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

Lloyd Granet lgranet at granetlaw.com
Wed Jan 7 14:32:55 PST 2009


I have several additional questions
 
1.    Does paragraph 1 create an ongoing obligation to advise during the
entire term of the lease?
 
2.    I understand the issue on foreclosures, why are short sales relevant,
is it the risk that the tenant will pay the rent to the wrong landlord?  
 
3.    What happens if this gets copied into the commercial statute? 
 
The concept of prospective notice of a possible foreclosure of short sale
does not make sense, no one can know what is going to happen. The standard
should be a bright line. 
 
When the foreclosure action is filed the tenant will get notice by being
served. If what is trying to be addressed is tenants who come into
possession after the foreclosure action is filed the notice makes sense.  
 
With regard to the civil penalty actual damages would probably be cost of
relocating early or cost of dealing with foreclosure/new landlord. The
reality is "actual damages" would probably be small where there is an
abundance of units in a market.  They might want to reconsider the measure
of damages. 
 
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From: landten-bounces at lists.flabarrpptl.org
[mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of Frank, Scott A.
Sent: Wednesday, January 07, 2009 3:05 PM
To: RPPTL Landlord Tenant Committee
Subject: Re: [RPPTL LandTen] FW: SB 454 1/7/09


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 
HYPERLINK "http://www.arnstein.com/"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 
HYPERLINK "mailto:SAFrank at arnstein.com"SAFrank at arnstein.com

Offices in Illinois, Florida, and Wisconsin 
 

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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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