1.   Gather up your Lease, your Notice to Pay Rent and your Payment ledger.  

 

2.   Confirm your Notice to Pay Rent is completely filled out and the “Certificate of Service” is completed.

 

3.  Go to www.evict.com and you will see how simple it is to send the info in to us.

 

4.  While we have hundreds of articles and videos, you may want to watch a couple of the below ones to get an understanding of the process and timelines.

 

PREPARING THE THREE-DAY NOTICE   https://vimeo.com/511224514

 

RETURNING RENT  https://vimeo.com/295616035

 

THE  BASIC EVICTION-  https://vimeo.com/295658623

THE UNCONTESTED EVICTION  https://vimeo.com/295616767

 

NONPAYMENT OF RENT- THE PROPER NOTICE https://vimeo.com/311537164

 

SHUTTING OFF ONLINE PAYMENT https://vimeo.com/337287280   

 

THE MOST COMMON NOTICE MISTAKE https://vimeo.com/337287393

 

 

IF YOU HAVE ANY QUESTIONS, DO NOT HESITATE TO CALL 1 800 253 8428 OR EMAIL US AT INFO@EVICT.COM 

 

ONCE THE EVICTION IS FILED, WE WILL KEEP YOU UPDATED AT EACH STEP.

 

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OFTEN THE TENANT WILL SUE YOU OR THE PROPERTY MANAGEMENT COMPANY ON A SECURITY DEPOSIT DISPUTE RATHER THAN SUING THE PROPERTY OWNER

 

1.   Technically, AND especially if the HWW Lease is used, the Tenant is to only sue the Property Owner rather than the Property Manager or Property Management company.

 

2.   Tenants often sue the Property Manager or Property Management company improperly.

 

3.   If the Tenant sues the Property Manager or the Property Management company, a MOTION TO DISMISS can be filed and there can be one of three results. 

1. The Judge may dismiss the case OR
2. The Judge may dismiss the case and tell the Tenant to sue the Property Owner  OR
3. The Judge may leave the Property Manager or Property Management company in the lawsuit and tell the Tenant to also sue the Property Owner.

 

4.   If a MOTION TO DISMISS is filed, while you may get your company out of the lawsuit AFTER A HEARING ON THE MOTION, the Tenant simply amends (the judge often allows this) or files a new lawsuit so you often will have accomplished little.

 

5.   The KEY to success is to try to settle the case to avoid time wasted in court and attorney’s fees.

 

6.   If you or your Property Management company is sued in a Security Deposit lawsuit, you MUST take action right away if you wish that we try to have you or your Property Management company dismissed from the case.  

 

IF A LAWSUIT IS FILED AGAINST YOUR PROPERTY OWNER, YOU OR YOUR PROPERTY MANAGEMENT COMPANY, AND THE TENANT HAS AN ATTORNEY, THE STAKES ARE HIGH.

 

ALWAYS CONTACT OUR OFFICE THE MOMENT YOUR PROPERTY OWNER, YOU OR YOUR PROPERTY MANAGEMENT COMPANY IS SUED NO MATTER HOW UNFAIR OR RIDICULOUS THE LAWSUIT MAY SEEM.   

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MOST SUCCESSFUL PROPERTY MANAGERS SIGN LEASES WITH A POWER OF ATTORNEY GRANTED TO THEM BY THE PROPERTY OWNER.

THE POWER OF ATTORNEY IS PROVIDED BY OUR OFFICE AND MUST BE SIGNED, WITNESSED AND NOTARIZED

Some reasons why it is wise to sign a Lease for the Owner:

1. Owner knows you are working with an applicant and wants to refuse them.
2. Owner does not want to rent to children and does not sign Lease.
3. Owner finds out applicant has a service animal or ESA and refuses to sign Lease.
4. Owner sees name of the tenant and decides he/she does not like people from that country.
5. Having Owner sign the lease could result in delays.
6. Only one owner may sign.
7. Owner changes mind.
8. Owner finds out tenant is Black, Asian etc. and decides to change mind.
9. Owner never gets you the signed Lease.
10. Owner gets Lease from you, makes changes, then sends it back to you.
11. Owner delays in getting you the lease, it’s Friday, you move Tenant in, Owner changes mind on Monday.

 

THE PROPER WAY TO HANDLE PROPERTY MANAGEMENT IS AS FOLLOWS:

TENANT APPLIES, TENANT IS APPROVED BY THE PROPERTY MANAGER, LEASE IS PREPARED, TENANT SIGNS, PROPERTY MANAGER SIGNS, PROPERTY MANAGER THEN TELLS OWNER THE GOOD NEWS A WEEK AFTER TENANT MOVES IN.   

“Serving the Property Management Professional”

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