If you have a policy whereby if a resident is locked out of the premises, he or she is to call a locksmith, you may not have to listen to this podcast

When you have this policy, you have no involvement with the situation, and hopefully the locksmith will not have damaged the lock and/or changed out the lock.

Hopefully as well, the resident does indeed call a real locksmith rather than simply break the lock to gain access.

Many of our clients do have a policy of opening up a locked door for a resident and sometimes will charge the resident for this service.

How the manager goes about giving access to a resident can have a serious effect on the manager’s liability.

Let’s imagine the scenario for a moment

It is 3 a.m., and your on-call maintenance tech or maybe you receive the dreaded phone call or knock on the door.

The “resident” has misplaced his keys and is obviously intoxicated.

You’re quite familiar with this resident, having seen him at the pool,

You have seen him drop off rent in the office, and he plays volleyball on Sundays, uses the exercise room and has even made maintenance requests.

You simply grab the keys and allow him access.

The problem is that he is not an actual resident, but has been an unauthorized occupant for quite some time.

He has now decided; once you grant him access, to take his roommate’s valuables, leave, never to return again.

So what’s the Problem?

It is quite obvious what the problem is in this case.

You failed to see if this person was indeed the resident on the lease, 

The ramifications could be severe.

Each year we see this scenario unfold, and managers are faced with paying fairly large sums of money to the actual resident who was not home when you allowed the unauthorized person access.

You may argue that it was not your fault that the unauthorized person took his roommate’s personal property, as after all, they have been living together for quite some time, but the problem remains.

You allowed an unauthorized occupant, not on the lease, access to the rental premises.

What are some solutions?

Your first step should be to create a written policy for your company regarding resident lock outs.

All employees who engage in allowing a locked out resident access should be required to read this policy and sign a statement that they have read it and agree to abide by the policy.

No exceptions should ever be made to the policy.

Your next step will be to provide the lock out access rules or procedures to the resident and make this part of the lease, the Community Rules and Regulations, or a separate addendum to which the resident has clearly agreed.

What is YOUR lock Out Access Procedure?

In the event a resident is locked out, they, the RESIDENTS need to follow certain procedures for you to even act upon this lock out.

They should be required to provide you with solid government issued identification.

This identification should then be brought to the office and compared with the copies of the identification you have in the resident’s file.

Names should match up completely, and a visual examination of the picture ID you have in the file should match up with not only the ID the resident is showing you, but the resident himself.

Once this match is established to the satisfaction of you or the bleary eyed maintenance tech who was just awakened, the identification provided by the locked out resident should be copied, notes made on the copy, and the copy of the ID placed in the file.

If the resident cannot provide you with the required ID, the resident should not be given access.

There is no doubt that the resident will not be satisfied, and an altercation or argument could ensue.

Keep your lock out policy handy in the event the resident is not able to satisfy your requirement, express regret, and tell him he must hire a locksmith.

Now, let’s be real Harry, we know this Resident!

Most of the legal problems we deal with occur when the manager or an employee makes an exception to the rule.

Every time an exception is made, the chances of a problem increase dramatically.

 If an exception is made once, it may be expected that an exception is made the next time and, if you make an exception for one resident but not another, you run the risk of being accused of discrimination. People often look alike, especially when related to one another.

Most recently, we dealt with a situation where the brother of a resident gained access due to looking so similar to the actual resident.

Had the maintenance tech carefully looked at the identification and made the comparison, the difference would have been evident, but this was not done and the company paid the price.

What are some of the Inherent Problems with Lock out Access by management?

Well, the person giving access will need to have both access to the keys to the unit and the resident’s file.

Due to privacy issues, it is recommended that there is limited access to the resident’s file. Do we really want any employee to have access to the file?

Some companies fail to keep a copy of the resident’s identification in the file. There is absolutely nothing illegal about keeping a copy of the resident‘s identification in the resident’s file. This is not a fair housing violation. We strongly urge you to keep a copy of the picture identification in the resident’s file.

1. Many managers do not have a written policy for the employee who will be engaged in granting access. This is simple. Write one up now.

 

2. Many managers have not provided the policy or rules to the resident regarding lock outs. Create your rules, and distribute them to all residents.

Can you charge the Resident for Giving Access?

 After hearing how dangerous it is to let a locked out person in, you may have decided to take the route of telling the resident that he must call a locksmith,

Some of you may have decided that you will assist in lock outs and should be compensated if you grant access.

We agree.

The extra work involved and the increased liability on the manager justifies a reasonable charge to the resident.

Some of our clients require this to be paid before the access is granted; while others charge it as additional rent which must be paid with the normal rent at the next payment period.

If you are going to charge the resident for anything, it must be clearly agreed to by all parties involved.

Managers often get an idea or create charges upon a whim and expect that they can force the resident to pay the charge.

Clearly state y our policy and any charge in your lease or whatever is incorporated in your lease like the community rules and regulations.

“Serving the Property Management Professional”

www.evict.com      www.evicttv.com      www.evictforms.com      info@evict.com

For over two years, property management companies have been sued in huge class action lawsuits for practices that most property management companies have engaged in for years. Common practices and agreed upon terms are under attack, and as a result of a judicial decision, have caused property management companies to incur millions of dollars in fees, costs and loss of the ability to collect sums owed to them. Most property manager companies have not revised their leases or procedures, and as a result, are a huge target for the lawsuits. Currently, the attorney filing these lawsuits is not taking the cases to trial but quickly entering into class action settlements. While this may lessen the effect of a huge, drawn out trial, the companies being sued are still paying small fortunes to settle the suits. Each one of these suits and settlements are costing the companies in excess of $1,000,000. There is no indication that the attorney filing these suits has any intention whatsoever of stopping. Our firm is recommending that you take action immediately to avoid becoming a target. Our recommendations are not our interpretation of the law, and we do not agree with the outcome of the lawsuit which started this incredible chain of events, but we feel that until the law is changed, property management companies need to take heed immediately and change their leases and practices.

IMPORTANT:

If your company has already been sued and is currently under a class action settlement agreement, please follow the advice of your attorney, as special conditions apply per the settlement agreement.

REDECORATING CHARGES

Current Law: Florida Statutes says absolutely nothing about redecorating charges, but are they legal? Are they being disclosed?

Cases: Other states have begun interpreting these fees as a way managers are making residents pay for ordinary wear and tear.

Recommendation: Cease charging redecorating charges. If you still insist on charging them, make sure they are disclosed in your advertising and in the first contact.

ADMINISTRATIVE FEES

Current Law: Florida Statutes say absolutely nothing about administrative fees. We fear that they may be challenged as anti-consumer or in some way in violation of Florida’s Unfair and Deceptive Trade Practices Act. Florida Statutes include a provision allowing a judge to strike down “unconscionable” provisions in a lease and award damages to the resident. Often these administrative fees are not being disclosed on first contact with the applicant.

Recommendation: Cease charging administrative fees. If you still insist on charging them, make sure they are disclosed in your advertising and in the first contact.

TERMINATION FEES

Current Law: Florida Statutes gives specific remedies to a manager when a resident breaks a lease or gets evicted. Termination fees for a lease break, voluntary or involuntary, are nowhere to be found in Florida law. Common practice for years has been to charge these fees to cover the costs incurred due to the resident’s lease break.

Cases: Recent court cases have held that these fees are unlawful, as they can result in the collection of double rent if the resident breaks the lease, a new resident moves in right away, and the termination fee exceeds the actual lost rent. Ridiculous? Yes, but some courts feel otherwise.

Recommendation: Cease charging termination fees

INSUFFICIENT NOTICE FEES

Current Law: Florida Statutes says absolutely nothing about insufficient notice fees for residents who break their lease.

Cases: Recent cases have stated that these are completely unlawful UNLESS specifically allowed by Florida law for notice prior to lease end.

Recommendation: Cease charging insufficient notice fees UNLESS they are those specifically authorized by law for notice prior to lease end.

AUTOMATIC FORFEITURE OF SECURITY DEPOSITS

Current Law: Florida Statutes do not state that security deposits are automatically forfeited when the resident breaks the lease. It has been common practice and makes good sense. After all, a security deposit is for the full and faithful performance of the lease.

Cases: The class action cases dealing with termination fees can be construed as prohibiting the automatic forfeiture of a security deposit upon resident breach

Recommendation: Cease automatically forfeiting a resident’s security deposit upon lease break. Most companies still forfeit the resident’s security deposit if they break the lease AND charge them rent on top of this. This can trigger a lawsuit.

LATE CHARGES

Current Law: Florida Statutes say nothing about late charges.

Cases: Some states are interpreting their usury laws to apply to rent owed.

Recommendation: Cease charging excessive late charges and cap them at 10%.

A Final Note

Most readers of this article will go away angry and confused. How could these perfectly fair charges and practices be illegal? Law is made two ways: (1) by statute, in which the legislature enacts a bill which becomes law, and (2) by court cases, in which a judge makes a decision interpreting existing statutes, and under the principal of judicial precedent, it becomes law that other courts will follow. In the current cases which have triggered this entire mess, the result is from a Circuit Court case in Palm Beach County, Florida. This case created law for any company which operates in the 15th judicial circuit, which encompasses a large area. When a judge makes a decision in circuit court, that judge will look to circuit court cases and higher. While a circuit court does not make law in another circuit, judges often will base their decision on that court’s decision, if there are no other cases in their circuit to the contrary or on point.

 

“Serving the Property Management Professional”

www.evict.com      www.evicttv.com      www.evictforms.com      info@evict.com

More and more eviction cases are being contested by attorneys specializing in representing residents, and a number of new class action lawsuits have been filed in Florida against major management companies and owners of multifamily housing. Items are of major concern right now, due to the increase in attorneys targeting managers, and particularly a recent court decision which has completely confused what was assumed to be permissible practices. Almost every apartment community in Florida has now become a huge target.

TERMINATION FEES, RE-LET FEES AND LIQUIDATED DAMAGES

Background

Managers have historically had clauses in the lease agreements which impose a penalty, re-let fee or liquidated damages in the event a resident breaks a lease before the term is completed or is evicted. A larger problem is that many managers have been using the lease requirements for a voluntary and agreed upon lease break to impose these fees in the event of a skip or eviction. The recent case out of Palm Beach County has held that these fees or penalties are impermissible and that the remedies provided in Florida Statutes are exclusive and cannot be modified by the lease terms. The main holding of this case states that charging these fees, penalties, or liquidated damages is not allowed by law, and that the ONLY remedy a manager has when the resident vacates voluntarily or involuntarily, and the manager puts the unit back on the market, is for the manager to charge the resident ONLY the rent that was lost at the time of the breach and AS IT BECOMES DUE. You cannot accelerate the rent or charge rent on top of a penalty, as this judge feels that this is charging “double rent”.

IMMEDIATE ACTION PLAN:

1. REMOVE ALL PENALTIES, LEASE BREAK FEES, And RE-LET CHARGES FROM YOUR LEASE NOW.

 

2. If you have charged these in the past to a resident, NOTIFY YOUR COLLECTION AGENCY THAT THESE CHARGES ARE TO BE REMOVED FROM THE RESIDENT’S COLLECTION FILE.

 

3. Recompute only your LOST rent UNTIL THE UNIT WAS RERENTED and REVISE THE AMOUNT SENT TO COLLECTIONS if and only if the revised amount is LESS than what was previously sent to collections.

How will this all be resolved? The law needs to clarified to allow the manager and resident to contractually agree to these penalties and fees as they should be allowed to do, and in our opinion are allowed to do. Unfortunately the Circuit Court Judge in Palm Beach County disagrees. The case is being appealed by the attorneys handling the case.

SECURITY DEPOSIT CLAIMS

Managers are required by law to make a claim upon a resident’s security deposit within 30 days of the resident vacating the premises, if the resident vacates or is evicted owing the manager money that the manager is entitled to per the lease and/or Florida law.

The Security Deposit Problem: Managers are charging amounts that are only wear and tear, amount that they cannot prove in court, accumulated late charges, fees, termination charges, liquidated damages or excessive amounts based on estimates. Residents are disputing these charges, and managers are not notifying the collection agency that the charge is “disputed”. Over the ensuing years, the resident has a black mark on his credit; he retains an attorney and eventually demand that you prove the damages that you charged the resident. This could be YEARS after the manager initially made the claim. Most managers cannot prove the damages in full, and as a result, the manager’s charge now has resulted in a “slander of credit” for which the resident can now sue. Attorneys are now specializing in representing the ex-resident debtor and suing!

IMMEDIATE STEPS TO TAKE WHEN MAKING THE SECURITY DEPOSIT CLAIM

1. Do not charge the fees, liquidated damages, relating charges as referred to earlier in this article.

 

2. Do not charge the resident unpaid or accumulated late charges. Judges hate late charges and attorneys are beginning to set their sights on whether late charges are usury.

 

3. Always perform a DETAILED move in and move out inspection. The resident should not be permitted to make this inspection. The manager makes this inspection

 

4. Document the move in condition with a video and/or photos of the unit, interior and exterior. Leave NOTHING undocumented. Preferably have the resident sign the “Move in Inspection Form, but if you cannot, take the move in inspection seriously, and do it right.

 

5. Document the move in condition with a video and/or photos of the unit, interior and exterior. Leave NOTHING undocumented. If you charge the resident for ANY damage, be prepared to prove this damage in a court of law up to 5 years after the resident vacates. Our clients who videotape units and videotape the damages RARELY have any security deposit disputes.

 

6. If something gets disputed, carefully weigh the risks of insisting upon the charge versus the benefits of settling with the resident. Settlement is NOT a bad word.
7. Never write or call back an attorney who has contacted you regarding a dispute without having your attorney review the situation.

EVICTIONS – LOSE ONE AND GET SUED

The majority of evictions that come into our office have some sort of problem. It may be as blatant as an incorrect Three Day Notice, an error in the lease, an excessive late charge, an unregistered fictitious name or some underlying problem that the manager failed to disclose to us when sending us the case. If the resident gets and attorney and you lose, you will have to pay the resident’s attorney. We recently had 2 cases where the manager lost, and the attorneys are demanding in excess of $4000.00.

IMMEDIATE ACTION PLANS

Prepare and Serve your notices correctly. Us the Three Day Notice Checklist. Let your attorney prepare any Seven Day Notices for you. Do not non-renew unless you have carefully read the lease and have good reasons documented.

 

1. Tell your attorney everything strange about the case. Have you accepted rent late on a regular basis? Have you been accepting partial payments? Has the resident complained about problems on the property? Has the resident given you a rent withholding letter? Are you trying to remove the resident for non-rent reasons but jumped on the resident when she was late on the rent, and refused the rent from the resident before filing the case?

 

2. Is your Fictitious Name filed with the Secretary of State? Do you even know what this means? Get it filed NOW. Click.

 

3. Do not accept rent during an eviction without calling your attorney first and possibly entering into a Stipulation.
4. Once an eviction is filed, do not take any other action without speaking with your attorney first.

 

“Serving the Property Management Professional”

www.evict.com      www.evicttv.com      www.evictforms.com      info@evict.com

Pools are dangerous. There is no doubt about this fact. Many people, many of them children drown or are seriously injured each year from accidents in residential pools. While Florida law requires fencing and safety measures on new construction, most pool owners are not required to install any safety equipment to help prevent accidents.

 

Can you relieve owner/agent liability by using a Waiver in the lease or in a separate document?

Probably not. In order for an owner or agent to be held liable for an accident or injury due to a pool, there must be some negligence proven. A typical Waiver or Release of Liability will most likely not be upheld in the event that it can be shown that there was negligence on the part of the owner/agent.

 

“We want a Waiver in our lease because the tenant has children.”

A Waiver or Release of Liability is an attempt by one party to take away the right or rights of another party to sue for something they may have been able to sue for in the absence of the Waiver or Release of Liability.  If an owner/agent uses a Waiver or Release of Liability because of the fear that a child will drown or get injured, the owner/agent is committing a FEDERAL FAIR HOUSING VIOLATION and is engaging in FAMILIAL STATUS DISCRIMINATION.  Without intending to, the owner/agent is trying to take away the right to sue due to the CHILDREN.  This is illegal.

 

Our recommendations. It is crucial that if a property has a pool, the owner gets additional or excess insurance. The price difference for a few hundred thousand dollars more in insurance is not significant. If the tenant places an above-ground pool on the premises, we recommend that the owner/agent takes immediate action to have the tenant remove the pool.

“Serving the Property Management Professional”

www.evict.com      www.evicttv.com      www.evictforms.com      info@evict.com

A “Letter of Protection” is a lawyer’s representation that his client has agreed that an amount, which is owed to a creditor by the client, will be paid to the creditor by the lawyer from the client’s share of a proposed monetary recovery.

Commonly Used For Medical Providers

This letter is commonly given by lawyers on behalf of their clients to medical care providers. Personal injury lawsuits and workman’s compensation claims are types of lawsuits in which letters of protection are often used. When a client has suffered a physical injury, he may not have sufficient money to pay for his medical care. Doctors, hospitals, and others who provide the medical care are promised payment from the client’s monetary recovery. They are more willing to render the medical care if they have some assurance from the lawyer that they will be paid before the money is distributed to the client. However, letters of protection can be given to any creditor of the client in the hope that the creditor will forego payment, accept the letter of credit and rely upon the possible recovery for payment.

Not Much Protection

The problem is that such a letter is not much protection for the manager. If and when the resident recovers any money in his lawsuit, he has instructed his lawyers to pay his manager an amount owed from the resident’s share of the recovery. The key words are “if and when” a recovery is made. If the resident loses his lawsuit or his workman’s compensation claim, than there is neither recovery for the resident nor payment to anyone. If a recovery is made, when it will be made is another question. The resident’s legal action or claim could take months or years.

What is Covered by the Letter?

It is important to understand how much a letter of protection is actually “protecting”. The resident may tell the manager that the letter will cover the past and future rent. Whatever the resident is saying, it’s the wording of the letter of protection that is important. Some letters are promising payment only of the amount owed at the time the letter is received, not future amounts owed.

No Guarantee of Full Payment

A resident’s recovery doesn’t guarantee full payment to his letter of protection creditors. The attorney fees and costs of the lawsuit are first deducted from the client’s recovery. It’s possible that after payment to the letter of protection creditors, the balance to the client will be little or nothing. Despite having given letters of protection, a lawyer is unlikely to make distribution from the client’s recovery without the client’s final consent. A client, who is receiving nothing or very little from his recovery, may not be disposed to give final consent. The lawyer might then ask the creditors to agree to accept only a percent of their amount owed, so that the client can receive more. If an agreement cannot be reached that induces the client to consent to distribution, the lawyer is likely to deposit the client’s recovery into court and let the court decide who gets what.

Significant Risks

After reading this, I am sure you understand why our law firm advises its clients that reliance on letters of protection poses significant risks. Managers invest in rental units, not in lawsuit recoveries. Foregoing collecting rent to rely on a letter of protection is a voluntary act by the manager. The manager is not required to do this. If the manager is unwilling to rely on a letter of protection, the manager should write a letter to the resident, with a copy to the law firm, indicating that the manager will not accept and rely upon the letter of protection. The rent must be paid timely and in full.

“Serving the Property Management Professional”

www.evict.com      www.evicttv.com      www.evictforms.com      info@evict.com

The Environmental Protection Agency (EPA) issued a significant advisory regarding Lead Based Paint restoration, repair and painting activities (RRP) that changes certification requirements for property management companies (PMC) and their employees. This often-overlooked advisory, dated April 18, 2022, has a direct impact on PMCs and their employees.

Key Takeaways from the EPA Advisory:

• Scope of the Directive: The EPA clarifies the obligations of PMCs involved in RRP activities, extending the definition of these responsibilities to include not only the execution of such projects but also the preparatory stages—namely, obtaining bids, hiring, scheduling, inspecting and approving work done by third-party vendors.
• Certification Requirements: Any PMC and individual employees engaged in RRP activities must be certified. This requirement is consistent with Federal law that expressly states that all PMC employees conducting lead-based paint activities must obtain certification.
• Affected Entities: The advisory targets PMCs that manage, propose, or undertake renovations in properties built before 1978.
• Compliance Steps: To comply with the RRP Rule, PMCs must secure RRP certification from the EPA for both their employees and any external renovation contractors they employ.

How PMCs Can Achieve Compliance:

You can visit the EPA's dedicated page for RRP certification at: https://www.epa.gov/lead/getcertified to start the application process. This site provides information on the certification requirements, application procedures, and resources for PMCs to ensure compliance.

Implications for PMCs:

This advisory marks a significant shift in how PMCs must approach RRP projects in older buildings. The emphasis on individual certification underscores the EPA's stringent approach to mitigating lead exposure risks. PMCs are now tasked with a proactive role in ensuring that their employees and the contractors they hire are equipped with the necessary knowledge and certification to safely manage lead-based paint activities.

For a Lead Based Paint Q & A, click here

https://evict.com/?page=qa_for_lead_based_paint

 

“Serving the Property Management Professional”

www.evict.com      www.evicttv.com      www.evictforms.com      info@evict.com

 

 

QUESTIONS AND ANSWERS

Q: What action did the EPA take in April 2022 regarding PMCs and RRP projects?

A: The EPA issued an advisory requiring PMCs and their employees involved in RRP activities, including hiring third-party contractors, to be certified under the RRP Rule. This applies to renovations in residential housing built before 1978.

Q: Who is affected by the EPA's new advisory?

A: The advisory affects PMCs that perform, offer to perform, or claim to perform renovations in pre-1978 residential housing, which includes PMCs hiring third-party contractors for such work.

Q: What must PMCs do to comply with the RRP Rule according to the EPA advisory?

A: To comply, PMCs must obtain RRP certification from the EPA for themselves and ensure that all employees and any third-party renovation contractors conducting lead-based paint activities are also certified.

Q: Why has the EPA mandated individual certification for PMC employees involved in RRP activities?

A: The mandate aims to ensure that individuals directly involved in RRP activities, including preparatory and supervisory tasks, are knowledgeable about safe lead handling practices, thereby reducing the risk of lead exposure to the public.

Q: How can PMCs, their employees and contractors get certified?

A: PMCs, their employees and contractors can apply for certification by visiting the EPA's "Get Certified" webpage at: https://www.epa.gov/lead/getcertified. The site provides details on the certification process, requirements, and additional resources to assist in compliance.

Q: What is the significance of the certification requirement for PMCs and their contractors?

A: The certification requirement underscores the EPA's commitment to public health, particularly protecting children from the hazards of lead exposure. It ensures that those involved in RRP projects are trained in lead-safe practices, thereby minimizing the risk of lead contamination.

Q: What are the potential consequences for PMCs not complying with the EPA's certification requirement?

A: While the advisory does not detail specific penalties, non-compliance with EPA regulations typically results in legal and financial repercussions. PMCs could face fines, legal action, and reputational damage for failing to meet the certification requirements.

Q: Where can PMCs find more information about the RRP Rule and certification process?

A: PMCs can find comprehensive information about the RRP Rule and the certification process on the EPA's website, specifically the "Get Certified" section accessible at https://www.epa.gov/lead/getcertified. This resource includes application procedures, training, and compliance guidelines.

Q: When should a PMC disclose lead based paint information to a prospective tenant of pre-1978 housing?

A: The PMC must provide prospective tenants of housing built pre-1978 the EPA-approved lead-based paint pamphlet and any known information concerning lead-based paint and/or lead based paint hazards prior to renting to the tenant.  These disclosures must be made prior to any monies changing hands or a lease being signed.

 

Click here for the article on Lead Based Paint Certifications

https://evict.com/?page=lead_based_paint

 

“Serving the Property Management Professional”

www.evict.com      www.evicttv.com      www.evictforms.com      info@evict.com

 

 

 

You just took over a property that has had 3 managers in the last 6 months. Needless to say things are a mess, and each day you find more money owed by residents and inconsistencies in the rent records, receipts and especially the utility accounts and late charges. It is pretty clear that collection of these amounts was the last thing on the prior manager’s priority list, but your company is now faced with thousands of dollars in unpaid utilities and growing ledgers full of late charges and other unpaid sums. Can you simply bill the resident and get paid? Not so fast. Collecting this money will be a “process”. Can you put the full amount of 4 months of uncollected utility bills and late charges on the on the Three Day Notice and expect to prevail in court? We certainly will not file the case.

With the economic downturn, the focus has been on collecting the base rent money. It is hard to turn away a payment of $900 because the $50 late charge was not included. While the resident may be responsible for the payment of late charges, NSF fees and utility bills when they tender the base rent alone, the base rent alone is being accepted. The result is a build-up in the other charges, including unpaid late charges building on top of other unpaid charges. Eventually the resident’s ledger is a complete mess and nearly impossible to distinguish. When the next month comes along the resident is given a Three Day Notice with the full amount owed, and again the resident simply pays the base rent which is accepted. If this occurs multiple times, the chances of collection diminishes, and the principle of law referred to as waiver may come into play. Some judges rule that prior uncollected late fees will be waived if base rent is subsequently accepted. Lease clauses indicating that all payments will first be applied to outstanding balances may or may not matter to this type of judge, particularly if there is a clear pattern of the resident paying the exact base rent amount late.

Preventing the Problem

What is a partial payment? Many managers will tell us that it is their company policy not to accept “partial payments”, but what they mean is that they don’t accept partial “base rent” payments but do in fact accept the base rent, even if a late charge or a utility charge is not included.

It is far easier to prevent the problem than to fix the problem. All a property manager needs to do is refuse any payment that is not the full payment amount under the lease terms and demand full payment only with no partial payment accepted. If the lease defines late charges and utility charges as additional rent, all of it goes on the Three Day Notice, and if the resident makes a partial payment, and it is the first time this is occurring, it should be returned to the resident immediately with the resident told in writing and in person if possible that no partial payments are accepted. Property managers who are most successful with collecting the full amounts owed all follow this method, and it sends a clear message to the resident that the terms of the lease will be upheld and enforced by the manager.

Solving the Problem

Not so fast! The problem of accepting partial amounts cannot be solved overnight. You must first determine what is owed and create a collection strategy. Determining what actually is owed can be difficult in and of itself. If you have inherited a property and it has been mismanaged, often the records of amounts owed are not accurate, or they are difficult to sort out, because when money was received it was applied by the manager’s computer accounting software to monies owed with the balance being “rent“ on the computer ledger, but the resident intended for rent to be paid. We recommend that unless the resident has been given a receipt and a balance due statement each time a partial payment was accepted, if the rent is $700 and the resident pays $700, it should be assumed that the resident is paying base rent. Getting a resident in line is a process that cannot be accomplished overnight and should not be attempted through the eviction process unless all else has failed.

1. Notify the resident in writing that NO partial payments will be accepted in the future. Explain that the payment the resident makes must include any utilities for the period used and any late charges for that period.

 

2. Demand the base rent and the late charge for that month’s payment on the Three Day Notice. We do not recommend you put the full amount the resident owes on the Three Day Notice if it is a large accumulation of late charges and utility bills.

 

3. At the same time the Three Day Notice is served, prepare and Serve a Seven Day Notice of Noncompliance with Opportunity to Cure, and on that notice you will clearly state the balance owed to you for the past amounts of late charges and utilities. If it is confusing or you think the resident may dispute the amount because of the past partial amount acceptance actions, attach a ledger to the Seven Day Notice. Make sure your ledger is accurate, because if it is not, you will really have a dispute later.

 

What Will Occur?

1. The resident may attempt to pay the base rent as before. We feel this should be refused and returned to the resident. Accepting this amount does absolutely nothing to solve your problem.

 

2. The resident may attempt to pay the full amount owed on the Three Day Notice but not the amount on the Seven Day Notice. If you have also given the Seven Day Notice of Noncompliance with Opportunity to Cure for the other past due amounts, and your company is insisting that all these amounts be aggressively pursued, you would need to refuse the amount tendered pursuant to the Three Day Notice, because the resident is still in noncompliance by not paying the amounts demanded on the Seven Day Notice of Noncompliance. However, now you are locked into filing a questionable Seven Day case. At the time the money tendered is returned, use this opportunity to explain to the resident that the amounts must be paid in full and you will not accept anything less than the full amount or, if your company permits, enter into a payment plan with the resident using the Past Due Amounts Workout Agreement.

 

3. The resident may pay everything that is owed, but we doubt this will happen if the accumulated amount is high. If you get the full amount, congratulations.

 

Why Use the Past Due Amounts Workout Agreement?

The Past Due Amounts Workout Agreement is like a promissory note, but it is used during a tenancy rather than after a tenancy. It allows you and the resident to come up with a plan to pay the past due monies owed in a fashion that hopefully the resident will be able to pay by converting any past due amounts into “rent”, and it makes the entire balance due and owing as “rent” if the resident fails to pay per the agreement. This will allow you to place the entire balance owed on a Three Day Notice in the event the resident fails to pay.

Best Practices When Accepting a Partial Amount

While it is easy for us to tell you to refuse a base rent payment or base rent including a current late charge that does not include the accumulated utilities or past accumulated late charges, we know acceptance of such payment will happen, and it may be your company policy. If you do this, we urge you to always immediately give the resident an accounting showing exactly how the monies the resident paid were applied. If they are applied to utilities and late charges first, make this perfectly clear, as the resident will often use the defense in court that she has “paid the rent”. You want to be able to tell the judge that money was accepted and applied first to the other amounts owed and second to the rent, AND that the resident completely knew it and understood it.

Not Sure How to Proceed?

If you are not certain how you should go about cleaning up seriously delinquent accounts, we recommend you call your attorney as ask for advice. Certain fact situations may require differing strategies. Always resist the temptation to simply put the full past due accumulated amount on the Three Day Notice.

Renewing a Lease?

Never renew a lease unless all the past amounts are paid or you have asked your attorney for advice on how to address the amounts owed on the new lease. Failure to do this correctly could result in you completely losing any ability to collect the accumulated past due amounts

“Serving the Property Management Professional”

www.evict.com      www.evicttv.com      www.evictforms.com      info@evict.com

Many property managers consider the return of keys as the date that the resident gives possession. When the key return occurs, they begin to count the 15 or 30 days as required by law for returning the security deposit or making the claim. Sounds reasonable, right? Wrong. This method of determining the possession date gets countless managers in trouble, as the resident argues about the key return or key return date, resulting in potential accusations of a violation of the security deposit claim/return laws.

The Lease

Your lease most likely has a clause which states that the resident is to turn in the keys, garage door remote, etc., upon surrender of the premises to you. This reminder is important, as often the resident leaves forgetting to return these items, and besides, when the key is returned, it is usually clear that the resident has in fact surrendered. Unfortunately, like any other lease clause, residents will do whatever they want. They do not always do "what they are supposed to do".

Your Company Policy

You may have a company policy that states that the resident has not surrendered the rental premises unless the keys are returned. While this seems like a logical policy, the reality of the resident not returning the keys can make this policy silly, as most managers have taken possession of a rental unit at one time or another, even when no keys were ever returned. The policy may be good in theory, but in reality it does not always work. Furthermore, many judges do not care much what your company policy is.

What is the Surrender Date?

Your residents are supposed to leave at the end of October. They have given notice that they are leaving, their lease may be expiring, or possibly you non- renewed the residents. At the end of October, no residents show up in your office to drop off the keys. The question now is whether the residents have indeed surrendered.

Rent and Keys

It would seem logical that if you did not receive the keys from the residents on the surrender date, the residents would continue to owe rent until such time as those keys are returned. This is simply not practical, as the chances are the residents have vacated on the surrender date, but for whatever reason or no reason at all, they drove off with the keys.

The Manager’s Actions

The manager who does not receive the keys on the surrender date often decides to continue charging residents rent. This amount will be deducted from the security deposit or could exceed the security deposit funds, resulting in the residents owing more money than the security deposit, which amount could eventually end up on a credit report.

Now For the Dispute

1. Charging the resident rent: Once the residents receive the Notice of Intention to Impose Claim on Security Deposit, the fireworks begin. The residents are furious that you would have charged them rent, when in their opinion, they vacated the property, and since they were not living there, they should not have to pay any further rent. They may even bolster their argument by showing you the notice of vacating they gave you or the notice of non-renewal you sent them. In your mind, since no keys were returned, they owe rent. In their mind, they vacated just as planned and owe nothing.

2. The 30 day Notice Period requirement: The manager receives the keys on the 4th day of the month or goes to the property on the 4th and finds the keys sitting on the countertop with a little note next to them and a forwarding address. A common problem occurs when the manager begins the counting period of 30 days to send the claim letter as of the key receipt date. Typically the problem is caused when the manager waits until what they consider the 29th day to send the notice out. Savvy residents know about the law regarding the security deposit and the timeframes under which the manager is working. The result is that the residents are now demanding the full return of the security deposit, as in the residents’ opinion, you sent it out late. The argument then becomes whether you sent the notice out on time. The manager argues that the resident did not return the keys until the 4th or not at all, since the keys were left on the counter. The residents argue that you knew or should have known that they had vacated, and you should have begun counting your 30 days from the date that the residents were supposed to vacate. The residents may even argue that they returned the keys to your receptionist or dropped them in the drop box. Who is correct, the residents or the manager? It is tough to predict how a Judge will rule under these facts; the best answer is for the manager to avoid this problem.

Avoiding the Problem

If you are told by the residents that they will vacate at the end of the month, or you gave them a notice of non-renewal for that date, it is YOU who should be going over to the property on the first day of the month and seeing if they have completely vacated. Sitting in your office waiting for keys which may never be returned is patently foolish. Additionally, waiting until the 28th, or 29th day from the key receipt date to send the deposit claim letter is dangerous and increases the odds of a dispute immensely. NEVER rely upon the return of the keys to begin the counting of your days when making the claim upon the security deposit, regardless of company policy or lease wording.

 

“Serving the Property Management Professional”

www.evict.com      www.evicttv.com      www.evictforms.com      info@evict.com

A UNIT IS LEGALLY ABANDONED UNDER FLORIDA LAW IF ALL OF THE FOLLOWING IS IN PLACE:

 

1. NO ONE HAS BEEN IN THE RENTAL UNIT FOR A FULL 15 DAYS AND YOU CAN PROVE IT.

 

2. THE RENT IS UNPAID.

 

3. NO RESIDENT OR OCCUPANT HAS GIVEN YOU ANY NOTICE, VERBAL OR WRITTEN STATING THAT THEY ARE GOING TO PAY THE RENT OR COME BACK AT A LATER TIME.

 

OUR RECOMMENDATIONS

 

If you are going to take possession under legal abandonment, you need to be able to prove the above three things. If there are any personal belongings in the unit, we recommend that you call us first to discuss whether eviction may be the better approach.

 

If you do take possession under legal abandonment, we recommend that you take pictures or videotape each room of the rental unit prior to taking possession.

 

NOTE: If you “jump the gun” and take possession prematurely, you could face serious consequences in court including criminal charges, charge of wrongful eviction, conversion, prohibited practices and liability for anything the tenant claimed was in the unit!!

“Serving the Property Management Professional”

 www.evict.com      www.evicttv.com      www.evictforms.com      info@evict.com