Traditionally in apartment communities, water is paid for by the property owner and included in the resident’s rental amount. Most apartment communities do not have separate water meters for each unit. Due to the increasing cost of water and technological advances in water flow measuring and resulting lower costs of retrofitting, many apartment communities are hiring companies to sub-meter their units and handle the billing aspects. This cost shifting results in tremendous savings to the owners of the apartment communities, and most likely also results in water conservation overall. The task of sub-metering is not difficult in most buildings but the legalities of getting the resident to now pay for the water that was once included in their rent presents some challenges.

The Current Resident Problem

Most leases simply state that water is included in the rent or it is the owner’s responsibility to pay water. In cases like this, if an apartment community decides to sub-meter, there is no way possible to make the current resident under the current lease pay for the water. If it was not in the contract, they are under no legal obligation to pay for water. The only option the manager has is to non-renew the resident’s lease at the end of the term and offer a new lease with the proper wording in the lease stating that the water is the resident’s responsibility.

A common provision found in many Florida leases states the following:

Insufficient Lease Clause

…Unless separately metered, we supply the water and sewer for normal usage. If separately metered, you must pay the water and sewer as additional rent when rent is due. If you do not have separately metered water, we may add separate metering…

As you can see from this clause, it would appear that in the event the unit was sub- metered after the resident moved in, you would be able to now make the resident pay for the water as additional rent when rent is due. Unfortunately the clause is not very clear, does not cover all scenarios and we know that ambiguity is construed in favor of the resident.

Suppose You Are Going to Institute a RUBS Program?

Ratio Utility Billing Systems (RUBS) is a system whereby the manager charges water use by a ratio like the square feet of the unit, bedrooms and/or the number of residents in a unit. This system avoids the retrofitting necessary to sub-meter an apartment building, but has its own problems as well. Many residents feel this system is unfair, as it could be inaccurate, as some residents will invariably overpay for usage, while other residents will underpay as these systems assume constant and equal water usage. Can an apartment community use the sample clause above if they decide to implement a RUBS program? The answer would be no, as that clause only addresses sub-metering. Therefore, if the lease does not address the possible future implementation of a RUBS program, there is no way you can impose it on a current resident.

A Possible Lease Clause Based Solution

Even if you have no immediate plans to sub-meter an apartment community or institute a RUBS program, we feel that your lease should allow for the possibility at a later time. Water costs may increase dramatically, you may sell the apartment community, or you may just decide that RUBS or sub-metering is the way to go. Without a proper lease clause, your hands are tied.

Sample Lease Clause

Currently water and/or sewer is provided by the Manager and Resident agrees to use same in a reasonable manner. Resident agrees that at some time in the future, Manager may pass this cost on to the Resident, and Resident agrees to pay for water and/or sewer each month upon demand with the monthly rental payments as additional rent, as Manager may decide to sub-meter the apartment or institute a Ratio Utility Billing System whereby Resident agrees to pay upon demand the cost of water and/or sewer based upon a formula taking into account factors including but not limited to the unit square feet, number of bedrooms and/or the number of residents. Resident shall be given 30 days prior written notice by Manager if Resident becomes responsible for paying for water and/or sewer.

The Importance of Disclosure

While a clause potentially making a resident responsible for water at a future time is legal, when the time comes to implement the clause and begin billing the resident, sparks will fly. There will be cries of unfairness, surprise and alleged verbal promises. If you intend to use such a clause, we recommend that it is clearly pointed out to the resident or possibly placed in a separate document as an addendum. A water/sewer bill could substantially increase the rental amount, and we recommend that before you sub-meter or implement a RUBS program you check with your attorney on the plan of action and legalities.

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The Better Business Bureau is a non-profit organization. It is composed of local businesses that voluntarily join and pay dues for membership. Its members commit to a code of ethics in dealing with the public. One of the services it offers is to assist in the resolution of issues between businesses and consumers.

The BBB Complaint

The consumer initiates the process by filing a “complaint” with the BBB. The complaint can be against any business, whether a BBB member or not. The BBB will not handle complaints involving employment practices or discrimination. The BBB indicates that these complaints are better made to and handled by the government agencies created to deal with these issues.

The BBB complaint process begins with the consumer filing a complaint, either in person or online. Anonymous complaints are not taken. Based upon the business’s zip code, the complaint is assigned to the local BBB. The complaint questionnaire asks the consumer to describe his/her complaint and the settlement sought. The BBB assigns a case number to the complaint, and within two business days the complaint is forwarded to the company. The company is asked to respond, normally within ten days. If a response is not received, the BBB issues a second request. If the BBB does not receive a response within thirty days, it closes the complaint as unresolved without a response.

 

A Response Isn’t Required

There is no legal requirement that any business, whether a BBB member or not, respond to a BBB complaint. BBB member businesses are expected to respond to complaints. A member business’s failure to respond may affect its continued membership in the BBB. Any response by non-member businesses is completely voluntary.

The Legal Complaint

The manager should not be confused by the BBB’s use of the term “complaint”. Managers are familiar with a legal “Complaint”. This is the legal document that is filed with a court to start a lawsuit. A legal Complaint should always be reviewed by the manager’s attorney, as it requires some response. On the other hand, a BBB complaint does not start any legal process. It does not necessarily have to be reviewed by a lawyer. It does not require a response.

Benefits of Responding

If responding, the manager should make a reasoned, professional response correcting any resident misrepresentations, indicating the efforts made to address the resident’s concerns, and citing the results obtained. In the response, the manager should refrain from any hostile attacks on the resident, inflammatory accusations or belittling language. Responding to a BBB complaint, even in instances of resident misrepresentation, demonstrates that the manager is acting professionally and in good faith. Also, at a later date in a different setting (court) the resident may try to argue that the unanswered complaint indicated the manager was unwilling to address the resident’s issues or that the complaint was accurate.

The BBB does keep track of the number of complaints filed against a business and the number of complaints resolved. Because this information is available to the public, responding to complaints may be good public relations.

Since it is the resident’s version of the facts, the BBB complaint is usually one-sided. However, it does give the manager notice that the resident considers the issues important enough that the resident has taken the time and made the effort to file the BBB complaint. It’s quite possible that the complaint is the manager’s first notice that the resident has these issues. Thus, the complaint may actually help a manager address and resolve a resident’s problems. Resolving a resident’s issues at this stage may avoid further complications. The resident’s next step may be to involve a governmental agency or issue a rent withholding letter to the manager.

Problems With Responding

While some residents’ BBB complaints may be filed in good faith, some are just another chapter in many residents’ continuing harassment of the manager. The complaint may be a complete misrepresentation of a situation which the manager has already fully and fairly addressed. It may be a request for relief that the manager is not required to give and has determined not to provide. It may be a waste of time to respond.

Although the BBB complaint and the manager’s response are not legal documents, the manager should give thought to the wording of his response. The complaint and the response are subject to being introduced as evidence should the matter eventually become the subject of litigation. The manager should not disclose any information that may later be used against him. The manager should be careful with regard to making any admissions of responsibility, liability or negligence. If in doubt about what he is disclosing, the manager should not respond.

Require a Privacy Waiver

The resident’s filing of the complaint can be considered his consent for the manager to disclose information necessary to answer the complaint. Unwarranted disclosure of the resident’s personal information unassociated with the complaint would be a privacy violation. The prudent manager should respond that privacy concerns prevent any response without a privacy waiver by the resident and enclose a waiver for the resident’s signature.

If the manager has any doubts about responding or the wording of the response, he should consult with his attorney.

 

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Every manager will someday deal with the situation when a resident comes storming into the office acting in a threatening or belligerent fashion. He may be unhappy about the rent going up, or because you are non-renewing him, or possibly because his car was towed, and it is all your fault according to him. He storms into your office, spewing profanities and acting aggressively towards you or others. It is possible that you have other prospects in the office who have to be subjected to this behavior by the resident. This can be a frightening experience, as the resident could go as far as threatening the life of staff members, or throwing objects about the office.

Can you evict a resident for this behavior? Should he and other leaseholders of his apartment be served any type of notice?

Calling the Police

Unless the dispute is minor, we recommend that the police are called immediately. Although they most likely will not do anything but speak to you, your staff and the resident, it will send a clear message to the resident that you mean business and will not tolerate such behavior in or out of the office. By calling the police, you will also create the much needed paper trail in the event another incident of a similar nature occurs again.

Trespassing the Resident

If a disruptive incident happened more than once, a threat was made, you were put in fear of your life, the resident did some physical damage to the premises or interfered in a serious way with you conducting business in the office, you have a right to request that the attending police office or sheriff’s deputy file a trespass warning against the resident.

If the sheriff does trespass the resident from the office and the resident returns, the resident can be arrested.

The Proper Notice to Use

If the office disturbance is such where there is yelling, profanity and general inappropriate behavior, while the manager would love to terminate the resident, this would not make for a strong termination case. In such a situation, a Seven Day Notice of Noncompliance with Opportunity to Cure should be given, and you should consult your attorney for the proper wording.

If the disturbance rises to a much more serious level including direct threats of physical harm to persons or property, a Seven Day Notice of Termination would be the proper notice to use. Never prepare a Seven Day Notice of Termination yourself, but immediately call your attorney for guidance,

Continued Behavior

If a Seven Day Notice of Noncompliance With Opportunity to Cure has been served, and similar disturbances occur after the notice expires of which you have good proof, it will be possible to serve a Seven Day Notice of Termination. Again, your attorney should assist you in making that decision.

Some Final Thoughts

Most self-respecting managers will eventually have their vehicle keyed or their tires slashed by an angry resident. A number of situations occur each year in which managers and apartment community staff in Florida are injured and even killed by irate residents.

Learn to try to diffuse situations whenever possible, as the risk is high that something serious can occur.

 

“Serving the Property Management Professional”

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You are trying to kick someone out of their apartment because their dog barks too much. Said like that, it puts your case in perspective from a judge’s viewpoint. You know that the barking dog is keeping the neighbors awake at 2:00 a.m., or that the unattended, whining dog on the balcony is interfering with the neighbors’ quiet enjoyment of their apartments. You know that because you have the irate phone calls, the complaining notes and even a neighbor’s letter refusing to renew. The means to turn what you know into a successful eviction is called evidence.

Do you want to win in court? Then you have to use your common sense.

Common sense

1. A dog barking too much occasionally isn’t that unreasonable.
2. If it isn’t important enough to come to court, it’s not that important.
3. If someone can’t remember when it happened, it wasn’t that serious.
4. If someone waits for a week to do anything, it wasn’t that bothersome.
5. If only one family is complaining, it may be an overreaction.

 

Witnesses

The earlier they’re on board, the better. Speak to them personally. Tell them your lawyer said (always blame it on the lawyer) no witnesses, no case. Witnesses need to write it down – keep a log: date, time, duration, and how loud. This also calms the angry neighbors, because now someone is doing something to address their problem. You have a plan.

Your staff and courtesy officer can testify to barking. Have them complete incident reports. You still need neighbors to testify. It’s the neighbors whose quiet enjoyment of their apartments is being disturbed. Unless your staff is on-site at night, they can’t help with night barking, because they must actually hear the barking. You need at least two witnesses, each from a different apartment. The more witnesses, the better your case will be. One witness alone is subject to a tie in testimony. He said, she said. You lose all ties.

Continuing

All notices should be within 90 days to show the barking is a continuing disturbance and not an infrequent lapse. Immediately serve a Seven Day Notice of Noncompliance with Opportunity to Cure. If the barking continues after the Notice expires, a termination notice can theoretically be served, but you need to seriously consider serving another Seven Day Notice of Noncompliance with Opportunity to Cure Notice. If the barking continues after the second cure notice expires, check with your witnesses. Did they keep logs? Will they testify? If yes, then contact your attorney about the Seven Day Notice of Noncompliance without Opportunity to Cure (the Seven Day Notice to Terminate).

Attorney

Involve your attorney early. Have your attorney do all the Seven Day Notices of Noncompliance with Opportunity to Cure. 

SOME PROOF THAT IS NECESSARY PRIOR TO TERMINATING THE RESIDENT FOR THE BARKING DOG

1. Witnesses who will testify in court that they heard the barking AFTER the Seven Day Notice of Noncompliance with Opportunity to Cure expired and are prepared to show the judge proof (logs and/or incident reports).

 

2. Police reports where the police indicate in the reports that they heard the barking and it was unreasonably loud AFTER the Seven Day Notice of Noncompliance with Opportunity to Cure expired.

 

3. Animal control reports in which the animal control warden indicates in the report that the dog was unattended and/or barking loudly AFTER the Seven Day Notice of Noncompliance with Opportunity to Cure expired.

 

4. Tape recordings of the dog barking AFTER the Seven Day Notice of Noncompliance with Opportunity to Cure expires.

 

5. Written admissions by the dog owner that the barking is unreasonable, i.e. an apology note from him.

 

6. Multiple Seven Day Notices of Noncompliance with Opportunity to Cure to show that you gave several chances for the resident to save his home.

 

7. Notices within a reasonably close span of time to show this was a not several, isolated incidents in an entire year. This barking was a continuing, serious, unreasonable disturbance of the neighbors.

 

8. Do not accept money after learning the dogs are still barking, if you are going to give a Seven Day Termination notice for that particular barking. Accepting money after learning of a noncompliance is a waiver of that noncompliance. Remember in accepting money the key is when you LEARN of the noncompliance, not when you serve the Seven Day to Terminate.

 

9. Do not accept money after serving a Seven Day to Terminate.

 

IF YOU DO NOT HAVE A STRONG CASE, YOU WILL LOSE. EXPECT THE RESIDENT TO DENY THE BARKING IS FREQUENT OR LOUD AND TO HAVE HIS FAMILY OR FRIENDS TESTIFY TO THAT. REMEMBER THE JUDGE WILL NEED TO BE CONVINCED THAT THE DOG BARKING IS SO UNREASONABLE THAT HE WILL TAKE THE RESIDENT’S HOME AWAY.

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It is the 5th of the month and you have not received the rent for one of your tenants. You are carefully preparing the Three Day Notice when the mail arrives. An official looking document from the Bankruptcy Court is addressed to you. Upon opening the envelope, you see that it is a “Notice of Commencement of Bankruptcy”, naming your tenant as the debtor. Unfortunately this scenario is becoming quite common, as bankruptcy filings are on the rise, with many of the bankruptcies being filed by renters. Can the tenant live there for free now? Can you evict that tenant? Can you cancel the tenant’s lease?

Once you receive notice from a tenant that he or she has filed for bankruptcy, you are prohibited by federal law to take certain actions. You are not allowed to attempt to collect the rent owed to you or seek possession of the rental premises without first obtaining permission from the bankruptcy court.

If you had already served the tenant a Three Day Notice, you cannot file an eviction. If you had already served a Three Day Notice and filed an eviction, the eviction comes to a screeching halt. Even if you already received a Final Judgment of eviction from the County Court Judge and the Sheriff has served the Writ of Possession scheduling a lock out within hours, the lockout will be “stayed.”

We have had tenants file bankruptcy minutes after the judge signed a final judgment of eviction in court. The bottom line is that a bankruptcy filing stops all collection and eviction proceedings cold. Any time you give a tenant a break or voluntarily delay finishing up an eviction, you run the risk of the tenant filing bankruptcy. If you violate the bankruptcy laws and attempt to continue collect the debt or regain the rental premises, you could incur serious penalties and sanctions. Is all hope lost?

Immediately upon receiving a written suggestion of bankruptcy, or even if the tenant verbally tells you that he or she has filed for bankruptcy, you should immediately call your attorney, who will check with the Federal Bankruptcy Court to see if a bankruptcy has indeed been filed. If it is verified that a bankruptcy has been filed, your attorney can prepare a motion to “obtain relief from the automatic stay” of bankruptcy. Since the bankruptcy filing “stays” or “stops” everything, you must petition the bankruptcy court to allow the “stay” to be lifted for the purposes of collecting your debt or continuing to pursue your eviction. The procedure of petitioning the bankruptcy court to successfully lift the stay will typically take 30-45 days with regard to a Chapter 7 petition, and 45-60 days with regard to a Chapter 13 petition. If the delinquent tenant in bankruptcy actually attempts to make payments to the landlord within the bankruptcy proceeding, the above timetables will be expanded, but in most cases, payment will not be forthcoming.

The most common bankruptcy filing you will see is what is called a Chapter 7 petition. This is also called a "liquidation” and often occurs when a tenant has mounting credit card debt, car payments, and hospital bills and just cannot get out of the proverbial debt trap. Most of the creditors, including you, will probably never see a dime of money once the bankruptcy is completed, but thankfully, the law has carved out a niche that at least allows you to prevent the tenant from living on the premises until the bankruptcy is completed. A typical Chapter 7 bankruptcy petition takes a few months and sometimes over a year to be completed, but a swift call to your attorney the moment you receive the dreaded Suggestion of Bankruptcy will usually result in about a month’s delay in removal of the tenant, in addition to the normal eviction timetable.

The tenant in bankruptcy can often buy more a little time when a Chapter 13 debt reorganization is filed, or in the rare event you rent to a corporation which subsequently files for Chapter 11 business reorganization protection, you could be looking at bigger delays. If you take no action in bankruptcy court as landlord, horror stories abound, since the tenant can occupy the premises for literally years with you having no legal recourse. Whether a Chapter 7, 11 or 13 petition is filed, if the bankruptcy is eventually followed through to the point of discharge, your collection will be limited to your security deposit retention and/or proof of claim filed with the bankruptcy court. The remainder of the tenant’s debt will be legally wiped out forever.

Suppose an applicant comes to you, and the credit report shows that the applicant is currently in a bankruptcy proceeding. Should you rent to that person? Technically, the lease with your company would constitute a “post-petition” transaction, and the automatic stay should not protect that tenant. However, that tenant could potentially seek to amend the bankruptcy petition to include you. Even if the tenant makes no attempt to amend the bankruptcy petition, if the tenant informs the sheriff of the bankruptcy at the end of the eviction, the sheriff is not likely going to make the legal distinction that your lease transaction is “post-petition”, and you will still often be required to obtain official authorization from the bankruptcy court before completing the eviction.

Be very leery of applicants who have a history of filing bankruptcy, but who do not actually follow through to the point of discharge, (known as serial filers). That pattern suggests an applicant who has no qualms about living rent free for a few months before moving on to another landlord to share the same treatment.

The next time you receive a “Suggestion of Bankruptcy” on behalf of a tenant or see any information regarding bankruptcy on an application to rent, call your attorney and get some advice. Not all attorneys are admitted to practice before the bankruptcy courts in Florida and some have to “farm” the bankruptcy proceedings out to another attorney.

 

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The problem of checks returned on insufficient funds (NSF checks) is often compounded by the manager’s subsequent actions. What starts out as a frustrating nonpayment event can become an eviction case lost with liability for the resident’s attorney fees. Every NSF check forces the manager to spend additional administrative time with such tasks as reversing the payment on the resident’s ledger and collecting the balance owed. It seems reasonable that the manager should be compensated for this additional time and work in the form of appropriate service charges. Yet not all managers are properly set up to pursue such charges.

Dealing with a NSF check will depend on whether the resident remains in possession or has vacated.

Resident Vacated – Collection

If the resident has vacated, then the NSF check is simply a collection issue. The manager adjusts the resident’s ledger to reflect the returned payment. The manager can address NSF checks just as she addresses any other amounts owed. She can pursue collection on her own (send balance due letters and sue) or send the account to a collection agency. The resident is liable for the face amount of the check, any bank fees incurred by the manager and court costs, and attorney’s fees, if suit is filed. The manager may also pursue other civil and criminal penalties, as detailed later in this article.

Resident Vacated – Notice of claim

If a Notice of Intent to Impose Claim on Security Deposit has been sent, and the manager is still in possession of the security deposit, and the 30 day period after vacating has not expired, the manager can make an additional claim against the security deposit. She sends an amended notice of claim by certified mail. If a notice of claim has been sent and it already claimed the entire security deposit, then there is no point in sending an amended notice. A balance due letter adding the NSF amount to the outstanding balance is all that’s needed.

Resident in Possession – 3-Day Notice

If the resident is still occupying the rental premises, the manager can serve a 3-Day Notice if the amount still owed is rent or additional rent. In calculating the amount for the 3-Day Notice, the manager should confirm that all amounts on the Notice, including any additional NSF service charges, are designated as rent or additional rent in the lease. The manager should serve a 7-Day Cure Notice for any amount owed that is not rent or additional rent. If the NSF check was tendered for payment of an outstanding 3-Day Notice or 7-Day Cure Notice, then the prior Notice is still viable. A NSF payment is not a valid payment and will not count as “payment” toward the Notice.

Resident in Possession - The Demand Letter.

A common mistake made by managers is to send a demand letter for payment of the NSF check. Almost universally, the demand letter gives the resident so many days to pay. The manager also serves a 3-Day Notice or a 7-Day Notice at or around the same time. If the demand letter and the Notice have different response dates or time periods, the manager has arguably voided her Notice. Of course, the manager’s attorney doesn’t discover this legal flaw until the eviction hearing, and may not be able to extricate the manager from the strong defense competing notices can provide. If the manager loses the eviction case, he will likely be responsible for the resident’s attorney fees, if the resident is formally represented.

 

 

NEVER SEND A DEMAND LETTER FOR AN NSF CHECK. IF IT IS RENT, SERVE A 3-DAY NOTICE. IF IT ISN’T RENT, SERVE A 7-DAY CURE NOTICE.

 

Resident in Possession - The NSF Statutory Notice

Many managers are aware that Florida provides for civil penalties under a NSF civil statute. The best advice is to forego this statute and its penalties while the resident is in possession. To invoke the statute, you must send a statutory form and give the person writing the bad check (usually the resident) 30 days to pay. While the 30-day period is running, any 3-Day Notice or 7-Day Cure Notice given may be invalidated, as the payment dates or time periods of such a Notice conflict with the statutory notice.

Criminal Penalties

Florida statutes provide for criminal penalties for intentionally writing an NSF check. If a manager is thinking of pursuing criminal penalties for NSF checks, he should first call the state attorney’s office for the county, in which the rental is located. Some offices have established procedures and particular forms for their county. A review of the appropriate websites may also provide the needed information and forms. Just as with informal demand letters or statutory demand letters attempting to pursue civil remedies, the pursuit of criminal prosecution involves sending a formal demand letter to the person writing the bad check (again, usually the resident), which demand will likely conflict with a 3-Day Notice or 7-Day Cure Notice, so we strongly recommend foregoing the criminal prosecution route while the resident is in possession of the rental premises.

NSF Service Charges

If the lease provides for NSF service charges, then those charges will be applicable. Florida law frowns upon imposing penalties upon residents. Managers are cautioned that service charges should approximate recovery of the economic loss caused by the NSF check for additional administration, loss of the use of the funds, etc. Many leases follow the NSF statutory service charges, on the premise that these charges are a legislative indication of reasonable service charges. As of July 2012 the statutory service charges are: $25 if the check is $50 or less, $30 if the check exceeds $50 but no greater than $300, $40 if the check exceeds $300, or 5% of the check amount, whatever is greater. Absent lease authorization or following cumbersome statutory procedures, the statutory service charges cannot be imposed.

Bank Fees

Almost all banks impose a fee on the manager/depositor if a check bounces. If the lease permits, than these fees are chargeable to the resident. If the lease is silent or there is no lease, the manager may still seek reimbursement of the fees from the resident, but may have to resort to litigation to establish his right to reimbursement.

The Manager’s Checks Bounce

What about the fees charged by the bank for the checks that the manager wrote in reliance on the NSF check? Because the resident’s check bounced, now the manager’s checks may be bouncing. It is unlikely that these bank fees are chargeable to the resident. Absent some extraordinary circumstances, the manager is responsible for giving a deposited check sufficient time to clear before relying on it.

Keep the Lease Up to Date

As a final point, managers should check their leases to insure that NSF charges are assessed, and that these charges approximate current statutory service charges. Leases should provide for reimbursement of bank service charges, and should include clauses providing for recovery of any collection fees or charges, including attorney fees and court costs.

 

“Serving the Property Management Professional”

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You discover that one of your residents has an unauthorized occupant. This may happen when you are doing an inspection, you see more vehicles than usual, you get a complaint form a neighbor, or possibly someone comes into your office and pays the rent or makes a service request and is not even on the lease. How you deal with this unauthorized occupant will determine if the person can be removed from the premises or properly added to the lease.

The Discovery of the Unauthorized Occupant and Waiver

Once you discover there is an unauthorized occupant on the premises, you need to take swift action. Waiver is an important principle of Florida law and basically means that if you know of a noncompliance, in this case an unauthorized occupant, and you fail to take any corrective enforcement actions or delay these actions while continuing to accept rent, you may not be able to enforce your lease terms and have the person removed. You will in a sense have “waived’ the lease provisions by your inaction and thus modified the lease.

Your First Step Upon Unauthorized Occupant Discovery

Serve a Seven Day Notice of Noncompliance with Opportunity to Cure immediately. This notice will simply say something like “You have an unauthorized occupant residing on the premises in violation of the terms of your lease, and this person must be removed”. Whether or not you intend or hope to have this person authorized and allowed to live on the premises, serve this notice without delay. If rent is coming due and the unauthorized person is still there, AND you want this person removed, DO NOT ACCEPT RENT, as this is a lease noncompliance. But wait! This article is not about removing an unauthorized occupant but rather how to authorize an unauthorized occupant. READ ON!

How to Authorize the Unauthorized Occupant

If your policy is that all adult occupants must go through a credit and background check, you should never allow an unauthorized occupant to remain on the premises, unless the person passes your Resident Selection Criteria test, just like the current resident in the unit. The problem though is that you have given the resident a Seven Day Notice of Noncompliance with Opportunity to Cure to have the resident remove the occupant. If you give the unauthorized occupant a Rental Application, it would seem to interfere with the Seven Day Notice, and it does. On one hand you are asking the resident to remove the unauthorized occupant, but on the other hand you are giving the occupant an application which will take time to fill out and process.

1. Serve a Seven Day Notice of Noncompliance with Opportunity to Cure.

 

2. Give the unauthorized occupant an application, and take the application fee in certified funds. Give a strict deadline to the resident for the unauthorized occupant to get you back the application, and this should be no more than 3 days. Make sure it states this on the application or supplemental notice that you give with the application. The application needs to state that the lease or Resident Addition Addendum is to be signed within no more than 3 days after approval.

 

3. Process the application, and if the occupant is approved, have the occupant sign the RESIDENT ADDITION ADDENDUM.

 

4. If the unauthorized occupant is NOT APPROVED, let the occupant know this and serve a BRAND NEW Seven Day Notice of Noncompliance with Opportunity to Cure. If the resident fails to remove the unauthorized occupant within the seven days, call your attorney, and you will be advised on how to take further action, which may include eviction.

Why do we need to serve a NEW Seven Day Notice of Noncompliance with Opportunity to Cure if the occupant is not approved?

Nothing in the law says you do, but think about what has happened, you gave the original Seven Day Notice with Opportunity to Cure, but then you opened up the door for possibly approving the occupant. This gave the occupant an expectation that they could be approved, so therefore they did not vacate pending an answer from you regarding approval. By the time you gave them an answer, possibly 4 of the 7 days had elapsed. We think it is a good idea to serve a new notice rather than to create a defense to the resident.

Should You Authorize the Unauthorized Occupant?

This decision needs to be based on your occupancy limits which should be in accordance with HUD guidelines, and if the occupant is approved through your application process. You are under no legal obligation to approve the unauthorized occupant or offer them the chance to be approved. Remember, your resident has violated the lease by allowing the unauthorized occupant to live with them in the first place. Next it will be the new resident’s pet python.

Common Mistakes

The most common mistake made by managers is to do nothing about the unauthorized occupant. As mentioned earlier in this article, this can by waiver authorize the unauthorized occupant, thus tying the hands of the manager and preventing enforcement of the lease. Another common mistake is to ask the resident to pay you more money for rent because of the unauthorized occupant. Here you are basically saying the resident can breach the lease, but the resident must pay more for the privilege. While it is perfectly acceptable for the rent to be raised if you are going to authorize an occupant, you need to do this carefully, in writing and have it agreed to by all the parties. Often the manager is angry, tries to negotiate, delays occur, and the occupant becomes more deeply entrenched in the premises. When talks break down, the manager comes to the attorney after the damage has been done. There will be times when an unauthorized occupant begins to pay rent, and the manager accepts the rent either on purpose or accidentally due to sloppy procedures. We urge managers to never accept rent from anyone other than the actual resident on the lease. Acceptance of rent from an unauthorized occupant is going straight down the path to authorizing this person, when maybe this was not your intention.

 

“Serving the Property Management Professional”

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In most legal disputes, each party, the plaintiff and the defendant, the winner and the loser, each have to hire an attorney and pay their own attorney’s fees to that attorney. An example would be a car crash where I smashed into your car and did $500.00 worth of damages to your fender. If we could not come to an agreement, you might hire an attorney and take me to court. A lawyer who represents himself has a fool for a client, so I go out and hire an attorney to represent me. We go to court, and you can prove that the accident was due to my carelessness. The judge awards you $500.00, which presumably I will go ahead and pay you. Let’s assume that each of us paid our attorney the bargain price of $750.00 to represent each of us in court. The end result would be that you would have to pay for your attorney, I would have to pay mine, and we probably should have just settled this out of court, because the attorneys made more money on this than all of us. The reason that I, as the losing party to the lawsuit, did not have to pay you for the attorney’s fee that you expended is that under Florida law, the losing party in an automobile accident case does not have to pay the attorney’s fees of the winner. Each of us had to bear our own fees and costs, because that is what the law says. Now, let’s step into landlord/tenant court. A resident sues you, because he feels that you took too much of his security deposit. The resident has an attorney. The resident’s attorney convinces the judge that you are the evil manager and that you cannot justify the charges you made on the poor resident’s security deposit. The judge awards the resident $300.00 that the judge feels you took unfairly, but now for the zinger. The judge awards the resident $900.00 in attorney’s fees, meaning that you get a judgment against you for not just the $300.00 but also $900.00. You walk out of the courtroom with your head spinning, holding a $1200.00 judgment against you!!! How did that happen?

THE ATTORNEY’S FEE CONUNDRUM IN FS 83.48 ---- Florida Statutes 83.48 Attorney's Fees states as follows “In any civil action brought to enforce the provisions of the rental agreement or this part, the party in whose favor a judgment or decree has been rendered may recover reasonable court costs, including attorney's fees, from the nonprevailing party”. This statute has major ramifications to the manager and can make a simple couple hundred dollar dispute into a $1000.00 plus nightmare very quickly. The prevailing party, meaning the winning party, in any landlord/tenant dispute can and will get an award of attorney’s fees in the event a court case is filed. In most cases the manager wins, as we see so often in eviction actions, but what good is it if you get an award of attorney’s fee against a resident who can’t even pay you the rent? Getting an award of fees certainly does not mean you will ever see the fees. The problem lies in the resident getting an award against the manager, as this judgment will attach to the property and become a judgment lien against the property.

EVICTIONS AND ATTORNEYS FEES-- The prevailing party in an eviction action is entitled to an award of attorney’s fees and costs. This is authorized by statute and is pled for in the eviction lawsuit. Thus, if you are successful in evicting the resident, you can ask the court to award you fees and costs. Let’s say you lose the eviction. You may have to pay the resident’s fees and costs if the resident retained an attorney. Now what if you simply filed an eviction in error against a resident, thinking that she owed you the rent but the resident had in fact paid the rent and you either misplaced or incorrectly posted the payment. You would of course immediately dismiss the case. No harm done, right? Not if the resident retained an attorney and filed and answer or Motion to Dismiss. Here you would possibly be on the hook for the resident’s attorney’s fees, even though you dropped the case quickly and never pursued it further. You may wonder how you can lose an eviction. There are a number of ways: your Three Day Notice could be wrong, you prepared the notice incorrectly, you served the notice incorrectly, the resident had a valid defense of payment, you failed to make a repair, you accepted late rent on a regular basis, or you are an apartment community and failed to get your fictitious name registered. There are many other ways you can lose a case. The last thing you want is to be on the hook for attorney’s fees of the resident.

ATTORNEY’S FEES AND SECURITY DEPOSIT DISPUTES-- Few managers have not experienced a security deposit dispute at one time or another. Routinely, residents feel that the manager unfairly took too much of a security deposit from them for damages that the resident vehemently denies. While most of these disputes should be and are settled prior to any litigation, in the event they end up in court, managers are often surprised to see how the judge acts quite kindly to the resident, and looks upon the resident as the victim and the manager as the evil person who is trying to rip off the resident. The manager must prove that the resident damaged the premises, there is the uncertainty of whether something is over and above ordinary wear and tear, the manager often does not have a detailed move-in and move-out inspection sheet, and often the manager does not have photos to document the property condition before move-in and after move-out. More often than not, the judge ends up ordering the manager to return some of the security deposit to the resident. Now suppose the manager claimed $500.00 of a $750.00 security deposit, and in court the judge feels the manager was only entitled to $450.00 of the security deposit. Who is the prevailing party? Most of the case law unfortunately says that the resident is the prevailing party because he or she sued and got something back from the manager. This does not seem fair, but most judges will consider the resident in a case such as this the prevailing party. If the resident had retained an attorney to represent him in court, the manager will most likely have to pay a significant amount of attorney’s fees to the resident. The amount of the dispute or the amount the resident wins has no relation to what the attorney can ask the judge for in attorney’s fees. If the attorney can convince a judge that 10 hours were spent on the case at $250.00 hour, the manager could end up having to pay the resident’s attorney $2500.00, when the dispute was only about a $500.00 claim that was made on the security deposit. A word to the wise: if the resident gets an attorney and is threatening a lawsuit, make darn sure you are going to win before you take a stance that you are not going to budge and settle the case.

WHY WORRY ABOUT ATTORNEY’S FEES-- Up until around 10 years ago, it was rare that a resident would retain an attorney to defend them in an eviction action or to pursue a security deposit dispute. With close to 100,000 lawyers now in Florida, things have changed. We now have lawyers who are specializing in representing residents for the sole purpose of extracting attorney’s fees out of the manager. These attorneys are advertising and direct mail marketing to residents who are under eviction, offering free consultations. The attorney then examines the case, looks for a weakness and next thing you know, you are up against an attorney in court who has filed an Answer, Counterclaim and three Motions to Dismiss. Take your time when preparing your notices, evict cautiously, and when making a claim on the security deposit, document absolutely everything you can. Most losses by managers in court are completely avoidable.

 

“Serving the Property Management Professional”

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Many apartment communities today have fitness centers, business centers, pools, gas barbeque grills, tennis courts and other amenities for their residents to enjoy. These amenities are often a great draw in attracting residents to a particular community. In most cases, the amenities, most of which are advertised in print, are available for the use of the resident, operable and in existence at the time of move-in. However, a problem arises when an amenity is not available to the resident for some reason. That wonderful amenity that you advertised becomes a nightmare.

The Amenity Failure

In the case of a pool, a leak may require major work to be done to rectify the problem. There have been many cases where the pool is emptied and the high ground water table has literally pushed the pool up out of the ground, causing a major repair necessity. A pool does not just pop back into the ground!! Fitness centers are often completely equipped with state of the art exercise bikes, treadmills and other mechanically and electrically operated devices. These devices fail in time and need expensive repair. Business centers for the resident’s use are often set up with a number of computers and are subject to viruses or power surges which completely disable the equipment. At some time, some amenity on the property shall fail, and the residents will rise up.

Repairs to the Amenity

Repairs of a particular amenity are often done quickly, and the resident experiences little to no inconvenience. In other cases, repairs take a significantly longer period of time, sometimes at great expense to the apartment community. Some owners who are under severe financial burdens right now are choosing to push off some repairs almost indefinitely. An owner who is considering selling may not wish to invest any further money, as the return on sale may not be there. There are times, as in the pool case, when a simple repair could result in a major multi-month project in which the pool is completely inoperable. Since most properties only have one pool, the problem is obvious.

The Resident’s Expectation

Florida law does not state that a resident has a right to a working pool, exercise bike or business center. This is all governed by contract. While the lease agreement may not specifically state anything about a pool, fitness center or business center, other than in the rules and regulations, these amenities are advertised to the prospective resident as being part of the “package”. The applicant who becomes the resident has a reasonable expectation that the amenities that are advertised or which he or she observes while on the property tour will be available for use throughout the tenancy. These expectations are by no means unreasonable. The question then arises as to whether the amenities advertised are in fact the “basis of the bargain”, or stated differently, did the resident decide to rent at this particular apartment community because of the existence of a certain amenity advertised or observed. It is extremely easy for the resident to make the case that the fitness center, pool or business center was indeed the “reason” why he or she chose the particular apartment community. A health conscious resident may have chosen your apartment community due to its state of the art fitness center. A resident in physical therapy may have been drawn to the community because of the pool. A person without a computer may have been sold on the business center. This creates a serious obligation on the part of the apartment community to make sure the amenity is in fact working at all times, or at least most times.

Amenity Failure Actions

Fortunately, most residents do not even use the pool, fitness center or business center, so a breakdown will not inconvenience most of the residents, but for the residents who do use them, you have a problem on your hands. Since Florida law does not address amenities or compensation, a resident may or may not be entitled to a credit in the event of an amenity failure; the management or owners must come up with something to keep the resident from taking the matter further and potentially suing in a court of law. The first step will be to rectify the problem immediately, if possible, but unfortunately, this may not always be a viable solution. Each situation needs to be dealt with on a case by case basis, but it is crucial to show that the manager is taking reasonable steps to mitigate the problem and make the resident whole again.

Pool Solutions

In the case of an extended pool problem, the apartment community may enter into an agreement with a neighboring apartment community for the temporary use of its pool for some compensation by the apartment community. Residents may be given vouchers to use a community pool, if one is in fact available, or temporary membership to a local gym may be an appropriate option. Finding a contractor and paying more money to get the job done quicker could prevent lawsuits.

Fitness Center Solutions

In the case of a minor fitness center issue, such as an inoperable piece of equipment, we recommend that a replacement piece of equipment is rented immediately until the repair can be effectuated. Many companies are in the business of renting commercial grade exercise equipment. In the case of a serious fitness center problem, such as when the fitness center is completely unusable by the resident, an agreement could be worked up with a nearby gym to provide low cost temporary memberships to residents who may wish to use the gym. Many gyms will jump on this opportunity to get people in the door, in the hopes that they will join permanently in the future.

Business Centers

Most business center problems can be rectified with the expenditure of a relatively small sum of money. If the issue is simply internet access by a resident who already has a computer, a basic internet account can be purchased for the resident to be used in his or her unit, or at a bare minimum, at least one PC should be set up with internet access and a basic printer until further repairs can be made.

Potential Legal Ramifications

A resident who is not receiving all that was bargained for in a deal can sue for breach of contract, and in the event certain things were advertised, false advertising. The resident can also attempt to withhold rent or even break the lease agreement and walk. A property manager may be tempted to compensate one resident for her inconvenience, but this could unleash a floodgate of residents asking for the same compensation. This is when prompt contact with your attorney can potentially avoid a major blow-up on the property. In the worst case scenario, a resident can hire an attorney who will institute a class action lawsuit against the property. While this is rare, class actions are not uncommon in consumer situations, so YOU HAVE BEEN WARNED!

The Amenities Addendum Solution

A simple addendum signed by all residents can significantly minimize the manager’s risk in the event of an amenity loss or malfunction. We cannot forget that the main thing that a resident is renting is an APARTMENT. The amenities are indeed a bonus to the deal, but part and parcel to the deal are the resident’s expectations and your responsibilities. By using the addendum below, you MAY be able to significantly decrease your risk of problems in the event of an amenity problem. Remember, nothing is guaranteed. Please read it carefully.

AMENITIES AND CONSTRUCTION ADDENDUM

It is agreed and understood by all Residents(s) that all amenities on the premises IF ANY EXIST NOW AND IN THE FUTURE including but not limited to balconies, patio(s), pool(s), hot tub(s), fitness center(s), gas grill(s), business center(s), tennis court(s), activities center(s), clubhouse(s), playground(s), playground equipment(s) or any other as specified herein for Resident(s)’ use may be altered, may become inoperable, unusable or out of service for the purposes of repairs, damage by storms or acts of God or man, rendered unusable or removed at any time without notice and without consent of the Resident(s). Resident(s) agree to hold owners, their agents and assigns, harmless for any liability arising from the alteration, removal or failure to be able to use any and all amenities. It is understood by all parties that this agreement has been entered into with good consideration and that it has been read in its entirety.

Amenities for the purpose of this addendum may also include and are not limited to:

__________________________________________________

__________________________________________________

Resident(s) understand that repairs or upgrades to the premises may possibly be made and agree to hold the owners, management, agents, employees and assigns harmless for the absence of or the delay in the availability of any amenities which may have been advertised, appear on any advertising materials, existed at the time of move-in or represented to by any of the staff. Resident(s) agree to hold the owners, management, agents, employees and assigns harmless for any inconveniences, including but not limited to noise, construction traffic, dust, construction equipment, temporary utility outages, etc., and agree that they cannot break their lease, withhold rent or receive a rent abatement because of any construction problem and/or the lack of amenities unless otherwise agreed to in writing.

SIGNATURE AND DATE AREA FOR MANAGEMENT AND RESIDENTS

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The Background

 

The most common cause for resident removal is nonpayment of rent. In most cases the facts are limited and not in dispute. Did the resident pay the rent? If not, a simple eviction usually occurs, with the manager prevailing in most cases. Unfortunately there are many other non-rent related noncompliances which result in the manager having a strong desire to have the resident removed from the property. The problem is that the manager’s desire to remove the resident is often far greater than the manager’s case or evidence against the resident.

 

The Manager’s options – In the event of a noncomplying resident, the manager is faced with a number of options: give the proper notices, gather evidence, prove the noncompliances, file an eviction action, and possibly have to prove the case in court. Another option would be to non-renew the resident if the lease was near completion, and if the resident failed to vacate, simply file an eviction based on the failure to vacate. Finally, there is the option of coming to an agreement with the resident to vacate the premises on a fixed date.

Forced Resident Removal for Noncompliances

In order to legally institute eviction procedures against a resident for noncompliances, certain prerequisites must be met. Depending on the noncompliance, either a Seven Day Notice of Noncompliance with Opportunity to Cure, a Seven Day Notice of Noncompliance Notice of Termination, or both, must be given to the resident. These actions entail informing the resident of the noncompliance, giving the resident time to cure the problem in most cases, if the offense is of a curable nature, and then terminating the resident if the offense continues or occurs again. In the event of a serious non-curable type of noncompliance, the resident is served with a Seven Day Notice of Termination, and an eviction begins right after this notice expires. Eviction cannot even begin until the notices have expired, and in the meantime, you have lost good residents due to your noncomplying resident. Once you file the eviction, you then have to win! This is not always guaranteed. While most managers have served the Notice of Noncompliance with Opportunity to Cure, very few managers have ever filed an eviction for noncompliance, as most residents either cure or vacate prior to the eviction. Far fewer managers have ever filed an eviction and ended up having to prove the noncompliance in court, as many of the residents vacate shortly after getting served with eviction paperwork. The manager who files an eviction for a non-rent related noncompliance and has the case contested is in for a real ride. It is amazing how difficult noncompliances are to prove in court, when your witnesses do not show up, or your solid proof melts away in front of a judge who was so tough on non-paying residents, but now is so sympathetic to the resident before them on a noncompliance case.

Can you really prove to the judge that there is an unauthorized occupant living in the unit? Did the resident remove the unauthorized pet right after or before you filed the eviction? Was it a housekeeping issue that the judge just does not feel so strongly about? Did all your constantly complaining residents who hounded you every Monday morning about the noise from parties suddenly decide not to show up in court? Is the allegation that the strange man who exposed himself by the pool now pretty difficult to prove? Were you surprised that your attorney informed you that affidavits signed by three residents are not admissible in court? Were you shocked when the police officer that responded to two noise complaints decided not to show up in court? Did you think the resident would get an attorney to fight the case and demand a jury trial? The bottom line is anything can happen in a noncompliance eviction, and they should be avoided at all costs.

The “Agreement to Vacate” Alternative – Probably the best possible way to have a resident vacate is to have that resident do so voluntarily. The resident and the manager simply sign an agreement whereby the tenancy is terminated, and the resident agrees to vacate on a fixed date. The “Agreement to Vacate” is this wonderful form, and managers who regularly use the form will attest to the fact that their evictions are reduced, their stress is reduced, and most residents who sign such an agreement vacate on the date they have said that they will vacate.

When is an “Agreement to Vacate” appropriate? – In almost any situation when a noncompliance is occurring or has occurred, including nonpayment of rent, if the manager and resident can agree to a fixed vacating date and memorialize this in writing, the Agreement to Vacate is appropriate: suspected drug use, excessive traffic, domestic disputes, unauthorized occupants, unauthorized pets, noise disturbances, the list goes on. Get the resident to agree to vacate, and you have probably won the battle.

How do you get the Resident to agree? – This takes some skill and experience. Basically the manager needs to approach the resident, explain how things just are not working out, possibly threaten eviction, but give the resident an easy way out. The easy way out is for the resident and the manager to agree to terminate the relationship without the need for further attorney or court intervention. How much time you give the resident to vacate will depend upon the severity of the problem, if the resident has paid rent, or any other factor which will assist you and the resident in just coming to an agreement.

Will the resident always sign an “Agreement to Vacate”? - Absolutely not, but more often than not. Let’s face it, just as the manager is not completely sure that they will win an eviction, neither is the resident. Many residents do not want to go near the courthouse for obvious reasons and will welcome an opportunity to vacate voluntarily. Some of the most belligerent residents, who will scream at you telling you how it will take you six months to evict them, will after some thought sign an Agreement to Vacate. On the sample form below, there is a date that the resident must sign the form by in order for it to be valid. This is used when you want to leave the Agreement to Vacate with the resident, so they can ponder their options, or you feel it would be better for you not to have a face-to-face confrontation with the resident. Once the resident signs the agreement and it is returned to you, you will then sign the agreement and this will create a binding contract. An Agreement to Vacate is no good unless you get all the residents to sign.

What if the resident signs the “Agreement to Vacate” and fails to vacate? – Fortunately most residents who sign the Agreement to Vacate actually leave when they say they are going to leave. If the resident fails to leave, the manager can then immediately begin an eviction action with no further notice, and the manager simply has to prove that the resident has failed to vacate rather than try to prove the underlying reasons why the manager wants the resident gone.

What about the money the resident may owe to the manager? Our sample Agreement to Vacate states that the agreement does not address money issues unless otherwise noted in the agreement. In the space provided, the parties may agree that the security deposit is forfeited, possibly will be returned if there is no damage, or any other financial arrangements can be dealt with directly in the form.

Advantages of the “Agreement to Vacate” – The main advantage is that it is an “agreement”. Emotions do not run as high, eviction may not be necessary, money may be saved, and there is a much higher chance that the resident will not do any intentional damage, as so often occurs in an angry eviction where your success is by no means guaranteed. The next time you have a noncompliance where you “just want them to go”, remember that they just might want to go as well. The Agreement to Vacate is a wonderful form. Help the resident out the door.

SAMPLE AGREEMENT TO VACATE:

AGREEMENT TO VACATE

I/WE ________________________________ hereby agree to vacate the premises which we now are renting no later than _______/______/______. In exchange for vacating at this time, Management agrees to not file any legal action for eviction prior to this time if I/WE continue to comply with the terms of our lease and Florida Law.

I/WE agree that any abandoned property that is left behind after the above date may be disposed of by Management without notice and I/WE agree to hold Management, the owners of the premises and any agents or employees harmless for such abandoned property.

I/WE agree that this AGREEMENT TO VACATE must be signed by us AND returned to Management by hand delivery to the property manager/management or assistant manager no later than 5:00 PM on ______/_____/_____ or Management may begin legal procedures at any time.

I/WE agree that this document and our vacating shall have no effect upon any financial obligations, forfeitures, security deposit forfeitures, early termination clauses etc under the lease or Florida law unless otherwise agreed to in writing by Management.

______________________________   RESIDENT

_______________________________ RESIDENT

_______________________________ RESIDENT

Additional agreements by Management if Residents vacate per this agreement: ____________________________________________________

_______________________________________________________

_______________________________________________________

_______________________________________________________

__________________________ ______/______/______ MANAGEMENT SIGNATURE

 

“Serving the Property Management Professional”

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