VOLUME 4 - ISSUE 7 LEGAL UPDATE

- Anti-Growth Ballot Initiative Threat To Apartment Industry
- Preventing Flood Damage
- Credit Reports And "Dismissals"
- Holding Off On Evicting
- The End Of Tenancy Walkthrough Inspection
- Advertising Without Discriminating

 

 

ANTI-GROWTH BALLOT INITIATIVE
THREAT TO APARTMENT INDUSTRY

by Jeff Rogo, Government Affairs Director, Florida Apartment Association

Florida's current population of 18 million people is expected to double by the year 2050. Will the state be able to accommodate this growth? Probably not, if an anti-growth amendment is added to Florida's Constitution with the November 2008 election.

Paid signature gatherers are working around the state right now to acquire sufficient signatures to place the "Vote on Everything" initiative on next year's ballot. It's a grave threat to Florida's future that is being presented as a way to "save our beaches" or "save the trees". In reality, the proposed amendment would imperil Florida's prosperity and quality of life. If Florida's economy is depressed and job growth is curtailed, the apartment industry will be crippled.

The proposed amendment - requiring that all local comprehensive land use plan changes meet voter approval - subverts a well-established, open, accessible, competent, and democratic planning process. With the "Vote on Everything" amendment, citizens, not the representatives they elected, would be forced to regularly decide thousands of intricate land-use planning issues.

If passed, the amendment would require you to vote on 200 or more comprehensive plan changes each year. Imagine the confusion. Imagine the cost of additional elections. The result will be a growth management and planning process that is far worse, not better. That's why respected environmental leaders refuse to support the amendment. They know this amendment will not put a stop to all development, but will make well-planned, higher density, smarter growth impossible.

Visit www.flsmartergrowth.com for more information. Most importantly, please read and seriously consider any constitutional amendment petition presented to you this summer. Thanks.

 

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PREVENTING FLOOD DAMAGE
by Harry Anthony Heist, Attorney at Law

Each year millions of dollars are spent repairing water damage due to bursting toilet, dishwasher, sink, and ice maker supply lines, and washing machine hoses. The washing machine hose alone is one of the top five causes of water damage losses in a home, Oftentimes these losses are not covered by insurance and cost the property owner a significant amount of money in damage repair, and increase the possibility of moisture related problems such as mold and mildew. While there is little we can do about floods and water damage caused by acts of God, there is something we can do right now to minimize the possibility of damage due to the bursting of supply lines and washing machine hoses. The solution is a simple and inexpensive replacement of the cheap worn out supply line and hoses with steel reinforced flexible hoses.

Current practices

The typical toilet supply line is either metal or plastic. The metal supply lines, while initially workable when installed, are usually made of thin brass tubing that is subject to corrosion over time. These cheaply made pipes are installed at the initial construction of the premises or when a toilet is replaced. Since toilets can last a significant amount of time with only the replacement of the "innards" necessary, the supply line can be extremely old and subject to failure. Due to the corrosion of these lines, they are often not replaced on a regular basis, as removal of the lines will result in a situation in which the valve must be replaced in addition to the lines. The corrosion often welds the cheap valve to the cheap supply line. The other common supply line is the cheap white or translucent plastic/rubber hose which has a fitting attached to each end that enters the valve and the tank. Over time these hoses deteriorate and eventually can fail. In addition to toilets, these cheap supply lines are also used for sinks and faucets, due to the ease of using a flexible line rather than soldering pipes in place. A typical wash tub type of sink will most likely have the plastic/rubber line, and most faucets now are made for the flexible hose, while in the past, they were made for the pipes to be soldered into place.

Washing machine hoses are almost always the standard black rubber type with a fitting on each end. Left untouched, they can last a long time. Some though will deteriorate, harden, or bubble out, and the fittings can corrode on each end. Often a washing machine is owned by the tenant, purchased, used or moved from another location. In the process of cleaning or repair, the washing machine is pulled out from and pushed into the location, causing potentially damaging stress on the hose and fittings. In some cases the washing machine hose is a touch too short and is stretched to its maximum when attached.

A recipe for disaster

The bottom line is that the high pressure pipes in a house, condo or apartment all feed the weak links, those being the supply lines and washing machine hoses. A supply line or hose failure can and often does occur, with the potential to cause massive damage to the premises. If the problem is not detected immediately, the water will continue to run, cascading down the front steps or into the unit below, until such time as it is noticed. By that time it is simply too late.

Liability Issues

Can the tenant be held liable in the event of a bursting supply line? In the case of the tenant-owned washing machine, the tenant would most likely be held liable. With that said, can you really collect from the tenant? Will the tenant be able to pay potentially thousands of dollars to repair the premises? It is extremely doubtful. If the tenant has renter's insurance with liability coverage for property damage, there may be some coverage, but the chances of having a covered tenant is slim. Liability to the landlord can be significant. In the event of damage to other premises owned by other parties, the landlord could be held liable, even though there is no real "fault" involved. The interior plumbing, such as supply lines, are owned by the landlord, and therefore the landlord can be responsible for any damage caused to others when that plumbing is faulty.

Renter's insurance and the tenant's personal property

While it is not clear that we can "require" a tenant to purchase renter's insurance, the landlord should do whatever is possible to encourage the tenant to get covered. While most leases contain a clause that states that the landlord is not responsible for damage to the tenant's personal property, this clause may not protect the landlord. The implied warranty of habitability can trump all of this, and it can be argued successfully that a tenant is entitled to live in a place where the pipes do not break, creating that unwanted swimming pool inside the premises. Landlords should never depend solely on a property damage disclaimer clause in the lease, but rather use it as a tool to encourage the renter's insurance purchase.

Vacant homes and Insurance coverage

Many owners would be surprised to find out that a typical homeowner's insurance policy has a clause stating that in the event a rental property is vacant for a certain period of time, there will be no coverage. The largest amount of damage will usually occur in the unoccupied home. Due to the high vacancy rates we are currently experiencing, it is imperative that policies are checked for this type of clause. Many owners are shocked to find out that their insurance did not cover the losses to their vacant property, and in the event of a supply line or washing machine hose failure, the damages will be extensive in a vacant home.

Two action items

1. Reinforced hoses

As of this writing, a reinforced supply line for a toilet at your local building supply store retails at about $5.00. A washing machine hose, for which you will need two, run around $13.00 each. This is a small price to pay for the peace of mind and increased protection you will receive. Buy and install them now. It should be noted that a reinforced steel braided hose can fail and can be made cheaply as well. Other products are on the market that are even stronger but cost more.

2. Turn off the water!

If the rental premises are vacant, the water should be shut off. It is the landlord's and property managers' duty to protect the premises, but often the water is left on. Many municipalities do not shut off the water when the tenant vacates, and this poses a great danger to the home. Unfortunately, with homes where there are pools or irrigation systems, turning off the water is really not a viable option, but whenever you can, make sure the water is shut off.

We would urge every landlord and property manager to take action immediately. Inspections of all hoses are a must. Locating a washing machine at least 4 inches away from a wall can help avoid stress on the hose. Knowing where the shut off valve for the premises is located, and showing the tenant the location can prevent a lot of damage. There are further steps which can be taken, such as the installation of electronic water detection systems which alert the tenant and/or shut off the water supplies in the event of a flooding situation, but at the bare minimum, replace those hoses and supply lines today with some quality hoses!!!

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CREDIT REPORTS AND "DISMISSALS"
by Harry Anthony Heist, Attorney at Law

In the "Public Records" section of your typical credit report, you will see things like evictions, foreclosures, suits for money and bankruptcy filings. Most application processing companies obtain and compile this data to allow the landlord to make a more informed decision on whether or not they will rent to the applicant. Often you will see that an eviction was filed on the applicant, and the disposition was "Voluntary Dismissal" or "Dismissed". Does this mean that the tenant was not evicted or that everything was amicably resolved? Don't be so sure.

The "Dismissal"

Not all tenants who have evictions filed against them are actually "evicted" by the Sheriff. A number of things can happen. The tenant may vacate the premises voluntarily shortly after the eviction is filed. The tenant may pay all the money owed, and the landlord requests that the eviction be stopped. The tenant may enter into a Stipulation with the landlord, under which payment arrangements are made, and the tenant successfully stays and pays pursuant to the settlement terms. In all these scenarios, the eviction filing will show up in the public record and will be in this public record for many years. Eventually, the eviction matter is "dismissed" and is recorded as such. There are two main ways an eviction is dismissed. It will either be by the landlord's attorney filing a "Voluntary Dismissal", or the court entering a "Dismissal for Failure to Prosecute". In both cases, the public record will show the case as being dismissed, BUT it does not always mean that things were worked out or that the tenant paid the rent. Usually, it is quite the opposite and simply means the tenant vacated and the eviction was not processed further.

The Voluntary Dismissal

When a tenant vacates, the attorney may file a "Voluntary Dismissal". This means that the case is no longer being prosecuted, as no further action is necessary on the file. The landlord got what they wanted, which is possession of the premises. In the situation where a Stipulation is entered into by the parties, the Stipulation may provide that the case will be voluntarily dismissed upon the tenant making the payments as planned. Unfortunately, the landlord, when looking at a "Voluntary Dismissal", usually has no way of knowing why the case was dismissed. Without further information, the best assumption a landlord can make is that the eviction was filed and that the tenant vacated.

Many evictions are filed as Two-Count Complaints. Under the first count the landlord is asking for possession, and under the second count the landlord is suing for money damages. In order to get a judgment for money damages in Count Two, the tenant will have had to be served personally with the eviction action or will have filed an answer to the complaint. Often, neither of these two contingencies occur, and at the end of the eviction or some time after the eviction is over, the attorney will file the Voluntary Dismissal with the court to close the case out. There may even have been a Final Judgment for Eviction somewhere in the public records, but the final action showing up may be that "Voluntary Dismissal as to Count Two"

The Dismissal for Failure to Prosecute

If an eviction is filed, the tenant vacates and the attorney takes no further action, the Clerk of Court's office will eventually send out a notice to the attorney and the tenant stating that the case will soon be dismissed by the court on its own, if the attorney for the landlord or the tenant does not pursue the case any further. This could be six months after the case has been filed, or even more than a year. The attorney will either then file a Voluntary Dismissal closing out the case or do nothing, and the Court will go ahead and dismiss the case. If a Two-Count complaint has been filed and no personal service has been effected on the tenant, the Court will know that the case is probably not going to proceed any further and will want the case dismissed. This dismissal by the court happens to tens of thousands of cases each year. The Court does not want to keep files unnecessarily open and will purge them from their active case system. When the landlord looks at the public record results, it will show as a "Dismissal".

What should the landlord do when the record shows "Dismissed"?

There is a high probability that the applicant had an eviction filed against him or her by a prior landlord and just vacated. It is imperative that if any eviction filing shows up on the public record, the landlord looks into the matter deeply to find out exactly what happened during the eviction. Did the tenant pay and stay? Did the tenant vacate? Did the tenant get fully evicted? These are all questions that can be answered by looking at the Court file further and contacting the prior landlord. Most counties are now online on the internet, and a lot of information will be available to the landlord by simply going to the website of the Clerk of Court where the tenant had the eviction filing and examining the docket.

 

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HOLDING OFF ON EVICTING
by Harry Anthony Heist, Attorney at Law

Filing an eviction is not always something that you look forward to doing. Well, there are some evictions when you got some joy out of filing. Admit it! With an eviction comes expense, uncertainty, a higher possibility of tenant damage, delays and more time where the tenant simply lives rent free. If you are the landlord and you have no one to answer to, you can delay the eviction filing as long as you want. The only usual consequence is that you will go a longer time without receiving rent. The problem arises when you are managing property for another. Where do you draw the line? When do you file? Do you have a procedure or guidelines? Most property managers do not have a procedure or guidelines in deciding when to file an eviction. Usually there is nonpayment, false promises, a Three day Notice, more tenant excuses, a partial rent payment acceptance, a bounced check or just about any other thing a tenant can and will do to delay an eviction. Often the property manager falls for some of this, and the result is a serious delay in filing the eviction.

Creating a procedure for the eviction decision

There is no set date on which you should file an eviction. Usually rent is due on the first, late charges begin on the 6th, and the property manager decides to take action some time after the 20th of the month, or even later. The decision to file is often based upon market conditions, prior rent payment history, and unfortunately, the promises or statements made to the property manager by the tenant. While many tenants will often come through and pay the rent, there will be many instances when they will deceive you, and now you are into the next month. The property owner, finding out that you waited a significant amount of time, can and will get angry at you for not taking action sooner, and could try to hold you responsible for lost rent, or allege that you failed to manage their property properly and file a FREC complaint against you.

Contacting the property owner

Hiring an attorney to file an eviction on behalf of a property owner without the property owner's consent is dangerous. Whenever you file an eviction, you are subjecting yourself to the Court, potential counterclaims, defenses, motions and ultimately liability to pay damages, attorney's fees and costs to the tenant's attorney if the tenant prevails. A simple eviction could end up being a Supreme Court case. We feel that even though the property management agreement may have given you permission to file an eviction on behalf of your owner, it is best to get the owner's consent in writing. The conversation with the owner to get this consent is where a problem lies.

Getting owner consent

Making the dreaded call to the owner to see if he wants an eviction filed is certainly not a pleasant task. After all, you probably approved the tenant and put that tenant in the unit, so in his eyes, it is your entire fault. When hearing your information regarding the situation and the tenant's promises, etc., the owner may wish that you "hold off on filing the eviction" for a bit, or wait until such time as the tenant has promised to vacate. This may be a few days or a week or more. While there is no problem holding off on an eviction, that same owner who told you on the phone to hold off will turn against you when the tenant does not come through with the payment as promised or vacate as promised. The owner, now angry about the decision to hold off, can try to blame you, the property manager, for the delay. Unless you have something in writing from the owner, it will be hard for you to defend yourself from an owner's allegation that you should have filed the eviction sooner. It is imperative that you either get something in writing from the property owner, either by fax or email, and send a confirmatory letter to the owner in the event the owner refuses to or fails to get you something in writing. We recommend the following "confirmatory letter" to be used whenever an owner tells you to hold off on filing an eviction.

 

SAMPLE EVICTION HOLD OFF CONFIRMATORY LETTER

Dear Property Owner: As of today's date, ____/____/____ we have not received rent for the month of ______________ for your property located at ______________________. As per our telephone conversation of ___________ at _______ am/pm, you have instructed us to hold off on instituting eviction procedures until:
1. _______________ (insert date) or
2. ____ Further written notice from you.

Please note that our attorney charges approximately $__________ in fees plus costs in the amount of $___________ to file an uncontested eviction. An eviction generally takes between 21 to 30 days, but many tenants will vacate shortly after they are served with the eviction paperwork.

We will send the file to the attorney on the date you have agreed to above, or await your written instructions before proceeding.

 

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THE END OF TENANCY WALKTHROUGH INSPECTION
by Harry Anthony Heist, Attorney at Law

A common request by the vacating tenant is that she accompany you during the move-out inspection. Sounds reasonable enough, but the practice of walking a unit with the tenant upon move-out is fraught with problems.

Why is the tenant making this request?

There is a good chance that a previous landlord of the tenant took all or part of the tenant's security deposit in a prior tenancy, and the tenant is now expecting that you will do the same. The tenant is afraid that you may charge her for something for which she is not responsible, or damage which she did not do. This should be your first clue that the tenant is suspect. The tenant may be hiding something, and if he accompanies you on the walk-through, he may be successful. The tenant may be intimidating, and he knows that you may not charge him for something due to the intimidation factor. Finally, the tenant may just be an honest person who feels that it is best that she do the walk-through with you, so she can show you how nice everything was left. Be afraid. Be very afraid.

The typical accompanied walk-through scenario

Here you are, walking through a home with the tenant behind you. There is a hint of Febreze in the air. You feel a bit uncomfortable and maybe even a little intimidated. Will you look carefully inside the oven? Will you inspect the bathroom? Open drawers? Smell the carpet? Most likely not. You smell some cigarette odor but really don't want to mention it. The walls look yellow, but you are not sure if they were this color at move-in. You will not want to engage in any controversy or altercation with the tenant, and even if you think there may be a charge for some damage, you avoid bringing the issue up. Probably you will want to get the inspection over with as soon as possible and will be asked the usual question, "When will we be receiving the security deposit back?" You tell the tenant that everything looks fine, and that she will get her deposit back within a couple weeks. This is a huge mistake. She will hang on these words and not let you forget them.

Fast Forward one week

Your maintenance person has headed over to the unit to do the usual cleaning, touch up and the like. Upon entering the hot unit, as the electric has been turned off, he immediately detects an odor of pet urine and smoke. Walking around the unit, the pet urine odor become stronger, and he kneels down in a corner and smells the carpet, only to come to the conclusion that it is cat urine. Standing up, he sees fleas jumping on his pant legs. This is interesting. The tenant was not supposed to have any pets, and no cat was present during the walk-through inspection. Walking through the house, he lifts up a throw rug; under the rug is a large bleach stain on the carpet. The walls seem to have been touched up, and it is quite evident, as the paint is bubbling up in each spot where the new paint was applied. Your maintenance person heads out back and sees a huge oil stain on the floor of the driveway, and behind a newly planted bush in the patio area, he notices that the vinyl siding is warped from a "grill gone wild". But wait. You told the tenant everything looked fine and that she would be getting back her deposit.

The problem

By initially telling the tenant that everything looked fine, you created an expectation on the tenant's part that the security deposit would be returned. This will be used against you in the event that you make a claim on the deposit. Once the tenant receives your claim, she will be sure to dispute the claim, and if you were to go to court, you would need to explain to the Judge why you said what you said, and why you made a claim contrary to those statements. Often there is undiscovered damage which becomes evident only later when the property is properly inspected at your leisure by you or your staff. Proper inspection is the key here, and no property can be properly inspected with the tenant in tow.

Proper procedure

You need to develop a firm policy and procedure on inspecting the premises upon move-out. This will mean that never will you inspect a property upon move- out with the tenant present. Immediate inspection upon move-out, without the tenant, is a must, but more importantly, a later inspection when the air conditioning may be off is in order, so previously masked odors can be detected. All throw rugs should be moved and inspections made of all the appliances, closets, garage, storage areas and every other area which may not be immediately apparent. The next time tenants ask or demand that they be present with you on the move-out inspection, simply tell them that it is not your company policy to allow this, and if they are afraid you will treat them unfairly, they should take their own photographs of the premises.

 

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ADVERTISING WITHOUT DISCRIMINATING
by Cathy L. Lucrezi, Attorney at Law

Fair housing laws prohibit making, printing or publishing a notice, statement, or advertisement that indicates a preference, limitation, or discrimination based on a protected class. The law applies to all types of marketing used in the rental process. That includes an ad in a newspaper or on television, an index card on a bulletin board at the convenience store, a vacancy sign in the window, and even word-of-mouth. The law covers all advertising.

Check the language that is used in your ad. There should neither be any words or phrases that show a preference for any protected class, nor should there be anything that would discourage a member of any protected class. Using phrases like "close to churches," "single adult community" or "perfect for mature professionals" would likely be considered fair housing violations. Symbols should be scrutinized too. If the signage to the community includes the Christian fish symbol, it likely discourages some people from applying.

Stick with describing the property, not the targeted audience. Describe the features of the unit that make it appealing -- the size and location of the unit, rental price, utilities included, laundry room, pool, etc.

If the printed ad uses photographs or drawings of people, try to use men, women, children, people with disabilities, and people of all races, nationalities and ages in a way that reflects the population as a whole. Better yet, leave humans out of the illustration altogether.

Avoid advertising concessions or move-in specials for particular groups. A television ad that tells seniors they can get the first month free may seem benign, but is really a red flag of a fair housing violation. It tells a family with children they may not be welcome there. A promo that offers a concession to newly married couples would, in some cities and counties, be a violation since it discourages gay couples from applying.

There are some situations where it is ok to indicate preferences. You can let the market know you have units which are accessible for people with disabilities. You can advertise amenities such as playgrounds and state that families are welcome. HUD finds it acceptable (and even encourages) landlords to expand their marketing options by advertising in minority newspapers and at social services agencies and organizations for people with disabilities.

 

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Law Offices of Heist, Weisse & Wolk, P.A.
Phone: 1-800-253-8428 Fax: 1-800-367-9038

Serving Florida's Property Managers with offices in Orlando, Clearwater, and Fort Myers Beach, Principal Office


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