Why Property Managers Need Legal Counsel

Why Property Managers Need Legal Counsel

The demands on property management companies are becoming increasingly burdensome. There are many reasons for this; for example, tenants are becoming more legally “savvy”; State legislatures are passing more laws and becoming more aware of problems that arise in the landlord-tenant relationships; the property management profession is becoming more sophisticated, which results in an increase of expectations of tenants and property owners; and as a result of the afore-mentioned, more contracts and legal forms are incorporated into the management business, from start to finish, which requires legal expertise. All these reasons, and more, necessitate that property managers use legal counsel as a part of their routine practice. Here are a few routine situations that require legal counsel.

Drafting of all Contracts and Legal Forms

The property management business, to maximize success potential, must use contracts and legal forms that are created by an attorney. These would include the rental application contract, lease agreement and all addenda, property management agreement and all addenda, and any contract with the tenant (e.g. lease termination agreement, back rent payment agreement, new tenant addition addendum) among others. Since all these documents affect the rights of both parties, only a licensed attorney is able to draft them, but more than that, they require the expertise of a landlord-tenant attorney because they need to be legally-sound and provide for situations that attorneys are skilled and equipped to handle.

Additionally, the primary contracts, such as lease agreement and property management agreement, need to be updated routinely to fit statutory changes, adjust to the property manager’s preferred business practices, and in consideration of court decisions that are decided on a host of issues that are litigated yearly. Having an on-going relationship with a landlord-tenant will enable the property manager to stay in front of potential legal issues that would otherwise be created without the routine updates.

Tenant Problems and Proper Procedures

Property managers encounter tenant problems routinely in their daily practice. Ultimately, it is the applicable statutes and contracts that will control the outcome of the conflict. While property managers may be proficient at their jobs, they are not attorneys and are unable to view the conflict for an attorney’s perspective. Thus. their decisions left unguided by a legal specialist may create even more legal problems. Property managers need to bring in the advice of legal counsel at the onset of any tenant dispute to ensure that the proper procedures are being followed, because landlord-tenant law is largely based on procedures, and failure to follow proper procedures may leave the property manager in a vulnerable position.

Legal Notices

As a part of the property managers duties, the property manager must deliver legal notices to a tenant who has defaulted on the lease agreement. This, again, is a legal issue—and one that the property manager should seek the advice of counsel to ensure the notice is legally-sufficient. The most common legal notices include the 3 Day Notice to Pay or Vacate and the 7 Day Notice (to Cure) (Non-curable). Legal issues involving these notices have been litigated in Florida for decades, and many court decisions have been rendered that affect the requirements of the same. The property manager should use the attorney to ensure the proper use of these notices, or else the property manager may encounter problems for trying to enforce a legally-insufficient notice.

Notices to Withhold Rent

Florida Statutes ch. 83, pt. 2 prescribes specific procedures regarding a tenant’s right to withhold rent, and usually, either the tenant gets it wrong, or the landlord does not know the specifics of these procedures—or how to apply the procedures to the given situation. To avoid handling the situation improperly, the property manager should seek the advise of legal counsel to ensure he is handling the situation properly.

Evictions

In Florida, a property manager is only allowed to file an eviction complaint for non-payment of rent but only if the eviction is non-contested. All other evictions must be filed and handled by an attorney. That said, the property manager will be doing their clients a better service by having an attorney file all of their evictions because the benefits far outweigh the cost of filing the eviction. First, when the tenants know there is an attorney handling the legal matter, they are less inclined to contest the eviction and thus, the eviction is accomplished with less risk of wasted money, time and effort. Second, the attorney is going to know what issues to look for in any eviction situation and to ensure that only successful evictions are filed. Third, it simply frees up the managers time to tend to management business and not have to worry about the eviction process. In the end, the attorney will help the property manager save time and money.

Security Deposit Claims and Disputes

A common dispute property managers encounter is security deposit claims and disputes. This issue concerns not only the law on making the claim but also the law on damages, which can be a complex and less-than-certain area of law. When the property manager inspects the property for damages or other monies owed under the lease agreement, he should utilize the advice of an attorney when there is any question as to the claim. Even more, when a tenant objects, the attorney should be brought in to advise on the legitimacy of the objection and to see if there are concessions that need to be made, if any. Otherwise, if a landlord gets it wrong and the tenant sues accordingly, the landlord could face an adverse ruling and be subject to paying the attorney’s fees and costs.

Attorney Tim Baldwin of The Virga Law Firm, P.A., with offices in Pensacola, Ft. Walton, Destin, Panama City and Orlando, specializes in landlord-tenant law and offers a unique legal services plan for property and apartment managers. The legal plans include a scope of services that encompass the property manager’s dealings with tenants from start to finish, all for a reasonable flat fee per month. We’ll show you how to operate a better property management business, make more profit and resolve disputes. Contact Tim Baldwin to discuss their legal plan offers at (850) 972-8610.