THE MISSING LEASE

 

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, mislabeled 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 preprinted 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.