Legal or Not May 2019
LEGAL OR NOT, by Brian Wolk of Heist, Weisse, & Wolk, P.A.
Q: About three months ago, one of our residents contacted our office late in the afternoon after she discovered a large water intrusion in her bathroom. She said that she came home from work and found a massive puddle of water in her kitchen along with damaged ceiling tiles. We drafted a repair order and immediately dispatched our maintenance tech to the apartment home. He said the source of the problem was a leak from one of the pipes. In less than one day the apartment home was fully repaired. The apartment home looked perfect. The resident never communicated us again concerning this repair until today. However, today we received a nasty email from a law firm, including a demand for insurance coverage information. The email stated that the resident injured her neck because ceiling tiles fell on her. This is ridiculous! We believe that the resident is lying about her alleged injuries. What procedures do we need to follow?
A: What you have described is sadly not uncommon. Every day frivolous and fraudulent insurance claims and lawsuits are filed. Therefore, written policies and procedures must be in place to minimize the landlord’s liability exposure. Management’s initial response was proper by writing up the work order. However, a critical mistake was then made. You should have invited the resident into your office and had her write up a report describing the events that took place. You should have an incident report form for the resident to fill out. At the time of the incident, the resident did not have time to conjure up the fraudulent claim or bogus lawsuit. This report should be utilized each and every time there is damage, theft or loss to a resident’s property, or any injury that a resident reports to management. Unfortunately, when some residents find out that the landlord will not compensate them for a loss, there is a strong likelihood they will inflate the amount of their loss or extent of their injury and then make a fraudulent claim. We recommend that the resident write everything down before you indicate your position on the matter. If your company has a risk management department, then it should be contacted at the outset, so that the landlord’s insurance coverage is preserved, as often the insurance policy will require that the insurance company be alerted at once of any unusual events which take place on the grounds of the apartment community. With respect to any formal insurance coverage information request, Florida law requires this disclosure.
Q: Yesterday I had a meeting in my office with Tom, a former resident who recently vacated. This resident believes that he is entitled to the return of his full security deposit, even though there is also another adult on the lease. I would like to accommodate this resident, as I know that the resident on the lease Marsha never contributed to the rent payments and did not contribute one cent towards the security deposit. Marsha has even locked Tom out of the apartment on occasion, as she has huge mood swings. May I send the entire security deposit back to Tom? I have also talked on the phone with Tom’s attorney’s attorney about this.
A: First, we strongly recommend that you never speak with an attorney over a contested matter unless it is your attorney! Also, a successful property manager will not feel sorry for a resident or get in the middle of a dispute between two residents and will otherwise not become emotionally involved. The law applies to all residents, regardless of whether they are likeable or not. As to your question, both residents are entitled to the security deposit refund, unless one resident has relinquished all claims to the security deposit in writing. That does not appear to be the case here. It is crucial that you do the following: if there is any agreement made with regard to the disbursement of the security deposit, the agreement must be signed by each and every resident and the landlord. Otherwise, you should let the two residents battle it out without any involvement from management.
Q: Recently, we were served with a small claims lawsuit. A former resident who moved out three years ago believes our former manager wrongfully retained his security deposit. He is disputing our charges for physical damages to the apartment home. However, because he moved out many years ago, we have no idea where the office file is, and it may have been destroyed. The prior manager would ordinarily take pictures to document damages in an apartment, but she has since moved to Hawaii. As far as we know, this former resident never even responded to the security deposit claim letter prior to this lawsuit being filed. The resident is asking for the $1300.00 security deposit plus court courts. Should we give in to his demands and pay him? Will the judge dismiss the case, if we can somehow prove the former resident never provided a written response to the original deposit claim letter before filing the lawsuit?
A: It is imperative that all lease records are kept for a minimum of five years after a resident moves out in order to defend yourself against a lawsuit by a former tenant. The reason for this is simple. The statute of limitations for any lawsuit which is based upon a written contract is five years. In this case, the lease is the applicable contract. Throughout Florida, many property managers are under the mistaken belief that the resident has no ability to sue the landlord for the return of the security deposit if the resident fails to dispute the claim in writing within 15 days after receiving the statutory notice imposing claims against the security deposit. That is just not true. The former resident has five years from the date of move-out to file the lawsuit. Since you have no records, the former resident will most likely win, and you will need to reimburse the full amount of the security deposit along with court costs. Before “giving up” and returning the monies, you can try and settle the case for a lesser amount. When you attend the pretrial conference, you will be given a chance to meet with the former resident and a mediator in a room. You are under no obligation at that time to disclose what records you have retained. If an attorney represents the former resident, the potential stakes can increase dramatically, as the landlord will be responsible to pay the attorney’s fees of the former resident if the landlord loses the case; the attorney fee award can be significantly higher than the deposit amount you are fighting over. If an attorney is representing the former resident, then we recommend that you attend the pretrial conference with an attorney that is representing your company.