[RPPTL LandTen] Security deposit issues

Tue Jul 14 10:53:12 PDT 2015

Perhaps I wasn’t clear in my previous email. My reading of the case you sent was that the judge stated that because the contract was in force at the time the lease terminated, tenant vacated, and clock started under 83.49, the management team could not wash their hands of the situation by sending the money to the owner and terminating the contract. Essentially, what the judge said was that because they were holding the money at the time the 30 day clock started (or 15 days in the case where either no inspection is completed or where no damage is found), they had to finish the process and could not remove themselves from it. I don’t believe the judge said that the landlord is entitled to keep the money, unless I missed that in the decision. It just said that the management company should not have sent it, which I think is pragmatically correct given the timelines within which they are working. There is nothing in that decision that prohibits the management company from seeking the return of the money from the owners.

The only point of my statement was that I do not believe that the decision was based on the missing language from the statute, which you are correct needs to be clarified. The judge rendered the decision largely due to the fact that the management company was holding the money at the time the tenants vacated, thus starting the process under 83.49. Had the management team terminated the contract while the lease was ongoing, I am not sure the judge would come to the same conclusion.

I agree with you it is obvious that the current owner can receive the money from the terminated rental agent, and am not surprised at the sloppy drafting. Again, I do not think this decision was based on that missing language, but was based on the fact that the rental agent was holding the money while the process had already begun under 83.49.

James Zink, Esq.
Florida Rural Legal Services, Inc.
3111 South Dixie Highway, Suite 140
West Palm Beach, FL 33405
Phone: (561) 820-8902 x. 6025
Fax: (561) 820-8892

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From: landten-bounces at lists.flabarrpptl.org [mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of Harry Heist
Sent: Tuesday, July 14, 2015 1:42 PM
To: 'RPPTL Landlord Tenant Committee'
Subject: Re: [RPPTL LandTen] Security deposit issues

James,

The termination of management has nothing to do with the 30 day clock. I am not sure I understand.

Management is terminated all the time prior to the end of the lease for a myriad of reasons.

Forcing the agent to hold the tenant’s money makes no sense especially when the owner will most likely not comply with FS 83.49 and if the agent has been fired, how does he/she have any power to inspect and make a claim on the deposit?

The owner is responsible for the tenant’s money. The agent is simply holding it. Whenever I see agents abscond with deposit money, the owner is on the hook for the agent’s actions.

I really feel this is a case of sloppy drafting. My interpretation is that the “current owner”  is not mentioned because it is obvious that the money can be transferred to the current owner who will have to comply with the law just like the agent would if they were managing.

Let’s say I designate my friend “Joe” to be my “rental agent” instead of my current property manager who is licensed and works for Century 21. Joe has no license, he simply is my “rental agent”. Note there is no definition of rental agent in 83 unless I am missing it.  So the legislature intended it is OK to transfer the money to Joe but not to ME as the owner?  It would seem absurd.

Harry

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FAX: 1 800 367 9038
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From: landten-bounces at lists.flabarrpptl.org<mailto:landten-bounces at lists.flabarrpptl.org> [mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of James Zink
Sent: Tuesday, July 14, 2015 1:00 PM
To: RPPTL Landlord Tenant Committee
Subject: Re: [RPPTL LandTen] Security deposit issues

Harry,

Do you have the Orlando case? To me, a big part of why the judge ruled this way is not just the language of the statute, but the fact that the termination of the management contract occurred after the tenant vacated, thus starting the clock on the return of the deposit or the issuance of a Notice of Claim. Without reading the Orlando case, I would think this judge’s interpretation is correct, largely because the statute is essentially written in a way that presumes the deposit is to be returned but for action by the landlord. In other words, it is the tenant’s money until it is properly claimed upon by the landlord. With that in mind, it is far more pragmatic, given the facts here, to require the management team to hold the deposit and notify the landlord in writing of the effect if the landlord fails to cooperate and allow the inspection of the property as it is the tenant’s money being held, not the landlord’s. I would be willing to bet the judge would have ruled differently if the contract were terminated while the tenancy was ongoing, based on how the decision was written.

James Zink, Esq.
Florida Rural Legal Services, Inc.
3111 South Dixie Highway, Suite 140
West Palm Beach, FL 33405
Phone: (561) 820-8902 x. 6025
Fax: (561) 820-8892

The information contained in this e-mail, including any attachment(s), is intended solely for use by the named addressee(s). If you are not the intended recipient, or a person designated as responsible for delivering such messages to the intended recipient, you are not authorized to disclose, copy, distribute or retain this message, in whole or in part, without written authorization from the sender.  If you have received this message in error, please notify the sender immediately

From: landten-bounces at lists.flabarrpptl.org<mailto:landten-bounces at lists.flabarrpptl.org> [mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of Harry Heist
Sent: Tuesday, July 14, 2015 12:39 PM
To: 'RPPTL Landlord Tenant Committee'
Subject: [RPPTL LandTen] Security deposit issues

So, the owner fires management or management fires owner, where does sec dep go?

Law: (7)  Upon the sale or transfer of title of the rental property from one owner to another, or upon a change in the designated rental agent, any and all security deposits or advance rents being held for the benefit of the tenants shall be transferred to the new owner or agent, together with any earned interest and with an accurate accounting showing the amounts to be credited to each tenant account. Upon the transfer of such funds and records to the new owner or agent, and upon transmittal of a written receipt therefor, the transferor is free from the obligation imposed in subsection (1) to hold such moneys on behalf of the tenant.

So. Sale from one owner to another, manager can transfer to new owner. Change in designated agent, manager can transfer to designated agent.

Big question. Suppose transfer is from manager to current owner?

Orlando judge said manager had to transfer to current owner when management was terminated.

Tampa case: attached. Opposite interpretation.

Issue: was the omission of “current owner” in the statute a mistake or on purpose? Is it obvious that a current owner has the same rights as a new “agent”  or a new “owner” so it goes without saying an agent can transfer to the current owner?

See attached from “Florida Bad Law Weekly”.

This needs to be clarified.  It is an easy legislative fix.

Harry

LAW OFFICES OF
HEIST, WEISSE & WOLK P.A.
PH: 1 800 253 8428
FAX: 1 800 367 9038
"Serving the Property Management Professional"
Website:  www.evict.com<http://www.evict.com/>
Email: harry at evict.com<mailto:harry at evict.com>
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