Missing leases are a fact of life, whether through negligence or theft. Whenever a business deals in as much paperwork as the apartment or home rental business does, misfiled, mislabelled or mistakenly destroyed paperwork, including leases, are bound to happen. Not to mention that the lease, and often the entire file, are taken by an employee for his benefit or the benefit of a friend. How do you deal with these situations? For purposes of this article I will assume that the resident’s rent is due on the first of the month.

Other Documents

While there may be evidence that a lease once existed - applications, signed addendums, move-in inventory, your computer entries – none of it is conclusive. The burden of proof in court is on you, because you are claiming that the lease once existed and what the lease terms were. The resident can dispute that he ever signed the lease. He can claim that, despite your company policy against changing the pre-printed form, his particular leasing agent agreed to changes. It is an uphill battle, and you are better advised to accept that there is no lease than try to prove one existed.

Eviction Cases

The simple answer in the eviction case is that the resident is month-to-month, but this may not really be an accurate assessment, particularly since oral leases of up to a year can be enforceable. If you are sure that a written lease did exist, and you know the duration of the lease, the attorney can allege in the eviction complaint that the lease is lost, and what the rent amount was under that lease. The monthly rent will typically be the amount that that resident has been paying and which you have been accepting. It is important that you tell your attorney that this is a lost lease case.

Non-Eviction Missing Leases

Often you will discover a missing lease during your own examination of the files. You will have to investigate carefully whether it appears that the lost lease has already expired, at which point the tenancy has become month to month. Florida Statutes require that the resident give fifteen days’ notice before the end of a monthly payment period in order to terminate a month-to-month tenancy. When you cannot produce the lease, and the resident attempts to non-renew during the apparent lease period, we would recommend not challenging the resident’s non-renewal notice in most cases, unless you have clear evidence of theft. Accordingly, the resident should not be charged any rent beyond the non-renewal date. The resident can be charged for damages in excess of ordinary wear and tear. The security deposit claim and return procedure 15-day (deposit returned in full) or 30-day (claim against deposit) clock starts when the apartment is vacated at the end of the month.

An Operations Decision

The resident may have his copy of the signed lease. Since you want the resident on a lease but your occupancy doesn’t afford you the luxury of losing a resident, you have to make an operational decision to tip your hand or not. If you do nothing, the best case scenario is that the resident performs as required under the written contract and pays rent until the end of the lease term. If a skip occurs, your ability to charge rent beyond the month the resident vacated early will be seriously compromised.

A Lease is a Must

If you want a lease signed, see the resident in person. Nothing replaces face-to-face contact in assessing the resident’s intentions. If he decides to stay but is reluctant to re-sign the old lease or sign a new lease, we don’t recommend trying to force the issue by sending a notice of non-renewal or a notice increasing the monthly rent, unless you are very confident that the missing lease has already expired.

LIHTC

A missing lease discovered during an audit can be critical in the low income tax credit property. As a rule a lease is always required. You can attempt to address this missing lease with a Seven Day Notice of Noncompliance with Opportunity to Cure, requesting that the resident produce his copy of the lease or re-sign the old lease. If the time period runs, I suggest a second Seven Day Cure. If the second time period runs, then you can send a Seven Day Termination notice, but a judge may be unsympathetic to the management office’s perceived incompetence, and without a signed lease showing the resident’s agreement to comply with LIHTC regulations, the eviction could fail for that reason.

Month to Month Fees

When you cannot produce a lease, late charges should not be assessed on a Three Day Notice, and your ability to enforce other terms and conditions can also be seriously compromised, such as repayment of concessions, or clauses addressing unauthorized pets or unauthorized occupants. If the lease is missing but one or more addendums is intact, the value of these addendums may be seriously diminished, but they may help in proving the intended duration of the tenancy. We still recommend that the manager adhere to the obligations created under the standard written lease, such as providing 30 or 60 days’ notice of non-renewal prior to the suspected lease expiration date.

Re-Signing

I’ll close with one last word on re-signing. A lease is a form of a contract. There is no requirement that a lease can only be signed at the beginning of the term. It is permissible for you and the resident to reprint and re-sign his old lease and date your signatures with the current date. This may be particularly helpful when the resident won’t sign a new replacement lease for an increased lease term.

 

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Each day it seems as if there is another spot in the world where there is conflict, or where destruction due to a natural disaster has occurred. Members of the armed forces are being deployed in large numbers to areas all around the globe. The event triggering the deployment may be obvious. For example, a war in the Middle East may be the cause of increasing the number of active duty military service-members. The event triggering the deployment can also be one that is less obvious, such as an earthquake in a foreign country where the military mission is to distribute massive relief aid. The increased military presence has also created more questions for property managers from residents who are service-members and family members of service-members who are unclear as to their lease obligations.

Background to the Service-members’ Civil Relief Act

The Service-members’ Civil Relief Act, also known as “SCRA”, is a federal law which affords service-members numerous protections in civil lawsuits. Some of these protections allow service-members or their family members, or dependents in some cases, to delay or suspend civil liabilities. The act was signed in to law by President Bush in 2003. However, the earlier version of the law was enacted during World War I and re-enacted in 1940 during World War II, and previously was known as The Soldiers’ and Sailors’ Civil Relief Act. Why were these laws created? The answer to that question is simple. Lawmakers wanted those who are serving in the military to remain focused regarding their mission to protect our country and did not want the service-members being distracted by civil lawsuits involving them. It is also the belief that service-members are at a distinct disadvantage in terms of defending themselves from a civil lawsuit while being stationed in a faraway land. Judges take this law very seriously and will in many cases “give the benefit of the doubt” to the military resident, if the outcome of the case is a close call. The United States Supreme Court in a 1948 opinion stated that the law should be interpreted “with an eye friendly to those who dropped their affairs to answer their country’s call”. The property manager attempting to evict a resident on active duty in the military or a resident in the process of reporting for active duty often encounters the following two areas that the Service-members’ Civil Relief Act covers: protection against the entry of default judgments, and a stay of proceedings when the service-member has notice of the proceeding. “SCRA” covers residential evictions of service-members or their dependents during the period of military service, unless the monthly rent is unusually high (currently an amount exceeding $2900.00; this amount is adjusted each year for inflation). “Dependents” are defined under the Act as the spouse of the service-member, a child of the service-member or an individual for whom the service-member provided more than one-half of the individual's support for 180 days immediately preceding an application for relief under “SCRA”.

Does the “SCRA” Apply to the Residents That I Intend to Evict?

Your three bedroom units are in hot demand because there are so few available in your market. Charlie, Wilma and Andrew are roommates and have stopped paying the monthly $2400 rent. You know that you can relet the unit the minute that the residents are evicted. You are very anxious to take back possession of the apartment. Yesterday, Charlie was called to active duty by the Coast Guard. Wilma is Charlie’s girlfriend, and up until 7 months ago when Charlie was laid off, she was supported entirely by Charlie for the last 27 years. He had paid for all of her living expenses. Much to Wilma’s dismay, Charlie has continued to pay for Andrew’s college expenses, even though Andrew is not a relative. In fact, Charlie has provided Andrew with 55% of his living expenses over the course of the last six months. Are Charlie, Wilma and Andrew covered by “SCRA”? The rent amount is low enough to fall under the act. It is clear that as a member of the Coast Guard on active duty, “SCRA” will apply to an eviction action filed against Charlie. With regard to Wilma and Andrew, they may have coverage if they are treated as “dependents” of a service-member. Unfortunately for Wilma, she is neither the spouse of Charlie, nor has she received enough living expenses in the recent past, since the service-member must provide more than half of the support during the preceding six months. Andrew, on the other hand, is considered a “dependent”, because he received 55% of his living expenses from Charlie during the last six months.

Obtaining a Default Against the Service-member or Dependent of the Service-member.

During the normal eviction scenario, if the resident does not answer the complaint after 5 business days, the manager is entitled to a default which is entered by the clerk of the court. The judge then will sign the final judgment of eviction. In the case of a service-member or dependent of a service-member, the process to obtain a default is more complicated. The judge, not the clerk of courts, must enter the default. To obtain the default, the manager must first provide the judge with an affidavit regarding the resident’s military service or the service-member who is a father, husband or financial supporter.  If the verification is inconclusive as to military status, the judge may enter a default but also require the manager to post a bond in a certain amount to protect the residents from damage, if the judgment is set aside at a later date because it turns out that one of the residents was a service-member. If the military verification shows that the resident, parent, or financial supporter is in the military, then the judge will order that an attorney be appointed to represent the resident. This attorney is called a military ad litem attorney. Extra costs are involved in this process, and courts may pass this cost on to the manager. The military ad litem attorney will attempt to locate the service-member and will review the case file to determine if there are any valid defenses that the service-member may assert. If the military ad litem attorney submits a report to the court that he does not believe that the resident has any valid legal defenses, the court then may enter a default and subsequently award possession back to the manager. Remember this: The Act calls for those who knowingly file false military verification affidavits to be fined and IMPRISONED FOR UP TO ONE YEAR. You read that right! You can end up in jail if you mislead the court here.

Potential 90 Day Stay

Cletus, one of your residents, has been called up for active duty in the Navy. Cletus did not pay the March rent. You deliver a three day notice, and subsequently file an eviction against Cletus after his continued failure to pay the owing rent. Cletus answers the complaint with an admission that he has not paid rent, but claims that there was some sort of oral agreement made with your assistant property manager, allowing him to pay late, and that he has been struggling with his bills since his deployment. Now that Cletus has responded, your attorney tells you that the military ad litem attorney is not required here, since the military resident filed an answer with the court and has therefore appeared in the action. You are happy to hear that, but your happiness is short-lived, because your attorney informs you that Cletus is likely entitled to a stay of the proceedings for at least 90 days. The Act will often entitle Cletus to a stay of at least 90 days, no matter how weak his legal defenses, if he can simply convince the judge his military service is adversely affecting his ability to timely pay the rent. The judge can stay the proceedings for a lesser period of time, but often judges will exercise their considerable discretion in favor of the service-member. The judge also has power to restructure terms of the lease, and has discretion to award a longer stay depending on the facts and circumstances.

Waiver By the Service-member

A property manager should still keep in mind that “SCRA” allows the service member to waive protections afforded under the act. Therefore, entering into a stipulation with the military resident is often a good idea. However, you should consult with your attorney to make sure the waiver wording listed on the stipulation is legally enforceable.

 

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No one would dispute that a soldier is deserving of respect. The soldier relinquishes his liberty to join the service and sometimes pays the ultimate sacrifice. Law makers have enacted various laws to protect service personnel in their dealings in the “civilian” world. Regardless of whether the law makers were motivated by esteem or by a desire to please voters, the result is the same. A person serving in the active military is entitled to special housing rights.

Nondiscrimination

A Florida manager may not discriminate against a service-member in offering a dwelling unit for rent or in any of the terms of the rental agreement. A violation of the law could subject the manager to same penalties as for changing the locks or turning off the electric service. Even if the service member had no financial damages, he would be entitled to at least three times the monthly rental rate, plus attorney fees and court costs.

Some counties and municipalities have their own ordinances that make it unlawful to discriminate against service-members. Besides making the manager pay damages, attorney fees and costs, these local laws often authorize the local government agency to investigate and file a complaint on behalf of the service-member. The significance of that is the resident may not need to find an attorney to help him. The city or county can sue the manager on the resident’s behalf.

Early Lease Termination

A resident who is in the military service can terminate the tenancy under certain circumstances. Criteria must be met:

1. The resident must give written notice 30 days prior to vacating.
2. The resident must give you a copy of the military orders that are the basis for the termination.
3. The resident’s circumstances must “fit” into one of the following categories:

A. The service-member is required, pursuant to a permanent change of station orders, to move 35 miles or more from the location of the rental premises;

B. The service-member is prematurely or involuntarily discharged or released from active duty or state active duty;

C. The service-member is released from active duty or state active duty after having leased the rental premises while on active duty or state active duty status and the rental premises is 35 miles or more from the service-member's home of record prior to entering active duty or state active duty;

D. After entering into a rental agreement, the service-member receives military orders requiring him or her to move into government quarters or the service-member becomes eligible to live in and opts to move into government quarters;

E. The service-member receives temporary duty orders, temporary change of station orders, or state active duty orders to an area 35 miles or more from the location of the rental premises, provided such orders are for a period exceeding 60 days; or

F. The service-member has leased the property, but prior to taking possession of the rental premises, receives a change of orders to an area that is 35 miles or more from the location of the rental premises.

Death of a Service-member.

If a service-member dies during active duty, an adult member of his immediate family may terminate the rental agreement by giving the manager a 30 day (at least) written notice of termination. The notice must be accompanied by either a copy of the military orders showing he was on active duty (or a statement signed by his commanding officer) and a copy of the service-member's death certificate.

Consequences of Early Termination

If the rental agreement is terminated under the special military statute, the resident is liable for the rent through the 30 day notice period. A pro-rated amount would be due if the thirty day notice ends in the middle of a month. The resident is not liable for any other rent or damages due to the early termination, no matter what the lease may say. The resident is not obligated to repay concessions.

If the service-member has not yet taken occupancy of the unit and gives at least 14 days notice of the termination, no damages or penalties of any kind can be assessed.

Nonwaiver

No part of the special military statute can be waived by the parties. The manager cannot have the resident sign an agreement that defeats the protections of the statute.

 

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The manufacture and use of methamphetamine, a highly dangerous, addictive and illegal drug is rampant throughout the United States. Usually it is manufactured in clandestine labs in trailers and homes in remote areas. Due to the severity of the problem, law enforcement has been making methamphetamine eradication a major priority. One of the big problems with methamphetamine manufacturers is the fact that they are often also seriously addicted to the drug they manufacture and sell. Once arrested, they may serve some time only to be released and resume the manufacture of the methamphetamine.

The Manufacture of Methamphetamine

Methamphetamine can be manufactured in any room of an apartment. The chemicals used are commonly available from the hardware store, paint store and online from chemical supply houses. All the ingredients used in the manufacture of methamphetamine are completely legal. Many of these ingredients are highly flammable, volatile and poisonous. Often a methamphetamine lab is discovered due to a fire or explosion.

What to Look For During Your Inspections

An operating methamphetamine lab will be simple to spot. You will see chemicals, propane tanks, burnt cookware, glassware, bottles of chemicals, and be struck with the odor of the noxious substances used in the manufacturing process. The problem is that in order to see it, you will need to enter the unit. Many property managers fail to conduct regular inspections of their properties and assume if the property looks nice and neat from the outside, an interior inspection is not necessary. All managers need to implement a policy of routine interior and exterior inspections. The interior inspection may be conducted less frequently than the exterior inspection, but in any event, inspections must be done on a regular basis. Severe damage can be done to an extremely valuable asset, and had an inspection been done sooner, often the damage could have been detected, stopped, or the resident could have been removed from the premises.

Items Which Could Indicate a Methamphetamine Lab

Glass jars with liquids or residues, large numbers of boxes of over-the-counter cold tablets, bottles of red phosphorous, iodine, sulfuric acid, hydrochloric acid, marked and unmarked bottles with colored or white solid on the bottom, coffee filters, strong noxious orders, laboratory type glassware, burnt cookware or frying pans, kerosene, paint thinners, acetone and starting fluid, piles of rechargeable batteries, propane tanks, pressure cookers, ice tea jars, gasoline cans with tubing.

Note: Almost all the above listed items are common by themselves. It is the collection of the items in one area which should raise some serious suspicion.

Behavioral Tip-offs

Unusual, paranoid behavior by the resident Nonpayment of rent, unemployment by the resident, blackened windows and drawn curtains, frequent visitors at all hours and excessive traffic, and, extensive security such as additional locks and reinforced doors

You Have Discovered a Methamphetamine Lab, Now What?

If you feel that there is the manufacture of methamphetamine on the premises, you should notify local law enforcement immediately. You should insist that they come with you to do an inspection, as often law enforcement does not immediately wish to shut down drug operations, but unfortunately want to watch the unit in question in operation for an extended period of time to get the “bigger fish”, or arrest a larger number of people. Notify your attorney immediately, and do not serve any notices without the attorney’s consultation and advice. Methamphetamine labs are extremely dangerous and sometimes booby trapped. Do not enter the unit again if you have strong suspicions, and leave this to the professionals.

Remediation and the Law

Many states are enacting laws which require complicated and expensive testing and remediation procedures based on the presence of certain chemicals in a rental unit. Sometimes the amount of the chemical needed to trigger remediation is so minute, it borders on absurdity. Some states have enacted laws which will require disclosure to future residents or adjacent residents. We are watching the laws carefully so Florida does not become one of those states. If your local municipality is dealing with this issue, please feel free to contact our office. Often local municipalities come up with ordinances that have not been properly thought out. We do not need the manager to become the victim in this war on drugs.

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The manager’s duty to maintain the rental premises can be found in FS 83.51 of the Florida Residential Landlord and Tenant Act. The statute can be confusing, because it mandates its coverage in broad language and then exempts certain situations and then overrides some exemptions. This is due to Florida’s building, housing and health codes moving from local to statewide application.

It is important to understand that the statute requires the manager to comply at all times during the tenancy, not just at the initial occupancy. The manager is subject to regulatory changes throughout the tenancy. Also, note that the statute distinguishes between a single-family home or duplex and a three or more unit building. In this article I will refer to the manager of a single family home or duplex as the “single-family” manager and the manager of three or more units as the “multi-family” manager.

FS 83.51(1) Building Codes

FS 83.51(1) mandates that the manager comply with all building, housing and health codes (hereafter just “codes” for short) or, in the absence of codes, comply with specific building and structural requirements. The definition of “building, housing and health codes”, which can be found in FS 83.43(1), is so broad as to encompass almost anything that applies to housing. Codes include both state and local housing regulations. Since local jurisdictions may have implemented more stringent regulation than is contained in the state codes and may have implemented other housing regulations, local ordinances should always be checked. If a visit from code enforcement, the health inspector, the fire marshal or any of the other myriad regulatory officials’ results in some infraction being discovered, the appropriate response is to remedy the deficiency diligently and thoroughly. This is important not only to avoid further issues with the regulatory authority, but also because unresolved violations are grounds for the resident to withhold rent or terminate the lease. Further, the resident may use a violation complaint to a government agency as the basis to accuse the manager of engaging in illegal retaliation, when the manager attempts to enforce rules, serves lease noncompliance notices (Seven-Day Notices), issues a non-renewal notice, or takes just about any action that the resident feels singles him out for alleged discriminatory treatment.

If there are no applicable codes, the statute requires that certain building and structural components be kept in good repair and capable of resisting normal forces and loads. It specifically lists roofs, windows, screens, doors, floors, steps, porches, exterior walls and foundations. It also requires that the plumbing be in reasonable working condition. At one time this provision may have been important in those areas of Florida without codes. Today the Florida Building Code and the health code apply on a state-wide basis. This part of the statute would have limited, if any, applicability. However, a judge, who is not familiar with the Florida Building Code, may look at the enumerated items as a guide to who should be responsible for the repair, for instance, of the screens.

The multi-family manager cannot modify his responsibilities for compliance with the codes. Any attempt to do so by the multi-family manager will be void and unenforceable.

FS 83.51(2): More Duties to Maintain

FS 83.51(2) contains additional maintenance obligations for the manager. The manager is responsible for:

1. Extermination of rats, mice, roaches, ants, wood-destroying organisms and bedbugs. The statute enumerates these pests. Note that bedbugs, a recent plague to managers, are specifically listed.

 

2. Locks and keys. Since the manager’s duty to maintain continues during the tenancy, damaged locks not the fault of the resident must be repaired by the manager.

 

3. The clean and safe condition of the common areas.

 

4. Garbage removal and outside receptacles therefore. The manager must supply outside garbage cans, if appropriate, and, if necessary, a dumpster, trash compactor other proper receptacle. This includes arranging for garbage pick-up in areas without county/municipal garbage service.

 

5. Functioning facilities for heat during winter, running water and hot water. One can immediately notice the absence of what some would say is the most necessary “functioning facility” of all in Florida – air conditioning.

 

The statute provides that the multi-family manager and his residents can agree under written leases that the residents are responsible for these maintenance duties. At one time this part of the statute was a benefit to managers. It is not much benefit today. The majority of codes now adopted in Florida place the responsibility for the duties listed in 1-5 above on the multi-family manager, and the multi-family manager is still responsible for these duties if the codes require it of him. For example, if the codes require a manager to remove garbage, then the codes control. Any agreement by the multi-family manager and his residents otherwise is void and unenforceable.

Charging the Resident

Although the multi-family manager may have to provide and the single-family manager may choose to provide garbage removal, water, fuel and utilities, they can require the residents to pay the costs and charges for these services.

Eviction Defenses

The statute contains another provision that at one time was helpful to managers, but with the state-wide application of the building and health codes, is not much assistance today. The resident may not use the manager’s failure to comply with the maintenance duties listed in 1-5 above as a defense to an eviction. However, the resident may use the manager’s noncompliance with codes as a defense to an eviction. Since most codes overlap the duties listed in 1-5 above, the codes are the resident’s defense.

Smoke Detectors

The statute requires the single-family manager to install working smoke detectors at the beginning of occupancy. The statute is silent as to any duty to maintain the detectors during the tenancy, so it appears permissible to require the resident to replace batteries and check that the detectors remain operational. The statute gives guidance on the type of smoke detector required. It gives no guidance on the number or placement of the detectors. Managers should check with their local fire marshals on these points. Although the statute does not require multi-family managers to install smoke detectors, the fire codes require such installation or more.

FS 83.51(4) Resident Fault

The manager is not liable for maintenance or repairs required by the statute, if the resident, his occupants or guests caused the condition by their negligence, intentional act or noncompliance with the lease or the statutes. While this may seem to shift the cost of maintenance and repairs to the resident when he, his occupants or guests are at fault, it can be difficult to accomplish in practice.

The manager bears the burden of proof in any litigation in which the manager claims the damage is caused by the resident, in an effort to hold the resident financially responsible for the repairs and as an explanation why the manager did not undertake the repairs, perhaps in response to the resident’s attempt to withhold rent.

The manager must prove that the resident, his occupants or guests caused the damage or that the damage was the result of their lease noncompliance.

Sometimes it’s easy to prove, and sometimes it’s not. The manager must also provide proof of the maintenance or repair cost. This may require vendors to appear in court to testify as to the cause as well as to the cost.

A manager may want to evict the resident for failure to reimburse the manager for a maintenance or repair bill that is alleged to be the resident’s responsibility. Many judges consider such costs to be a deposit claim issue to be resolved at the end of the lease, not a possession issue. This is true even if the lease provides that the resident is responsible for paying maintenance or repair costs when billed. The exception to this might be if the current costs are significant, exceed the security deposit by a significant amount, and the manager can show the judge the manager's property is being intentionally destroyed or abused. Even then the court outcome is not predictable.

Conclusion

The statute at one time was more beneficial to managers than it is today. With the advent of statewide codes and the proliferation of local additional codes or more stringent code provisions, the statute’s exemptions are of limited value today. The message of the statute today is that compliance with the codes is a serious matter. The failure to comply with codes can be used by the resident as the basis to withhold rent, terminate the lease or to defend against an eviction.

 

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Mailing the Three Day Notice is fraught with problems The resident can deny receipt of the notice, extra days must be added to the expiration date of the notice due to mailing, potentially more days added if payment is to be by mail, and the notice should not be called a Three Day Notice at all, since it will be far more than three days. Since a mailed notice will not be a true Three Day Notice, we will refer to the notice in this article as a “Notice to Pay Rent or Vacate”

Why Mail a Notice?

1. The lease may require it. The lease agreement may actually require that a Notice to Pay Rent or Vacate be mailed. A property manager will often inherit leases from other states or those drafted by attorneys who are unfamiliar with the workings of Florida law. The property manager faced with an unfamiliar lease needs to carefully read the lease to see if there are any clauses pertaining to the mailing of notices.

Many attorneys, feeling that mailing is a preferred way of the manager getting notice, draft a reciprocal clause in the lease requiring all parties to give notice by mail. If the lease requires notice by mail, this must be followed, even though Florida law does not require the mailing. While it may seem sensible to require a resident to give the manager notice by mail, unfortunately requiring the manager to do the same is unwise and can result in serious delays.

2. The manager chooses to mail the notice. Managers often choose to mail the Notice to Pay Rent or Vacate if the property is an excessive distance from their home or office. No manager wants to drive a long distance to serve a notice; thus, mailing is often the preferred choice. While we do not recommend it, we know that the realities of a long distance resident, where the manager may not have a local property manager, dictates this method of delivery.

How To Date the Notice to Pay Rent or Vacate if the Notice is Mailed

The expiration date of the Notice to Pay Rent or Vacate is dictated by the date of mailing of the notice and by how the resident is to pay the manager the rent.

Notice is Mailed and Resident is to pay rent by mail: 5 days must be given for mailing time, 5 days must be allowed for the resident to pay rent by mail and 3 business days must be given. The result? The notice has now become a Thirteen Day Notice to Pay Rent or Vacate which gives the resident 13 days excluding Saturdays, Sundays and Legal holidays from the date the manager mails the notice. Since weekends will always fall in the 13 business day period, we must allow at least 3 business days exclusive of the mailing times.

As you can see this method of delivery and payment will result in a substantial amount of time for the resident to pay the rent, resulting in a large loss of income for the manager in the event of nonpayment, as no eviction can be filed until the notice expires.

Notice is mailed and Resident is to drop off rent: If the Notice to Pay Rent or Vacate is mailed and the resident is to drop off the rent, the manager must use an Eight Day Notice. 5 days are given for mailing plus the 3 business days as required by Florida Statutes, not including Saturdays, Sundays or legal holidays. Again, mailing a Notice to Pay Rent or Vacate is not the preferred method, as it results in delay.

Mailing AND Posting or Hand delivering the Notice to Pay Rent or Vacate

With the exception of certain properties governed by special federal regulations, a Notice to Pay Rent or Vacate should NEVER be mailed AND posted on the premises or hand delivered, or unless it is (strangely) required by the lease agreement. If the manager posts a Notice to Pay Rent and then mails one, presumably the resident will receive the Notice to Pay Rent by mail between 2 and 5 days after the notice is posted. This causes confusion. In one case you are telling the resident they have a certain number of days not including Saturdays, Sundays or legal holidays to pay the rent, but then the resident receive the notice by mail at a later date, which says the same thing. Which notice applies? The mailed one might not allow enough time, while the posted or hand-delivered one may. This conflict causes confusion and ambiguity. The second notice received may cancel out the first notice, the second notice is possibly short, and the bottom line is that the notice is just legally improper.

Never serve a Notice to Pay Rent or Vacate by BOTH mail and posting on the premises or hand delivery. While it may seem logical that this will insure that the resident gets notice, the technicalities will render it invalid.

To Whom Must the Resident Pay Rent?

Typically, a resident pays rent to the same person at the same address throughout the tenancy. The problem arises when this address changes. How is the resident notified that the payment address has changed? Should the resident simply pay to whatever address is listed on the Notice to Pay Rent or Vacate? Due to the increasing numbers of out-of-state managers who are intent on managing their property from afar, situations will arise where the out-of-state manager decides to hire a property manager or designate someone his or her agent for the purposes of collecting delinquent rent. A new address on a Notice to Pay Rent or Vacate is not enough. The manager must notify the resident in writing of an address change or agent change, and often this is not done. Beware of the out-of-state manager who wishes that you “help” them with serving a notice or collecting rent. Proper authorization and direction by the manager is a must.

 

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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”

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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”

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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”

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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”

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