Most managers prohibit a resident from conducting business in the residential unit. In most cases the lease clearly states or should state that the premises are to be used only for residential purposes, and that commercial activity is prohibited. It is usually clear when commercial activity begins to occur in a residential unit, as customers will be showing up, traffic in and out of the unit will increase, and the resident may be so bold as to advertise his or her services or products using the address of the residential unit. What about babysitting? Is this a commercial activity? While many people love children, it is doubtful that an individual will voluntarily take on the responsibility of watching another person’s child or children on a regular basis for no compensation.

Babysitting and Daycare Services

In both apartment communities, babysitting and daycare services are being conducted for compensation. It starts out with one child, and then the babysitter begins to realize that more money can be made by watching more children, and soon you have a unit full of children with their parents or guardians dropping the child off and picking the child up. Money is exchanged, and often this is “under the table” or cash. Seems harmless enough right? Wrong. What is occurring here is a commercial activity on a residential property. This is a lease violation and may or may not be a violation of law.

Legal Daycare Services in a Residential Home

Many counties and municipalities actually allow small scale day care services to operate legally and with a permit in a completely residential area. In response to the need for affordable child care or child watching, these activities are in many cases permitted with some limits, but often without many regulations. Do you want to allow a resident to conduct a babysitting or daycare service in the apartment? ABSOLUTELY NOT.

The Liability

Massive liability to both the caregiver and the owner of the premises can be created in the care of children. Now you may wonder why a daycare center would ever operate at all. Simple. Insurance. A legitimate daycare or babysitting service will have liability insurance to cover just about anything that could occur that may cause the injury or death of the child. Not only will the business be carrying insurance, but the property owner, if separate from the business owner, will also be carrying insurance, and the insurance company will be put on notice as to what type of business is being conducted on the premises. Everything is disclosed, proper permits and licensing are in place, and the insurance is tailored to the activity which is being conducted on the premises.

The “No Insurance” Problem

In many cases of babysitting or small scale daycare services, these activities are occurring in the residential unit with no license, no permission from the manager and NO INSURANCE. The property owner may have the normal liability insurance coverage, but you can rest assured that this insurance does NOT cover a business being conducted on the premises, and in the event there is a claim, the insurance company will fight all the way to prove that they did not cover commercial activity on the residential premises.

What “Bad” Things Can Happen?

We have seen cases in which children have nearly drowned in the pool of the babysitter’s home, been molested by a boyfriend of the babysitting resident, overdosed on medicines the child found in the babysitter’s medicine cabinet, and most recently a situation in which a child climbed on a table near a window and fell three stories to the ground below. As you can see, the potential dangers are limitless. Is the manager liable? Possibly, especially if the manager had knowledge that the babysitting was occurring on the premises.

Did the Manager Have Knowledge That Babysitting Was Occurring?

Whether or not the manager had knowledge that babysitting was occurring on the premises can be a crucial factor in whether the manager can be held liable for the injury or death suffered by a child, or whether the insurance carrier will in fact cover a potential claim. Some of our clients actually have knowledge that babysitting is occurring on the premises, because they have personally observed it, and some have even encouraged it! Recently while giving an in-house legal class, we observed a number of notices on the community bulletin board in the clubhouse where residents were advertising their services for babysitting on the premises. This knowledge by the manager and the failure to act swiftly to stop the activity can result in serious liability to the manager.

You Discover Babysitting, Now What?

If a manager is made aware that babysitting and or daycare type activities are occurring on the premises, the resident needs to be immediately served with a Seven Day Notice of Noncompliance With Opportunity to Cure, which your attorney will assist in drawing up for you. Follow-up is crucial, and it needs to be determined if the activity has stopped or is still occurring. There is nothing wrong with observing the premises and asking a parent if in fact the resident is babysitting their child. If you observe children and parents coming and going on a regular basis, it can be safely assumed that babysitting and or daycare is occurring. This assumption will not be enough for termination and eviction, so we recommend that you document the unit carefully, and if necessary, take video surveillance of the entrance to the premises. If you feel that the authorities need to be notified that an illegal daycare or babysitting service is occurring, reporting and follow-up is crucial.

Fair Housing Considerations

You must have a written policy regarding babysitting and a strong clause in your lease prohibiting such activity, but you do not want to be accused of familial status discrimination. We recommend that you post a sign in the common area clearly stating that no commercial activity is permitted on the premises, and that this includes running a daycare or babysitting service. Monitor the community bulletin board regularly, as this is where advertisements for babysitting frequently occur. A resident could say that you are preventing their child from having friends come over to play, or that you are trying to only have residents who have no children. You will need to counter such accusations by clear proof that the resident was actively engaged in babysitting on the premises, and better yet, be able to prove that the resident was receiving compensation for doing so.

You suspect your resident is engaged in babysitting or running a daycare service? Call your attorney as soon as possible.

“Serving the Property Management Professional”

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In the “Public Records” section of your typical credit report, you will see things like evictions, foreclosures, suits for money and bankruptcy filings. Most application processing companies obtain and compile this data to allow the manager to make a more informed decision on whether or not they will rent to the applicant. Often you will see that an eviction was filed on the applicant, and the disposition was “Voluntary Dismissal” or “Dismissed”. Does this mean that the resident was not evicted or that everything was amicably resolved? Don’t be so sure.

The “Dismissal”

Not all residents who have evictions filed against them are actually “evicted” by the Sheriff. A number of things can happen. The resident may vacate the premises voluntarily shortly after the eviction is filed. The resident may pay all the money owed, and the manager requests that the eviction be stopped. The resident may enter into a Stipulation with the manager, under which payment arrangements are made, and the resident successfully stays and pays pursuant to the settlement terms. In all these scenarios, the eviction filing will show up in the public record and will be in this public record for many years. Eventually, the eviction matter is “dismissed” and is recorded as such. There are two main ways an eviction is dismissed. It will either be by the manager’s attorney filing a “Voluntary Dismissal”, or the court entering a “Dismissal for Failure to Prosecute”. In both cases, the public record will show the case as being dismissed, BUT it does not always mean that things were worked out or that the resident paid the rent. Usually, it is quite the opposite and simply means the resident vacated and the eviction was not processed further.

The Voluntary Dismissal

When a resident vacates, the attorney may file a “Voluntary Dismissal”. This means that the case is no longer being prosecuted, as no further action is necessary on the file. The manager got what they wanted, which is possession of the premises. In the situation where a Stipulation is entered into by the parties, the Stipulation may provide that the case will be voluntarily dismissed upon the resident making the payments as planned. Unfortunately, the manager, when looking at a “Voluntary Dismissal”, usually has no way of knowing why the case was dismissed. Without further information, the best assumption a manager can make is that the eviction was filed and that the resident vacated.

Many evictions are filed as Two-Count Complaints. Under the first count the manager is asking for possession, and under the second count the manager is suing for money damages. In order to get a judgment for money damages in Count Two, the resident will have had to be served personally with the eviction action or will have filed an answer to the complaint. Often, neither of these two contingencies occur, and at the end of the eviction or sometime after the eviction is over, the attorney will file the Voluntary Dismissal with the court to close the case out. There may even have been a Final Judgment for Eviction somewhere in the public records, but the final action showing up may be that “Voluntary Dismissal as to Count Two”

The Dismissal for Failure to Prosecute

If an eviction is filed, the resident vacates and the attorney takes no further action, the Clerk of Court’s office will eventually send out a notice to the attorney and the resident stating that the case will soon be dismissed by the court on its own, if the attorney for the manager or the resident does not pursue the case any further. This could be six months after the case has been filed, or even more than a year. The attorney will either then file a Voluntary Dismissal closing out the case or do nothing, and the Court will go ahead and dismiss the case. If a Two-Count complaint has been filed and no personal service has been affected on the resident, the Court will know that the case is probably not going to proceed any further and will want the case dismissed. This dismissal by the court happens to tens of thousands of cases each year. The Court does not want to keep files unnecessarily open and will purge them from their active case system. When the manager looks at the public record results, it will show as a “Dismissal”.

What Should the Manager Do When the Record Shows “Dismissed”?

There is a high probability that the applicant had an eviction filed against him or her by a prior manager and just vacated. It is imperative that if any eviction filing shows up on the public record, the manager looks into the matter deeply to find out exactly what happened during the eviction. Did the resident pay and stay? Did the resident vacate? Did the resident get fully evicted? These are all questions that can be answered by looking at the Court file further and contacting the prior manager. Most counties are now online on the internet, and a lot of information will be available to the manager by simply going to the website of the Clerk of Court where the resident had the eviction filing and examining the docket.

 

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The vast majority of managers understand that a resident who vacates prior to the lease end date may be liable to some extent for future rent. Likewise, most managers have comfort that if they comply with all of the terms of the lease, then they will prevail if sued by the resident at a later date. While there is some truth to the above assumptions, it is definitely not the whole truth. Let’s see why a manager can get in to “hot water” if they fail to look past the obvious.

 

The Constructive Eviction Scenario

 

Larry appeared to be the ideal prospect. His application was approved, and he paid all of his deposits and moved in. After being in the unit for only three days you received his first work order. The washing machine was leaking. Soon after, you fixed the problem. However, two weeks later, the pipe below the washing machine bursts, and the kitchen and living room is flooded. Your maintenance staff responds and the pipe is fixed. Soon after, you start receiving repeated calls from Larry that his carpet has a strong foul odor. Larry then sends in another work order stating that the apartment home has a bed bug issue. Your exterminator confirms the existence of bed bugs inside the unit. Larry has nine months left on his lease and had already written to you two weeks earlier that he is withholding the rent until the manager remedies the situation. You figure that it will cost a substantial amount of money to fix the apartment, and you cannot bear to think about dealing with Larry for nine more months. The next day you receive keys from Larry and a note which says, “I HAVE VACATED”. “Good riddance”, you say to yourself. You plan to sue Larry for breaking his lease and will hold him responsible for future rent until the property is leased. Good news? Nope! The manager is now vulnerable to a constructive eviction claim by the resident.

 

What is a Constructive Eviction?

 

Did you know that you can end up illegally evicting one of your residents who voluntarily vacated the premises even if you never posted any notices on their door and never requested that your attorney file an eviction action in court. Florida Courts will allow a resident to break their lease and move out of the premises if the judge rules that a constructive eviction took place. A constructive eviction may occur if the manager has neglected the leased premises to the point where it is unsafe or unfit for use by the resident for the purposes for which they were leased. There is also Florida Statute 83.63 below:

 

“Casualty damage.--If the premises are damaged or destroyed other than by the wrongful or negligent acts of the resident so that the enjoyment of the premises is substantially impaired, the resident may terminate the rental agreement and immediately vacate the premises. The resident may vacate the part of the premises rendered unusable by the casualty, in which case the resident's liability for rent shall be reduced by the fair rental value of that part of the premises damaged or destroyed. If the rental agreement is terminated, the manager shall comply with s. 83.49(3).

 

A judge may rule that a resident is constructively evicted if the manager turned off the utilities or was cited for health or housing code violations, such as mold or roach infestation. In one court case, the manager was unable to remedy excessive noise disturbances by other residents. The judge ruled that there was a constructive eviction. Although threats of a future eviction usually would not constitute a constructive eviction, a court allowed a resident to assert a constructive eviction defense when the resident reasonably believed that the manager was about to lock out the resident after refusing the rent and threatening the resident with an eviction. The manager may also be liable for a partial constructive eviction if part of the premises is unusable.

 

You should also keep in mind that residents can sue for damages for the fair market value of the apartment for the period that the unit was not habitable. If they prevail, you would have to pay their attorney’s fees and court costs, or the residents can elect to remain on the premises by sending a notice to withhold rent as specified in Florida Statute 83.56 (1).

 

FS 83.56(1) If the manager materially fails to comply with s. 83.51(1) or material provisions of the rental agreement within 7 days after delivery of written notice by the resident specifying the noncompliance and indicating the intention of the resident to terminate the rental agreement by reason thereof, the resident may terminate the rental agreement. If the failure to comply with FS 83.51(1) or material provisions of the rental agreement is due to causes beyond the control of the manager and the manager has made and continues to make every reasonable effort to correct the failure to comply, the rental agreement may be terminated or altered by the parties, as follows:

 

1. If the manager's failure to comply renders the dwelling unit untenantable and the resident vacates, the resident shall not be liable for rent during the period the dwelling unit remains uninhabitable.

 

2. If the manager's failure to comply does not render the dwelling unit untenantable and the resident remains in occupancy, the rent for the period of noncompliance shall be reduced by an amount in proportion to the loss of rental value caused by the noncompliance.

 

The Retaliatory Eviction Scenario

 

Before Moe leased a unit, your residents all thought that you were a strong property manager. Well those days are over! Ever since Moe discovered that other residents along with himself had faulty air conditioning and heating units, he has created havoc for the property management office.

 

Moe started a resident association at your apartment community. They have meetings every Monday night. As a result, work orders have increased by over 80%! The manager is beside herself that she has incurred all of those maintenance costs. Every day it seems like you are receiving complaints from residents covering all aspects of the apartment community. You definitely feel that this unwanted attention brought on by Moe will cause your residents to decide not to renew their leases.

 

You want to resolve this situation. You feel that the only way to do this is for Moe to live somewhere else where he can be another property manager’s nightmare. What can you do? Moe has paid his rent on time. He lives very quietly; in fact, you have never issued to him a Seven Day Notice to Cure. Then your idea hits like a bolt of lightning!

 

Moe’s lease expires in two months. The manager’s lease stated that renewal is at the discretion of the manager. Moe is sent a letter stating that he will not be allowed to renew his lease. Moe walks in to your office and tells you he would like to renew at the market rate. Moe does not vacate as of the lease expiration date. You have your attorney file a holdover eviction action. Now you just had a phone call with your attorney, in which it is revealed that Moe has hired an attorney. He also tells you that you may very well end up losing the eviction action and that you will likely have to pony up money to Moe’s lawyer as well to cover legal fees and costs. You wish that you had understood the term “retaliatory eviction”.

 

What Is a Retaliatory Eviction?

 

Since 1983, the Florida Statutes have protected residents from being evicted for retaliatory reasons. Thus, retaliatory evictions are illegal in Florida! The Statute is below: 83.64 Retaliatory conduct.-- (1) It is unlawful for a manager to discriminatorily increase a resident's rent or decrease services to a resident, or to bring or threaten to bring an action for possession or other civil action, primarily because the manager is retaliating against the resident. In order for the resident to raise the defense of retaliatory conduct, the resident must have acted in good faith. Examples of conduct for which the manager may not retaliate include, but are not limited to, situations where: (a) The resident has complained to a governmental agency charged with responsibility for enforcement of a building, housing, or health code of a suspected violation applicable to the premises; (b) The resident has organized, encouraged, or participated in a residents' organization; (c) The resident has complained to the manager pursuant to s. 83.56(1); or (d) The resident is a service-member who has terminated a rental agreement pursuant to s. 83.682. (2) Evidence of retaliatory conduct may be raised by the resident as a defense in any action brought against him or her for possession. (3) In any event, this section does not apply if the manager proves that the eviction is for good cause. Examples of good cause include, but are not limited to, good faith actions for nonpayment of rent, violation of the rental agreement or of reasonable rules, or violation of the terms of this chapter. (4) "Discrimination" under this section means that a resident is being treated differently as to the rent charged, the services rendered, or the action being taken by the manager, which shall be a prerequisite to a finding of retaliatory conduct.

 

As you can see, there is much conduct on the part of the resident that is protected. The statute prohibits the manager from retaliating against a wide range of resident related activities, including but not limited to: residents that make written complaints regarding the manager’s noncompliance with the lease, residents that make complaints to government agencies to report building or health code violations, or members of the military who terminate their lease in accordance with Section 83.682.

 

Section 83.64(1) (b), shown above, will protect Moe from being evicted due his activities related to the resident’s group that he founded. In fact, the statute specifically makes even the THREAT of eviction unlawful.

 

Acts That Will Get the Manager in to “Hot Water”.

 

The Florida retaliation statute prohibits the manager from treating the resident who takes part in the conduct above, differently than other residents with regards to services provided, rent charged or other actions on the part of the manager. The manager may not retaliate by cutting or reducing services such as utilities, raising the rent, threaten to or file eviction or other civil lawsuits.

 

What Were They Thinking?

 

Courts will attempt to get inside the heads of managers to see if they were acting in a retaliatory manner. In the case of Moe, the manager will need to convince the court that the eviction was not primarily related to Moe’s resident association activities. You should not feel that the manager is powerless over a resident who complains. The key question to ask is this: what was the real reason behind the manager’s action? To change the facts of our above example, if the manager’s primary reason for evicting Moe was related to a history of paying the rent late, then there would likely not be a violation of the statute. Why? Because the main reason for the eviction was NOT related to Moe’s resident group activities.

 

A Final Word of Caution

A common trait shared by many managers who are successfully sued by residents due to constructive or retaliatory eviction related conduct is one that you have probably already figured out. They are managers who fail to maintain the premises in accordance with their lease and Florida law. If one decides to become a manager, then there are many responsibilities the go along with that title. Those responsibilities should be taken very seriously! If not, then only bad things will be in store for them, including being tagged with large money judgments against them obtained by residents and their attorneys.

 

“Serving the Property Management Professional”

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Approximately 30% of apartment communities are utilizing the new Early Termination Addendum which gives the resident a choice of “damages” upon breaking the lease before the natural end of the lease. If the resident chooses Option 1, the resident will owe a fixed amount, usually one or two months’ rent to the apartment community, in addition to any past or current rent owed and physical premises damages which may be attributable to the resident. Most residents, when they are given the explanation of the choices, choose Option 1, as it is in their best interest, since the apartment they vacate may stay vacant for quite some time, making Option 2 a much more risky venture. A large amount of confusion occurs when the resident has been given a rent concession, chooses Option 1 and then breaks the lease. An equal amount of confusion has to do with the “notice” requirements imposed upon the resident in Option 1.

 

Concession Chargebacks

 

Most concession addendums or clauses have some form of chargeback provision in the event the resident defaults on the lease agreement by vacating before the end of the lease, either voluntarily or through an eviction. One would assume that if the resident chooses Option 1, receives a rent concession and then breaks a lease, the concession payback can be charged in addition to the Liquidated Damages amount provided for in Option 1. This is INCORRECT. If the resident chooses Option 1, the liquidated damages amount is fixed to the one or two months’ rent that have inserted in Option 1. YOU CANNOT also charge the resident a concession payback. Now you may be wondering why this is the case. The law is not clear on its face regarding this, BUT the legislative history of the law will show that the legislative intent of the bill passing process dealt with this. In attempting to get the Early Termination Law passed, early drafts and versions of the bill before it was enacted into law INCLUDED a concession chargeback. Through negotiations with the legislators and the Governor, it became clear that the Governor wanted concession chargebacks removed from the bill, or else he was going to veto the bill. The concession chargeback language was removed from the bill, and therefore it is fairly clear now that the liquidated damages are limited exclusively to the one or two months’ rent in Option 1. While this does not seem fair for a resident to receive a generous concession, break a lease and then only be required to pay liquidated damages, the manager must understand that providing rent concessions are done at the risk of the apartment community. Give the gift, but don’t expect anything in return.

 

Requiring Notice From the Resident

 

Under the Early Termination Law, the resident can be required to give notice to the manager of up to 60 days in addition to being charged liquidated damages of up to 60 days’ rent. It would appear to the average reader that this means you can ask a resident to give you notice, charge the resident through the notice period and then ALSO charge the resident up to 60 days additional rent as a liquidated damages. For example: a resident walks into your office, pays the rent and gives you 60 days’ notice. The resident then leaves after 30 days. What does the resident owe you if they chose Option 1? The resident only owes you the 2 months’ liquidated damages. Now suppose the resident gives you 60 days’ notice and stays and pays for the 60 days and then vacates. What does the resident owe you? The exact same thing: 2 months’ rent as liquidated damages. As you can see, the notice requirement of Option 1 is really quite hollow. You want them to give you notice, BUT if they do not, the penalty is exactly the same. We caution you to never charge the resident through the notice period PLUS the liquidated damages, because that is how all the lawsuits and the need for the law change begin in the first place. If the resident gives you 60 days’ notice and lives there for 60 days, great. If they give you 60 days’ notice and pack up and leave or do not give you notice at all, you can STILL only charge the liquidated damages amount. If you have any doubts as to what you can charge the resident, call your attorney ASAP.

 

“Serving the Property Management Professional”

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Every property management company should have a plan to deal with man-made or natural disasters. Having a business continuity plan in place is crucial for any business, and especially important in property management. Property managers are asset managers who manage many millions of dollars in assets for other people with little regulation or legal requirements. The property owner hands over an asset which is of substantial value to a property manager who is not required to have any experience or property management knowledge. This property manager then places residents in this valuable asset, collects rent, remits funds and deals with repairs. It is somewhat scary how unregulated property management really is. A mutual fund manager or any type of money manager has to undergo vigorous training, education, bonding and licensing, but a property manager does not even need a license to manage property. The only time a license is necessary is if the manager is engaged in leasing, and even then, a real estate broker’s or sales person’s license suffices. Needless to say, the responsibility is huge, and potential liability is great for a property manager and the broker of the property management company. All property managers should immediately begin planning for a natural or manmade disaster, and there is something they can and must do immediately to reduce their liability, protect their business, and protect the information concerning the asset that they manage. This first step is protection of computer data.

The Typical Property Manager

The typical property manager does engage in some sort of data protection, be it an external back up hard drive, tape drive, CD or DVD burner, or some sort of simple means to copy data from a computer to something else for later use. Some managers take the tape or CD home, some place it in a safe in the office or simply on a shelf. In most instances, if there is data loss on a server or a desktop, the property manager has a backup available and can be up and running quickly with little to no downtime. Is that back up recent? Probably not. Most property managers who engage in some sort of backing up only do so once a week if that. Since backing up often requires the computer file not to be in use at the time of back up, you would most likely need to be the last person working in the office in order to back up that important data file in your property management or accounting software.

The Problems

What happens if your office burns to the ground, is swept away in a flood or a thief decides he want to take all your computers, your safe and your server? None of this happens in Florida, right? Well, many property managers have insurance for their equipment. Computers can be easily replaced, and you will probably end up with better equipment than you did before the incident. The problem though is your data. Your financial data, move in and move out inspections, photos, file notes and everything pertaining to the relationship between the resident, owner and you may have disappeared or been destroyed. Sure, you can reconstruct all the financial records to a large extent, as your bank certainly has the information, but at what cost in time and money? How can you replace the file notes? What about all your digital photos of the properties you manage? They may all be gone.

The Simple Solution

Off-site back up, also known as remote data storage, is the simplest and most economical solution to these problems and the first step in a disaster recovery plan. Hundreds of companies exist now that provide safe, inexpensive storage of all your data in a remote safe location. Your computer is simply hooked up to them through the internet, and they keep all the data that you send them safe, secure and accessible to you when you need it.

What To Back Up?

Have your technical support person help you with deciding what information should be backed up. Most programs are useless when backed up, plus take a load of space in the back up, but data, scans of your file, photos, property inspection reports, emails and anything you can think of that you would need to refer back to should be backed up. You should have a plan for safekeeping of your program files, because many programs can only be installed once in one computer to avoid piracy problems. Convincing your software company that your office burned down and you need to reinstall the programs is possible, but can take hours on the phone.

How Often Do You Back Up?

Your first back up will be your largest, and then you back up changed and new files on a regular basis. Our office backs up data every single night. Since the nightly back ups are new and changed files, each nightly back up is fairly quick. It is set to back up at a specific time, and nothing is necessary on our end to accomplish the back up. The back up occurs when the office is closed, and no one is using any of the databases or computers.

Making Sure You Are Really Backing Up

It is easy to assume that you are backing up each night and that the information is going to the offsite data storage company. After all, you set it up, tested it, and it worked. The problem is that often there are network, internet, software or hardware problems which could result in your back up never occurring. Installing a firewall, changing a setting or installing that new anti-virus software could result in your back up not working. Some companies email you a report each morning showing that your back up was successful, but many do not. Remember that you only need to retrieve backed up data when you really NEED it. That is when you might find out that you have not really been backing up for weeks or months. Always confirm that your off-site back ups are in fact occurring as you expect. When restoring data, always call your technical support person if you have any doubts. You may have a corrupted data base and then restore another corrupted database, or ruin files in the restoration process.

Should You Discontinue Your Usual In-House Back ups?

We don’t. We back up to an external hard drive connected to the network on a regular basis just to have that one additional back up. This back up is done once a week on the weekends. Paranoia is a good thing when it comes to data!!

Let Your Owners Know How You Safeguard Data!

One of the selling points of a property management company is to have a disaster recovery plan which includes off-site data back up. Your owners know the risks of operating a business in Florida, and data loss will be one less thing that you and they have to worry about. Let your owners know that you have joined the ranks of the successful professional property management companies who ALWAYS back up their data off-site.

 

“Serving the Property Management Professional”

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Most leases have various clauses designed to protect the manager when he contacts the resident. The clauses allow the manager multiple ways to contact the residents, indicate whom he can contact if there is more than one resident, etc. In any given notice required by Florida law, if the statute dictates the method to contact the resident, the statute is controlling over the lease. Further, since the purpose of some notices is to warn the resident that the failure to comply with the notice will result in the loss of her home, the judges often strictly interpret the statutes. Very little deviation, if any, is permitted. Finally, the court system’s resources –judges, staff, and equipment – are increasingly strained to cope with the growing case loads. The fact that you have successfully filed notices, which your attorney feels are marginal, may mean nothing more than your cases have been hidden in the volume of cases flowing through the system. It is risky to trust your eviction to luck.

 

Now we turn our attention to missing the obvious on Three Day, Seven Day and Nonrenewal Notices.

 

All Residents Should be Named

 

Names – all adult residents should be named. This is obvious, universal, fail-safe advice. Just as obvious is that the resident’s name is both his first and last names, not just his last name, i.e., “Mr. Last Name”. If you want to know who “all the residents” are, check to see who signed the lease. Two bad notices with one resident named on each are not a substitute for one good notice with all the names. Spell the names correctly on the notice.

 

There are a few counties that permit some notices to name only one resident in multiple resident leases. Some counties require that some notices add a catch-all phrase such as “and all other occupants” to the names, if only one resident is named in multiple resident leases. Before deviating from the safe harbor of naming all residents, you should consult with your eviction attorney. It is foolish for you to guess or base your notices on your experience in another county. Even if one name sufficed in the past in a county, there is the risk that a new judge or visiting judge may decide that strict statutory compliance requires all residents to be named.

 

Include the Full Address.

 

Address – include the full address under the resident name(s). The statutes require it. The full street name includes the right directional (north, south, east, west) and the right ending (court, road, lane, etc.). To miss this obvious point is to obtain a judgment and writ, only to find that the deputy will refuse to serve the writ because the address is wrong.

 

The statute provides that the county should be listed on the notice. While most judges will overlook omitting the county, do you want to be the manager who discovers the hard way that some judges are meticulous and require strict compliance?

 

Despite the obvious, managers will argue that it is unnecessary to include the complete address, because both the manager and the resident know where the rental is located, because the manager didn’t mail the notice so the address wasn’t needed, because the manager included only the apartment complex name under the resident name and there is only one “XYZ Apartments”, etc. All are fine arguments, but they are legally insufficient.

 

Date the Day That You Are Serving.

 

Date – date the notice the day that you are serving the notice. Watch out for the word processing software auto-entering the date. It can be confusing to both you and the resident to have different dates for preparation of the notice and for the delivery of the notice. Worse, since it is the delivery date that begins the time period for compliance, counting from a notice date which is different from the delivery date will often result in an invalid notice.

 

Include Your Name, Address and Telephone Number

 

Manager’s or agent’s name, address and telephone number – print these at the end of the body of the notice. Your firm belief that the resident already knows this information is not a good defense to failing to comply with the statute. If the manager’s or agent’s address has changed from the one listed on the lease, follow the notice of new address procedure in the lease. Although it is obvious that the new address is on the notice, there may not be a legally sufficient notification of a change of address.

 

Complete the Certificate of Service Completely

 

Certificate of service – complete it correctly and thoroughly. It is not obvious to a judge that the delivery date is a typo. If it’s wrong, it’s wrong. Just because the date is on the top of the notice does not mean the judge will assume that you served it the day it is dated. Your signature on the body of the notice does not substitute for your signature on the certificate. If the date or signature is missing, the notice is flawed.

 

Altering a Notice

 

Never alter a notice after you have delivered it, even if it is an obvious typo. If it is later used in an eviction, it is a misrepresentation to the judge that the notice submitted to the court is the same as the one given to the resident.

 

Three Day Notice Demand Date Counted Correctly

 

Three Day Notice demand date - the days are correctly counted. Do not include the day of delivery as one of the three days. Did you remember the holidays this month? If you were going to hand deliver the Three Day Notice, but mailed it instead, the demand day is wrong, unless five days were added for mailing. If you printed it out yesterday, but got busy and did not deliver it until today, the expiration date will often be short, making the notice invalid.

 

Three Day Notice Demand Amount is Only Rent

 

Three Day Notice demand amount – rent, rent and only rent. The Three Day Notice says “the sum of _____ FOR RENT”, so it’s obvious that you can include only rent and amounts that are defined as additional rent under the written lease. Before you complete the Three Day Notice check the file. Is there some justification to consider late charges, utility charges, pest control charges and anything else included in the Three Day Notice as “additional rent”? If the charge is created under the utility addendum, did the resident sign the addendum? Is it in the file?

 

This is so obvious that I almost did not include it. Did you add the amounts for the Three Day Notice correctly? Checking your addition will not hurt.

 

Three Day Notice Late Charges

 

Three Day Notice late charges – calculate as of the notice date. Assuming that late charges are “additional rent”, they cannot be included unless the rent is late as of the delivery date of the Notice (not as of the expiration date). If there are daily late charges, then calculate them through the delivery date of the Notice (not through the expiration date).

 

Non-Renewal Notice

 

Non-renewal notice – adequate notice of non-renewal is required. If the lease requires X days’ notification to the resident of non-renewal, then “almost X” is not enough. If you mailed the Non-renewal Notice, then you were required to add five days to the notification time. The fact that the resident obviously already knew of the non-renewal does not relieve you of the obligation to comply with the lease and the statutes. If the date is an obvious typo, it is still wrong.

 

Missing the obvious can hurt you. Do not assume that everybody will know what you mean. Take time to think, and review your notice before you send it. There are enough factors that you cannot control in an eviction. Missing the obvious is something that you can control. Why make the process any harder than it has to be?

 

“Serving the Property Management Professional”

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Every property manager has the task of screening applicants. The property manager wants to find good residents who will pay rent on time, not disturb the neighbors, and take good care of the property. The flip side of that is the property manager wants to weed out applicants who will fail to pay rent, have keg parties, or choose to remodel the unit. The decision will be easier if you avoid these mistakes.

 

“The screening criteria are in my noggin, not on paper.”

 

Every property management team should have a clear, written screening policy. All staff who deal with the leasing process should be aware of the policy and have her own copy at her desk. Management must train staff, so they are aware of and follow the policy consistently with all applicants.

 

“I never tell the screening criteria to anyone.”

 

A property manager’s best tool to prevent potential fair housing complaints is a paper that tells prospective residents about the criteria that will be used in evaluating the application. It does not have to be a copy of the policy itself. Rather, it can be an inviting document that lets a prospect know about the rental property.

 

“Once denied, I never talk to the applicant again.”

 

If a property manager declines an application, or puts extra monetary conditions on acceptance, an “adverse action” letter must be sent to the person. That adverse action letter, if completed properly, tells the applicant everything he is entitled to know. It allows the property manager to communicate the decision to the applicant honestly and quickly.

 

If the applicant demands to more information or explanation, he should diplomatically be referred to the adverse action letter and the paper he initially received about the criteria that would be used. Details not contained within the adverse action notice should not be volunteered.

 

“I rely on my gut reaction in choosing a resident.”

 

While experience is invaluable, it is important to make sure one’s experience is not influenced by biases that could be discriminatory. Every manager has had the experience of the resident who “looked” okay and then turned out to be a bad resident. That, as well as fair housing complaints, can be avoided by having a written screening policy. Working on assumptions and experience alone just doesn’t cut it.

 

“I choose the best applicant from a pool.”

 

Where there are several people competing for the same unit, it is best to treat them on a first-come, first-serve basis. When you reach a qualified applicant who meets your screening criteria, stop screening and offer the unit to that applicant.

Property managers should date and time stamp applications so there is no confusion about who was first. If an application is not complete (for example, when a resident needs to bring in a paycheck stub), date and time stamp it when it is complete.

 

“Serving the Property Management Professional”

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It is inevitable that you will have a chronic late payer. Every excuse in the book is given by the resident for the tardy payment, but the payment always comes, sometimes with the late fees, sometimes without. You may inherit a later payer from a self-managed property or a prior management company. Is a resident always allowed to pay late? Can you evict a late payer? Is there any way to tell a resident to shape up or ship out, or will you be destined to always accept late payments?

 

Is a Resident Allowed To Pay Late?

The short answer is “yes”. There is nothing in Florida law that allows you to evict residents because they pay late. You can evict a resident if she does not pay at all, but paying late is not prohibited. Regardless of what your lease may provide, if a resident wishes to pay late, she may. There is a built in grace period under Florida law of three days, not including Saturdays, Sundays or legal holidays. If a resident fails to pay the rent according to the due date of your lease, you must serve the resident with a Three Day Notice which gives the resident the opportunity to pay you within that period of three days. This is in essence a “grace period”. Without serving the resident that Three Day Notice, there is nothing you can do to terminate the tenancy for nonpayment of rent. No provision in your lease can override the fact that a resident is entitled by law to receive a Three Day Notice from you, and is allowed by law to pay you the rent if the notice has not yet expired.

We Want To Get The Chronic Late Payer Out!

My usual response to this request is to tell the manager to be glad to have a resident who pays, albeit somewhat late. Times are tough right now, and anything a manager can do to keep a resident is advisable. However, there will be times when the manager does not want the uncertainty of getting the rent late, or is tired of having to serve a Three Day Notice on the resident every single month, and wants the resident out. If the resident pays the rent within the Three Day Notice timeframe, no matter how angry or frustrated the manager is, the resident can stay and pay as long as the notice has not expired. The manager’s only recourse is to non-renew the resident at the end of the lease, or if the lease is currently month to month, non-renew the month to month tenancy.

The Resident Does Not Pay Within the Three Day Notice Period

This is a different story. If the resident does not pay within the Three Day Notice time frame, Florida law allows the manager to terminate the tenancy. This sounds easy enough. The resident is given a Three Day Notice and fails to pay within the time frame allotted. The manager then files an eviction, and the resident is evicted from the premises. It would seem perfectly legal. The resident is chronically late, the manager has had it, and the resident does not pay and therefore is evicted. If the resident is in “new territory” by finally failing to pay within the three-day notice period, the manager will have a strong case. However, it is often not that simple. The fact that the resident has paid rent late so many times actually put the resident in better standing in court, if the manager has accepted rent after the expiration date of prior Three Day Notices. The manager could also have problems in court if the Three Day Notice that finally “snares the resident” is delivered earlier in the month than normal.

The Resident Beats An Eviction Because He Has Always Paid Late?

While some judges are extremely strict and will evict a resident if the resident fails to pay within the Three Day Notice period no matter what the resident’s excuse may be or the resident’s past payment history, be it prompt or tardy, if a resident can prove to a judge that he has been paying the rent late, after the expiration of the Three Day Notice, and the manager has been accepting the rent late, the resident may be able to prevail in court. This seems to go against logic. A resident who pays the rent late is certainly not a good resident. That resident has blatantly violated the lease terms and caused extra work and worry for the manager. The issue here is waiver. The manager, by accepting the rent late time and time again has potentially waived his rights to enforce the terms of the lease. By his own actions, the manager has modified the terms of the lease.

What is Waiver?

If you know that a resident has a pet in violation of your no pet policy, but you do absolutely nothing about it for months, you will have possibly “waived” your rights. The same would apply if there were unauthorized occupants in the unit and the manager did nothing. Any noncompliance that the manager ignores or “tolerates” for some time can result in the manager waiving his rights. The exact same waiver can occur with late rent payment. The manager thinks his case is better because the resident looks “bad” in court, but actually it will be the manager who will be at a disadvantage in court.

Can “Waiver” Be Overcome?

If the resident has been chronically late, does this mean you can never evict or must tolerate this late payment forever? Probably not, but you must notify the resident that late payments, although accepted in the past, will not be tolerated in the future, and the resident can be subject to eviction if the payments are not made within the Three Day Notice time period. Essentially it is a “shape up or ship out” type of notification. We recommend this type of notification is done in writing, by regular mail and certified mail, and at least 30 days before the next monthly rent payment is due.

Sample Wording

 

LATE RENT PAYMENT POLICY, WARNING AND NOTIFICATION

DATE ________________

TO __________________________
ADDRESS ____________________

Dear Resident:

According to our records, you have not been paying your rent according to the due date which is ________________ (insert date).

While we may have accepted these late payments in the past, this letter shall serve as notification that in the event you do not pay according to the stated due date on your lease, you may be subject to receiving a Statutory Three Day Notice. If the rent is not paid within that notice period, we may opt to refuse your late rent and file for eviction ANY time thereafter. In the event we file an eviction, we may elect not to stop the eviction, or if we decide to do so, you will incur additional attorney’s fees, late fees and costs.

It is imperative that you pay your rent according to the lease terms from this point on.

Please feel free to contact us should you have any questions.

Very truly yours _______________________

Name of apartment community, management company etc.

Will This “Shape Up Or Ship Out” Letter Work?

There is a good chance that this type of letter can overcome a waiver defense by a resident. There is no solid guarantee, but it is better than nothing. Remember that in order for the resident to raise a defense of waiver, the resident first must know that he has this defense, and in most cases must place the rent into the court registry. This minimizes the risk you have, but if you are managing property for others, you will often be inheriting residents with inconsistent and late rent payments.

“Serving the Property Management Professional”

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The simple question of how much to charge the resident for carpet damage is often more complex than it appears. Straightforward legal principles become muddied when they have to be applied to real-life situations.

 

Simple Legal Principles

 

The legal principles are simple. The manager should use the least expensive, practical method to replace or repair. This is known in legal jargon as mitigating your damages. If it’s possible to remove a stain from the carpet, the manager should remove the stain rather than replace the carpet. If the carpet has a small tear that can be repaired, then the manager should repair rather than replace the whole carpet.

 

Upgrading

 

When the manager must replace the carpet, he should not upgrade at the resident’s expense. He should replace with an equivalent grade. If the same grade is not available, then carpeting at a comparable cost should be used. If upgrading, then the additional upgrade cost should be paid by the manager. The manager should not charge the resident for more than the resident has damaged. If only the bedroom carpet was damaged, then the manager shouldn’t charge the resident for re-carpeting the entire apartment.

 

Undepreciated Cost

 

The manager cannot charge a resident the full cost of new carpet to replace carpet that isn’t new. This would be charging the replacement cost. The manager should charge the resident for the loss of the value that was left in the carpet. This is charging the undepreciated cost. For example, if carpet will last five years (its useful life) and the carpet is three years old when the resident vacated, then you have used 60% (3yrs/5yrs) of its value. The residents’ destruction of the carpet has prevented you from using the other 40% (2yrs) of value in the carpet. If the new carpet costs $600, you can charge the resident $240, which is 40% (the value or useful life that you lost) of the full cost of carpet.

 

Real Life Isn’t as Simple

 

The real life situations are complicated. These are just a few of the host of other factors that are considered. The location of the tear or stain will affect the decision. A tear in the middle of the living room is less acceptable than against the wall under the drapes. The value of the rental as reflected by the amount of monthly rent will affect the latitude the manager has to repair rather than replace. The manager of a $5000 per month rental has a reasonable argument that his renters will be less accommodating to carpet imperfections than the $500 per month renter. The single-family home renter’s expectations with regard to the carpeting scheme will probably be greater than the college student apartment renter. Industry custom may come into play. Although the padding under a carpet may not be damaged, it may be customary to replace the padding when you replace the carpet.

 

The Concept of Presentation

 

There is some intangible in the way things look, feel, flow and match. There is an entire segment of the multi-family industry devoted to helping managers convey the right look and feel for their apartments, such that the prospective resident wants to rent. The tension is between the manager’s desire to preserve presentation to enhance marketability of the apartment versus the resident’s desire to suffer the minimum possible repair or replacement charge.

 

Uncertain Litigation

Finally, these matters are so subjective that they defy prediction of a judicial outcome. The manager should remember that he carries the burden of proof in any claim against a security deposit or in any lawsuit by the manager for damages. The manager must prove the condition of the carpet at move-in and at move-out and that the any damage is greater than ordinary wear and tear. Factors affecting the court’s decisions will be the reasonableness of a party’s position, the demonstrative evidence (pictures), the credibility of the testimony and independent expertise in the particular area. The manager’s opinion that the tear or stain required replacement, or that mismatched carpet in the bedrooms and hallway affects his ability to market the apartment, may strike the court as simple common sense or as self-serving, depending on the availability of comparison pictures. Testimony from an industry expert, such as a carpet or flooring specialist, or an interior decorator, may be required by the court.

 

“Serving the Property Management Professional”

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A child starts a fire in the playground, climbs on the roof, sprays graffiti in the laundry room, and hits another child. What do you do? Probably speak to the parents. The usual outcome is a complete denial by the parents that THEIR child could be involved in such behavior, and possibly the child’s behavior improves or gets worse. Rarely if ever are the police made to be involved, as you know the police usually will not do much anyway, and proof issues are tough. Ironically though, if a 45-year old man engaged in the same or similar activity as the child, you would be on the phone calling 911, and you would be pushing the police to arrest the man and pressing charges. Why the disparate treatment? The same child that caused the original problems may eventually burn the place down or shoot a child in the eye with a BB gun. Now YOU were on notice, and YOU did not do anything earlier. Liability? You bet!!

 

Why Call the Police?

The reason the police should be called is to clearly document the occurrence and impress upon the child and the parents of the child the gravity of the child’s actions. In most cases no arrest will be made, but often the police will speak to both the parents and the child and put a level of fear into both. By calling the police, you are showing that you consider the matter important and are building a paper trail. If the matter is serious enough, the child will be arrested.

When to Call the Police

Whether the police are called out to the property will depend upon the action of the child. Obviously, calling the police for every incident large and small will result in the police eventually ignoring your calls and potentially a discrimination claim by the parents that you are engaged in familial status discrimination. The hard part is to determine when it is appropriate to get police involved and when the matter should be handled in-house.

Property Damage or Theft

Commonly children engage in vandalism on the premises. This may include vandalism to property belonging to the apartment community or property belonging to other residents. The vandalism may be slight; for instance the child breaks out a light bulb or pulls a shrub out of the ground or starts a small fire in a garbage can. The vandalism is more serious when a significant amount of damage occurs on the premises or to another resident’s property. In some cases you will be dealing with theft of property belonging to the apartment community or another resident.

Damage to or Theft of Another Resident’s Property

It is our opinion that in any case where a child damages or steals another resident’s personal property, the police need to be called and this treated as any other serious crime on the property, no matter how small the incident may seem. Usually the victim will not want to press charges. The police will defer to the victim’s wishes, but the paper trail has been started, and the victim knows that you consider the resident’s personal property important. Failure to take definitive action could result in the victimized resident using this incident as a way to break a lease.

Damage to Apartment Community Property

A policy needs to be set whereby the property manager can decide if the damage warrants calling the police or just speaking with the parents and serving the Seven Day Notice to Cure. This policy can be based upon a monetary limit or the type of damage involved. Toilet papering the balcony would not warrant police action, while graffiti with paint or some difficult to remove substance certainly would. Discharging a fire extinguisher is an illegal action, and we feel this warrants police involvement. Breaking light bulbs with rocks may seem slight, but if some other resident is the victim of a criminal act because the crime area was not well lit following the prior vandalism, you can see the severity of a child breaking a light. In many instances of property damage, the damage is reported to you by other children. While their testimony often will not hold much weight, the child may admit to the damage. You might choose not to get police involvement, but rather serve the parents with a Seven Day Notice to Cure, charging the parents for any costs related to repairing the damage.

Theft of Apartment Community Property

Not a week goes by when we do not have a case in which a child decides to take a golf cart on a joy ride throughout the premises. Usually the maintenance tech has left the key in the switch, and the temptation is just too great. We recommend calling the police if a child uses a golf cart without permission and/or causes damage with or to that golf cart. If an adult did it, you would want them put in jail. Don’t be so easy on that “future” car thief.

Actions Which Do Not Rise To the Level of Criminality

Children often engage in behavior such as climbing on the buildings, skateboarding down railings, using the pool after hours or throwing the pool furniture into the pool. These actions would usually warrant a Seven Day Notice to Cure rather than police activity.

Actions of a Sexual Nature

Rapes and attempted rapes or sexual molestations occur on a regular basis in apartment communities and condominiums. Often you hear about something occurring through the grapevine. There are a huge number of children who engage in sexually inappropriate behavior, sometimes with the consent of the victim. These matters are extremely important to deal with using the police, even if just based on a rumor or one child’s word against another. Often the police will make an arrest if the child admits to the action or there are enough witnesses. Insisting on a police report is crucial, as the police report will include the statements made by the child, which your attorney can then use against the child later in court upon subpoena of the police officer. A child who commits sexually inappropriate behavior on the premises has a serious problem which usually does not go away but instead worsens.

Use of Firearms or Weapons

Any use of firearms, weapons or projectile shooting equipment should immediately result in police action. A child who shoots a BB gun off the balcony at other persons, property or animals has absolutely no regard for the seriousness of his actions, and this needs to be dealt with swiftly. BB guns, paint ball guns, sling shots and other common weapons are given to children as gifts on a regular basis. They are fine on the 5-acre farm but completely inappropriate and potentially illegal and deadly when used on the premises of an apartment community. Will the child be arrested? Probably not, but this is a serious matter. A report must be created, and potentially the resident will be evicted if your attorney advises this action.

Suppose the Police Do Nothing?

Often the police will do absolutely nothing other than maybe speak to the parent or child. You need to insist that at a bare minimum some report is written up, other than simply a visit log that the police normally will have if they respond to the site. Even though the police may do nothing, the property manager MUST serve their Seven Day Notice to Cure, or in rare cases, the Seven Day Notice of Termination. Your attorney will assist you in wording the notice to avoid any danger of it appearing that you are engaged in some sort of discrimination.

At a bare minimum, make sure the parent or guardian of the child involved is served a Seven Day Notice. Never stop at a long lecture or a warning letter. Whether it is a Seven Day Notice to Cure or a Seven Day Notice of Termination will of course depend upon the circumstances, and most importantly the advice of your attorney. Many property managers become frustrated when they believe a child’s actions merits a termination notice and eviction, when their attorney advises against a termination notice. Trust your attorney’s judgment on this. Most property managers have no clue how difficult noncompliance cases can become or the financial consequences of losing the noncompliance case. An Agreement to Vacate may be another possibility, and your attorney will be able to best advise you.

“Serving the Property Management Professional”

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