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Property Management and Tenant Damages

In the rental business, it may happen that a tenant causes damages to your property, caused either by tenant neglect or misuse or normal wear and tear, or the tenant may have unpaid rent owed under the lease agreement.

What can a property manager do?

First, we inspect the property during the tenancy, but even a lot of inspections may not prevent a tenant from damaging the property, or the damage may have already occurred prior to the inspection. Most property management companies conduct 2 - 4 inspections per year. Clearly, there is plenty of opportunity for a bad tenant to cause damage to the property during the tenancy.

If it is discovered that a tenant is causing damages during the tenancy, we can enforce the terms of the lease by delivering notice to the tenant of his lease violation, including a 7 day notice to cure, or in the event of intentional destruction of property, a 7 day notice to terminate the lease. If the tenant does not cure the violation, an attorney must file an eviction based on the lease violation.

Next, once the lease agreement is terminated and the tenant vacates or is evicted, we inspect the property, document evidences of damages, and make a determination of tenant liability as well as valuation of damages (see "Valuation of Damages") for the purpose of making a security deposit claim. Most of the time, property managers collect a deposit equal to 1 month's rent, but sometimes more if the tenant poses higher risks, such as, having a pet.

If the value of damages to the property far exceed the security deposit amount, it may unnecessary to list every possible item of damage on a security deposit claim, because the claims are more than sufficient to retain all of the deposit. Once the full amount of the security deposit amount is claimed, and the 15 day tenant objection period has expired, we transfer the money to the appropriate persons.

A landlord may ask, so what do I do about getting the tenant to pay for what is unpaid that the tenant is responsible for? Here are the basic options:

  1. Hire a debt collector to go after the monies owed. Debt collection companies usually charge quite a high percentage of the recovery, and they have discretion of what amount to settle for with the tenant.

  2. Hire an attorney to sue the tenant and get a civil judgment ordering the tenant to pay you the amount of damages. This may prove ineffective and expensive, particularly because even with a judgment in your favor, a tenant may be "judgment proof", or have very little on which to collect.

  3. Acquire insurance. This must be done before the tenant is underway, but there are insurers that provide special insurance to landlords in case a tenant skips out on the lease or causes malicious damage to the property. Like all insurance policies, they are designed to offset risk. It may happen that you don't need to make a claim for a while, but if you ever need it, you'll be glad you have it.

In summary, under F.S. ch. 475, a property manager's role is limited and can only enforce the lease agreement, terminate the lease agreement if the tenant is in violation and doesn't cure or immediately, if the violation is non-curable), and make a security deposit claim for the damages owed by the tenant.

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