Leasing

Leasing is the forgotten stepchild of real estate. It involves all facets of a real estate transaction without the glamour ($$$).

In other words, call your local friendly neighborhood top producer and ask if they do rentals. The response should go something like this “sure, let me get [brand new agent], they will be able to assist you”.

Couple of quick notes:

You’re either a lessee (tenant) or lessor (landlord).
Unless specific terms are written into the Lease… then you do not have any specific terms!
Lessor does not have to give your deposit back at end of lease.
Lessor can discriminate, if he/she doesn’t like you… than he/she don’t have to like you.

Why?

Funny little Florida State Statute “Chapter 83” better known as the Landlord/Tenant Act. If you’re leasing in our great state, get to know it. It just became your new best friend.

The leasing process…

Contract to Lease

A contract to lease is a form used to negotiate terms and conditions of the final lease agreement. Contrary to popular belief (psycho EWM agents), you DO NOT need to do a Contract to Lease, you can go straight to jail (the lease)… Why?

Because the lease supersedes a Contract to Lease (CL).

So remember: if you want it, make sure it’s written in the lease.
Now, this will not stop agents from “wanting” a CL, so here’s what they may detail:

Lease terms, rent payments/fees, security deposits, utility maintenance, and special clauses… they need to be on lease to be valid (seeing a pattern here?)

You will also be required to fill out a Rental Application. They are used to determine the quality of the tenant. Keep in mind that if you are leasing in a condominium, they have separate applications and they could take as much as two weeks to approve and you will need approval to move in.

Some suggestions:

Credit checks are paid by tenants. Make sure you sign all applications.

Protect your Social Security number, give out only if absolutely necessary.

Leasing

Lease agreements written by realtors in Florida must be approved by Florida Association of Realtors (FAR). These are fill in the blank, with Florida BAR approved language, and may not exceed one year (they really don’t trust us). BUT lessor and lessee can do whatever they want.

Lease agreements now include addenda required by law. For example, a lead base paint disclosure.

In a lease, pay special attention to these sections:

Length of lease period
Total amount of value of lease
Security deposit (how will it be held)
Who is responsible for general maintenance (i.e. lawn, pool, etc.)?
Who is responsible for minor maintenance and to what financial limit?

Also, know your rights as to foreclosed properties and hold over leases. They cannot toss you out if you have a lease that is current so beware of lessor’s who do not want to enter into a yearly lease AND month-to-month….means just that.

Which brings me too…

Florida Landlord Tenant Act

The Landlord/Tenant Act governs all leases written in the State of Florida. This law was enacted to protect all parties involved in the leasing of residential properties. The LTAct deals with many issues, but the most common section refers to security deposits; how they are held by the landlord and in what type of account.

In some cases, the tenant is entitled to 75% of the interest earned on deposit.

Other topics covered are:

When must the landlord return deposits to tenant?

How are claims against deposits done?

Click here to review the complete LTA: Landlord/Tenant Act

Deposits & Walkthroughs

Deposits are required by landlords to show intent to lease, with the equivalent of one month’s rent typically used when entering into a contract to lease. When all terms are agreed to and the lease has been executed, second deposits may be required which may equal the last month’s rent and security deposit or the balance of same. Deposits will be held in escrow.

In some instances, if the property is new or has been substantially remodeled, the landlord may ask for two months rent security. Condominiums are now beginning to require one month security for common elements. This may constitute four months of deposits.

Security deposits are NOT used as payment for a month’s rent.

NOTE: if any landlord asks for final deposits ahead of you taking possession… get a new landlord. That’s why we do….

Walkthroughs: I do these to let the landlord and tenants know of any obvious problems prior to occupancy and to document appliances, fixtures and completion of any “special items” that were agreed to and written into lease (remember?).

I do one at start of lease and one one at end of lease to avoid disputes and misunderstandings at the end of the lease term.

Rental Scams

Let’s start with the old saying: “If it sounds too good to be true, it probably is” . If you practice this, no need to read any further.

If not, here we go…

Rental Scam #1: Renting a soon-to-be-foreclosed or foreclosed home.

Because of the foreclosure crisis, many renters have found themselves with “great deals”, and then are surprised when they are kicked out of their rentals because the bank is foreclosing on the home.

What’s happening here is that the owner can no longer keep up with the payments and has decided to pocket the rent until someone catches them (aka the bank).

The renter is then left “homeless” and stuck with the expense of trying to find a place to rent and move all their belongings ASAP. Sure, you can try to take them to small claims court but how much money and time are you going to spend attempting to collect $1K at most…Remember, these folks are probably claiming bankruptcy too.

So how do you avoid this? Get a Realtor you trust, one that will look into the tax records and see if it bank owned.

Beware: NEW scams coming to a rental near you!

Same lead-in from Craigslist, really nice property (in this case my listing), but now we come to the twist… they don’t want dough, they want your credit history.

Have a look at this example:

Subject: Re: $1788 / 2br – 1106ft² – Stylish 2/2 House For Rent (Coral Gables)

Hello Steven,

Thank you so much for getting in touch about the property. Yes, it is still available.

As you may imagine, we have gotten an overwhelming amount of responses from all sorts of people interested in our properties. In order to manage our business and our tenants most efficiently, we have established the following policy:

We don’t charge application fees, but we do require each prospective tenant to provide a current copy of their credit report(s). We just want to make sure there aren’t any recent evictions or lease-related judgements. Completing this step also shows us that you are indeed serious about leasing with us and not just window-shopping.

Follow this link to access your report – Equifax

Let me know when you’ve printed out your report. DO NOT e-mail it to me! Once you’ve got it printed out, I’ll be happy to set up a time with you to walk through the property.

And this is just one example, there are still the classics out there!

There are people who “pirate” a listing and “claim it” as their own. Once claimed, they make several notable changes.

First and foremost is PRICE, they change it to some ridiculous number that reflects what it would have rented at before the advent of running water and or electricity.

Second, they change the contact info to their brand new email address (see below).

Third, they sit back and wait for you to call/email.

BUT how can they do this you say?

Simple as A, B, C…and even D.

A. They go on public records (very easy to do) and get the owners name.
B. They open an email address, such as, [email protected]
C. They pose as said owners with a variation of this story: “I am an astronaut and have been transferred to the moon, I need to rent my home ASAP”.
D. They get you to send them dough for keys and the lease (they really are not on the moon).

Or just use the ole bait and switch, telling you, “That house in no longer available, however I can help you find something else…”

How can I avoid such scams, you ask?

The answer is obvious: hire a realtor!