[RPPTL LandTen] FW: SB 454 1/7/09

Wed Jan 7 12:04:41 PST 2009

Unfortunately, in my humble opinion, we get another example of
legislation that sounds great - and makes those voting feel good about
doing their part for the "little guy" - but comes far short in
addressing any real problems.

As to this legislation, I agree that it is a good idea to require notice
from the landlord if a foreclosure action has been initiated.  But a
representation by the landlord that "to the best of his or her knowledge
and belief, the mortgage lender does not intend to initiate foreclosure
proceedings in the next 12 months"?  Let's just start racking up the
legal fees now, because the only people that will truly benefit from
that provision is us landlord/tenant attorneys.

In this market, many banks who don't want to take back any more
properties have waited 2, 3, 4 months or even more of deficiencies
before filing proceedings.  So if a landlord is 2 months behind, does he
have a reasonable belief that the lender will initiate foreclosure
proceedings in the next 12 months?  What if the landlord has every
intention of coming current in the next couple of months (but doesn't?
If the banks don't know, how can the landlord?  And what is the standard
of reasonableness?  (Okay, now I'm rambling, you get my point).

But all that being said, let us also realize that this statute addresses
one moment in time only - the date of the signing of the lease.  What
happens if foreclosure proceedings are commenced 3 months into a
12-month lease?  Under the proposal, that tenant is out of luck (other
than trying to allege knowledge on the part of the landlord).  Yes, some
of the notices from lenders may be served at the premises, which will
give those tenants the knowledge they need, but such notice is in no way
required.

Next potential problem is the penalty.  Yes, $10,000 seems steep, but
what of rental properties (more likely in the 3-4 unit and up variety)
that are owned by LLCs. S Corps or the like?  Is the threat of a $10,000
civil penalty going to intimidate the principal of such an entity that
is already facing foreclosure (and most likely subsequent bankruptcy)?
I think not.  However, the only alternatives may be to either
statutorily create principal liability, as in payroll taxes and the
like. or to create criminal (misdemeanor) penalties - and I'm not so
sure I want to head down either of those paths.

So the shorthand version of my opinion is that the statute - if you take
out the "best of knowledge" portion - is not bad, and may even help a
few tenants.  But I believe that it will address only a very small
minority of the problem leases, and even with many of those will not
have enough bite to back up its bark.

Thus ends my $0.02.  Thanks.

Scott A. Frank
Attorney at Law
ARNSTEIN & LEHR LLP 
www.arnstein.com <http://www.arnstein.com/>

515 North Flagler Drive 
Sixth Floor 
West Palm Beach, Florida 33401-4323
Phone: 561.833.9800 
Fax: 561.655.5551

2424 North Federal Highway
Suite 462
Boca Raton, Florida 33431-7735 
Phone: 561.322.6900
Fax: 561.322.6940 
SAFrank at arnstein.com <mailto:SAFrank at arnstein.com> 

Offices in Illinois, Florida, and Wisconsin 

________________________________

From: landten-bounces at lists.flabarrpptl.org
[mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of roshani
gunewardene
Sent: Wednesday, January 07, 2009 2:11 PM
To: landten at lists.flabarrpptl.org
Subject: Re: [RPPTL LandTen] FW: SB 454 1/7/09

I think that there definitely needs to be notice given to tenants by the
landlord(although details need not be given) that there is pending a
foreclosure action/short sale. This will relieve the landlord perhaps of
future law suits and massive damage awards. I know I sent several cases
to the listserve on how landlords have been made to pay $10,000 plus in
damages.  

In most cases though now, what is happening is that the Fin.Co/Bank is
serving papers at the location where the rental property is and not
where landlord is and tenant "gets the shock" and holds these papers
hostage in order to bargain for not paying rent or very little rent.
Small landlords are the worst hit. Therefore, in the long run it is best
that the landlord give notice to the tenant in a general format and
avoid the calamity. If the tenant wants to vacate this is a cost to the
landlord, but I am sure in the long run, it is better to have a tenant
who is willing to take the risk and wait and honor the lease than a
tenant who does not and will use every loop hole to harass the landlord.

I also think a civil penalty is appropriate in this case to give some
beef to the requirement of disclosure. There have been many, many
unscrupuolous landlords around who have actually taken the rent, even
though financially able, not paid the mortgage and then the tenants have
been forced out without any warning whatsoever. However, the penalty
should be reasonable and only if the landlord does not give the notice
required in a timely manner. 

Roshani M. Gunewardene
Attorney

> Date: Wed, 7 Jan 2009 11:59:57 -0500
> From: David.Weisman at gmlaw.com
> To: landten at lists.flabarrpptl.org
> Subject: Re: [RPPTL LandTen] FW: SB 454
> 
> While the concept is not bad in principle, how can a lessor be held to
know what the Lender intends to do? The language should simply require a
disclosure of whether there is a pending foreclosure or short sale or
whether the lessor has received a notice of default from the lender.
> 
> What is next, an affidavit of intention to abscond with the rent? 
> 
> 
> 
> David Weisman
> Board Certified Real Estate Lawyer
> Greenspoon Marder, P.A.
> Trade Center South, Suite 700
> 100 West Cypress Creek Road
> Ft. Lauderdale, FL 33309
> Phone 954-491-1120
> Toll Free 888-491-1120
> Direct Phone 954-343-6941
> Direct Fax 954-343-6942
> 
> 
> >>> "Arthur J. Menor" <AMenor at shutts.com> 1/7/2009 11:01 AM >>>
> Dear Committee Members:
> 
> Please see the attached proposed legislation and provide any comments
> that you may have.
> 
> 
> ________________________________
> 
> From: Fields, Alan B [mailto:abfields at firstam.com] 
> Sent: Monday, January 05, 2009 10:32 PM
> To: BrutonB at gtlaw.com; Michael J. Gelfand; Arthur J. Menor; Neil
> B. Shoter
> Cc: jbn at floridalandlaw.com; Meyer, George J.
> Subject: SB 454
> 
> 
> 
> Didn't know if you had seen this bill by Fasano yet requiring
> notice of foreclosures and shortsales be given to lessees.
> 
> 
> 
> Alan
> 
> 
> 
> 
> 
> Alan B. Fields
> 
> Florida State Counsel
> 
> First American Title Insurance Company
> 
> 7360 Bryan Dairy Road, Suite 200
> 
> Largo, FL 33777
> 
> 727-549-3243
> 
> 877-798-7058
> 
> Cell: 727-773-6664
> 
> Fax 727-549-3481
> 
> abfields at firstam.com 
> 
> 
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