There are a number of “costs” involved in an eviction action. These are not to be confused with “attorney’s fees”. The costs in filing an eviction are those charges by the office of the County Clerk of Court and the Sheriff’s Department or Process Server. For many years, when the eviction case was filed, the Clerk charged a “filing fee” which was set by the Clerk of Court in the individual counties, and ranged from an amount as low as $35, but also exceeded $180 in some counties. A number of years ago, the fee was set by Florida statute and became uniform throughout the state. In order to file an eviction, the Clerk of Court collected $80.

Another “cost” which must be paid is to have the summons and complaint, hereinafter the “eviction action”, served upon the tenant or tenants. For many years, the Sheriff provided this service for $20 per defendant. This particular cost made the total eviction costs vary, since there would be an additional $20 charge for each defendant. In most counties, the landlord has the option of using a Private Process Server who is authorized to serve the eviction action; Private Process Server charges usually exceed the Sheriff’s $20 charge. The final “cost” was $70, which the Sheriff charged to serve and execute the Writ of Possession. A few counties charged an additional $20 per additional defendant when processing and executing the writ. The writ cost was not always incurred, as many times the tenant would vacate the premises prior to the end of the eviction action, and the landlord could opt not to have the Sheriff give the landlord possession, if possession was already obtained through a surrender or abandonment. Well, times have changed, and not only has the Clerk of Court changed their fee structure, but a new law has just been enacted changing the Sheriff’s charge to serve the eviction and complete the eviction.

The Clerk of Court Filing Fee

Up until July 1 of 2008, the cost to file an eviction action was set at $80, and this was uniform throughout Florida. While the actual statutory amount was a bit lower than this, there are a few other fees that are tacked on, and for this article, we will simply say the filing fee was $80, which is exactly what the landlord had to pay to have the Clerk of Court file the case in county court. Due to the budgetary crisis, a new law was enacted in 2008 which raised the cost of filing a one tenant eviction from $80 to $270. This was a dramatic increase and seriously impacted the landlord and the tenant. The impact to the landlord was immediate, as in order to file an eviction, there was an additional $200 ($190 + $10) to be paid to the Clerk of Court. The impact to the tenant was that many tenants could not afford to “stipulate” or settle with the owner after an eviction action was filed, as this extra $200 put them over the edge. In the end, the tenant ended up paying for this additional cost, due to higher rent for all, and the dramatic filing fee increase did its part in hurting affordable housing in Florida. Recognizing the severity of the problem, associations such as the Florida Apartment Association, (FAA) the Florida Association of Residential Property Managers, (FARPM) and the local chapters of the National Association of residential Property Managers (NARPM) took action, with the Florida Apartment Association taking the lead in the fight to lower the filing fee. The battle was successful, and the filing fee was lowered by $85, which though not exactly what we all would have desired, will save the landlord approximately $12,000,000 a year in filing fees. The “filing fee” beginning July 1, 2009 will be $180, but wait, there is a little catch. In 2008, the Clerk of Court began charging a “summons’ issuance fee” of $10 per defendant, which in 2008 made the filing fee for a one defendant eviction $280, but for each additional defendant, there was a charge of $10 to issue the summons, and this fee did not go away. The actual cost to file a one tenant eviction will be $190.

The Filing Fee and Summons Issuance Fee

When figuring out the cost of an eviction or budgeting for next year, beginning July 1, 2009 you can use $190 as your “filing fee” amount for a one defendant eviction. There is no getting around this fee; this is what the Clerk of Court charges. For each additional defendant, figure on adding $10, as this is the summons issuance fee charged by the Clerk of Court. A tenant eviction against 2 tenants will cost $200 to file, and so on. As you can see there will be some savings over evictions filed prior to July 1, there being an approximate 32% reduction in the filing fee. Unfortunately this is only the beginning of the eviction action. The tenant must be served with the summons and complaint of eviction.

Serving the Tenant with the Summons and Complaint

The current fee the Sheriff charges for serving the tenant with the Summons and Complaint is $20 per defendant. The bad news is that this fee is increasing to $40 per defendant by statute on July 1, 2009. Through the lobbying efforts of the various associations that the Sheriff’s and Process Servers belong to, this fee is now doubled. While $20.00 may seem to be a significant amount, this amount has remained the same for a long time, and probably some increase was justified. Double? We don’t think so, but the Sheriffs did, and the Legislature has spoken. Now you are probably thinking that the Sheriff does not serve YOUR summons and complaint, and in most cases you are correct. In almost every county where we file evictions, we use a Private Process Server to serve the eviction. The main reason we do this is that the Private Process Server is an individual who is authorized by the courts and/or the Sheriff’s department to act as the Sheriff acts in these civil cases, and serve the tenants with the summons and eviction complaint. The Private Process Servers are usually significantly faster than the Sheriff’s department. Will the Private Process Servers increase their fees now that the Sheriff has doubled theirs? You can pretty well bet on it. How much will this add to your eviction action? When budgeting, on average there are 1.5 tenants in a typical eviction. We recommend budgeting an additional $30 per eviction on average for the increase costs of service of process.

The Writ of Possession

If the Writ of Possession is needed, you MUST use the Sheriff to handle this for you. You cannot use a Private Process Server. The Writ of Possession is not always necessary, but we see it processed in about 50% of the cases that we file. As described above, the charge is now $90 for the writ in most counties PLUS even more in some. This fee covers the Sheriff serving the Writ of Possession to the tenant and then meeting you at the property at a later time and “executing” the Writ of Possession. Whether you need the Writ of Possession is dealt with in other articles we have written, and we urge you to be careful when making the decision on getting the Sheriff out to the property or not. The $90 you spend at the end of the eviction may be the BEST money you have spent, as it completes your eviction and among other benefits, significantly reduces your liability

Conclusion

As you can see, we won some and we lost some this year. The filing fee decrease will save the landlord about $12,000,000 the service of process increase and Writ of Possession increase will cost the landlord over $4,000,000. We guess a savings of $7-8,000,000 overall is really not so bad, considering that almost every other fee rose dramatically, and Florida is in such a serious economic crisis. In my opinion, the landlords were indeed victorious this year and hopefully will continue to be strongly involved in the associations that made the cost savings a reality.

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Residential oral leases of less than one year are enforceable contracts. The usual form of residential oral leases is monthly, and references in this article to oral leases will be to monthly oral leases. A monthly oral lease does not become a lease of greater than one year if it is renewed and the tenancy continues for more than one year. It remains an enforceable monthly oral lease no matter how long possession continues.

Agents

Oral leases are commonly found in situations in which the owner/landlord is directly entering into an agreement with the tenant. However, an agent for a landlord can enter into an oral lease, on behalf of the landlord, with the tenant. In this situation, another level of complexity enters the matter as to the agent’s authority, scope of the agent’s employment, etc.

Tenancy at will

An oral lease creates a tenancy at will, that is, a tenancy that can be terminated by either party at any time without any reason. To have a valid tenancy, there must be some basis for concluding that one party was giving the other party the right to possession of the property. A court won’t create a tenancy without sufficient proof that one was intended to exist.

Filling in the details

The oral agreement between the parties outlines the terms of the tenancy. Like most oral contracts, an oral lease is usually a general agreement without much detail. So how are the missing details filled-in? Since a lease is a type of contract, contract law applies to leases. Some Florida statutes, which are generally applicable to contracts, apply to leases. Some Florida statutes apply only to leases. Chapter 83, Part II, of the Florida Statutes will supply certain missing terms if not otherwise agreed. For example, absent the parties agreeing, the statutes dictate how much time must be given for a notice of termination, what the landlord’s and the tenant’s duties are, and some other provisions.

Case law

Where neither the parties nor the statutes supply the terms, a judge may provide them. The judge consults “case law”. These are the legal principles developed on a case by case basis over the years. These principles help the judge interpret and apply the law in manner that is designed to be consistent.

The course of dealing between the parties is a prime example of such a legal principle. This is really a form of the old adage that actions speak louder than words. What the parties are actually doing is the best indication of what they agreed to do. Another such legal principle is looking to industry standards and local custom for guidance. This allows a judge to ascertain what the parties’ agreement probably was by looking to what is usually done by a landlord or tenant in that situation in that locale.

Testimony

Finally, the judge will rely on testimony of the parties and other witnesses. Factors affecting the evaluation of testimony include the credibility of the witness, the reasonableness and consistency of his story, and the common sense assessment of his position.

Warning

One warning: an old legal principle is that the law will not save the landlord or tenant from a bad deal. Absent fraud or such other reason, the judge will not remake the terms to relieve either party of an oral lease that he no longer wants.

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We see it all the time. What you ask? Your lease! You can run, but you can’t hide! When you have to file an eviction, the lease must be attached to the eviction complaint. so your attorney gets to see the lease and all the fun stuff that goes along with it. The most common thing we see in the lease is that printed on the lease are 2 tenants, but on the signature page only one tenant signed. Hmmm. How did this happen? You would never let this happen would you? Well, let’s see.

The Scenario

John and Mary Smith have been approved, paid all deposits, and the only thing left is to sign the lease. They are to come in on a Friday, sign the lease and move into the unit. At the appointed time, John shows up without Mary, because Mary had to leave town for an emergency. John assures you that Mary will be back next Thursday and will promptly come in and sign the lease. In the meantime, you let John sign the lease, you give him the keys and he moves in. You then take the file, put it in your filing cabinet and expect that next Thursday, Mary will show up to sign the lease. Thursday comes and goes, Mary never shows up, and either you completely forget about Mary needing to sign the lease, or you remember and call her, only to be promised that she will come in, and that never happens. You think that this scenario is not played out all the time? It happens.

The result

You possibly remembered that Mary did not sign the lease, and you possibly made a few calls to Mary asking her to come in, but she never does. Is there much you can do? Not really. Most likely you simply forget, and she never signs. It is now three months later, you have been collecting the rent each month, as Mary drops it in the drop box on time every month. The fourth month you don’t get the rent and head out to the property to serve a 3 Day Notice. You go to the door, knock loudly, and a “gentleman” named Bill answers the door. You ask who he is, and he states that he is Mary’s boyfriend and lives there, as John left Mary two months ago for another woman. Looking inside, you notice two children and another “gentleman” passed out on the couch. The condition of the unit is horrendous, and the rent is unpaid. Mary is allegedly at work, so you ask Bill who all these people are, and he tells you that the children are his and the guy on the couch is his brother who recently got out of jail and needed a place to stay temporarily. NOW WHAT?

The Problem

The problem is fairly obvious. You have unauthorized people in a unit, problems with the unit, and the person who signed the lease is nowhere to be found. Yes, Mary, the other tenant on the lease is living there, but Mary never signed the lease, so Mary really has no obligation to you to pay the rent or uphold any of the rules and regulation of the lease. Mary is really no more than an occupant, and if you were to file an eviction against her, it might not be proper, because she has not signed the lease and does not owe you anything. To further complicate matters, because Mary has never signed the lease, she can say on one hand that she is a listed occupant on the lease and allowed to be there, but on the other, she can claim she owes you nothing. This is just ONE of the problems that we face when the lease is not signed by all parties.

Another bizarre situation can occur even if John and Mary are indeed living in the home as planned. John and Mary are looking around the neighborhood and see a beautiful home for sale that they can afford. With the prices dropping rapidly, they just can’t pass up this opportunity. They consult their attorney about breaking the lease, and the attorney reviewing the lease spots that only John signed it. Is the lease valid? The attorney then argues that since Mary never signed the lease, it is not a fully executed agreement and he is advising his client to vacate and purchase the house down the street. The majority of judges would find that the lease is enforceable against John, but failing to get both signatures opens you up to some risk. John and Mary pack up and leave, the property owner wants to pursue them for breaking the lease, possibly cannot, and now they are looking to you for compensation, because YOU did not make sure all the parties signed the lease.

The Solution

Never allow a tenant access to a unit unless and until such time as ALL tenants sign the lease. Sure, you are saying you know this already, but why do we continue to run into the same situation? You cannot let your guard down. A simple mistake such as this can set the stage for a legal battle or a complicated eviction action later on. You need to stand firm and insist that all parties sign. If Mary is out of town, do everything to contact her, get Mary to go to an office supply store such as Staples, Office Depot or Office Max, send her the lease by fax, have her sign it and send it back. All this can happen while John is standing in front of you. Once you get the lease back by fax, have John sign. Is a lease signed and faxed a valid document? It sure is better than one that is not signed. If Mary cannot sign the lease, you cannot give John the keys. It is that simple.

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Many employees of apartment communities live on-site and are provided an apartment as part of their compensation package. This apartment may be free of charge or at a reduced rental amount as long as the tenant is employed by the apartment community. Thousands of employees are in this situation and are living on-site, usually under some form of employee rental agreement or addendum. However, the time comes when the employment of the tenant may end, either voluntarily or involuntarily, fancy words for the employee quitting or getting fired. Sometimes it is an amicable breakup with the employee getting another job, while other times the employee is fired and you want him or her off the property as soon as possible, preferably yesterday! The mechanics of removing the ex-employee from the property all depend on the employee rental addendum and how you or your company deals with the situation. Mistakes are constantly being made, resulting in difficult evictions or delays in having the former employee leave the premises. In some cases the continued presence of the former employee on the property causes increased liability to the apartment owner or manager, and can seriously affect operations. The former employee may begin to act in a vindictive fashion, causing disturbances, badmouthing management, or otherwise interfering with business operations. Let’s face it: sometimes tenants go “off the deep end”, and your former employee is no more or less likely to do this than any of your other tenants.

Termination of Employment

This is handled in most companies by upper management according to the guidelines of their human resources department, and laws or rules covering this will not be covered in this short article. Your job will be to make sure that the former employee gets off of the property, and we highly recommend you immediately call your attorney for guidance from the very start.

The Employee Lease Addendum

For this discussion, we are going to assume your former employee signed an Employee Lease Addendum. If they did not, you have more significant problems. A typical Employee Lease Addendum will state what will happen if the tenant quits or is fired. For us attorneys, the most important clause is the one that states how long the tenant has to vacate the premises. We typically see timeframes between 3 days and 2 weeks as to when the tenant must vacate.

The Call

Our office usually gets the call from the property manager about a week after the former employee was to vacate the property, desperately asking us to get the tenant evicted as soon as possible. This is when we begin to ask some crucial questions, the answers to which will have an impact on how or if we are able to evict the tenant.

1. Are there more than one tenants on the lease, and did all of them sign the Employee Lease Addendum?

We often see that Bill and Jane both signed the lease, but only Bill, the maintenance tech, signed the Employee Lease addendum. This can pose a major problem, as really the Employee Lease Addendum only applies to Bill and not his wife Jane. Big mistake. ALWAYS make sure all the tenants sign the Employee Lease Addendum, not just the employee. This mistake is made all the time and will completely complicate if not make an eviction impossible.

2. How much time does the former employee have to vacate and did you give them notice?

Notice you ask? What notice? You assume that since the Employee Lease Addendum states that the employee must vacate within 15 days, this is notice enough. Think about this. Your lease states that the tenant is supposed to pay the rent, but you have to give them a Three Day Notice. To non-renew a tenant, you need to give the tenant a Notice of Non-Renewal. A tenant who has unauthorized occupants needs to get a Seven Day Notice to Cure. Why are you not giving the former employee a notice to vacate? Because you don’t have one! Is it really necessary to give the former employee notice? Perhaps not, but it cuts down on any confusion as to the firing or quitting date, or exactly what date the tenant must vacate. It is wise to use an Employee Lease Termination Addendum which clearly states the day the former employee must vacate.

The former employee needs more time

A common request by former employees who must vacate per the Employee Lease Addendum is that they need more time. They ask you and you say, “no”, they ask your regional manager who says “no”, and then they get high up in the corporate offices, and some big wig says “yes”, trying to avoid any kind of litigation. Now when does the former employee have to vacate? They have been given a verbal extension by someone in New York! If you are going to allow the former employee more time, make sure they sign an Agreement to vacate. Who are “they”?: the former employee and anyone else who is on the lease agreement, and hopefully on the Employee Lease Addendum

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An unnecessary, self-inflicted injury is a client’s failure to disclose to his attorney all the facts. It is human nature that a person doesn’t want to disclose his mistakes or case weaknesses. Maybe they’ll magically disappear, won’t be discovered or won’t make any difference. They don’t disappear. The tenant knows about them, and they do make a difference when the tenant springs them on the landlord’s lawyer in court.

Your attorney’s general advice to you is based upon the facts. Without knowledge of all the facts, his advice may at best be worthless and at worst harmful. It’s never a good idea for the client to prejudge what he thinks the attorney needs. Your attorney is in the best position to judge which facts and documents are important and which are not.

7-Day Termination Notice

Our office rigorously examines a client’s request for a Seven Day Notice of Noncompliance Without Opportunity to Cure (a 7-Day Termination Notice). We require the client to provide proof of the noncompliance: police reports, witnesses’ names, addresses, and possibly statements, etc. Often we find that a client has omitted key facts. The reasons range from innocent omissions to intentional concealment to aid in obtaining the 7-Day Termination Notice. Your attorney works to protect you, not the tenant. Requiring a vigorous screening of a 7-Day Termination Notice protects you. Slipping something past your attorney harms you by exposing you to a potentially invalid 7-Day termination case.

When negative facts are later discovered, at a minimum you may be withdrawing the 7-Day termination notice. This will embolden the already difficult-to-deal-with tenant. At worst it may result in a legal action against you by the tenant.

3-Day Notice

Even a straightforward 3-Day Notice nonpayment eviction can go awry when you fail to tell your attorney all the facts. Were there other notices regarding payment sent with or after the 3-Day Notice was served? Did you enter into any other agreements as to payment of the balance? What about other correspondence regarding payment or nonpayment? Are there any emails or letters from the tenant regarding rent withholding, maintenance complaints, retaliatory claims, or code enforcement notices? Is there any reason to think a Fair Housing claim may be made by the tenant? Has the tenant claimed protected class status?

Before the hearing:

It is probable that the undisclosed fact or document will be supplied to the judge by the tenant. The result can be an outright dismissal by the judge, an unnecessary delay while your attorney responds to the tenant’s claim, or an unnecessary hearing, perhaps with no money deposited into the court registry. A tenant’s “answer” may mislead the judge with untrue or unsupported claims that have slivers of truth from the undisclosed facts or documents. The point is that your attorney usually can deal with these issues, if disclosed, before filing the eviction, either by advising against filing or by explaining them in the complaint or a separate filing.

At the hearing:

The stakes are higher when the non-disclosures are revealed at a hearing. You attorney’s ability to win your case can be seriously hampered. Documents needed to counter the unexpected development have not been obtained. Case law to support your position has not been researched. Cross examination of the defendant’s witnesses has not been prepared. Witnesses needed by the landlord are not in court prepared to testify. The benefit of the eviction procedure providing for quicker hearings with less discovery becomes a disadvantage when confronted by surprise documents and testimony.

Consequences:

If the defendant has an attorney, an adverse court decision will likely result in a substantial defendant’s attorney fee award paid by the landlord. This is in addition to any damages recoverable by the defendants. If the landlord’s undisclosed actions have been statutorily prohibited practices, for instance locking the tenant out or improperly disposing of his property, there are statutory damages tripling the monthly rent amount. Often the tenant will file a counterclaim for defamation, harm to credit standing, or impairment of future ability to obtain housing caused by the filing of the eviction. A lost eviction case can lead to a fair housing complaint. Clients, who have not experienced the financial exposure or legal complications resulting from an unfavorable outcome, have difficulty understanding the seriousness of filing even the simple 3-Day Notice nonpayment eviction. Non-disclosure by the client to his attorney can result in the attorney seeking to withdraw from the case or demanding additional attorney fees.

Ask your attorney:

I’m not implying that a client has to send his attorney the tenant’s entire file. Someone with even a little experience in property management knows when a document or other fact should be disclosed. A good rule of thumb is that if you question whether it should be disclosed, it should be. Talk to your attorney. Allow your attorney to decide what is or is not relevant to your case.

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Once the landlord has sent the tenant a Notice of Non-Renewal, that tenant’s file should be tagged for special identification The landlord will want to avoid taking any action which would jeopardize his right to retake possession of the rental unit or to double rent in the case of a hold-over tenant.

The following discussion has to be placed in the context of modern communications: distribution list emails, mass mailings, computer-generated statements. A landlord is often sending documents without verifying the specific recipients.

The superseding agreement:

If the tenant is unwilling or unable to move, he will be looking for any opportunity to extend his tenancy. Many tenants will use an inappropriately sent letter or notice as evidence to bolster their position that there was an oral agreement. This correspondence superseded the Non-Renewal Notice and permitted him to renew his lease or to remain month-to-month. Even a complete fabrication can be convincing to a judge if there are documents of the landlord that seem to support the fabrication. In fairness to the tenants who operate in good faith, inconsistent documents of the landlord can create enough confusion that the tenant assumes he can stay.

Renewal notice sent in error: If the landlord has sent the tenant emails, letters or notices implying, suggesting or offering renewal, then the landlord must immediately notify the tenant of the error. I do mean “immediately”. I suggest that an email (with a delivery and read receipt if available in the email system) be sent to the tenant. A follow-up letter or even the printed email should be immediately posted on the tenant’s door and mailed to the tenant via certified mail. The renewal information was sent in error and is withdrawn. The landlord wants to notify the tenant before the tenant can seize the information as a renewal offer and accept it.

The focus is not the legal arguments with regard to contract formation. The important point is to avoid providing the tenant with an opportunity to make these arguments in court.

Helpful reminders:

After the landlord has served the Non-Renewal Notice, the landlord gives the tenant additional non-renewal reminders or warnings at the landlord’s own risk. While these reminders are sent under the pretext of helping the tenant, they are usually sent for the benefit of the landlord. Any contradictions or deviations from the original Non-Renewal Notice can result in voiding the original Non-Renewal Notice. The most common mistake is a contradictory vacating date or an incorrect calculation of the time remaining until the vacating date.

7-Day Notices after the Non-renewal Notice:

Our firm generally advises against serving 7-Day Cure and 7-Day Termination Notices after a Non-Renewal Notice.

While the landlord may still serve a 7-Day Notice of Noncompliance with Opportunity to Cure (a 7-Day Cure Notice), one has to question both the effectiveness of the notice and the wisdom of antagonizing a tenant that has been non-renewed. Additionally, serving such a notice, when there are less than seven days until the vacating date, creates the confusion that we are trying to avoid. (Similarly, serving a 3-day notice that expires outside the vacating date is a bad idea). Serving a 7-Day Notice of Noncompliance Without Opportunity to Cure (a 7-Day Termination Notice) actually can worsen the landlord’s ability to remove the tenant. What would have been a straightforward holdover eviction becomes a complicated 7-Day termination eviction with all the attendant burden of proof problems that the landlord must bear.

That being said, there are times when the health and safety of the staff or other residents requires a 7-Day Cure or 7-Day Termination Notice. This is a matter for the landlord to discuss with his attorney.

Notices after the vacate date: Serving a 3-Day Notice, a 7-Day Cure Notice or a 7-Day Termination Notice to a holdover tenant after the vacating date may be fatal to the non-renewal. A landlord would only have the right to serve these notices if the tenancy was continuing. This means that the landlord waived the non-renewal demand. Sending the tenant a billing statement or account balance notice charging rent beyond the vacating date or other monthly services (pest control, valet waste) gives rise to the same argument that the tenancy is continuing. Accounting notices may be more easily explained and excused than the statutory notices. A court can easily reason that a landlord should be more careful about the statutory notices.

Consult the attorney:

As a final thought, it is always advisable for the landlord to consult his attorney as soon as he discovers that he has mistakenly sent a notice, letter, or other communication to the tenant that may jeopardize his Non-Renewal Notice.

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The following are some of the most common questions we deal with on a day to day basis regarding foreclosures in the single family home setting and some short answers. The answer to a particular question you may have depends on the factual circumstances, so do not rely upon this information as a final answer, but a starting point in your journey through the foreclosure maze. Very few laws directly address the unexpected situations which have arisen, due to the large number of foreclosures currently being filed, but we expect to see some state legislation passed in 2010 which will give us better direction.

Q. My tenant just got a copy of a “lis pendens” in the mail. Does this mean the property is in foreclosure?

A. No. A “lis pendens” is a document which must be filed before a foreclosure action is filed. A foreclosure may or may not be filed, but probably will be soon.

Q. My tenant received a letter on their door from a bank stating that they have to move out in 10 days. Is this legal? Must they move?

A. This is not legal, and the tenant does not have to move. Only the Sheriff’s Department can make the tenant move out upon order of the Court, and at a minimum, the foreclosure would have to be finalized, with a Writ of Possession at some later time being issued and executed. Under a new federal law, the bank or third party purchaser will acquire the property subject to the existing tenancy.

Q. My owner told me that he is not really in foreclosure but trying to make a loan modification. Is this true?

A. That one is too funny. If the owner received foreclosure paperwork, the owner is in foreclosure. While they may end up modifying the loan and getting out of foreclosure, the truth is that they are IN FORECLOSURE. Some owners do not like to admit the truth.

Q. Does my tenant have to respond to the court within 20 days like the foreclosure summons states?

A. The tenant does not need to respond but can if they wish. Do not give them any advice.

Q. What should my tenants put in their response to the court?

A. That is up to the tenant, You should give them no advice at all. Their response will not make much difference in the foreclosure action other than to delay it a bit more.

Q. Do my tenants still have to pay rent?

A. Yes. Nothing has changed. The rent obligation to the owner continues.

Q. My tenant is claiming that they are not going to pay the rent but instead put it into “escrow”. What are they talking about?

A. There is no recognized mechanism for putting the rent into “escrow” prior to litigation. The tenant may decide to hire an attorney who may place the rent his or her “Trust Account”, but this would probably not be a good thing for the tenant to do and has no basis in law.

Q. Does the bank have a right to the rent money?

A. Yes, but the banks needs to exercise the Assignment of Rent clause in the lease and notify you, most likely through court documents. The bank usually does not do this in the residential setting.

Q. What should I tell the tenant when they say they are refusing to pay rent?

A. Tell them that if they do not pay rent they will be served a Three Day Notice and be evicted if they fail to comply.

Q. Can I file an eviction if they fail to pay?

A. Yes. If the owner instructs you to file, you should proceed as normal. Make sure you tell your attorney that the owner is in foreclosure.

Q. My owner is broke and does not have the money for the eviction. Should I advance the money to pay for the eviction?

A. Do so at your own risk. We highly recommend against this.

Q. I feel sorry for the tenant and have so many vacant homes. Can I find the tenant another home to move into?

A. Absolutely NOT, UNLESS you get permission from the owner in writing. Make sure all parties agree on any money you are holding so there is no misunderstanding.

Q. Can the tenant win the eviction if the owner is in foreclosure?

A. The tenant can bring up the owner’s foreclosure as a defense, but most judges will evict the tenant anyway if the tenant fails to place the rent into the court registry. The owner does have a greater risk the eviction will be contested, and a judge may feel that the tenant can stay.

Q. The owner does not want to pay for an eviction and has told me not to file one. What should I do?

A. Get this in writing from the owner so that later, the owner does not try to say that you should have filed an eviction and did not do so.

Q. The tenants just up and skipped on me. What do I do with the security deposit?

A. Process it as normal, deducting the rent that is owed and any damages and send your Notice of Intention to Impose Claim on Security Deposit out by certified mail.

Q. Can I let the tenant out of the lease?

A. If the owner instructs you in writing to let the tenant out of the lease, you certainly may, BUT it is crucial that you use a proper form, a Mutual General Release Agreement (which we can provide), to settle all monetary and other issues, and have each party release the other in that form.

Q. Does the tenant receive back their security deposit/last month’s rent or any other sums we are holding if we let them out of the lease?

A. This must all be decided between you, the owner and the tenant and memorialized in writing on the Mutual General Release Agreement.

Q. If the owner is agreeing that we return the escrow money we are holding to the tenant, when can the tenant get the money?

A. At any time the money can be disbursed to the tenant, but we would not recommend doing so unless the tenant has given you the keys, turned over possession to you, the property was inspected for damages, and the tenant signed a Confirmation of Vacating Premises.

Q. We don’t want to work for the owner anymore as he has no money for repairs, and this is causing us a major headache. Can we fire the owner?

A. Most property management agreements state you can terminate the management agreement within 30 days, and the good agreement states that you can terminate immediately. Look at your agreement and call your attorney.

Q. What do we do with the tenant’s security deposit and other escrowed funds if we terminate management?

A. You need to hold it in your escrow account until the tenant agrees it can be put in the owners’ Florida account. Most tenants will not agree to this.

Q. The owner told me that the property is being sold in a short sale. What does this mean?

A. A short sale is nothing more than a sale where the payoff the bank takes is less money than what is actually owed. It is simply a sale just like any other sale as far as the tenant is concerned.

Q. Is the lease still in force after a short sale?

A. Yes. It is just like any other sale and the lease survives unless there is a termination on sale or contract clause in the lease agreement.

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There will inevitably come a time when the tenant wishes to be released from the lease, or you desire that the tenant vacates the premises, and all the parties are in agreement. This is an ideal situation in property management, as there is no need or desire for litigation, and everyone goes their separate ways. The tenant may be the one who wants to be released for a myriad of reasons, such as a job transfer, sickness, inability to afford the rent, house purchase, problem with the neighbors or anything else. While these may not be legal reasons to break a lease, in certain situations it behooves the landlord to agree and release the tenant. In other cases, the landlord wants the tenant to vacate. Possibly there are problems with the tenant, behavior issues, the apartment community will be going under a complete rehab project, or maybe the landlord of a single family home needs the tenant to vacate due to a foreclosure or a sale of the home. Whatever the reason, a release of the tenant can and should be accomplished through the use of a written agreement. Never is anything done verbally. Whenever a tenant is being released, the landlord needs to make sure that the landlord is being released as well, and that every single base is covered.

Unnecessary Surprises

Surprises are only fun if they are surprise parties, and even then, maybe not! In property management surprises usually end up with one or more angry parties and the potential for litigation. Added to that, the law states that any ambiguity in a document can be construed against the landlord, so already the landlord has one strike against them. The tenants could think that they are going to receive the security deposit back upon vacating, as this is what the owner said, but after they vacate, the landlord finds major damage and keeps the deposit. Now we have a problem. The landlord may have told the tenants that they will receive a particular sum if they vacate and then pays the tenants. The tenants get the money and do not vacate. These are the typical scenarios that occur when everything is not put in writing in the proper document.

Vacating Date

The Release agreement needs to clearly state if the tenant has indeed vacated or the date the tenant will vacate. If the date that the tenant will vacate changes after the Release is signed, this needs to be done in writing with an addendum to the Release signed by all parties. Verbal extensions are what get the landlord in trouble every time.

Personal Property

If the tenant has any of the landlord’s personal property such as gate cards, clickers, keys etc, this should all be returned when possession of the premises is granted on the vacating date. When the landlord realizes that keys have not been returned or a $50 clicker or garage door opener has not been returned and then charges the tenant, sparks fly, and the tenant then claims that these items were indeed returned, and a dispute results. Neglecting to make sure everything has been returned immediately causes problems.

Damages to the Premises

Unless otherwise agreed to, the landlord never wants to give up his right to charge the tenants for damages that the tenant caused which exceed ordinary wear and tear. If the release does not address this, the landlord could end up having to return the entire deposit, even after he discovers that the tenant has caused severe damage to the unit. Damages are never fully assessed until the tenant has vacated with all personal items having been removed; the landlord should not give up his right to these types of charges. Although we do not recommend walkthroughs with the tenant at the move out, we don’t want the landlord retaining his right to make a claim on the deposit a deal killer for the landlord, so good judgment under the particular circumstances needs to be exercised. A tenant may not want to sign a release if there is any doubt on the return of the security deposit.

Does the landlord have to send the Notice of Intention to Impose claim on Security Deposit?

While the Release may state that the tenant receives the full security deposit back minus any damages at move out, or agrees to forfeit the deposit if this is part of the deal, the question remains whether the landlord must follow FS 83.49, which provides that the landlord must send out a Notice of Intention to Impose Claim on Security Deposit. We recommend that the landlord comply with FS 83.49 and send the Notice of Intention to Impose Claim out, if the any of the security deposit is being kept by the landlord. We are not sure if the Release can override the law or if the tenant can waive FS 83.49, and there is no reason for you become the test case in court.

Attorney’s Fees and Costs

The Release should have a statement that all parties are bearing their own attorney’s fees and costs. It is possibly that an attorney was in the picture at some time, and if the landlord or tenant ended up getting an unexpected bill and then tried to recoup this from the other party, someone is going to be angry.

The Release language

In the body of a typical release lies the legalese where each party agrees to release the other, their agents, employees, manages, owners, assigns etc, etc from all manner of suits or claims in the past, present and future. This is important wording. The goal in the Release is to end it all and have no chance of future litigation or disputes. If the terms and conditions of the Release are followed, it is OVER. That is the PURPOSE of a Release.

Who signs the Release and who is released?

ALL tenants should sign of course, and the landlord or the landlord’s agent. Your goal is to accomplish a release of ALL parties involved in the transaction, and this includes a third party manager, the owners, employees and anyone else involved. You do not want a situation in which the tenant releases the landlord, and the tenant then decides to sue the third party manager or an employee who was somehow involved.

Who keeps the original Release?

Just like the landlord keeps the original lease and all the originals in the file, the landlord should keep the original Release and give the tenant a copy. We are not in favor of duplicate originals being executed, as one or both parties could alter the document, and you will end up in court.

Transfer of Money

In many Release agreements there is some transfer of money. The landlord may be paying the tenant extra just to leave, or is returning a last month’s rent or security deposit immediately. The tenant may be paying the landlord a particular sum as part of the deal. The timing of the money transfer must be clearly spelled out and the form of payment listed, whether it be cash, money order, check or certified check. The tenant should never receive a dime unless he is completely out of the premises and has granted you clear possession, which should be confirmed by an inspection.

Questions still? Good. You should never go it alone, even when the deal appears simple. We have seen deals go bad very fast, and it is always advisable to have your attorney take a look at the agreement. You attorney is trained to see what isn’t in the document.

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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 landlord. If and when the tenant recovers any money in his lawsuit, he has instructed his lawyers to pay his landlord an amount owed from the tenant’s share of the recovery. The key words are “if and when” a recovery is made. If the tenant loses his lawsuit or his workman’s compensation claim, than there is neither recovery for the tenant nor payment to anyone. If a recovery is made, when it will be made is another question. The tenant’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 tenant may tell the landlord that the letter will cover the past and future rent. Whatever the tenant 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 tenant’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. Landlords invest in rental units, not in lawsuit recoveries. Foregoing collecting rent to rely on a letter of protection is a voluntary act by the landlord. The landlord is not required to do this. If the landlord is unwilling to rely on a letter of protection, the landlord should write a letter to the tenant, with a copy to the law firm, indicating that the landlord will not accept and rely upon the letter of protection. The rent must be paid timely and in full.

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With every crisis or economic downturn you see an increase in fraud and scam artists seeking to prey on the individual who already is in a weak and vulnerable position. The property manager needs to be keenly aware of what is happening in the online world and how it can affect them and the property owner. The popular website craigslist.org and others have been a fertile breeding ground for scammers, and with the increase in foreclosures and vacant homes, new and improved scams are appearing.

Ads for your rentals at a lower rent amount!

Some property manager have actually found photos, descriptions, addresses and prices of the homes they have on the rental market appear online on other classified ad websites. Often the rent price listed is lower than on the property manager’s site. The scammer takes action when an individual interested in the home contacts them. They have the interested party send money to them for the deposit, first month’s rent, last month’s rent, etc. Some scams involve the “landlord” being out of town, and the prospective tenant is asked to send a small sum to the landlord for the keys to be overnighted so the tenant can check out the property for himself. The scammer then simply takes off with the money, and the prospective “tenant” finds out he has been ripped off. Some of the scammers even go as far as physically showing the home to the prospective tenants, taking phony applications, deposits, etc., and do this multiple times on the same property. Beside the fact that there is fraud, you are now competing with phony ads making it appear your prices are inflated.

The problem

If an individual is ripped off by a scam artist, it is really not your problem or that of the property owner, UNLESS the “tenant” goes as far as moving into the home. Fake landlords seek out vacant homes and are actually placing tenants in these homes. You discover there is a family residing in the home, call the police, and the police refuse to get involved.

Why will the police not get involved?

While the police may be interested in the fraudulent aspect of the matter, you cannot depend upon them or expect them to remove the tenant, who as far as you are concerned is trespassing in the unit. Law enforcement is extremely cautious not to get involved with being “used” by a landlord to evict a tenant, and the standard response is, “It is a civil matter,” which means you have to hire an attorney to file some type of dispossession action.

Protecting your owners

Some desperate owners, upon discovering that there is a tenant in their home, will actually seek to cut a deal with the tenant and have the tenant sign a lease with them, thinking that at least they now have a tenant. We advise against this. The owners have no idea whether the “tenant” has been scammed or is in fact a scammer himself. The simple act of trying to cut a deal validates the tenant’s occupancy in the unit and complicates the issue further.

Although it may seem burdensome, it is crucial that you constantly inspect your vacant homes for signs of entry or lock tampering. Some property managers have increased their charges to their owner, due to the necessity of the homes being checked more often. The faster it is determined that someone has entered a unit or has taken up residence in a unit, the easier it will be to have them removed. Although law enforcement does not want to get involved, they will be of some help, especially if it can be proven that the person has not been in the unit for any length of time and has absolutely no legal right to be there. Being able to show clear and concise records and inspection reports to law enforcement will assist in having law enforcement at least question the tenant in the unit, and they may encourage the tenants to leave without the necessity of legal action. Keep an eye on craigslist.org for your area and notify them and law enforcement immediately if you see your homes posted on the website.

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Seasonal rentals are quite common in Florida, and many property managers specialize in seasonal tenancies, preferring them over annual tenancies. Some managers who concentrate primarily on annuals will encounter situations when they are asked to rent one or more units seasonally for their clients. Before taking on seasonal rentals, the property manager must understand and follow all the laws set forth by the Florida Department of Revenue, or they could be in for some trouble. Recently, the Department of Revenue, hereinafter DOR, has increased its auditing and has been catching quite a few property managers by surprise. Most of the property managers who were in noncompliance did not fail to collect the taxes intentionally, but simply failed to know the law and made a mistake.

This article will address only a small part of the requirements regarding the taxes in seasonal rentals, and we will concentrate on the “non-rent” items which are taxable. Most property managers, if asked, will know that the “rent” is taxable on a seasonal rental ,but the DOR goes a bit farther, and there are big traps for the unwary. If you find after reading this article that you have not been properly collecting the taxes, we recommend you contact your accountant right away and see what the best approach would be to avoid bigger problems, if and when you are audited. If you are audited and found to be in noncompliance, you will be subject to the back taxes, interest and penalties. Often the penalties and interest will be waived by the DOR if the mistake was unintentional, but the back taxes could be substantial.

What constitutes a “transient” rental?

The words seasonal or transient mean the same for the purposes of tax collection. If the rental term is for a period of 6 months or less, the tax must be collected. This would include a verbal month to month tenancy, so it is crucial that you never allow a tenant to reside on a premises month to month from day one, unless you expect to collect the taxes. Under this scenario, the tax liability is only for the first 6 months and stops after that.

What taxes need to be collected?

Unfortunately, the typical 6% “state sales tax” is just the beginning. There is also a discretionary sales surtax in many counties, the amount varying by county, and the Local Option Tourist Development Tax, commonly referred to as the Tourist Tax, this amount also varying by county. Some taxes are paid directly to the State of Florida and in some cases paid locally. You need to know your county and know the law that applies. Many counties differ, so make no assumptions.

What is taxable?

Here is the issue. It is not simply the base rent that is taxable. According to the DOR, the TOTAL amount charged to the seasonal renter is taxable. Many seasonal rental agreements state the rent amount and also have a cleaning charge. This cleaning charge is taxable and it is the most commonly overlooked tax by the property manager. While the cleaning charge is the most commonly overlooked and incorrectly untaxed charge, it is only the beginning of the items which must be taxed.

The List

The following are some of the charges the DOR has stated are taxable, but it is not an all inclusive list. You may have other charges which also could be considered by the DOR as taxable. If in doubt, err on the safe side and charge the tax.

1. The Base Rent: This is the most obvious charge and is not the problem.

2. Electricity: In many but not all seasonal rentals, the electric is included in the rent, especially in weekly rentals. Sometimes though, the tenant does pay the electric in full or an amount over and above a particular set amount by the landlord. Any amount paid by the tenant for electricity is taxable.

3. Cleaning: This is the real problem area. Many property managers are not aware that this is taxable and simply add the cleaning charge to the bill. The DOR is fully aware of the lack of knowledge of the property managers, and this is the most common tax that has not been collected.

4. Parking: Some condominiums that allow seasonal rentals charge additional vehicle fees or parking fees, and these are taxable.

5. Miscellaneous charges: Garbage Pick-up, Life Guard, Security, Furniture rental, Club House use. If these amounts are extra, and the tenant must pay for them, the amounts are taxable.

Other potentially taxable amounts:

1. Application fee: If an application fee is required, this fee may also be subject to the tax. 2. Condo Approval Fee: The law is unclear, and this may be taxable.

Phone and Long Distance Charges:

Phone and long distance charges that the tenant incurs are not additionally taxable to the tenant, most likely because the DOR and all the other taxing authorities have already handled that on the phone bills.

Exceptions to the tax:

Most, but not all seasonal rentals, are subject to taxation. There are some exceptions carved out but not frequently encountered. A seasonal rental to a full time college student is exempt from taxation. Rentals to federal employees are exempted out as well, if they are performing work related duties. This would be encountered in such hurricane related situations when FEMA employees needed a place to rent on a short term basis. Military personnel and diplomats are also exempt, and in the case of military personnel, they must be traveling under military orders. It is the responsibility of the lessor to obtain all the necessary documentation from the tenant before any exemption should be given. If in doubt, check with your accountant or attorney.

Are you in compliance?

If you are not, get into compliance immediately. Make sure your lease or reservation agreement states that the amounts are taxable, and if you already have leases for next season, take a look at them and make it clear to the tenants that they must pay sales tax. If they refuse to pay, refer them to the law. If the lease or reservation agreement did not properly address the fact that the seasonal tenant would be liable for the sales tax and the tenant refuses to pay, you may be put in a position in which you or the owner must pay the amount due. In any event, make sure you do a self-audit immediately of your files and those of the agents you may be in charge of in your office. We highly recommend you download the DOR publication called Sales and Use Tax Guide for Transient Rentals

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

Simple legal principles

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

Upgrading

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

Undepreciated cost

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

Real life isn’t as simple

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

The concept of presentation

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

Uncertain litigation

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

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

The BBB complaint

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

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

A response isn’t required

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

The legal Complaint

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

Benefits of responding

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

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

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

Problems with responding

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

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

Require a privacy waiver

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

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

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Many tenants who are struggling to pay rent understandably attempt to obtain rent assistance, whether the assistance be from a church, charity, city, county or state program. It is also understandable that the landlord would want to help the tenant obtain rent assistance, which theoretically should help both the tenant and the landlord. However, when the tenant brings you a form for you to fill out in the pursuit of this assistance, you need to be aware of potential risks. These forms often require the landlord’s agent to provide the landlord’s federal tax identification number (TIN), and also require a signature by the landlord’s agent. Moreover, many of these forms attach conditions to receipt of the rent assistance. If you sign this type of form, what have you just done? What happens if you agree to wait upon charitable assistance, even if there are no forms to sign?

When no forms have to be signed, the main question becomes whether the landlord has agreed to wait on payment, and if so, for how long? For example, if the tenant indicates he can obtain rent assistance from his church, and you have already given a 3-day notice, do you subsequently agree to wait on this assistance? Often, we see situations in which a payment from a charity rolls in during an eviction action, an amount that was intended to pay some or all of the rent amount demanded on the 3-day notice. If the tenant provides proof of this attempted charitable payment to the Court, the eviction could be derailed, even if the attempted payment is returned to the donor(!) The Judge’s decision may be based upon whether there was some agreement, either express or implied, to wait on payment. If the landlord in fact accepts a charitable contribution for some or all of the amount demanded on the 3-day notice, the majority of judges will rule that the landlord has technically waived the right to complete the eviction, just as if partial or full payment was made directly by the tenant.

If rent assistance forms are signed, it is even harder for the landlord to claim that there was no agreement to wait on payment. Moreover, rent assistance forms often come with a variety of conditions, and particularly when a city or county gives assistance, the typical form will require the landlord to forebear its right to pursue an eviction for the time period which will be covered by the rent assistance, even if the payment is not full payment. Some forms can be interpreted to signify that the amount given for assistance will be considered full settlement of the tenant’s outstanding rent obligations. Some forms require the landlord not to file eviction 30 days from the point assistance is received. Often when these forms are used, it is not clear when the landlord has waited long enough for assistance funds that never materialize, and it is not unusual for the form to indicate that payment will be made in 6-8 weeks. After obtaining the landlord’s signature, the tenant will sometimes delay or completely fail to submit the form to the organization offering assistance.

We have seen cases in which rent assistance procured under an assistance form rolls in many weeks after the 3-day notice was delivered, and that assistance payment covers some or all of the amount demanded on the 3-day notice. In this scenario, the tenant will frequently file with the Court documentation showing the landlord’s signature on rent assistance paperwork, and the eviction can be jeopardized. The landlord may claim that the forms were signed to help the tenant eventually obtain money to deposit into the Court Registry, but that will probably be a losing argument.

One final point: if a landlord decides to sign rent assistance forms, consistent standards must be applied concerning when the forms are used. Inconsistent use of rent assistance forms will invite a fair housing complaint. The landlord may be opening the door to a flood of rent assistance applications which ultimately prove to be less than desirable.

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The typical property manager’s goal is to maintain his or her current accounts and get more accounts. New accounts are acquired by many means. They could come from referrals or marketing. The property owner who is in need of a property manager contacts you, and then you put your process into motion to decide whether to accept or reject the account for management. Each company has some sort of criteria, and every property manager has at one time or another rejected new business, as the owner or the property does not meet their criteria. Probably the biggest mistake property managers make is to accept an account for management without doing their due diligence. This means checking out who the property owner really is, why he or she needs you to manage, and what you are going to be managing. The temptation is great to accept an account. After all, it is new business and more money so it may appear. The reality is that in some cases you find out after the fact that you just acquired a nightmare owner, a nightmare property and now need to get out fast to avoid potential litigation. What happened here? Whose fault is this mess you are now in? It is the property manager’s fault for not investigating the property owner more carefully to see whether this owner is someone for whom you really want to work.

the “Manager Jumper”

We all know that there are property managers of differing quality out there. Some are excellent, and some are extremely bad. There is no special license or training required to manage property, and some “property managers” are not managers at all, but just trying not to lose the relationship with an owner who may be thinking of selling, and decide to assist in the rentals and everything that goes along with this. Some are untrained and cause the owners serious problems and liability. and the owners are put in a position in which the owner legitimately has cause to fire them and hires you. Now, you are the new manager, and the owner is looking to you to fix all the problems and reverse the damage that the prior manager caused. But wait. Are you the second or third manager in a short period of time that this owner had? There comes a point where the problem is not with the manager but with the owner, who for some reason does not wish to retain a manager for any length of time. This is the “jumper” who uses a manager to rent and/or manage the home, then decides to switch to another manager without a legitimate reason for the switch. If you spot a “jumper”, you need to either say no to that owner and decline the account, or really do some investigation as to why the prior manager or managers were terminated.

The Slumlord Owner

Before accepting an account, you will go to the property and make some kind of assessment of the property condition. Often you only are able to see the outside of the property and not get a true picture of the inside condition or maintenance needs. You accept the account, only to find out that maintenance requests are not being taken care of. The owner blames this on the prior property manager, and you might tend to believe the owner. Let’s think about this though for a moment. Don’t most property managers who are given sufficient funds to make repairs actually make those repairs? Of course they do. The real problem here is that the property owner either failed to make the repairs himself if he is self-managing, or has failed to or refused to give any funds to the past property manager to make these repairs. Do you think that when you begin managing, the owner will open his wallet and shower you with money to make repairs? Of course not. You will be stuck managing a home where the tenants are complaining about legitimate repair needs, and you will have no money for repairs. This will just cause you further headaches and liability to you and your company.

The Financially Distressed Owner

You were probably waiting for this one. Many property owners are simply broke or real close. They purchased a home, or in some cases, multiple homes, that they could not afford, and between taxes, insurance, fees, repairs, mortgage payments and vacancy, the property is not only not making a dime for the owner, but is a huge financial drain. The owner is hanging on right now and is looking to possibly sell in the future, BUT things are not looking good. Should you manage for an owner in such a financial condition? An owner in bad shape is someone to seriously consider declining.

The REALLY financially distressed owner

So many of our clients accept new accounts, only to find out that the owner has not paid the mortgage for months, condo dues or assessments, taxes, insurance or any other amounts which may pertain to the property. The wise property manager will investigate the owner carefully, not being afraid to ask all pertinent questions, and asking for proof that everything is completely up to date and paid. If you place a tenant in a property, and the tenant finds out that the property is actually in foreclosure or the owner has been in default for a significant period of time, this tenant can try to hold you liable, saying you knew or should have known of the financial condition of the owner as it pertains to the property that you rented the tenant.

The Angry Owner

What recent purchaser of rental property is not either angry at himself, angry at the world, angry at the salesperson who misrepresented the rental rate for the home, or angry at the tenant who has not paid rent in 2 months. I call this the “angry owner syndrome”. This owner is not going to get any better once you start managing the property, unless you can pull some real tricks out of your hat, fill the vacancy and get a rent amount with which the owner will be happy. You must clearly understand the owner’s expectations and make sure that they are not so unreasonable that you will simply be another in a string of fired property managers.

The Owner with the Non-Paying Tenant

If tenants paid their rent, properties never needed repairs, and everyone on earth was honest and did exactly what they said they would do, property managers and lawyers would be completely unnecessary. Some owners will come to you with a property where the tenant has not paid the rent in months, and they expect you to evict the tenant. You hire an attorney, the eviction is filed, and it turns out to be a nightmare, because the owner failed to fill you in on little tidbits of information, such as the fact that she gave the tenant a special payment plan or allowed the tenant to do work on the property in lieu of rent, or that major repairs were not being done, and the tenant is rightfully withholding rent. Since you did not know about this, the eviction blows up, the attorney is demanding more money, and the tenant decides to file a counterclaim against the owner and tries to pull you into the lawsuit. If an owner wants you to manage a home, and there is a current tenant in the property that has not paid rent, we recommend that the beginning date of your management agreement is the date that the tenant is fully evicted from the property and the tenant has been completely removed from the premises. Your attorney can help you write up contingency wording for the management agreement so you are not actually the manager of the premises until the tenant is OUT.

The Owner who wants to modify your management agreement

The most successful managers we work for refuse to allow modifications of their management agreement or leases. Will they lose a few potential tenants or accounts along the way? Absolutely, but they will have avoided major problems otherwise encountered f they had allowed owners to modify the contracts. Modification requests spell trouble and are some of the best indicators of problems in the future. If a modification request is completely reasonable, and you run it by your attorney for approval, you certainly don’t want to kill a deal and can make a modification. Unreasonable requests should be flatly refused no matter how much you need the business.

Is there more?

This article only touched on some of the many issues involved in making a wise and educated decision to manage or decline an account. There are so many more. We urge you to create a checklist by which you can go through questions one by one to decide if the account is one that you want. The best thing you can do sometimes is to just say no to an account. Our office uses a checklist and questionnaire to determine if we will work for a homeowner, and so should you.

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Why would you ever want to refuse rent? The tenant may be currently under eviction, in continuing noncompliance with some other term or condition of the lease, holding over, or making a partial payment. In these cases you would not want to accept rent, but rather you will want to refuse the rent payment, as it could interfere with the tenant removal process. The problem is that the tenant came to your office, paid your front desk person and received a receipt showing that payment has been made! Have you accepted rent? Has a waiver been created such that the tenant now cannot be removed? This article will deal specifically with the “acceptance of rent” and the “receipt” given to the tenant, rather than how to return the “accepted” rent to the tenant.

Rent Acceptance and Evictions

Accepting any rent during an eviction without the parties properly entering into a stipulation is a sure way to kill an eviction action. Most landlords are aware of this and know that when a tenant attempts to pay, the consequences can be severe. If a tenant attempts to pay the rent, the landlord will usually refuse the rent and call the attorney for guidance. Possibly a stipulation will be entered into, or the tenant will simply be told that rent cannot be accepted. Accepting or even holding any rent payment from a tenant under eviction can have dire consequences to the eviction action.

Rent acceptance During Noncompliances

Less obvious are the situations in which a tenant may be in some kind of lease noncompliance and tries to tender the rent during this lease noncompliance. Examples of continuing noncompliances include unauthorized pets, code violations, unauthorized occupants, or some other uninterrupted, ongoing violation of the lease. Accepting the rent from the tenant during a continuing noncompliance creates a serious, potential waiver and estoppel problem, in that the landlord is basically giving the tenant the permission to continue living on the premises for another month, even though there is a noncompliance. Many landlords think that they can accept the rent and then quickly turn around and evict the tenant for some violation of the lease not involving rent. This is a classic case of “trying to have your cake and eat it too”, and it is not good practice. Following is a typical situation: a tenant is given a Seven Day Notice of Noncompliance with Opportunity to Cure on May 26 for an unauthorized pet, then comes in on June 1 and pays the rent. Can the landlord turn around and terminate the tenancy? Probably not, if the rent is accepted.

The Accidental Rent Acceptance

In a very small company or when a landlord is in complete control of rent acceptance, the landlord can easily refuse the rent, explaining to the tenant that rent cannot be accepted, possibly because an eviction action has been filed or the tenant is in noncompliance. The tenant comes in to the office, is recognized by the landlord, and the landlord is fully aware of the situation. This is the easy case. The problem starts when a tenant waltzes into a rental office, hands a check or money order to the person at the desk that has no idea about the current eviction or noncompliance, and the tenant is given a receipt and leaves. The landlord may discover this immediately or even a couple days later. Possibly the rent has even been deposited! Now we have a big problem. The tenant has tendered the rent to an employee or agent of the landlord, the rent has been “accepted”, and potentially the landlord’s ability to remove the tenant has been compromised. Will a judge consider this “rent acceptance”?

The Not So Perfect Solution

In a perfect world, your front desk person or employee would know exactly who was under eviction, who was in noncompliance, and most importantly know not to accept the rent from that tenant. The reality is that companies are dealing with sometimes hundreds or thousands of tenants, and to investigate each tenant at the time he or she comes in to pay the rent, normally on the 1st through 5th of the month, is simply impractical. One solution is to add some wording to the receipt that is given to the tenant. While this wording is not perfect, it makes the person, be it the tenant or a third party tendering the rent, aware that the rent may be returned and the tender and the receipt by the front desk person does not constitute legal “acceptance”, which we now know could kill that eviction or hurt the prospects of filing an eviction.

This receipt is provided for your convenience to show that you have given a form of payment to our office. In the event you are in default of the lease agreement, you are under a pending or actual eviction process, and/or you are attempting to make a partial payment, your tender of any payment to us and our giving you this rent receipt does not constitute our legal acceptance of the tender, and the payment may be returned to you at our option.

What is being accomplished?

By placing this wording on the receipt that is given to the tenant, you possibly can protect yourself from being considered to have accepted the rent from the tenant. This wording makes the acceptance of the rent from the tenant conditional upon other possible circumstances. Could it be challenged in court? Sure, but it is probably better than what you have on your receipts today.