No penalty for failure to escrow security deposit

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get-out-of-jail-freeA Sarasota County Court has ruled that although it is a violation of Florida Statutes 83.49(1)  for landlord to co-mingle the security deposit with operating funds,  the statute provides no penalty for such violation.   Tenant’s claim  that  landlord’s failure  to put the security deposit  in escrow should result in  forfeiture of landlord’s right to make a claim on said deposit and for attorneys fees and costs was denied.

OBENDORF, v. RASMUSSEN. County Court for Sarasota County. Case No. 14 CC 4623 SC. July 1, 2015.

Florida extends protection to tenants under foreclosure

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Effective July 1, 2015,  purchasers though foreclosure sale are required to give “tenants”  in possession a 30 day notice to vacate before issuance of a writ of possession.   Although the statute provides that the “tenant”  is obligated to pay rent,  it states that a landlord-tenant relationship has not been created except to the extent that the “landlord”  may not exercise self-help to remove the “tenant.”

Click here for the 30 day notice to vacate.

Here is the full text of the new statute.

83.561 Termination of rental agreement upon foreclosure.—

(1) If a tenant is occupying residential premises that are the subject of a foreclosure sale, upon issuance of a certificate of title following the sale, the purchaser named in the certificate of title takes title to the residential premises subject to the rights of the tenant under this section.

(a) The tenant may remain in possession of the premises for 30 days following the date of the purchaser’s delivery of a written 30-day notice of termination.

(b) The tenant is entitled to the protections of s. 83.67.

(c) The 30-day notice of termination must be in substantially the following form:

NOTICE TO TENANT OF TERMINATION

You are hereby notified that your rental agreement is terminated on the date of delivery of this notice, that your occupancy is terminated 30 days following the date of the delivery of this notice, and that I demand possession of the premises on   (date)  . If you do not vacate the premises by that date, I will ask the court for an order allowing me to remove you and your belongings from the premises. You are obligated to pay rent during the 30-day period for any amount that might accrue during that period. Your rent must be delivered to   (landlord’s name and address) .

(d) The 30-day notice of termination shall be delivered in the same manner as provided in s. 83.56(4).

(2) The purchaser at the foreclosure sale may apply to the court for a writ of possession based upon a sworn affidavit that the 30-day notice of termination was delivered to the tenant and the tenant has failed to vacate the premises at the conclusion of the 30-day period. If the court awards a writ of possession, the writ must be served on the tenant. The writ of possession shall be governed by s. 83.62.

(3) This section does not apply if:

(a) The tenant is the mortgagor in the subject foreclosure or is the child, spouse, or parent of the mortgagor in the subject foreclosure.

(b) The tenant’s rental agreement is not the result of an arm’s length transaction.

(c) The tenant’s rental agreement allows the tenant to pay rent that is substantially less than the fair market rent for the premises, unless the rent is reduced or subsidized due to a federal, state, or local subsidy.

(4) A purchaser at a foreclosure sale of a residential premises occupied by a tenant does not assume the obligations of a landlord, except as provided in paragraph (1)(b), unless or until the purchaser assumes an existing rental agreement with the tenant that has not ended or enters into a new rental agreement with the tenant.

History.—s. 1, ch. 2015-96.

PURCHASING AN OCCUPIED PROPERTY

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PURCHASING AN OCCUPIED PROPERTYstranger

When you buy a property it is subject to the existing lease.    The new owner steps into his shoes and assumes the  landlord’s obligations under the lease.    If the tenant had made deposits (i.e.  last month rent and security deposit )  the new landlord is liable to the tenant for those deposits.  The buyer does not have the right to terminate the tenancy or change any of its terms. Telling the tenant he has to move out because the house has been sold  could be deemed  unlawful eviction and punished by a fine of 3 month’s rent.

A buyer must require the seller to provide an estoppel   letter signed by the tenant verifying the amount of the rent and security deposit and the lease terms.   The seller should provide the tenant’s social security number and  date of birth so you can obtain a non-military status affidavit on-line in the event you have to evict the tenant.  If you do not have this information,  you must have a factual basis for swearing out an affidavit that the tenant is not active duty military in order to obtain a default judgment.

The buyer should receive prorated the rent and credit for the deposits  from the seller on the closing statement.

The seller must  disclose in the  sales contract the property is subject to an existing lease,  or the buyer could sue for failure to deliver possession at closing.

FORECLOSURE

How does the filing of a foreclosure against the rental property affect the tenancy?  Legally the foreclosure does not affect the tenancy until the foreclosure auction has taken place.    Foreclosure auctions can be cancelled at the last minute,  so the parties should check the court docket online to verify the case status.   Until then,  the lease is fully enforceable.   If the tenant does not pay the rent,  they can be evicted.  A foreclosure in progress is not a defense to the non-payment of rent.

Post foreclosure:   Any lease that is junior to the mortgage is subject to being foreclosed.  The tenant should be named as a party defendant and served.   Check the docket of the foreclosure case.   If the lease was entered  into after the lis pendens of foreclosure was filed it is subject to the foreclosure. A  buyer  may obtain a writ of possession  directly on application to the Clerk of Court,  or by  filing a motion for a writ of possession  depending on the language in the judgment of foreclosure.  You can obtain a copy of the judgment of foreclosure from the Clerk of Court’s website.

The  Federal Law (Protecting Tenants Under Foreclosure Act)  requiring a  90 day notice to move  expired December 31, 2014.

The buyer may solicit the tenant to sign a new lease,  or to stay as a month to month tenant until the buyer can re-sell the property.   If you accept a rental payment from the occupant you have created a new month to month tenancy.  Month to month tenancies may be terminated by providing  a notice of non-renewal at least 15 days before the next monthly lease term.  Once you have created a new tenancy,  you must file an eviction to obtain possession rather than get a writ from the foreclosure judge.

REO PROPERTIES

Be careful on REO purchases as the bank puts a waiver in the sales contract that they do not guarantee possession at closing.   In fact,  the bank may claim to  have no knowledge as to who is living in the property,  or if they are the former owner, a former tenant,  or a trespasser.   Unless a new tenancy was created post foreclosure,  you may obtain possession by applying to the foreclosure court for a writ of possession.

Be absolutely sure that the seller obtained a condominium estoppel letter. The banks are very sloppy about paying delinquent condo dues and their title companies equally sloppy about obtaining estoppel letters.  If you close without a condominium estoppel letter,  you may end up liable for the delinquent condominium dues.

LANDLORD’S FAILURE TO PAY ASSOCIATION DUES.

In condominiums,  if the landlord is not paying the association dues,  the association may seize the rent by sending a written demand to the tenant.  If tenant has already paid the rent,  the  tenant  must provide evidence of such to the association within 14 days.   The payment of the rent to the association is a defense to  any claim from the landlord for non-payment of the rent.   The association is entitled to evict  the tenant for non-payment of rent   (although  one would wonder how that would benefit the association, other than generating a legal fee for their attorney ).    The association has no obligation to perform repairs.

In some cases, the non-payment of dues has become so rampant that the condominium put the delinquent units into court receivership.  In this instance the receiver has the power to enter into new leases, collect rents, and incur significant expenses against the unit.    Be sure the seller has an estoppel letter from the receiver and has paid these charges.   You may be stuck with the new tenancy,  so be sure there is no receiver before you close.

 

The race to the court house

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Zack Bacon riding Grand Cherokee, Sam Padilla riding Sauxsoe, Don Proctor riding Suntana and Marcus Chet Delorme riding Mucho Mite try to catch Don Herber riding Dudon as they make their way around the final turn Sunday at Pari-Mutual Horse Races at the Brown County Fairgrounds in Aberdeen. Herber and Dudon won the race. Photo by Dawn Dietrich-Sahli taken 5/17/09.

In a race to the court house,  a landlord narrowly avoided a ruling in favor of the tenant by filing a voluntary dismissal two hours before the court entered  the judgment.  On the landlord’s appeal of the judgment for the tenant,  the circuit court wrote once the landlord filed a voluntary dismissal,  “the trial court was without jurisdiction to enter a final judgment on the merits.” See Pino v. Bank of New York, 121 So. 3d 23, 32 (Fla. 2013) [38 Fla. L. Weekly S78a]; Colucci v. Greenfield, 547 So. 2d 224, 225 (Fla. 3d DCA 1989).  [Editors note:  in this case,  the tenants were pro se,  if they had had an attorney,  the landlord would still be considered the “losing party”  by filing a voluntary dismissal,  and liable for the tenant’s attorney’s fees].

WILEY Appellants, v. JUPITER HOUSE LLC, Appellee. Circuit Court, 15th Judicial Circuit (Appellate) in and for Palm Beach County, Civil Division. Case No. 502013AP000061XXXXMB, Division AY. L.T. Case No. 502013CC008256XXXXMB. February 23, 2015. Appeal from the County Court in and for Palm Beach County, Judge Sandra Bosso-Pardo . 22 Fla. L. Weekly Supp. 1008a

The 10 Most Affordable Rental Markets in The USA

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As the economy contracted earlier this month, we’re reminded that the effects of the Great Recession are still being felt. Home ownership is down, incomes are down, and more and more people are renting. We decided to help out our fellow Americans by putting together a list of the most affordable places to rent, nationwide.

Using HUD Fair Market Rents, Gross Family Income, Data from the American Housing Survey and the National Low Income Housing Coalition, we look at where rents will take the least chunk out of your salary. Our listing methodology is based on the % of Gross Income a 1 Bedroom apartment will take out of your total salary. The lower, the better. We defined a Metro as an area with at least 100,000 households and 33% of the population renting.

Surprisingly,  some  of the metros that met our criteria were on either coast of the USA.  Also surprising is the average median income for the area, and the purchasing power those dollars provided. It makes sense to live in cheaper areas in more ways then one. Ohio is by the most affordable state, with nearly all of its metro areas making our list.

Click here for the results

Landlord fined $500.00 for claiming double rent after tenant left messy apartment.

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petstainLandlord agreed that tenant could have until noon, on the day after his lease ended to complete his move out. When the new tenant arrived that day he found the front door broken, the locks missing,  a bed left behind, and the carpets smelling of pet urine.    The new tenant was not able to move in for three days while landlord remedied these problems and the landlord had to prorate his rent by $49.54.   Landlord then claimed against security for the replacement of the carpet, door, locks, cleaning, and double the monthly rent for holdover.

Tenant filed a counterclaim that the claim for double rent violated section 559.72(9), Florida Statutes, of the Florida Consumer Collection Practices Act (“FCCPA”) by knowingly and willfully attempting to collect monetary damages to which he was not entitled.  The court ruled that although the landlord was entitled to recover the door repair, lock replacement, and interior cleaning, but not the double monthly rent or carpet (perhaps because of landlord’s failure to produce a receipt).  This left $60.46 of the security deposit refundable to the tenant,  who consequently was deemed the prevailing party.   The court also awarded the tenant $500.00 under the FCCPA for the wrongful claim for double rent.  On appeal,  the court affirmed that the tenant was the prevailing party both at trial and on appeal,  although the court noted that without a trial transcript it was not in a position to evaluate the trial court’s decision not to award damages for the carpet or at least partial rent loss for September.  [Author’s note:  §83.58 F.S. “Remedies; tenant holding over”  provides for double rent per diem,  not two months rent].

WOLK, Appellant, v. GOODMAN, Appellee. Circuit Court, 9th Judicial Circuit (Appellate) in and for Orange County. Case No. 2014-CV-000022-A-O. L.T. Case No. 2013-SC-009018-O. November 5, 2014. Rehearing denied December 9, 2014. Appeal from the County Court, for Orange County. Online Reference: FLWSUPP 2209WOLK

Size doesnt matter

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sizeLoadstar award of attorneys fees to prevailing party not diminished by size of the damages awarded.

Tenants Ochoa and Ciofalo sued landlord.  Ochoas lease has a provision awarding the prevailing party attorney fees.  Ciolalo’s lease did not. Ochoa was awarded $53.195  and Ciolfalo $45,441.00,  but the only claim that Ciofalo prevailed on  with an attorneys fee provision was $200.00 (tripled to $600.00)  under the local rent ordinance.   The attorneys fee award to the two tenants was $184,340.40

The landlord appealed, arguing that Ciofalo shouldn’t get any attorneys fees,  as the claim that he prevailed on was so small  in proportion to the size of the attorneys fee.

The appellate court ruled that $600.00  was enough to be considered the “prevailing party”  and also that the attorney time spent on Ciofalo could not be separated from that spent on Ochoa,  who was entitled to attorneys fees by his lease.  On the issue of the attorneys fees being disproportionate to the size of the Tenants damages award,  the court stated that as  the tenants attorney fee was determinable under the loadstar criteria of a reasonable hourly rate  for a reasonably expended number of hours.  This calculation is not subject to proportionality to the amount the party recovered.

OCHOA V. SAN JUAN  COURT OF APPEAL OF THE STATE OF CALIFORNIA FIRST APPELLATE DISTRICT DIVISION TWO A130993 (Cal. Ct. App. Jun 09, 2014)

Tenant’s notice that trespassers will be shot  deemed an incurable lease violation

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trespassersTenant of a public housing project in Deerfield Beach , Florida posted a notice on his door threatening to shoot any trespassers.  The landlord responded on May 23, 1995 by posting a seven day notice of lease termination under 83.56(2)(a) (repeat violation within twelve months of a prior notice of the same violation and /or  incurable lease violation).   The tenant had been previously served with a notice to cure lease violation November 30, 1994.   The court found that tenants threat to shoot trespassers was both a repeat lease violation and an incurable lease violation,  justifying immediate termination of the tenancy.

The court also found that if landlord’s notice did not meet federal guidelines for termination of public housing,  tenant’s remedy would be in Federal Court,  but as landlord’s notice complied with Florida state law,  the Florida state courts had jurisdiction to terminate the tenancy.

SCHAPIRO, Defendant/Appellant, v. DEERFIELD BEACH HOUSING AUTHORITY, Plaintiff/Appellee. 17th Judicial Circuit in and for Broward County, 1996.

You’ve got to pay the piper

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Pay the PiperA landlord filed an eviction for non-payment of rent.  The tenant defended  on the basis of landlord’s failure to maintain the premises and filed a motion for rent determination.   Nevertheless,  the court ordered the tenant to deposit  the amount claimed of  $1550.00  into the court registry without conducting a rent determination hearing.   When the tenant did not make the deposit,  the landlord filed for a default judgment of eviction which was granted.

The tenant filed an appeal .   The appellate court ruled that even though the court did not conduct a rent determination hearing,  once it ordered the tenant to pay a certain amount,  §83.60(2), Fla. Stat., required the entry of a default judgment  if that amount was not paid.

LARRY J. HAMPTON, Appellant, v. 2636 5TH STREET SOUTH LAND TRUST ASSET PRESERVATION TRUST SERVICES, INC., Appellee. Circuit Court, 6th Judicial Circuit (Appellate) in and for Pinellas County. Case No. 14-000065AP-88B. UCN 522014AP000065XXXXCV. February 24, 2015. 22 Fla. L. Weekly Supp. 780a.

Commercial landlord’s duty to perform repairs

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repairmenAs a general principal, a commercial landlord has no duty to perform repairs or maintain the leased premises. Without a special agreement to repair the leased premises, a landlord is not under a duty to make repairs. City of St. Petersburg v. Competition Sails, Inc., 449 So.2d 852 (Fla. 2nd DCA 1984).   A lease provision stating that  the tenant is not obligated to repair or replace an item,  such as a roof,  does not by implication,   impose the burden on the landlord.  Fischer v. Collier, 143 So.2d 710 (Fla. 2d DCA 1962).  The fact that landlord voluntarily performed repairs on the past,  does not create an obligation to continue to do so.  Ibid.

Nevertheless,  it a landlord testifies in court that it was his duty to maintain the air conditioning,  even though the lease did not so provide,  it was not error for the trial court to award tenant the costs of repairing it.  MANNO vs. RELIABLE RADIOGRAPHIC SERVICES, INC. 11 Fla. L. Weekly Supp. 797a. (Broward County 2004)

Florida Statutes Section 83.201  provides that where a landlord is under an agreement to repair, and fails to do so, and the premises in consequence thereof become untenantable, the tenant may abandon the premises without liability for further rent.  The mere failure, however, of the landlord to make repairs, the need of which does not render the premises untenantable, will not warrant an abandonment of the premises or relieve the tenant from liability for rent. 18 Am. & Eng. Enc. Law (2d Ed.) 231; 16 R. C. L. 691; Stewart v. Childs Co., 86 N. J. Law, 648, 92 A. 392, L. R. A. 1915C, 649, and note.

Where the repairs involved are inexpensive as compared with the rent, the measure of a lessee’s damages for breach of covenant of the lessor to make the repairs may be the cost of making such repairs. Where the repairs are extensive and the cost is excessive in comparison with the rent, as was the situation here, the rule of difference in rental value could be applied, but in such case the lessee may recover as damages compensation for injuries to his property or his business, including loss of profits. The lessee is entitled to be compensated for financial injuries suffered as a direct and proximate result of a defect in the premises due to the breach by the lessor of a covenant to repair. City of Miami Beach v. Ellis, 279 So. 2d 335 (Fla. 3rd DCA 1973)

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