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Independent living residency agreement ruled to be a lease even though it states that it is not a lease.

Margritti this is not a pipe

Fountains Lake Pointe Woods SL, LLC (the “Fountains”) and Milton Crystal entered into an agreement entitled Independent Living Residency Agreement (the “Agreement”).

In pertinent part, the Agreement provides the following. The Fountains is a community that provides apartments and various services to individuals who are at least sixty-two years of age and meet certain wellness criteria. It is an independent living community and not an assisted living facility or an entity, such as a nursing home, licensed under Chapter 400 of the Florida Statutes.

In order to become a resident of the Fountains, Mr. Crystal paid a $141,500 entrance fee of which 90% was refundable with certain conditions (the “Entrance Fee”). Mr. Crystal would then pay $2700 per month as a monthly service fee (the “Monthly Service Fee”). This Monthly Service Fee includes various items including but not limited to: an apartment, 24 hour staffing, utilities, dining, light housekeeping, laundry, activities, transportation, maintenance and routine health and some routine wellness services. There are other additional costs contemplated in the Agreement including pet fees, smoker’s fees, a resident’s use of services outside the scope of the monthly service fee and damage to the apartment. The Fountains, in its discretion, may increase or decrease the Monthly Service Fee with notice.

Both the Fountains and Mr. Crystal had the right to terminate with notice or upon death or in the event Mr. Crystal needs skilled care. Upon termination of the Agreement, the Fountains may offset any outstanding fees or costs owed to it using the Entrance Fee.

After a year, the Fountains notified Mr. Crystal that the Monthly Service Fee would be increased by $97.00 per month which Mr. Crystal refused to pay.

The Fountains filed an eviction action pursuant to Chapter 83 of the Florida Statutes.   Mr. Crystal filed a Motion to Dismiss the eviction action claiming that the County Court does not have subject matter jurisdiction because the Agreement is not a lease. The Defendant argued alternatively that the agreement constitutes an interest in real property which would require an ejectment action or alternatively, the Agreement is a license.

The Agreement stated, “[t]his Agreement does not create a life estate, lease or other interest in real estate or personal property, nor does it provide a health insurance policy for your benefit.” The Fountains’ explanation for this glaring issue is that the Agreement is a form used to comply with another state’s laws but that language regarding the lease is not applicable under Florida law.  The court noted that this was careless drafting  which certainly invited problems. However, the Court  looked  at the substance of the document over its form finding it had all of the hallmarks of a typical lease: the use of a residence or apartment, a monthly payment and clauses related to pets, smoking, damage to the apartment, etc. While the Fountains offered other amenities like dining, housekeeping, transportation and more, there is no authority for the proposition that this turns the Agreement into something other than a lease governed by Chapter 83 and was therefore found to be a lease.

FOUNTAINS LAKE POINTE WOODS SL, LLC, d/b/a THE FOUNTAINS AT LAKE POINTS WOODS, by and through its manager, WATERMARK RETIREMENT COMMUNITIES, INC., Plaintiff, v. MILTON J. CRYSTAL, Defendant. County Court, 12th Judicial Circuit in and for Sarasota County. 22 Fla. L. Weekly Supp. 275a.