VOLUME 11 - ISSUE 1 LEGAL UPDATE
- The Curable Noncompliance Part 2
- Sevicemembers Terminating the Lease
- Abandoned Items – Back to Basics
- The “Innocent” Request
- Single Family Quick Legal Q AND A #3
The Curable Noncompliance Examined #2
by Harry Heist, Attorney at Law
The article is the second in a multi-part series examining specific curable noncompliances and how the property manager must deal with getting compliance or setting the case up for a potential future eviction action. Each noncompliance is unique; many are dealt with in a similar way, but often the proof needed to proceed with legal action if the noncompliance is not cured differs. The legal papers filed in the court for an eviction for a non-rent lease noncompliance are very similar to those filed for a nonpayment of rent case, but if the case is contested, the property manager must be prepared to prove AND win the case.
The vast majority of property managers have prepared and served a Seven-Day Notice of Noncompliance with Opportunity to Cure to a resident. Some property managers have had to file evictions when the noncompliance was not cured. Only a small fraction of property managers have had to deal with a contested case concerning a noncompliance eviction, in which the resident has fought to stay in the unit. Finally, in an even smaller percentage of those cases, the resident was represented by an attorney fighting the case, but when all those elements are present, the property manager stands to LOSE a majority of those cases.
BARKING/NUISANCE NOISE PETS
PROBLEM: Resident’s authorized pets are causing a nuisance due to noise.
FORM: SEVEN-DAY NOTICE OF NONCOMPLIANCE WITH OPPORTUNITY TO CURE
WORDING: “Your pet is causing unreasonable disturbances on the premises due to barking and is disturbing the peaceful, quiet enjoyment of the premises for other residents” (Note: Have your attorney help you with the exact wording – this is for sample purposes only.)
RENT ACCEPTANCE: Do not accept rent after you have served your Seven-Day Notice of Noncompliance with Opportunity to Cure, unless you are certain the pet disturbances have ceased. Acceptance of rent may waive your ability to proceed. If the disturbances cease, you may accept rent.
PROOF ISSUES: Most likely you have received complaints from other residents. You need them to write down the dates and times they were disturbed and what they heard. You need to explain to them that they may have to come to court and testify if you end up having to file an eviction. You may think that you can simply present letters from the residents or reports in court, but you cannot. Letters and reports are usually inadmissible hearsay. Please read our article on hearsay so you better understand this. You and or your staff should hear the noise disturbances yourself, documenting the dates and times. Finally, a recording of the barking or other noise could be crucial to winning the case in court. An hour of recorded noise could spell success in court. The absence of sufficient or proper proof spells disaster.
1. Internal reports you and your staff have created based on complaints.
2. Written reports detailing dates and times from your residents.
3. Written letters or reports from other residents.
4. Residents of the community who will testify in court that they heard the noise and that it was severe.
5. Audio recording of barking, chirping, noise, etc. of the unauthorized pet AFTER the Seven-Day Notice of Noncompliance with Opportunity to Cure expired.
GAS GRILL ON BALCONY
PROBLEM: Resident has a gas grill on the balcony, patio, lanai area in violation of the lease, rules and regulations or local law.
FORM: SEVEN-DAY NOTICE OF NONCOMPLIANCE WITH OPPORTUNITY TO CURE
WORDING: “You have a gas grill on your balcony in violation of the terms of your lease, rules and regulations and/or law, code or ordinance” (Note: Have your attorney help you with the exact wording – this is for sample purposes only.)
RENT ACCEPTANCE: Do not accept rent after you have served your Seven-Day Notice of Noncompliance with Opportunity to Cure, unless you are certain the grill has been removed. Acceptance of rent will act to waive your ability to proceed and could end up authorizing the grill.
PROOF ISSUES: You need to take photos of the balcony, patio, and lanai area and have witnesses, such as other employees, who will testify in court if necessary.
1. Photos of the gas grill before, during and after the curative period, if not cured.
2. Employee witnesses who can testify in court.
FOLLOW UP AFTER GRILL REMOVAL
Oftentimes, the grill is removed from the balcony only to end up in the unit. This is extremely dangerous. Any unauthorized grill issue should be followed up with an interior inspection of the unit, including closets, to confirm the grill is not being stored in the unit.
PROBLEM: Resident has poor housekeeping to the point of filth, infestation, hoarding, rotting food and/or noxious odors. The situation goes far beyond clutter or mess.
FORM: SEVEN-DAY NOTICE OF NONCOMPLIANCE WITH OPPORTUNITY TO CURE
WORDING: “You are failing to maintain your unit in a clean and sanitary condition due to an accumulation of trash, filth, and rotting food, resulting in noxious odors and infestation of insects” (Note: Have your attorney help you with the exact wording – this is for sample purposes only.)
RENT ACCEPTANCE: Do not accept rent after you have served your Seven-Day Notice of Noncompliance with Opportunity to Cure, unless you are certain the unit has been cleaned to your satisfaction.
PROOF ISSUES: A messy or cluttered unit is not a lease violation. It must be bad. Real bad. Courts are very reluctant to evict a resident for housekeeping issues unless the housekeeping problem is extreme. If the lease is close to the expiration date, you are far better off non-renewing the tenancy, NOT trying to evict based upon a Seven-Day Notice of Noncompliance. Often the report of poor housekeeping will come from your pest control professional. This must be immediately followed up by staff. While you will be getting written reports, remember that those reports will be inadmissible hearsay, and the person who actually saw the unit and wrote the report will be required to come to court and testify. After the curative notice expires, you should give written notice of inspection, and be prepared to document again with photos the condition of the unit.
1. Written reports from pest control if applicable.
2. Testimony from pest control if applicable.
3. Photos of the unit’s condition by pest control and maintenance staff.
4. Written reports from maintenance staff.
5. Any correspondence between the resident and staff.
6. Any correspondence from residents in surrounding units who may have complained about noxious odors and/or pest infestation.
A Cautionary Note
In some cases, the resident’s disability, be it physical or mental, may have contributed to the situation. Speak with your attorney, as you do not want a housekeeping issue to develop into a Fair Housing complaint.
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Sevicemembers Terminating the Lease
by Brian Wolk, Attorney at Law
Perhaps one of the most misunderstood areas of the law for property managers is how to deal with military personnel who wish to terminate a lease prior to the end of the lease term. Often the resident will have made wrong assumptions not based on actual law, or the property manager will not be properly trained in this area of the law. In fact, in many instances both the military resident and the property manager will be dreadfully misguided, and a casserole of utter confusion will be created. If a property manager has never encountered these types of questions from residents in the military, then it is a safe bet that the property manager will. Years ago these types of questions were rarely asked, but now with military actions around the world, along with natural catastrophes such as earthquakes, servicemembers are often deployed or relocated, making these questions very common. It is important to note that servicemembers enjoy a wealth of protection under both federal and state law. Most would agree that this is good result, as we want the men and women that safeguard our country themselves protected in these situations, so that they do not face financial ruin. Property managers must also realize that servemembers enjoy free advice from their military branch, and many outside agencies assist servicemembers and arm them with information about their rights as residents. If the property manager feels like all of this is just too much of a headache and therefore declines the application of servicemembers because of their military status, they better think again. Florida law prevents a property manager from discriminating against military personnel. Significant liability will be in store for the company that engages in that type of discrimination. The good news for property managers is that an experienced attorney can point them in the right direction when they are faced with issues involving servemembers who wish to terminate leases early.
The Servicemembers' Civil Relief Act, also known as "SCRA", is a federal law which provides United States military personnel a number of protections in civil lawsuits. The SCRA covers members of the Army, Navy, Air Force, Marine Corps and Coast Guard on active duty, or those on active duty in the National Guard and Public Health Service or National Oceanic & Administration commissioned officers on active service. For example, this law enables servicemembers or their family members, or dependents in some instances, to delay or suspend civil liabilities, as well as setting the framework for terminating leases, including residential leases. SCRA does not apply to retired military personnel or troops called to duty under state orders.
Lease Termination under SCRA
If a resident after executing a lease becomes an active duty servicemember or receives orders for a permanent change of station or receives orders to deploy for 90 days or more, then the SCRA authorizes a servicemember to terminate a lease that the servicemember has signed for either himself or his dependents with no penalty. However, the resident must provide written notice effective 30 days after the next rent due date. For all tenancies in instances when rent is due monthly, the lease will terminate 30 days after the first date on which the next rent payment is due, after the lease termination notice is provided. For example, if the rent is due on the first of the month and the notice is delivered to the property manager on March 5, the lease obligations will terminate as of April 30. No claim on the security deposit may be made for the rent period after April 30, assuming the resident vacates, but rent through that date and physical damage claims to the premises in excess of reasonable wear and tear may be assessed. For all other tenancies, the lease will terminate on the last day of the month after the month in which the proper notice is given. A resident terminating the lease early is required to deliver to the landlord, either in person or by certified mail return receipt requested, a written termination notice stating that it is given pursuant to SCRA, along with a copy of the military orders. Oral notice is not authorized under this federal statute. A property manager may not charge the resident who successfully terminates the lease pursuant to SCRA any lease break charges or early termination of lease penalties. The SCRA does not specifically grant dependents the ability to terminate leases, but it is possible that a judge may determine that it was the intent of the framers of the law to give dependents that protection as well. This can be confusing for property managers, as dependents do have special protection under SCRA when they are under eviction.
Florida has enacted a law to allow servicemembers to terminate leases. The purpose of the law was to offer additional protections for servicembers to supplement the protections afforded under federal law. The Florida law offers a wide array of specific eligibility requirements, so a property manager must not respond off the cuff and say no to any lease termination request by a servicemember, unless there is first a careful determination made that the servicemember is not eligible to terminate the lease.
Scope of the Florida Law
Florida law allows a servicemember to terminate a lease if they are released from active duty or state active duty after having leased the premises while on active duty or state active duty when the rental premises is 35 miles or more from the servicemember's home of record prior to entering active duty or state active duty. The statute also authorizes lease termination rights to a servicemember who is prematurely or involuntarily discharged or released from active duty or state active duty. Servicemembers are also covered under Florida law if the servicemember has leased the property, but prior to taking possession of the rental premises, receives a change of station order to an area that is 35 miles or more from the location of the rental premises. A property manager must also take note that Florida law will allow a servicemember to terminate a lease if after entering into a rental agreement, the servicemember receives military orders requiring the servicemember to move into governmental quarters, or the servicemember becomes eligible to live in and opts to move into governmental quarters. Florida law also protects servicemembers who are given temporary duty orders, temporary change of station orders, or state active duty orders to an area 35 miles or more from the location of the rental premises, provided such orders are for a period exceeding 60 days. If the servicemember is authorized to terminate the lease early under Florida law, the tenant's rental obligations run for thirty straight days from the time formal notice is provided. That is a more favorable result from the servicemember’s perspective than applicable federal law. For example, if notice is given on July 17, the lease would terminate on August 16, as opposed to August 31 under federal law. Florida law does not expressly authorize dependents to terminate leases in these scenarios, but a judge could decide that the intent of the legislators was to offer that protection to dependents as well. Finally, a servicemember who invokes termination rights pursuant to Florida law must provide at least 30 days' written notice to the landlord, which must be accompanied by either a copy of the official military orders or written verification signed by the servicemember's commanding officer.
Leases Signed by both Servicemembers and Non-Servicemembers
A servicemember may terminate the lease without the permission of another resident who signed the same lease. Does the non-servicemember resident remain liable on the lease? The law is unclear on this point. State and federal laws allow the servicemember to terminate the lease. Therefore, it could be argued that only the servicemember's liability is terminated under the lease. However, it could also be argued that the servicemember has the power to cancel the entire lease on behalf of all residents, if the other resident does not intend to remain in occupancy beyond the notice period provided by the servicemember. In this situation, it may be wise to allow all residents to terminate, rather than risk losing in court and paying substantial amounts of money to the non-servicemember’s resident’s attorney, if that resident prevails in court. If the non-servicemember remains in occupancy, then the landlord will need to recognize that resident’s ongoing occupancy rights, but the non-servicemember should then be fully responsible for the remaining lease obligations.
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Abandoned Items – Back to Basics
by Brian Wolk, Attorney at Law
One of the most gut wrenching and pressure filled decisions a property manager must make is how to effectively and properly deal with personal property that a resident has left behind. A property manager must carefully remain in full compliance with Florida law when faced with this type of situation. Property managers must not give in to the temptation of relying on their own common sense. In fact, many of the applicable laws that pertain to the disposition of abandoned items are counter-intuitive. The successful property manager will have a properly written lease that authorizes the disposal of abandoned property. Proper documentation in the resident’s file is also crucial in order to support any claim that the items were abandoned. Why is this so important? A property manager who does not navigate through this process carefully can cause his or her company to be liable for hundreds of thousands of dollars to the former resident, and if that does not scare a property manager, then perhaps the possibility of jail time will!
How to Determine if a Unit is Abandoned
A property manager, before determining whether items in a unit have been abandoned by a resident, must first correctly evaluate the situation and determine whether the unit is in fact legally abandoned. The idea that a unit with no power on must be abandoned is simply an urban myth. Florida law sets forth a definition for legal abandonment in the absence of actual knowledge of abandonment. To meet the test for legal abandonment, a property manager must be able to prove the following three elements to establish a presumption of abandonment: (1) the rent is past due, (2) the resident did not notify the property manager of an intended absence, and (3) the resident has been away from the premises for at least 15 straight days, if rent is paid monthly. Without a private investigator staking out the rental unit, proving 15 consecutive days of no occupancy can be prohibitively difficult. Many property managers are stunned to learn that the above definition for abandonment has nothing to do whether power is on inside the unit, or whether mail has been retrieved from the mail box by the resident. A seasoned property manager will not give in to the temptation to be guided by instinct or common sense in this type of situation, and will simply see if the unit meets the above test for legal abandonment. Remember, you must prove in court that all of the elements for legal abandonment have been met if your company is sued. If there is any doubt, then the property manager should evict in order to obtain a writ of possession, which authorizes the property manager to place at the property line the personal items left behind by the resident once the sheriff executes the writ of possession. Remember also that a presumption is created when all three parts of the above test are met. Presumptions can be overcome in court, particularly if the personal property left behind is valuable. Disposing of the Former Resident’s Abandoned Items
If the property manager is completely and justifiably confident that the unit has been legally abandoned, then the property manager must next determine how to deal with the property inside the abandoned unit. The Florida Landlord/Tenant Act authorizes the property manager to dispose of abandoned items inside the unit if certain requirements are met. The fact that the unit is legally abandoned does not automatically give the property manager the ability to dispose of the items that the former resident left inside the unit. If the property is legally abandoned and the lease has proper wording, then the property manager need not place the abandoned items at the property line, unlike disposing of items upon the execution of a writ of possession.
Lease must have Proper Abandoned Property Clause
If the lease was drafted with the proper language required under Florida law, the property manager may dispose of the resident's personal property without liability when the property manager obtains possession of the premises after abandonment is established. The abandoned property legend language which must be placed in the lease is:
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
If the lease used does not have a correct abandoned property clause, as required by the statute, or if there is no lease, then the property manager should contact his or her attorney and start an eviction action in order to obtain a final judgment of eviction and a writ of possession.
Best Practices for the Property Manager
A wise property manager should never allow staff to take any of the resident's property for their own personal use. Such action will tend to undermine the property manager’s credibility; a judge may believe that the property manager was motivated by bad intent, and the judge will likely find that the unit was not abandoned. Also, if the unit is filled with furniture, a property manager should contact an attorney before removing anything, as the potential liability can be sky high! It is also always a good idea to take pictures of the unit and place them in the file.
Surrender of the Unit
If all the residents have surrendered the premises by turning in all keys to management and vacating the premises, the property manager absolutely may not assume that he or she can throw out the items left behind. The lease must contain the same required abandoned property legend mentioned above. However, even if the lease contains the required legend in the lease, some less than honest residents will inevitably later deny that they surrendered the unit and will sue for the destruction or loss of their personal property. If a resident has surrendered possession but left items inside the unit, then the property manager should attempt to obtain a written confirmation from each resident listed on the lease that the premises have been surrendered, and that there is no claim to any property left behind.
If a resident is under eviction, the resident will often vacate prior to the sheriff executing the writ of possession. Residents often make multiple trips back to the unit to remove items during an eviction action. Residents can and will trick property managers into taking back a unit prematurely, so if the resident is under eviction, the property manager should be patient and wait for the sheriff to execute the writ of possession when there has been no surrender, and items still remain inside the premises.
Storage Items and Vehicles Left by the Resident
Residents rarely truly abandon an operable automobile or boat, trailer, or any other vehicle. If a property manager discovers that a vehicle remains after the resident has vacated, the police should be contacted, as they will remove the vehicle if it is stolen. If the police do not remove the vehicle, then the property manager should consult an attorney for advice. Additionally, the resident may have left behind items in a garage or storage unit. If the storage unit or garage is not listed in the lease properly, then the property manager may not dispose of those items upon surrender, abandonment or eviction. It is often unreasonable to believe that a person would abandon those items, so the property manager must proceed with extreme caution in these circumstances and consult with an attorney.
A property manager who prematurely throws out the property of a resident can face charges for criminal theft and may be liable for civil theft. Also, The Landlord/Tenant Act, when defining prohibited practices by the landlord, provides the following: "A landlord who violates any provision of this section shall be liable to the tenant for actual and consequential damages or 3 months' rent, whichever is greater, and costs, including attorney's fees. Subsequent or repeated violations that are not contemporaneous with the initial violation shall be subject to separate awards of damages." Prohibited practices include, but are not limited to, prematurely changing the resident’s locks and prematurely disposing of a resident’s personal property. The wording of the statute makes it clear that the potential amount of liability in a given case can be very significant. For example, if the monthly rent is $1600, then the minimum penalty would be $4800 for one prohibited practice violation. However If the resident's property was valued at $6000, and the resident also had consequential losses of $4000, the penalty to the landlord if the resident prevailed in court would be $10,000, along with attorney's fees and costs. The resident would not be limited to $4800, the three months' rent penalty, because the resident's actual costs and consequential damages were more than three months' rent. What a horrendous result that would be!
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The “Innocent” Request
by Harry Heist, Attorney at Law
Occasionally, whether you are a manager in the single family home or multi-housing context, you will be asked seemingly innocent questions, or you will get requests by applicants, residents or owners which seem logical and proper, but are mines in the “Fair Housing minefield.” When managing single family homes, sometimes the owner will request certain terms or conditions of the rental: no kids, higher rent if there are kids, occupancy limitations, no kids if there is a pool, waiver of liability signed by resident if there is a pool, no residents of a certain national origin. An apartment owner may ask you to reserve certain buildings for adults only: you know, quiet buildings. An applicant may ask about the demographics of your apartment community. If that applicant is Hispanic and is asking if many Hispanics live in the apartment community, that can’t be bad, can it?
TELL ME ABOUT THE APPLICANTS
You are in the process of approving an applicant, you speak with the owner, and the owner wants to know about the applicant. Color, race, kids, etc. Should you tell the owner? Why is the owner involved in the first place? You will find that professional property managers have the ability to deny or approve an applicant and sign the lease on behalf of the owner with no input from the owner, UNLESS the property manager wants to have input from the owner. Allowing an owner to sign a lease gives the owner the ability to ask questions about the prospective resident before the lease is signed. Never a good idea.
NO KIDS ARE ALLOWED
Let’s face it. Kids can do a lot of wear and tear on a property. They come in and out all the time, they play in mud, they play football in the house, and sometimes they express their artistic flair by using a Sharpie on the living room wall. Your owner had a bad time with the last family, and this time is looking for that quiet retired couple with grown kids who long moved on. Can you accommodate this request? No. An apartment community owner may have decided that he has had enough with younger folk, preferring the older set. Unless the property is a designated over 55 community, and you have full proof of this, you cannot steer or discriminate against people based upon their familial status. Pretty obvious, but it does come up.
NO KIDS, WE HAVE A POOL!
Many owners of single family homes are deathly afraid of having a child get injured or drowning in their pool. A common request is for you to either not rent to families with children, OR make the residents sign a document which will attempt to limit the liability of the owner in the event a child is injured or drowns in the pool. Well, we have a couple problems here. First, you cannot refuse to rent to families with children because you are afraid of a possible death or injury. Second, just merely asking a resident to sign a limitation or release of liability is a Fair Housing violation. Not only would a release like this be ridiculously worthless, BUT it is an attempt to take away a person’s right to sue. What person? A person with children. This is clear-cut familial status discrimination.
Students are not a protected class unless they have been made a protected class by a local law or ordinance. Never take any action in denying students from renting, unless you are 100% sure that a law or ordinance has not changed or been put into effect. If the student has children, the situation gets further complicated, as possibly we have a familial status issue.
NO BOY – GIRL IN BEDROOM
Common sense would dictate that at certain ages, children of the opposite sex should not be sharing the same bedroom or sharing a bed. While you may have views, feelings or beliefs on this, it is not your place to tell a parent what to do in this regard concerning conventional, non-HUD or subsidized housing. If the parents wish to rent a two bedroom apartment with their 16-year old boy and 12-year old girl sleeping in the same room, that is their decision, not yours or the property owner. If you get a request like this, you must explain to the property owner that denying the applicant on this basis or even discussing this with the applicant would be a violation of the Fair Housing laws.
NO KIDS UPSTAIRS
Kids make noise; they play, they jump up and down, and they run around. Your owner tells you not to put kids in any upstairs unit because they fear problems with the downstairs residents. No can do. This is a Fair Housing violation. The owner’s valid fear that the children will disturb downstairs neighbors is not a legal basis for denial or limiting rentals to families with children to the first floor.
NO MORE THAN X NUMBER OF PEOPLE
A common request is for you to limit the number of people in a particular unit. Some owners just don’t want 8 people in a 4 bedroom house. What if a prospective family comes along with 6 kids and 2 adults? Can you deny them on this basis? This would be a Fair Housing violation. The law is very unclear in limiting occupancy, but you can be confident that it is dangerous to limit occupancy to less than 2 people per bedroom. If a home has a septic system, and you can prove that the septic system can only handle a certain amount of people, that may be a different story, but you would need to make sure you have the written proof of this ahead of time from a licensed septic service person.
Your owner got burned before. A man in the military moved in and 3 months later gave notice and was legally able to break the lease, because he was moving into base housing 2 miles away!! “No more!”, the owner exclaims. Well, this is discrimination against a servicemember, and is illegal under both federal and Florida law.
NO PETS AT ALL
The owner states that no pets are allowed period, and tells you that under no circumstances will a pet be allowed. The last pet destroyed all the rugs, and this is not going to happen again. You get an applicant who has a service animal. Not only is it a service animal, but it is a big German Shepard. Can you deny this applicant? No. The applicant is allowed to have a service animal. A service animal is not a pet; it is a service animal. If you are not sure what to do when an applicant has a service or assistance animal, give us a call as soon as possible.
RESIDENT PAINTS AND OWNER PAYS FOR MATERIALS
Your applicant or resident wants to get a deal and offers to paint the unit. Sounds good. Not only that, the applicant or resident is a painter! The owner just has to pay for the paint, and the labor will be free. Bad idea. The resident will either not paint at all, paint poorly, get hurt painting or not stop painting, and claim greater rent reductions are in order. We have actually seen residents put a lien on the property. It can complicate an eviction immensely, as the resident will claim that the amount you claim as rent owed is not accurate. Just say no to work in exchange for rent deals: any and all work, not just painting.
EXCESSIVE LATE FEES
Your owner wants you to charge huge late fees, like that is really going to make someone pay on time. While it is doubtful that this will make someone pay on time, it is a certainty that a judge will have a big problem with excessive late fees when you try to file an eviction. Be reasonable about late fees, and avoid piling up daily late fees. It is not about being nice, it is about winning a potential eviction.
AUTOMATIC DEPOSIT FORFEITURES
The resident breaks the lease and automatically forfeits the deposit. Illegal. Illegal since 2003 for that matter. There is no automatic forfeiture allowed under the Florida Residential Landlord/Tenant Act. The damages that can be charged when the resident breaches the lease are defined and limited by Florida law. While it would seem logical and fair to have an automatic forfeiture, it simply is not legal. Now does that mean the resident gets the deposit back if the resident breaks the lease? Doubtful. Most likely there are sufficient “damages” i.e., money due to physical damage or rent owed that will justify retention of the full deposit.
AUTO-RENEWAL OF LEASES
Automatic renewal of a lease sounds great. If the resident fails to give proper notice, the lease is automatically renewed. Surprise!! Yes, surprise! The owner intended to sell the house, and now you have a binding lease for another year, OR the resident expected to move at the end of the lease and forgot to give you notice. Auto-renewal clauses, while legal, are seriously problematic, and we strongly discourage their use.
ALLOWING RESIDENTS TO USE PERSONAL ITEMS
Your owner left behind some furniture or other personal items. The resident may or may not be allowed to use the items. The resident moves out, and the items are gone. The resident uses the owner’s old pool chair, it breaks, the resident breaks a hip, gets an infection and has serious medical complications, or possibly even dies. Who is liable? It was the owner’s chair, and you knew it was in the unit when the resident moved in. Liability? Possibly. Units need to be 100% cleaned out of ALL personal items, or a detailed addendum needs to be drawn up. We see bad things happen all the time when owners store some of their personal property in an occupied unit, or allow the resident to use their personal property. Expect things to go wrong.
What could be better than a long lease? Actually, what can be worse? Often an owner will fall into the trap of entering into a long lease with a resident thinking that this will lock the resident in for many years, and all will be fine. The truth is that in Florida, many residents simply decide to break the lease at will. While you can “go after them”, this is usually a fruitless and expensive exercise. Few owners collect lost rent from the resident. The problem is that the resident can hold the owner to a long lease. The owner may be fed up with the problem resident, or may wish to retire early and move back into the house, or sell it. If the resident is not in default of the lease, the resident can force the owner to honor the lease, and there is NOTHING the owner can do to overcome this. We do not recommend any lease for more than 2 years.
APPLICANT’S INQUIRY OF RESIDENT COMPOSITION OR CRIME RATE
Some applicants will inquire as to the racial composition of the community. For example, a Caucasian applicant wants to know if most of the residents in the community are white. Don’t try to answer this question, except to clarify that Fair Housing laws prohibit you from trying to answer this question. Some applicants will want to know if the crime rate is low on and near the property. Refer those applicants to local law enforcement for any statistics concerning crime in the area; do not make statements minimalizing the risk of crime in the community and in the general area.
When managing property, you will get weird inquiries and requests. That is a given. The key is to be able to spot these requests and see them as a warning sign. Being consistent and having the exact same lease or policy should be the goal, but there are times when you have to bend a bit to keep from losing a deal. If you get an odd request or inquiry, recognize it, and then ask for advice. While we can’t say that we have seen it all, it is rare that we come across a request that we have not dealt with before. Give us a call!
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QUICK LEGAL Q & A #3 by The Law Offices of Heist, Weisse & Wolk, P.A
Q. According to our property management agreement which renews each year, we are given the right to sign leases on behalf of the property owner. The end of the year was approaching, and we sent out our standard offer to renew letter. Our excellent, long term residents came in and signed the renewal lease; we signed the lease, and provided them with a copy. Two weeks later, we got an e-mail from the property owners, advising us that they no longer wished to rent the house out, as they were planning on selling. In the e-mail, they told us they wanted the residents out at the end of the lease. Well, we spoke with the residents, and this did not go over well. They say they are not leaving, because they have a signed lease for another year. Are we in trouble?
A. You do have a problem that could have been avoided by checking with the owner prior to offering the lease, or before signing the renewal lease with the resident. It is that last, final check before signing the renewal lease. While your property management agreement and your power of attorney gave you the full right to do just what you did, the owner sometimes has a different expectation, and differing expectations and changes of plans can result in just this situation. Legally, you probably do not have any liability, but the fact remains that you have an angry owner who wants the residents out, and legally, they do not have to vacate. There have been some situations when the property owner had indeed notified someone in the property management company that the lease should not be renewed, and this information, for whatever reason, never made it to the property manager. In a case like that, there would be severe legal liability. In the present case, there is not much you can do, but you can try again to see upon what terms the residents would agree to vacate early. From now on, make it your procedure that before signing any renewal lease that the owner be contacted, and preferably have something in writing from the owner ratifying the renewal effort. You may avoid more aggravation by checking with the owner before even making the renewal offer.
Q. There are a lot of homes available to rent in the particular subdivision where we manage a home. Our current resident has been griping that his rent is higher than that charged on many of the houses like his or even nicer than his. He had been making veiled threats that he wants to break his lease unless the owner will “work with him” on the rent. I spoke with the owner, who agreed to allow me to lower the rent by $100 a month, as this owner cannot afford a vacancy. I spoke with the resident, and he seemed satisfied. Well, when the next month came along, my nice resident took it upon himself to reduce his rent by $150, so now we have a balance owed. Did I do something wrong here?
A. You made a few mistakes, and now are paying for them. In the first place, there is way too much going on verbally and not enough in writing. Try to keep all your communication in writing, and the easiest way to do this is by e-mail. It is crucial to get the owner’s permission in writing to reduce the rent. The phone call could be easily forgotten or misconstrued. After this, a lease addendum should be used to reflect the lowered rent amount. We use the Rent Reduction Addendum, and this will be signed by the resident first and then either the owner or you, if you have this authority granted to you in the management agreement. Finally, you should not have accepted the reduced rent. Accepting partial payments has its dangers, especially in situations like this. If you have a resident who has fallen on hard economic times, and you decide to accept a partial payment of say 50% of the rent, that is one thing, but when a “deal” is being made, as in your case, accepting the reduced or partial rent can be used against you to try to prove that the deal was for a $150 reduction, and not a $100 reduction. The bottom line is that everything should be done in writing, especially when a “deal” or modification like this is being made.
Q. One of our owners insists on using his handyman, Fred, for the various maintenance items that pop up on his properties. This owner has 12 houses scattered throughout the county that we manage, and although we don’t like the arrangement, I have to say the handyman is excellent. I have even used him on occasion for some of my other properties. We have a problem, though. Some of my owner’s homes were built before 1978, and may or may not have lead based paint. I heard there was some new law that required people who worked on these older homes to have some sort of “certification”. Do I have any liability here? I asked Fred if he was “certified” to work on pre-1978 homes, and he had no idea what I was talking about. This is getting me a bit concerned.
A. You should be concerned. The Renovation, Repair and Painting Rule (RRP) which has been in force for a couple years now, requires that your vendors performing renovation, repair and/or painting where possible lead based paint is disturbed be certified by the EPA and follow lead-safe practices. Homes built before 1978 have a good chance of containing lead based paint, and work on these homes could result in the release of hazardous dust. While not every little repair requires that the vendor be certified, it is dangerous to ever use a vendor who is not. In your case, you are not using a vendor, but your property owner is using Fred. Are you paying Fred? Are you arranging the appointment with the residents for Fred to make the repair? Are you aware of what Fred is doing? It is never advisable to allow an owner to use his or her own handyman, but the reality is that many managers acquiesce to this type of arrangement so as not to lose accounts, just as you probably did not want to lose 12 properties over this arrangement. If any of the properties are pre-1978, you need to take this seriously and demand from your owner that under no circumstances will Fred be allowed to do any work on those units. If this is not acceptable to the owner, you should cease managing the properties, and put this all in writing when you are terminating the relationship. The liability to you and your company is massive if your vendors are not RRP certified.
Disclaimer: These Q and A’s are basic general legal advice only and pertain to single family home management issues. They may be reproduced in full, as long as nothing in the text is modified.
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