VOLUME 6 - ISSUE 4 LEGAL UPDATE
- Tenant Death And The Obsolete Lease
- Concession Paybacks and the Early Termination Law
- Authorizing the Unauthorized Pet
- Mid-America’s Open Arms Program
Tenant Death And The Obsolete Lease
by Harry A. Heist, Attorney at Law
Prior to the law change almost 2 years ago, if the last remaining tenant in a dwelling unit died leaving personal property behind in the unit, serious problems were created for the property manager. Upon the tenant’s death, relatives often would request keys or access to the unit to retrieve personal belongings of the deceased. If the property manager provided such access to the relatives or friend of the deceased, massive liability was potentially created, as heirs could later appear claiming a property interest in something that they said was or indeed was willed to them by the deceased. Since the property manager was not allowed to provide access, the result was that the relatives of the deceased would need to open up a probate estate so a personal representative, referred to in some states as an executor, could be appointed, and the property manager could then deal with the executor directly, possibly get possession of the rental unit from the executor, or even serve notice on the executor and file an eviction if necessary. Since more often than not an estate was never opened, the property manager was left in a legal limbo, and would frequently have to consider hiring an attorney to open up an estate at significant expense and delay.
Florida Statutes Section 83.67 solves the problem of the deceased tenant and the abandoned property, BUT it only will be effective and applicable if the proper wording is in the lease agreement.
The wording which MUST be in the lease is as follows:
BY SIGNING THIS RENTAL AGREEMENT, THE TENANT AGREES THAT UPON SURRENDER, ABANDONMENT, OR RECOVERY OF POSSESSION OF THE DWELLING UNIT DUE TO THE DEATH OF THE LAST REMAINING TENANT, AS PROVIDED BY CHAPTER 83, FLORIDA STATUTES, THE LANDLORD SHALL NOT BE LIABLE OR RESPONSIBLE FOR STORAGE OR DISPOSITION OF THE TENANT'S PERSONAL PROPERTY.
Is this wording in your lease? Really? Are you sure?
Take another look and see if these words: OR RECOVERY OF POSSESSION OF THE DWELLING UNIT DUE TO THE DEATH OF THE LAST REMAINING TENANT are in your abandoned property clause. Chances are the words are not there. Fix it now!!! Failure to fix this clause can mean the difference between getting possession 60 days after a tenant’s death or having to wait many months and spending thousands of dollars in attorneys fees. Here is some suggested reading: Tenant Death – The New Law
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Concession Paybacks and the Early Termination Law
by Harry A. Heist, Attorney at Law
Approximately 30% of apartment communities are utilizing the new Early Termination Addendum which gives the resident a choice of “damages” upon breaking the lease before the natural end of the lease. If the resident chooses Option 1, the tenant will owe a fixed amount, usually one or two months’ rent to the apartment community, in addition to any past or current rent owed and physical premises damages which may be attributable to the tenant. Most tenants, when they are given the explanation of the choices, choose Option 1, as it is in their best interest, since the apartment they vacate may stay vacant for quite some time, making Option 2 a much more risky venture. A large amount of confusion occurs when the tenant has been given a rent concession, chooses Option 1 and then breaks the lease. An equal amount of confusion has to do with the “notice” requirements imposed upon the tenant in Option 1.
Most concession addendums or clauses have some form of chargeback provision in the event the tenant defaults on the lease agreement by vacating before the end of the lease, either voluntarily or through an eviction. One would assume that if the tenant chooses Option 1, receives a rent concession and then breaks a lease, the concession payback can be charged in addition to the Liquidated Damages amount provided for in Option 1. This is INCORRECT. If the tenant chooses Option 1, the liquidated damages amount is fixed to the one or two months’ rent that have inserted in Option 1. YOU CANNOT also charge the tenant a concession payback. Now you may be wondering why this is the case. The law is not clear on its face regarding this, BUT the legislative history of the law will show that the legislative intent of the bill passing process dealt with this. In attempting to get the Early Termination Law passed, early drafts and versions of the bill before it was enacted into law INCLUDED a concession chargeback. Through negotiations with the legislators and the Governor, it became clear that the Governor wanted concession chargebacks removed from the bill, or else he was going to veto the bill. The concession chargeback language was removed from the bill, and therefore it is fairly clear now that the liquidated damages are limited exclusively to the one or two months’ rent in Option 1. While this does not seem fair for a tenant to receive a generous concession, break a lease and then only be required to pay liquidated damages, the landlord must understand that providing rent concessions are done at the risk of the apartment community. Give the gift, but don’t expect anything in return.
Requiring Notice from the Tenant
Under the Early Termination Law, the tenant can be required to give notice to the landlord of up to 60 days in addition to being charged liquidated damages of up to 60 days’ rent. It would appear to the average reader that this means you can ask a tenant to give you notice, charge the tenant through the notice period and then ALSO charge the tenant up to 60 days additional rent as a liquidated damages. For example: a tenant walks into your office, pays the rent and gives you 60 days’ notice. The tenant then leaves after 30 days. What does the tenant owe you if they chose Option 1? The tenant only owes you the 2 months’ liquidated damages. Now suppose the tenant gives you 60 days notice and stays and pays for the 60 days and then vacates. What does the tenant owe you? The exact same thing: 2 months’ rent as liquidated damages. As you can see, the notice requirement of Option 1 is really quite hollow. You want them to give you notice, BUT if they do not, the penalty is exactly the same. We caution you to never charge the tenant through the notice period PLUS the liquidated damages, because that is how all the lawsuits and the need for the law change begin in the first place. If the tenant gives you 60 days’ notice and lives there for 60 days, great. If they give you 60 days’ notice and pack up and leave or do not give you notice at all, you can STILL only charge the liquidated damages amount. If you have any doubts as to what you can charge the tenant, call your attorney ASAP.
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Mid-America’s Open Arms Program
by Harry A. Heist, Attorney at Law
A couple weeks ago, I had the opportunity to visit an apartment in South Carolina. Although I have represented hundreds of apartment communities for close to 20 years, rarely if ever have I been inside any of my client’s apartment units. It just usually is not necessary. Most of the time, our job is to remove residents from apartments, and occasionally I will go on-site to put on an in-house seminar or have a meeting with a client. I have seen plenty of apartment pictures of move-in and move-out conditions, the marketing brochures and websites, but living in a house for so many years, the inside of a Florida apartment was just not something I had seen in a long time.
The apartment I visited in South Carolina was special and indeed unique. I pulled into the entrance driveway, and it looked like your typical Florida apartment community. The nice landscaping, the “Welcome Home” sign, the access gate, the office near the entrance, the speed bumps. Nothing out of the ordinary. I parked the car and proceeded to Unit 167, which was the last door in the breezeway of one of the three story buildings. Upon entering the apartment, I observed what was probably the typical apartment unit you would find in Florida. The living room and dining areas were off of the entrance, there was a kitchen and a countertop through to the dining room, 2 bedrooms, 2 bathrooms and a room off of one of the bathrooms with a full size washer and dryer. There was a lanai off of the living room looking out onto a landscaped hill. While I am sure it looked like a typical apartment, there was a striking difference; the unit was fully furnished like a seasonal rental you would have in Florida: move-in ready with everything you would need to take up residence. All the usual furniture, TV, phone, fully stocked kitchen, towels, sheets, pillows, paper products, dinnerware on the dining room table: everything you would need besides your food. It was as if I stepped into someone’s occupied apartment.
You may be wondering where this story is going. Well, this was no ordinary furnished apartment. No, it did not have granite countertops, no in–door icemaker, no stainless steel appliances, no huge flat screen TV, no fine art on the walls, no high end furniture, and no concierge service. It was a fully functioning, furnished, clean and welcoming apartment which was the temporary home and place of comfort to my good friend Nan Cavarretta, whose husband Donnie has been in a nearby hospital gravely ill for almost 2 months. You see, Nan lives over an hour away in North Carolina and Donnie’s condition was such that he could have died any day. Nan needed to be at the hospital every single day to help out, make decisions and be with the one she loves so dearly. Nan could possibly have stayed at a hotel nearby the hospital, but the cost of a hotel would have been prohibitive, not to mention having to go out to eat each day. With massive medical bills already and being out of work due to Donnie’s hospitalization, it would have been nearly impossible for Nan to be near Donnie, and driving over 2 hours each day would have taken a serious toll on Nan physically, financially and emotionally. How did it come about that Nan was able to have such a wonderful gift given to her? Where did this apartment come from?
Mid-America Apartment Communities, one of our clients who owns and manages many apartment communities in Florida and many more throughout the country, provided this apartment to Nan. Did Mid-America do this because Nan was so “well known” in the industry or “special”? Well, we all know and love Nan, and she is indeed special to hundreds if not thousands of people in the industry, but Mid-America does this for hundreds of people in the same situation as Nan through their Open Arms Foundation. The Open Arms Foundation was developed by employees of Mid-America to provide a safe, comfortable place for individuals or out of town families to stay when a family member is hospitalized. Truly a home away from home. Like Nan, many times friends and family members live far from the hospital or must come in from another state for a period of time to be with their loved ones, some who may even be afflicted with a terminal illness and be in their last days of life. A situation like this could be devastating and exacerbate an already bad situation. Mid-America started this program in 1994 and now has 38 Open Arms Apartments through the United States, funded through employee donations, fundraisers, payroll deduction plans, and others who wish to help out.
Interested? What can you do to help?
First off, the Open Arms Foundation does accept donations to support the program, and we urge you to read more about their award winning program at Open Arms Foundation and donate if you can. If you really want to take this idea to another personal level, think about using one of your vacant units and possibly starting your own program. We all know most properties have vacant units! So many companies and individuals in the industry would be willing to help out. The furniture rental companies may donate the furnishings, your local stores may donate linens, the supermarket may even donate gift cards, you can have a fundraiser on your property or through your local apartment association, you can even hit the thrift stores for sundry items. The possibilities are endless for you to make a huge difference in the lives of people in need. While Mid-America took this program and made it into a non-profit charitable foundation, you can start smaller and start immediately. I hope the Open Arms Foundation which the employees of Mid-America created will inspire you and your company to give this a try. Thank you Mid-America for your efforts, commitment, generosity and inspiration.
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Authorizing the Unauthorized Pet
by Michael Geo. F. Davis, Attorney at Law
Much to the chagrin of many a manager, the unauthorized pet that she wants removed has somehow become authorized. This is particularly distressing when the unauthorized pet is an aggressive pit bull or a 100 pound Labrador. How did this happen? Note that this article does not apply to service animals, as they are statutorily authorized by the various fair housing laws, regardless of any lease provisions to the contrary.
The correct procedure
As everyone knows, the correct procedure for an unauthorized pet is to send a 7-day cure notice. Seven days after service of the notice, you gather the evidence that will be needed to support a 7-day termination notice and then serve it. A good practice is to offer an agreement to vacate to the tenant responding to the notice. The agreement serves the best interests of both the landlord and tenant. The landlord avoids the expense of filing an eviction and the prohibition against accepting payment from the tenant while the 7-day termination notice is outstanding. The tenant avoids the stigma of an eviction. Whether the tenant is released from any further financial obligations under the lease (rent until relet) is a separate matter of negotiation. If the landlord does not want to force the issue of lease termination, it is legally permissible to serve another 7-day cure notice to give the tenant additional time to dispose of or apply for authorization of the pet.
Waiver and estoppel
Every landlord should be mindful of two legal concepts: “waiver” and “estoppel”. Waiver is a legal concept under which a party is found to have foregone his legal right by his actions. The lease gives the landlord the right to demand that an unauthorized pet be removed. However, his actions are so inconsistent with enforcing that legal right that he is deemed to have “waived” that right. The most obvious example of a waiver is renewing a lease when he knows that the tenant has an unauthorized pet.
Estoppel is a legal principle holding that if a party makes a legal representation to another party and the other party relies on that representation, the first party is prohibited from taking an action contrary to that representation to the detriment of the other party. He is “estopped” from taking legal action that takes unfair advantage of the other party’s trust in his representation. For example, the lease prohibits pets, but the landlord’s agent indicates that the provision is not enforced as long as the pet causes no problems. The tenant with the pet relies on that representation and signs the lease. The landlord cannot enforce the no pet policy against that tenant, because the tenant relied upon the agent’s statement in signing the lease. It does not matter that at the time the agent made the statement it was the truth, and that the landlord has recently decided to enforce the no pet policy.
A continuing breach?
Florida Statutes provide that, if the landlord has knowledge of the tenant’s breach of the lease and accepts payment from the tenant, the landlord waives that breach. (“Acceptance of money is forgiveness”). This prevents landlords from dredging up old lease violations to suit their needs.
The unauthorized pet is thought to be a continuing lease violation, because the unauthorized pet breach continues after payment. A county court judge may not agree. His opinion may be that it was the act of obtaining the unauthorized pet that was the lease breach. Acceptance of payment without objection from the landlord, after the landlord has knowledge of that lease breach, is a statutory waiver of that breach forever. The 7-day cure helps to refute this argument, since it indicates the landlord’s objection.
When does the landlord know?
The landlord’s knowledge of the unauthorized pet is the trigger which subjects him to the tenant defenses outlined above. The landlord is imputed to have the knowledge of all of his past and present agents. This means that even the best, new manager is stuck with whatever the old manager and staff knew.
This concept makes it advisable for a new manager to examine all the tenant files for evidence that there are known unauthorized pets. The most obvious evidence will probably be complaints from other resident about unauthorized pets. The manager should interview each staff member for any known lease violations, including unauthorized pets. Perhaps a maintenance person knows of a harmless cat owned by a nice resident and in a mistaken act of kindness has said nothing.
Having found yourself with a deemed authorized pet, what about demanding that the tenant sign a pet addendum and pay a pet fee, pet deposit or pet rent? It can be argued that the landlord has also waived these. I believe the better argument is that the landlord has waived objecting to the pet but has not waived that the tenant’s compliance with the process of authorizing the pet.
Demand can be made to fill out a pet application and sign a pet addendum. The tenant is subject to the standard rules and regulations regarding pets. Likewise, I think the tenant has to pay the standard pet fee (the fee for the privilege of having a pet on premises) and the standard pet deposit or increase in the security deposit, whichever is the landlord’s policy, and the standard monthly pet rent prospectively. It is unclear if past pet rent would be collectible. The failure to charge it at the time the landlord knew of the pet probably resulted in its waiver.
A word of caution about implementing your standard pet procedures: this is just my opinion, and many county court judges may feel that the pet fee, deposit and/or rent have been waived completely. Lastly, my opinion changes if a renewal is involved and the pet is known at the time of renewal. Renewing a tenant with a known pet operates as a waiver of all pet associated fees, deposits and rent. The landlord may not even be able to demand that the tenant sign the pet addendum, which was ignored at the time of lease renewal.
I hope this article makes clear that a delay in addressing the unauthorized pet may in effect authorize that pet. It may even operate to waive the ability to collect a pet fee, pet deposit and pet rent.
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