EVICTION DEFENSE BASED ON EVICTION TYPE

Posted: Aug 02, 2019
By: NatEvict
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EVICTION DEFENSE BASED ON EVICTION TYPE

Let’s take a step back and study types of evictions that would be claimed in the UD. For the most part, each type of eviction has distinct types of defenses to go with it. To understand which defense applies to a specific type of eviction, we must first look at the various types of eviction.

NationalEvictions: We help Landlords with Evictions! On our Website both Landlords and Tenants can learn how evictions work. For Landlords – We have Every State and the Laws along with each States Process of an Eviction. For Tenants – How to defend Evictions and what evictions are per your State that apply to your Landlord Tenant Laws.

Eviction for Non-payment of Rent
This is the most common reason for eviction. A tenant is unable to pay rent, and therefore the landlord starts an eviction for “non-payment of rent.” The applicable eviction notice a tenant receives with this type of eviction is a “3-Day Notice to Pay Rent or Quit” But, what if the reason the tenant was unable to pay rent was a result of the landlord’s actions or in-actions? For example, what if a tenant was unable to pay rent because he had to pay an excessive water bill due to the landlord’s failure to maintain the plumbing at the property? In cases involving “non-payment of rent,” tenants may also “withhold” rent because of the landlord’s failure to make necessary repairs or maintenance. Should a tenant be evicted for withholding rent? Well, if the tenant has approached this situation in the proper order, this may be an acceptable defense to eviction. We’ll talk about the numerous defenses to this type of eviction later.

Eviction for Termination of Tenancy (no-fault eviction)
Just as a tenant who may terminate their tenancy with 30 days’ notice to the landlord, California law allows landlords to do the same for tenants who live in a property of one year or less. For tenants living in a property more than a year, the landlord must give 60 days’ notice. However, in some cities under local “rent control” or “eviction control” laws, landlords are prohibited from terminating tenancy this way. Evictions legally initiated under these laws do not require any reason or “cause.” The landlord can simply choose to “terminate” the tenancy. If a tenant is unable to comply with the termination notice, the landlord may pursue an eviction in court to regain possession of the property. Evictions initiated under this reason are the toughest to defend against because they do not require any reason or “cause.” The applicable eviction notice a tenant receives with this type of eviction is either a “30 Day Notice to Terminate Tenancy” or a “60 Day Notice to Terminate Tenancy.”

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Eviction for Breach of Lease or Rental Agreement
“Breach” means breaking or violating. Any time there is written rental agreement or lease, the “rules” of the tenancy are clearly stated. Typically, the written agreement outlines all the rules a tenant must follow. It is an instrument to protect the landlord and his property. Any “breach,” such as having pets when they are prohibited in the agreement, are a violation that can lead to eviction. But, what if the pet is a trained dog for a disabled tenant? We’ll talk about that later. However, any “breach” is cause for eviction. Usually, landlords notify tenants of breaches of the rental agreement, and give them an opportunity to correct or “cure” the breach. The minimum amount of time a landlord must give a tenant to “cure” a breach is three days. If a tenant is unable to comply with the notice to cure the breach, a landlord may initiate an eviction.
The applicable eviction notice a tenant receives with this type of eviction is either a “3 Day Notice to Cure Covenant or Quit” or a “3 Day Notice to Perform Covenant or Quit.” What about “oral” agreements? A tenancy may be created under an oral agreement, and nonpayment of rent can be enforced. However, it is difficult for a landlord to prove there was a breach of oral agreement for most anything other than rent. This may also work against a tenant because the landlord can simply change terms later. If terms have been changed in writing, these would be legal even if the original rental agreement was oral.

Eviction after Foreclosure
There are two types of eviction that fall under the “Eviction after Foreclosure” category. The first is when the owner of a property defaults on his mortgage and the bank forecloses. The home is then sold, and the new owner initiates eviction based on a “Three-Day Notice to Quit” under This type of 3-day notice is different from a three-day notice to pay rent-or-quit because there is no alternative except “quit.” The only way the previous home-owner can comply with the notice is to move-out within three days. The second type of eviction under this category is related to tenants of the foreclosed owner. Often, properties are leased to tenants by an owner who later defaults on his mortgage. The tenant may be paying rent on time, and is otherwise a “good tenant.” But, after the foreclosure, the new owner may initiate an eviction anyway. Under this type of eviction, tenants must be afforded the same process to terminate tenancy under law. If a tenant has a fixed-term lease, even with the previous foreclosed owner the property, that lease may continue. However, under some circumstances, even with a lease, the tenancy may be terminated with a 90-day notice.

Eviction for Tenancy At Will
A “Tenancy At Will” is basically a person who lives at a property for an indefinite period without ever paying rent. ex of case law:(Covina Manor v. Hatch (1955) 133 CA2d Supp 790). Usually, a tenant-at-will is a relative who lives with another for free. For example, an adult child living with parents. This type of tenancy only requires a 30-day notice no matter how long the tenant has resided at the property.

There are other unusual types of eviction. But, for the purposes of this guide, we will focus on the most common as listed above. In the next section, we’ll look at some of the eviction defenses and how they apply to these evictions.

NationalEvictions: We help Landlords with Evictions! On our Website both Landlords and Tenants can learn how evictions work. For Landlords – We have Every State and the Laws along with each States Process of an Eviction. For Tenants – How to defend Evictions and what evictions are per your State that apply to your Landlord Tenant Laws.

What Is A Rental Property Business?

Posted: Jul 31, 2019
By: NatEvict
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How To Start A Rental Property Business

As Antoine de Saint-Exupery once said, “A goal without a plan is just a wish.” Consequently, the best plans have developed a reputation for helping people in every industry realize their own goals, no matter how lofty they may be. There literally isn’t a single professional who couldn’t benefit more from a well-crafted strategy, and real estate investors are no exception. Buy-and-hold investors, in particular, stand to better their long-term outlook when they take a moment to establish a sound rental property business plan.

A proven rental property business plan can help lay out the systems and benchmarks investors need to realize success at a higher level. That said, only one question remains: what does a rental property business plan look like?

If you are interested in starting a rental property business, there are several valuable lessons to take away from experience. Meanwhile, here’s a guide for developing a bullet-proof rental property business plan; it may be just what you have been waiting for.

What Is A Rental Property Business?

A rental property business is a venture through which an investor will purchase and manage one or more income-producing properties. These properties can have one or more units that are leased out to tenants in exchange for monthly rental fees. Investors can have an effective rental plan without having to directly manage these properties; property management companies can be hired to carry out the duties often associated with landlords, such as rent collection and maintenance.

Is My Rental Property A Business?

Renting a house may be considered a business endeavor, depending on who you ask. This may seem like a controversial question, and there are at least two answers to take into consideration. From a financial standpoint, renting a residential property may result in passive income. It is important to note that investors do not have to pay self-employment taxes when reporting their rental properties. Therefore, many would argue that owning a rental property is not considered a “business,” specifically in the lens of tax filing. From a career standpoint, however, many individuals make a living on passive income derived from their rental property companies; in this lens, renting a house can be considered a business. When all is said and done, it’s entirely possible to manage a rental property portfolio as a business, but those with a single rental property may not necessarily need to start a company to collect passive income. It’s only once the portfolio starts to grow that turning the practice of renting into a business becomes more important.

A Rental Property Business Takes Time!

Learning how to start a rental property business isn’t all that different from just about every other entrepreneurial endeavor. Investors simply need to identify several key elements prior to getting started; that way, they can start their business on a solid foundation. Here are some of the most important steps to consider when drafting a rental property business plan and becoming a real estate entrepreneur:

Join a local REI club and start networking
Pick a niche and choose your rental property market
Figure out the proper financing and secure it
Conduct the appropriate research and hire a manager
Implement systems to improve efficiency
Manage the properties and scale the business at a sustainable pace

Join A Real Estate Investor Club

Joining a local real estate investing club or association provides networking opportunities, not the least of which may actually help rental property investors find a partner—or perhaps anyone else who may help them further their rental property business plan. There’s absolutely no reason to think new investors, and specifically aspiring rental property owners, can’t find a helpful hand at a real estate investor club. These types of meet-ups are specifically designed to help their attendees, and there’s always someone willing to lend a hand. At the very least, investors will gain insight into local professionals who are most likely already doing the one thing they want to do.

Pick A Niche & Choose A Market

Determining where to invest can often be more important to investors than how much capital, or experience they bring to the table. After all, the golden rule of real estate still persists: location, location, location. There is perhaps no factor that is more influential to the success of a rental property investor than the location in which they choose to invest. The location will determine everything from demand and price, not to mention the property’s long-term potential. Therefore, a truly great rental property business plan will want to make sure it answers these questions, and many more just like them:

How distant a market am I willing to invest in?
Do I have a team in place to handle the day-to-day, or will I have to commute back-and-forth?
How much will commuting and market research cost me?
How stable and diverse is the economy in a market? Are there various business sectors that can help keep jobs and businesses? Is there one main employer?
What’s the average market price for property acquisition?
What’s the average rental price?

There’s no rule that says investors need to live in the markets they invest in, but there is no excuse for neglecting to mind due diligence and research the local hosing market. To invest successfully, investors need to know every detail about a specific area, not to mention the specific niche they intend to serve. If for nothing else, investors need to know their renters just as much as the area they are investing in. Picking a niche, not unlike focusing on college housing or single-family homes, is the easiest way to target a specific audience. Therefore, it’s at this time rental property investors should decide who they are going to serve; only then will they be able to tailor their rental property business plan to see the needs of their audience.

Figure Out Financing

Securing financing is probably the biggest hurdle rental property investors face. However, financing a real estate deal isn’t nearly as hard as many new investors make it out to be. As it turns out, there are countless lenders just waiting for an opportunity to give a savvy investor the money they need to invest in real estate. Outside of traditional sources, like institutionalized banks, today’s real estate investors have access to more funding sources than ever before. Private money lenders and hard money lenders, in particular, have become synonymous with the best ways to secure funding, and are as willing to work with investors as investors are eager to work with lenders.

These “alternative” sources tend to coincide with higher interest payments (often three to four times higher than traditional banks), but the added cost is well worth it. In exchange for their higher rates, investors not only receive the money they need to complete a deal, but they also receive it a lot faster than they would if they went through a bank. Whereas banks can take upwards fo a few months to distribute funds, alternative lenders can have the money in investors’ hands in as little as a few days—if not hours.

It is also important to note that securing financing should be done prior to even looking for a home. That way, the investor will know exactly how much home they can afford, and which investments are worth pursuing further.

Conduct Research & Hire A Property Manager

Becoming a landlord means investors will be responsible for maintaining the appearance and function of the rental property. Whether or not the investor is a handyman, however, is a moot point, as it’s highly recommended that they hire a property manager. While it helps to know everything about a subject property, enlisting the services of a third-party property manager is an essential step in a rental property business plan. Through their help, investors may expand their portfolio without adding on countless hours of work. If for nothing else, a property manager will take care of everything. From finding tenants to collecting rent, property managers will see to it that everything is covered. Meanwhile, the investor is free to add more assets to their portfolio and increase their passive income cash flow.

Systemize

There are many rental plan options for landlords, such as specializing in low-income neighborhoods or university towns. Alternatively, they can choose to specialize in higher-income, urban neighborhoods. Different strategies require different skills sets, so landlords may find better success if they pick a niche in which they specialize. However, regardless of the niche, landlords will need to set up a system for running applications, credit and background checks. Adding proven systems to a rental property business plan is the surest way to make success habitual. Therefore, investors will need to create a system for every single process associated with rental property investing. That way, there will always be an appropriate course of action, regardless of the situation. Property managers, for that matter, make it a lot easier to implement systems.

Manage The Properties

Managing a rental property is about far more than just hiring a property manager; it’s about figuring out exactly what systems will be put in place to keep the properties in good shape and the cash flowing in. This means answering queries like:

Are you going to be a landlord? (Or will you hire a property manager?)
Who will find and select tenants?
Will you perform repairs to maintain property? (Or hire a contractor?)
Who will perform yard maintenance and other duties?

Your answers will depend on your budget, and available time. The key is to use your rental property business plan to map out all management systems beforehand and ensure there are no last-minute surprises.

How To Write A Rental Property Business Plan

Starting a rental property business is one thing, but learning how to write a rental property business plan is something entirely different. While the two sound similar, the latter is a critical step that makes the former even stronger. At the very least, knowing how to start a rental property business must come before actually starting one. As a result, investors will need to familiarize themselves with the most important steps first:

Determine a vision and write a mission statement
Set passive income and business goals
Build a team structure that is conducive to success
Gain a high-level overview perspective of the company as a whole
Develop marketing systems and funnels tailored to a specific audience

Vision & Mission

A truly great rental property business plan must emphasize one thing above everything else: the investor’s vision or mission. What an investor hopes to achieve by investing in real estate may simultaneously serve as motivation and a guide when times are less than ideal. Therefore, investors must take a minute to think about why they are investing. Is it to retire comfortably? Is it to spend more time with family and friends? Is it both of these things? Knowing their “why” will help investors build out a sound business strategy; one that gets them closer to their goals with each and every investment. Consequently, those without a mission won’t have any idea what direction to head, which doesn’t bode well for any rental property business.

Passive Income Goals

While closely related to one’s own vision or mission, passive income goals identify how much cash flow will be necessary to satiate investors’ appetites. That said, passive income goals should help investors meet their own mission statement. Likewise, if an investor wants to retire comfortably, they will need to set their passive income goals high enough to facilitate their desired retirement. While everyone’s passive income goals will be different, a general rule of thumb is to account for how much cash flow will be necessary to maintain their preferred lifestyle.

Remember, goals should be realistic and directly related to the reason someone wants to invest. Seeing overly ambitious goals can deter many investors from progressing, so it’s important that the goals are achievable. The sense of accomplishment developed from realizing a goals is, oftentimes, a powerful motivator.

Determining passive income goals will also help answer the most important question of them all: what type of rental property will I focus on? Residential? Commercial? Multi-family? Start from the end, and work backwards for better results; it’s the best, and most efficient, way to build a business.

Structure

Starting a rental property business may lead many investors to hiring a team. After all, it’s true what they say: many hands make light work. The more qualified individuals investors have working towards a common goal, the more likely they are to realize success. Not only that, but hiring a competent real estate team is simply one more step towards investors removing themselves from the equation and earning more passive income. That said, it’s not enough to hire just anyone; the employees need to bring something new to the table. Investors need to hire a team that compliments their skills—not that replicates them. That way, the team structure is more well-rounded and capable of accomplishing more tasks.

High-Level Overview

Investors need to look beyond the prospects of a single investment property, and towards the potential of an entire portfolio. While a single home can produce encouraging cash flow levels, an entire portfolio can help investors realize financial freedom. Therefore, it’s important not to forget the “bigger picture.” Sure, start with a single home, but plans should inherently be scalable. When writing a rental property business plan, see to it that everything can be expanded to include future growth.

Marketing

Buying a rental property is just the first step on a passive income investing journey. At some point, investors need to figure out how to find tenants to bring in cash flow. More often than not, investors will rely on their property manager to fill vacancies. However, in the event an investor neglects to hire a property manager, there are various ways to find tenants, not the least of which include:

Rental websites
Social media
Print media/newspaper
Local bulletin boards
Local Realtors
Word-of-mouth marketing
Direct mail campaigns
Previous renters

Is A Rental Property Business A Good Investment?

Investors will know if a rental property is a good investment if their net cash flow remains consistently positive. Seasoned real estate investors know that, in order to have a solid rental plan and business, they must first mind their due diligence and ensure that a rental property is indeed a good investment. There are several measurements available to help investors get an idea of the profit-making potential for a property.

Tags: Eviction Information, Landlord Information, Property Maintenance

Bankruptcies can be complicated knowing your rights when a tenant files is crucial.

Posted: Jul 28, 2019
By: NatEvict
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Bankruptcies can be complicated, and knowing your rights when a tenant files is crucial.

First, some clarification on the types of bankruptcy available to the consumer and the injunctions that accompany bankruptcy filings:

Chapter 7 versus Chapter 13. Individuals who file for bankruptcy are “debtors” and have the choice of filing either Chapter 7, a liquidation, or Chapter 13, a repayment plan. (Chapter 11 is another option, but it’s available to those with extraordinarily high debt and is much less common.)

In a Chapter 7 filing, the debtor essentially hands all of his or her assets over to a trustee, who then decides whether to administer those assets. When a lease is involved, the tenant can assume the lease but usually can only do so if the rent is current. In a Chapter 13 filing, however, the tenant has the option of making the delinquent rent payments current over a period of time, usually no more than six months. More on this point below.

The automatic stay. One of the most important aspects of any bankruptcy filing is the “automatic stay.” This is an injunction that stops creditors from trying to collect debts from the debtor.

Essentially, once a tenant files for bankruptcy, a landlord may take no further action to collect past-due rent, continue with an eviction, or even offset a security deposit. Landlords who violate the automatic stay may suffer serious repercussions.

There are exceptions to this general rule. For example, the U.S. Bankruptcy Code allows a residential landlord to enforce a judgment for possession against a bankrupt tenant if that judgment was obtained before the bankruptcy was filed. In addition, the automatic stay doesn’t apply to tenants who have engaged in illegal drug use on the property or who have endangered the premises somehow. In any event, if there’s any doubt about whether the automatic stay applies, and to what extent, contact your bankruptcy counsel for advice.

Terminating the automatic stay. The Bankruptcy Code’s automatic stay isn’t without its limitations. For example, although the bankruptcy filing can protect a tenant’s past defaults, it won’t necessarily protect any new defaults. In other words, once a tenant has filed for bankruptcy, lease payments must be made on a timely basis going forward. If not, the landlord has good reason to ask the court to permit it to move forward with its eviction against the tenant.

The Tenant’s Options
The tenant in bankruptcy has several options available when the lease hasn’t expired or hasn’t been terminated prior to the filing.

The tenant may reject the lease. This means the tenant voluntarily agrees to vacate the premises and is therefore no longer bound by the terms of the lease.

On the other hand, the tenant may decide to assume the lease, which means the tenant can reaffirm his or her obligations under an unexpired lease. However, the Bankruptcy Code permits a tenant to do so only if the tenant is (a) current on lease payments or can “cure” any arrears in a prompt manner, and (b) gives “adequate assurance of future performance” under the lease. What does this mean and what can a landlord do to ensure that its rights are preserved?

Curing payment defaults promptly. The Bankruptcy Code requires a “prompt” cure of lease defaults but fails to define what “prompt” means. Most courts will consider payment over six months to be prompt. If the tenant proposes to cure past-due payments over a period of years, on the other hand, the court will most likely reject the proposal.

Adequate assurance of future performance. Once again, the Bankruptcy Code doesn’t define this concept; rather, it’s generally applied by bankruptcy courts on a fact-sensitive basis. Typically, courts won’t rigorously adhere to this facet of lease assumption but may give some consideration to the tenant’s financial condition, ability to pay based on income, and any offers to make prepayment of rent going forward.

When a lease is assumed, both landlord and tenant must continue to comply with all terms and conditions of the lease. Failure of the tenant to do so may be cause for the landlord to seek the court’s permission to terminate the lease.

It is also important to know when debtors must decide what option to pursue. Generally, tenants have 60 days in a Chapter 7 (liquidation) case, or up until a repayment plan is confirmed in a Chapter 13 case, to decide whether to assume or reject a lease. If these deadlines aren’t met—or aren’t extended by the court—the landlord should react quickly and move forward with a remedy.

Asserting Your Claim
Simply stated, a claim is acknowledged when a creditor files a statement with the bankruptcy court stating that the debtor owes the creditor money.

A landlord should file a claim in a bankruptcy case to protect its interests, particularly when the tenant rejects the lease. The rejection of a lease results in several possible claims by the landlord, including: (a) damages for all past-due payments under the lease as of the filing date; (b) amounts due for any unpaid charges or rent that arose after the bankruptcy filing; and (c) lease-rejection damages subject to a cap, which normally won’t exceed one year’s worth of rent due.

Landlords may also be entitled to recover other charges, including attorneys’ fees. However, these claims are afforded different priority under the Bankruptcy Code’s distribution scheme. Therefore, it is absolutely essential to consult with a bankruptcy professional to determine what claims will be paid, and in what order.

What Else Can You Do?
Because tenant bankruptcy can be costly to owners, once the tenant’s financial situation becomes clear, the owner/landlord should consider alternatives. If at all possible, you should negotiate a pre-bankruptcy resolution with a tenant in financial distress. Can the lease be modified to keep the tenant in the property (and paying rent)? Can a peaceful and consensual termination of the lease be negotiated that lets the landlord regain possession of the unit on terms that are workable for the tenant?

These and other options should be explored if at all possible. A carefully negotiated pre-bankruptcy resolution can help you avoid pitfalls if the tenant eventually does file for bankruptcy protection.

Landlords have some other options, as well, when faced with a tenant’s bankruptcy filing. Did the tenant file the bankruptcy petition in good faith? Is this the first time this particular tenant has filed? In other words, is your tenant a serial bankruptcy filer? If so, you may be able to convince the bankruptcy judge that the tenant’s sole purpose in filing was not to reorganize but simply to frustrate his or her landlord’s attempt to regain its property, thus resulting in a dismissal of the tenant’s case.

In any case, bankruptcies can be complicated, and knowing your rights when a tenant files is crucial. Having qualified counsel on board can help a landlord navigate through these difficult issues.

Tags: Eviction Information, Landlord Information

How to Protect Your Right to the Security Deposit

Posted: Jul 09, 2019
By: NatEvict
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How to Protect Your Right to the Security Deposit

As a landlord, you may be entitled to keep a portion of your tenant’s security deposit for reasons such as a breach of lease or damage caused to the apartment. However, if you do not follow your state, county, and city security deposit laws exactly, you may be forced to return the security deposit you are rightfully owed. Here are some steps to take to help you protect your right to the security deposit.

Put it in Writing

All information regarding the security deposit basics should be included as a provision in your lease agreement. It should include:

The amount of the security deposit received.
The fact that it is a refundable deposit if the tenant abides by all terms of the lease.
That it will be stored according to your state, county and/or city’s procedures for security deposits. For example; It will be placed in a separate interest-bearing bank account. The bank’s name is “X,” the bank’s address is “X,” and the interest rate is “X” percent.
You will also want to include reasons you, the landlord, may be legally allowed to keep a tenant’s security deposit, such as damage done to the property in excess of normal wear and tear and nonpayment of rent. Legal reasons you may be allowed to keep a tenant’s deposit will vary based on the state, county, and city where your rental property is located.

Take Pictures of the Property, Inside and Out, Before the Tenant Moves In

Print out the pictures. When the tenant moves in, have them sign and date the back of each picture to acknowledge the condition of the property upon move in.

Have a Move-In Walk-Through With the Tenant and Have Them Sign a Move in Checklist

In addition to having the tenant sign and date the pictures showing the condition of the property, you will want to walk the tenant through the property. Turn on the stove, open the freezer, open, close, and lock the windows, run the faucets, and flush the toilets.

Your move-in checklist should include the items in the apartment and their condition. Some examples would be:

Stove in working order
All outlet covers in place
All windows lock
Screens on all windows
Refrigerator in working order
Freezer in working order
Two smoke detectors
Two carbon monoxide detectors
Smoke detectors in working order
Carbon monoxide detectors in working order

As the tenant approves each item, place a checkmark next to it. Then have the tenant sign and date the bottom of the form acknowledging their agreement that the property is in good, habitable condition. If there are any known defects, such as a large scratch in the hardwood floor in the living room, they should be noted here.

Notify the tenant in writing after they move in

Notify the tenant in writing within “X” number of days of their move-in date (as determined by your state; usually between 14 and 30 days) of the name of the bank, the address of the bank, and the interest rate at which their security deposit is being held (if applicable in your state).

Notify the tenant of the annual interest accumulated on their security deposit (if applicable in your state).

Before the tenant moves out, give them a list of move-out procedures.

For example, they should remove all trash, leave the property broom swept clean and should return the keys to you, the property manager or the building superintendent.

Take Pictures of the Property After the Tenant Moves Out

Sign and date these pictures. Make a note of any damage done to the property.

Notify the Tenant in Writing After They Move Out

Send the tenant a letter within “X” amount of days of their move-out (as determined by your state law). Return the applicable amount of security deposit to the tenant. If you have kept any or the entire security deposit, you must give an itemized list of expenses explaining why you have kept the money. If the tenant has not provided you with a forwarding address within 30 days of move-out, you may not be legally obligated to return the security deposit.

Realize That Your Tenant Does Have the Ability to Contest Any Money You Have Kept

The tenant can file a claim in small claims court to try and recover the money. If you have not followed the laws of your state, county, or city exactly, they may be able to take back the security deposit, even if you were otherwise entitled to keep it. For example, in some states, if you did not notify a tenant in writing as to the bank name, address, and interest rate at which their security deposit was held, you may not be allowed to keep any money owed to you.

Tags: Eviction Information, Landlord Information, Security Deposits

Here’s some answers for the security deposit laws in Florida

Posted: Jul 09, 2019
By: NatEvict
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Here’s some answers for the security deposit laws in Florida

In Florida, many residential rental agreements or leases require a security deposit. Usually a month’s rent, a security deposit is a dollar amount that’s collected by the landlord to protect against property damage due to a tenant’s negligence or carelessness.

When it comes to security deposits, Florida landlords and tenants both have certain basic rights. These rights are specified under Florida landlord-tenant law. Landlords must comply with these laws when handling a tenant’s security deposit.

1. What amount can a landlord ask for a security deposit?

The Florida Security Deposit law doesn’t limit the amount a landlord can charge a tenant for a security deposit. However, the amount should be reasonable.

Local laws can, however, set the cap on the amount a landlord can ask.

2. How should landlords store a tenant’s security deposit in Florida?

Florida rental laws state that a landlord can store a renter’s security deposit in three different ways. First, landlords can post a surety bond for the amount of security deposit. A surety can be used as an alternative to a security deposit.

A surety bond, similar to a security deposit, is a form of insurance that provides a contractual promise. That is, the bond company stands ready to compensate the landlord up to the limits of the bond if the tenant fails to abide by the lease terms.

Tenant surety bond premiums typically cost a tenant about 10% to 20% of the deposit. The landlord must also pay the tenant 5% interest annually on the bond.

Second, in Florida, landlords can place a tenant’s security deposit in a non-interest bearing account. Landlords aren’t allowed to commingle fun ds. Also, unless the funds are due, landlords shouldn’t use any part of it.

Third, landlords may also place a renter’s security deposit in an interest-accruing bank account. Interest earned annually must be paid to the renter when the lease term expires. A landlord can pay it in two ways. One, by crediting it back to the tenant in the form of rent. Or two, paying it directly to the tenant.

3. Is a landlord required to give the tenant a written notice after receiving the security deposit?

It’s mandatory for landlords to do so under Florida security deposit law. After its receipt, a landlord must notify the tenant, in writing, of its receipt within thirty days. In the notice, the landlord must state:

The address of the banking institution; where the security deposit is being held.
If the funds are separately kept or are mixed with other funds.
If it’s being kept in an interest-bearing account and how much the interest rate is.

The notice can be delivered in person or can be sent via mail to the tenant.

Moreover, if any of these terms are changed, it’s the landlord’s responsibility to inform the renter in writing within one month.

4. What reason does the landlord have to keep all or a portion of the tenant’s security deposit in Florida?

There are instances where a landlord may make deductions from the renter’s security deposit. Common reasons include:

The renter made unauthorized repairs. For example, the tenant repainted the rental unit without getting the landlord’s approval.
The renter caused property damage. The damage must be in excess of wear and tear. Examples of wear and tear include:
Discoloration of furnishings and upholstery.
Scratches and marks on wooden furniture, worktops, door handles and other often used items and surfaces.
Painting and redecorating.
Damage caused to a property due to high winds.
Appliances that have broken down due to age.

Damage caused by the tenant’s negligence or carelessness isn’t the landlord’s responsibility. Examples of damage that a Florida landlord has a right to deduct from the tenant’s security deposit include:

Damaged electrical appliances by careless usage.
Broken bed frames, tables, curtain frames, chairs, and so on.
Pets damaging property or items.
Ruined carpets with stains or cigarette burns.
Damages caused by a party.
Broken windows caused by tenant or tenant’s guests.
Failure by the tenant to pay rent. Landlords can withhold a renter’s security deposit when the renter fails to make rental payments.
The landlord can also make deductions to a tenant’s security deposit when tenants fail to clean the rental unit especially when they are moving out.

5. Is a walkthrough inspection required under Florida landlord-tenant laws?

No. It isn’t required in Florida. However, in other states like California and Arizona, this process is required. A walkthrough inspection is when both the tenant and the landlord go through the rental unit to assess its condition.

Tenants must vacate the rental premises in the same way they found it when they moved in. Otherwise, the landlord has a right to make deductions to the tenant’s security deposit.

6. When should the landlord return the security deposit to the tenant once they move out?

If the landlord intends to impose a claim on the deposit, the landlord has 30 days to give the tenant a written notice specifying the reasons. The notice, using exact language found in Florida Statute, must list the damages as well as the charges.

The deductions are automatically forfeited if the landlord fails to do this. If the tenant doesn’t object to the deductions, the landlord must send the remaining deposit within 30 days after initial notice.

However, if the landlord doesn’t intend to impose a claim on the security deposit, he or she has 15 days to return the deposit back to the tenant.

7. What happens to the security deposit when property ownership changes?

In the event of property ownership changes, the landlord is required to notify the tenant of the changes in writing. The landlord must also transfer the security deposits to the new landlord. Once this is done, the new landlord assumes all responsibilities under the existing lease agreement.

Other Articles on Security Deposits: Read Protecting your Rights to your Security

This overview of security deposit laws in Florida is only meant to be informational. For specific questions, please consult a qualified Florida attorney. For help with your Florida Eviction needs contact us today!

Read the Florida Laws on Security Deposits: https://www.flsenate.gov/Laws/Statutes/2011/83.49

Tags: Eviction Information, Florida Eviction Articles, Landlord Information, Security Deposits, Tenant Information

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