VOLUME 3 - ISSUE 10 LEGAL UPDATE
- The 15 Day Security Deposit Dispute Period
- The Home Warranty Problem
- Can You Prohibit Smoking On The Premises?
- Renewing a Lease with A Balance Owed
- How A Complaint Is Filed
THE 15 DAY SECURITY DEPOSIT DISPUTE PERIOD
by Harry Anthony Heist, Attorney at Law
A tenant has just 15 days to dispute the claim on the security deposit, and if they do not, you are in the clear – Right? WRONG. The tenant has up to 5 years to sue you for a refund of all or part of the security deposit. This often comes to a surprise to the landlord, as most professional landlords are very familiar with the wording of Florida Statutes and the timing requirements imposed upon the landlord.
The Landlord’s Duty
The landlord is required to send the Notice of Intention to Impose Claim on Security Deposit to the tenant by certified mail within 30 days of the tenant vacating the premises. Most landlords know this already. In the old days, the landlord had 15 days, now the landlord has 30 days. The timing requirements are described in detail in our article entitled Security Deposit Timing Review We recommend you read this carefully as a refresher. To understand the tenant dispute procedure, we need to look at the relevant portion of the statute.
Florida Statute 83.49 Deposit money or advance rent; duty of landlord and tenant…
The notice shall contain a statement in substantially the following form: This is a notice of my intention to impose a claim for damages in the amount of ____________ upon your security deposit, due to ________. It is sent to you as required by S. 83.49(3), Florida Statutes. You are hereby notified that you must object in writing to this deduction from your security deposit within 15 days from the time you receive this notice or I will be authorized to deduct my claim from your security deposit. Your objection must be sent to (landlord's address). If the landlord fails to give the required notice within the 30 day period, he forfeits his right to impose a claim upon the security deposit.
(b) Unless the tenant objects to the imposition of the landlord's claim or the amount thereof within 15 days after receipt of the landlord's notice of intention to impose a claim, the landlord may then deduct the amount of his claim and shall remit the balance of the deposit to the tenant within 30 days after the date of the notice of intention to impose a claim for damages…
An examination of the statute’s wording
A careful reading of the statute seems to imply that the landlord is only authorized to deduct the money claimed from the security deposit if the tenant fails to object within 15 days of receipt of the Notice of Intention to Impose Claim on Security Deposit. Does this mean that if the tenant objects, the landlord cannot claim the money? If this were the case, what is the landlord to do with the disputed funds? The law is not clear.
The Landlord receives an objection by the tenant, now what?
1. Property Manager is licensed under a Real Estate Broker.
Many years ago, Florida law required a property manager under a real estate broker’s license through the State of Florida to go through certain specific procedures in the event a tenant objected to the landlord’s claim. The real estate broker had to report the dispute to FREC and then ask FREC for an Escrow Disbursement Order, file an interpleader, or file a lawsuit against the tenant, if none were already filed by the tenant. This was a cumbersome and frankly ridiculous burden on the property manager and was removed from the law. Now, the property manager is not required to do any of the aforementioned procedures.
2. Landlord/owner is self-managing
Former and current law does not specifically provide what the actual owner/landlord is to do. The law does not require the landlord to file a lawsuit, hold the disputed funds indefinitely or take any action. Only in the wording of the Notice of Intention to Impose Claim on the Security Deposit does it reference the landlord being “authorized” to deduct the funds from the security deposit. Does this mean if the tenant disputes, the landlord is not “authorized”?
Can the Landlord make the deduction and disburse the funds?
1. Property Manager is licensed under a Real Estate Broker
The law specifically allows the property manager who is licensed under a Florida real estate broker to disburse the disputed funds as they see fit. As you can see in the wording of Florida Statutes 475, the FREC reporting, interpleader or lawsuit requirement is not present anymore as it pertains to a disputed security deposit. If the tenant objects, the property manager can disburse the funds pursuant to the Notice of Intention to Impose a Claim on the Security Deposit, after the 15 days have elapsed from the time the tenant has received the Notice by certified mail. The fact that the tenant has objected has lost its relevancy in the law.
83.49 Deposit money or advance rent; duty of landlord and tenant… (d) Compliance with this subsection by an individual or business entity authorized to conduct business in this state, including Florida-licensed real estate brokers and salespersons, shall constitute compliance with all other relevant Florida Statutes pertaining to security deposits held pursuant to a rental agreement or other landlord-tenant relationship. Enforcement personnel shall look solely to this subsection to determine compliance. This subsection prevails over any conflicting provisions in chapter 475 and in other sections of the Florida Statutes, and shall operate to permit licensed real estate brokers to disburse security deposits and deposit money without having to comply with the notice and settlement procedures contained in s. 475.25(1)(d).
2. Landlord/owner is self-managing
Nowhere in the statutes does it impose a penalty on the landlord if the landlord deducts the amount owed from the security deposit per the terms of the Notice of Intention to Impose a Claim on the Security Deposit. It is our opinion that the landlord should simply wait the 15 days after the tenant receives the Notice and then deduct the funds accordingly.
Is it over yet? The tenant has not objected.
Absolutely not. The tenant and the landlord have five years from the date the tenant vacates or the claim is made on the security deposit to institute litigation against each other. This is due to the fact that under Florida law, the parties to a written contract such as a lease have a 5 year statute of limitations, meaning that they have 5 years to sue one another. The common misconception among landlords is that if the tenant does not object, the tenant has implicitly agreed to the landlord’s claim, and everything is over. While it would make sense, this is not the case.
When a tenant objects to the security deposit claim, you should give your attorney a call. If you have received a call or letter from the tenant’s attorney, you should never respond other than to tell the attorney that you have received the message or correspondence and are forwarding it to your attorney. You should then examine the facts of your situation, look carefully at the proof you have to justify the deduction, and either stand firm or consider settlement.
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THE HOME WARRANTY PROBLEM
by Harry Anthony Heist, Attorney at Law
Many new homes have been put on the rental market due to the sales slowdown. Most come with a “Home Warranty” to cover many of the usual items which need repair. The problem? Most home warranty services are terrible, resulting in huge delays and legal ramifications for the owner. What are the tenant’s rights and the owner’s obligations?
The Landlord’s Obligations
The Landlord/Tenant act specifically lays out the landlord’s obligations. If these obligations of the landlord are not met, the tenant has remedies under Florida law. These remedies are strong, and they place the landlord under a time limit. This is where home warranty problem begins. Below is FS 83.51 (1) which lays out some of the obligations of the landlord. While the landlord has other obligations under the lease and Florida law, the Section 83.51(1) obligations are those for which if not met, the tenant can break the lease or withhold rent.
83.51 Landlord's obligation to maintain premises. (1) The landlord at all times during the tenancy shall:
(a) Comply with the requirements of applicable building, housing, and health codes; or (b) Where there are no applicable building, housing or health codes, maintain the roofs, windows, screens, doors, floors, steps, porches, exterior walls, foundations, and all other structural components in good repair and capable of resisting normal forces and loads and the plumbing in reasonable working condition. However, the landlord shall not be required to maintain a mobile home or other structure owned by the tenant. The landlord's obligations under this subsection may be altered or modified in writing with respect to a single-family home or duplex.
What if the Landlord fails to meet these aforementioned obligations?
Here we have to jump right back into the Landlord/Tenant Act. Florida law allows the tenant to serve notice upon the landlord, giving the landlord 7 days to correct the problem, OR the tenant has a right to withhold rent OR break the lease agreement without penalty. The service of the notice on the landlord by the tenant will act as a complete defense to an eviction action, so it must be taken seriously, and the problem, if it exists, MUST be remedied within 7 days.
The Tenant’s Complete Defense to an eviction
83.60 Defenses to action for rent or possession; procedure. (1) In an action by the landlord for possession of a dwelling unit based upon nonpayment of rent or in an action by the landlord under s. 83.55 seeking to recover unpaid rent, the tenant may defend upon the ground of a material noncompliance with s. 83.51(1), or may raise any other defense, whether legal or equitable, that he may have, including the defense of retaliatory conduct in accordance with s. 83.64. The defense of a material noncompliance with s. 83.51(1) may be raised by the tenant if 7 days have elapsed after the delivery of written notice by the tenant to the landlord specifying the noncompliance and indicating the intention of the tenant not to pay rent by reason thereof. Such notice by the tenant may be given to the landlord, the landlord's representative as designated pursuant to s. 83.50(1), a resident manager, or the person or entity who collects the rent on behalf of the landlord. A material noncompliance with s. 83.51(1) by the landlord is a complete defense to an action for possession based upon nonpayment of rent, and, upon hearing, the court or the jury, as the case may be, shall determine the amount, if any, by which the rent is to be reduced to reflect the diminution in value of the dwelling unit during the period of noncompliance with s. 83.51(1). After consideration of all other relevant issues, the court shall enter appropriate judgment.
As you can see, if the landlord does not comply with the requirements of the law in FS 83.51(1), the tenant can give notice to the landlord, withhold rent and potentially defend the eviction on these grounds.
The Tenant’s Right to Terminate the Lease
83.56 Termination of rental agreement. (1) If the landlord materially fails to comply with s. 83.51(1) or material provisions of the rental agreement within 7 days after delivery of written notice by the tenant specifying the noncompliance and indicating the intention of the tenant to terminate the rental agreement by reason thereof, the tenant may terminate the rental agreement.
In this portion of the law, you can see how the tenant is allowed to terminate the lease if the landlord fails to comply with 83.51(1) or material provisions of the lease
How does this relate to a Home Warranty Service?
There are situations in which a property is covered by a home warranty service provided by the builder, or something in the premises is covered by some sort of warranty, where a third party is to repair or replace certain items. Often the landlord will receive notice of a problem and then notify the home warranty service. The problem arises when the problem is NOT fixed, or a good attempt to fix the problem does not occur within 7 days from the time the landlord receives notice. When this occurs, the landlord wants to blame the home warranty service for the inability to get a problem rectified. In court, a judge could not care less that your home warranty service is busy, backed up or just plain inadequate. The blame game and passing the buck just does not work in court.
If you get a rent withholding letter from a tenant demanding a repair within 7 days and threatening to withhold rent or break the lease, you need to act immediately. The home warranty excuse or the “I need 3 estimates” excuse will not help you in court. Act immediately, inform the property owner if you are managing for them, and get the problem fixed immediately. If there is a delay due to the home warranty service, it may be necessary to hire another vendor and get the problem fixed to avoid a potentially huge legal problem with the tenant. Remember that not all the tenant’s complaints will rise to the level of the tenant being able to withhold rent or break the lease. If you have any questions, give us a call.
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CAN YOU PROHIBIT SMOKING ON THE PREMISES?
by Harry Anthony Heist, Attorney at Law
Many landlords are now setting aside certain units as “Smoke Free” or renting homes out and prohibiting smoking on all or part of the premises. Many tenants do not want to rent a unit where the prior tenant smoked, and in many units, smoke travels through the premises interfering with the rights of other tenants. Restricting a person’s ability to smoke on the rental premises in full or in part is not prohibited by law. The lease needs to clearly spell out the restrictions, and the challenge to the landlord will be enforcement and proof.
Smoking Prohibitions and the law
There are no laws, state or federal, that prevent a landlord from prohibiting smoking in a rental unit, house or designating a building as smoke-free. There are no laws that prohibit a landlord from designating certain areas as “smoking areas” or limiting smoking in the common areas.
Smoking Prohibitions and Fair Housing
It is not illegal discrimination to create a smoke-free policy, smoke-free units or smoke-free areas, as smoking is not protected under law. It is important to note that creating a smoke-free policy should never be used to target a protected class, as this can trigger a discrimination action and potentially be considered illegal. Tenants who are affected by second hand smoke actually may be able to sue your company under the Americans With Disabilities Act and the Fair Housing Act for discrimination, if they have breathing disorders and you do not make accommodations for them in their rental premises, or the common areas in the event they have health issues which are being adversely effected by secondhand smoke.
The Benefits of Smoke-Free Units
1. Reduced risk of fire and injury. Lighted tobacco products cause over 15,000 residential fires, over 500 deaths and over 1300 injuries due to these fires, and over $300 million dollars in property damage each year.
2. Litter reduction. Your maintenance personnel will attest to the fact that cigarette butts accumulate and remain on the premises for a long time. Tenants routinely will throw the cigarette butts on the ground, in the garden areas and all around the common areas. These cigarette butts pose a threat to small children and animals that may place them in their mouths and ingest them.
3. Better health. Cigarette smoke travels through walls, ceilings, floors, electrical conduits and HVAC systems. This exposes other tenants to secondhand smoke, and these tenants then suffer health hazards and inconvenience.
4. Decreased damage to property. Smoking damages walls, ceilings, carpet, furniture and can deposit a layer of tar on just about any surface with which smoke comes in contact, in addition to increasing the likelihood of carpet, flooring and counter burns. Often smoking related damage requires a substantial expenditure of funds to remove staining and odors, and to otherwise repair the unit.
5. Reduced liability. Americans With Disability Act and Fair Housing complaints are rising each year. Accommodating tenants who do not want to be affected by second hand smoke and/or reducing the exposure of a tenant to second hand smoke will reduce your liability. In addition, a tenant has common law remedies, including the implied warranty of habitability and that the peaceful, quiet enjoyment of the premises is being interfered with. Smoke infiltration from another unit may qualify as a violation of the common law rights, and we have seen tenants break their lease due to smoke infiltration.
Creating the Smoke-Free Unit or Building
1. Current tenants. You cannot prohibit a current tenant from smoking, if there is no prohibition in the lease, or the tenant has failed to sign a no smoking addendum after the lease has been signed. A non-smoking tenant who has already signed a lease may be willing to sign a no smoking addendum, and this can speed up the conversion of a building to non-smoking units.
2. New tenants or renewals. If your new lease or addendum prohibits smoking, you can prohibit a new tenant and their occupants from smoking, or refuse to renew a lease if a current tenant refuses to sign the new lease or addendum.
SAMPLE LEASE WORDING
”Tenant agrees that Tenant, guests and/or occupants will not smoke or ignite any tobacco, clove, incense, or other legal or illegal smoking product on the premises. The premises for the purposes of this section includes the interior or the apartment, the breezeway outside the apartment, and any lanai or balcony if provided. Smoking for the purposes of this section is defined as igniting, inhaling, exhaling and/or carrying any lighted legal or illegal smoking product. In the event Tenant, guests or occupants violate this smoking policy, Tenant shall be in breach of the lease agreement and subject to eviction action, in addition to being liable for any damages to the premises cause by smoking or costs incurred by Landlord in removing smoke odor”
Note: The above sample clause is for a complete smoking prohibition. The clause can be modified to allow lanai smoking, smoking areas or other variations.
While smoking can be prohibited in the lease agreement or addendum, enforcement is always going to be a problem. We all know that tenants often will not do what they are “supposed” to do or what they “agreed” to do in the lease. A no smoking clause is a start though, if you wish to create a smoke-free unit or building, but proof will become an issue in the event of a violation or violations.
Useful Smoke-Free Websites
Smoke Free For Me
Smoke Free Housing Consultants
Smoke Free Apartments House Registry
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RENEWING A LEASE WHEN A BALANCE IS OWED
by Harry Anthony Heist, Attorney at Law
A common mistake when renewing a lease is to use a standard lease renewal or draw up a new lease omitting any reference to money that may be owed from the expired or expiring tenancy. Late charges may have accumulated, the tenant may owe for some damage, or there may be NSF charges or some other charges that have been incurred under the prior lease. Once the new lease is executed, while the tenant may still owe you the money, there is no enforcement mechanism to collect it. You cannot evict under the new tenancy for money owed under the prior tenancy, UNLESS the new lease or renewal clearly spells out that there is a balance owed and states how the tenant shall pay this balance.
What might be owed from the prior lease?
A tenant can easily have accumulated late charges, NSF charges, unpaid water, sewer or garbage bills, unpaid repair bills or almost any other amount that could have been incurred over the past year. The landlord will most likely want to collect this money and does not intend to write the amounts off when giving the tenant a new lease. The landlord has a full expectation that the tenant will pay these sums. But will he?
Tying in the old balance to the new lease
When preparing the new lease, it is crucial that terms of the new lease contain the past or accumulated amount due, a definition of this amount as “additional rent” and the payment arrangements. We recommend that the amount is spread out in a reasonable fashion and due with the tenant’s rent payment as “additional rent” until paid in full. Done this way, if the tenant fails to pay, the tenant can then be given a Three-Day Notice for non-payment, and an eviction can be instituted if necessary. We do not recommend that you accept the normal monthly rent without the tenant paying the full rent amount and the “additional rent” at that time. If you wish to have a separate form for dealing with the amounts, terms and conditions we recommend a Past Due Amounts Workout Agreement.
The new lease does not reflect the past balance; is the money still owed?
The execution of a new lease does not wipe out the prior debt, but creates two distinct problems. First, if the prior debt was debatable or in dispute, the landlord’s actions in entering into a new lease certainly favors the tenant, and secondly, the ability to evict the tenant under the new lease for amounts incurred under the old lease are slim at best. With that said, the tenant still owes the money, and the landlord can at some time attempt to collect this money through litigation or other means, but much of the leverage is gone. Before you renew a lease, always check to see if money is owed, and carefully reflect this in the new lease.
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HOW A COMPLAINT IS FILED
by Cathy L. Lucrezi, Attorney at Law
Perhaps every recipient of a complaint letter from HUD is shocked. The recipient wonders how they could be accused of unlawful discrimination. They wonder how the complaint even got filed. This article describes the life of an administrative complaint.
The initial contact with the Governmental Agency
A tenant or applicant starts by contacting HUD or the Florida Commission on Human Relations or the local agency dealing with fair housing. It can be as simple as a phone call or filing a complaint online. The agency will usually mail a complaint form to the “complainant” for her to fill out. The form asks for the names and addresses of the people that did the discriminating and asks for a description of the discriminatory act.
Once the form is back at agency, it is transformed into a more formal complaint – typed and easy to read. The Complainant may sign the form, but the law does not require it.
The Governmental Agency sends out the Complaint
The agency then sends the Complaint to the individuals who are alleged to have participated in the discrimination. These folks are the “Respondents” and can include the owner of the property, property manager, leasing agent, maintenance man, or anybody else the Complainant says participated in the discrimination. No one is safe.
What does the Governmental Agency want from you?
The Complaint arrives with a letter from the agency. Most of the time, it asks if the Respondent would like to “conciliate”. This means “do you want to settle?” It’s often a good idea to try that process, but never without advice from your attorney.
Sometimes, the letter also requests various documents. It asks for a “position statement”, which is really your side of the story. Although there is no requirement that the Respondents be represented by a lawyer, it is nonetheless a good idea to do so. The lawyer can help formulate responses in a way that most effectively communicates the Respondents’ position. Do not naively believe that, because you’ve done nothing wrong, you don’t need an attorney.
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