Rental Agreements: Lease’s to protect the Landlord (Part 2 of 3)
This week we will continue with our discussion on the necessity of having a thorough rental agreement in place when renting residential real estate. Whether you are a homeowner considering renting your home for the first time or an experienced landlord, it is imperative that you protect yourself, your family, and your investment.
All Money Is Rent Money- As a landlord, it is only a matter of time before you are put in a situation where you need to evict a tenant for not paying their rent or for breaching the rental agreement. When that glorious time comes, you will quickly learn that there are a lot of costs and damages involved with having to file for an eviction. These include attorney’s fees, court costs, costs of service, back rent, patching holes, painting, replacing carpet, unclogging drains, changing locks, etc., etc., etc… When a tenant gets served eviction papers, the idea that they would leave your property clean and in good repair, all while making sure that their rent is paid in full is quite comical. Depending on the type of service used to serve the tenant, some damages that you would generally think are recoverable in an eviction sometimes are not. That being said, it is also a good idea to have a clause in your lease that makes any and all money due by the tenant, no matter what they are for, to be deemed rent money owed. This should facilitate getting as much money as possible included into the final judgment.
Security Deposit & Last Month’s Rent– I strongly recommend getting both a security deposit as well as last months rent upon execution of the rental agreement. The amount of the security deposit should vary depending on the results of their credit/rental history, the value of the home, whether it is furnished, etc. Usually, the security deposit is equal to one month rent considering there are no other issues. Florida law requires that any money received upfront from the tenant be deposited into a separate interest-bearing or non-interest bearing account in a Florida banking institution and cannot be commingled or used by the landlord until they are actually due. The security deposit is not the landlord’s money and as such, it should not be touched until the proper procedures are followed subsequent to a breach, termination, or eviction. The security deposit is intended to protect the landlord from accumulating excessive amounts of back rent or physical damage to the property. The last months rent on the other hand is meant to secure the final payment, which would be the landlord’s money. However, Florida Law still prohibits the landlord from touching it until its owed. However, you could include a clause that states that the tenant expressly waives the above requirements and permits the landlord to use these funds before the last month as a non-refundable good faith pre-payment. This would free up these funds for use elsewhere. This type of clause should only be used if there is a small mortgage or no mortgage at all, and the rent monies are not being relied upon for the mortgage payments.
Join me next week as I conclude my discussion on additional clauses that every landlord should incorporate into their rental agreements.
This is a generalized discussion on rental agreements in Florida and is not intended for any particular set of facts. By no means does this blog create an attorney-client relationship or privilege between the Attorney and the readers. If you are facing foreclosure or considering buying, selling, or leasing real estate in Southwest Florida, you should speak to a licensed Florida Attorney. If you have any questions, comments, or suggestions on upcoming topics, please comment below or email GuirguisLaw@gmail.com
Posted on May 23, 2012, in Legal and tagged Attorney, Attorney's Fees, Back Rent, Comingle, Court Costs, Credit History, Eviction, Homeowner, Landlord, Last Month's Rent, Lawyer, Legal Schmegal, Mortgage, Pre-payment, Rent, Rental Agreement, Rental History, Security Deposit, SWFL Real Estate, Tenant, The Guirguis Law Firm, Vernon Guirguis. Bookmark the permalink. Leave a comment.