Florida Real Estate Brokers Guide Sixth Edition Linda
Florida Real Estate Broker’s Guide, Sixth Edition Linda L. Crawford Edward J. O’Donnell Copyright © 2017 Kaplan, Inc. All rights reserved.
Unit 18 Property Management
Florida Landlord and Tenant Act 3 © 2017 Kaplan, Inc.
Part 1—Non-residential • An unwritten lease is a tenancy at will – Termination of a tenancy at will • Holding over becomes a tenancy at sufferance • Right of possession upon default in rent • Landlord’s lien for rent – Distress for rent; trial, verdict, judgment • Causes for eviction – Waiver of right to proceed with eviction claim – Removal of tenant; judgment © 2017 Kaplan, Inc. 4
Part II—Residential Landlord’s statutory duties Tenant remedies for breach by landlord Tenant security deposits and advance rent Landlord’s right to enter the premises during lease term • Eviction proceedings • • • 5 © 2017 Kaplan, Inc.
Florida Landlord and Tenant Act— Part II • Manager of single-family home or duplex – Must provide working smoke detectors • Manager of dwelling other than single-family home or duplex – Must provide pest control, locks and keys, clean and safe common areas, garbage removal, heat, hot water • Landlord may enter the premises – To inspect, make repairs, or show apartment – Must give 12 hours notice unless emergency 6 © 2017 Kaplan, Inc.
Florida Landlord and Tenant Act (Cont’d) • When tenant vacates premises, landlord must – return the deposit within 15 days OR – notify tenant within 30 days of intent to retain a portion or all of the deposit • If landlord fails to notify tenant, cannot keep the deposit 7 © 2017 Kaplan, Inc.
Broker Property Management • Usually, the broker is the single agent of the absentee owner • Deposits and rents are trust funds – Sales associates must deliver funds to the broker within 1 business day – Broker must deposit the funds into the broker’s escrow within 3 business days • Brokers may place up to $5, 000 into a property management escrow account. © 2017 Kaplan, Inc. 8
Federal Laws Concerning Property Management • Fair Housing – Civil Rights Act of 1866 protects against racial discrimination – Fair Housing Act (1968) prohibits discrimination based on race, color, religion, sex, national origin, handicap, or family status • Americans with Disabilities Act (ADA) – Prohibits discrimination in employment – Public and common-use portions of dwellings must be readily accessible and usable 9 © 2017 Kaplan, Inc.
Types of Management • Property management firms – Brokerage firms that specialize in management – High levels of professional expertise • In-house management staff – Large companies hire and train their own staffs • Brokers often manage properties they sell – Set up property management divisions © 2017 Kaplan, Inc. 10
License Requirements • Exemptions from licensing – Persons who rent their own properties – Employees of corporations renting corporate property who are paid by salary – Salaried employees who work in an on-site office – Salaried managers of condominiums who rent units for periods no more than one year – Persons who rent properties for transient occupancy under FS 509 – Persons renting lots in mobile home parks 11 © 2017 Kaplan, Inc.
Property Management Markets • Office buildings • Retail stores • Residential properties – Single family – Multifamily – Condominiums – Vacation rentals 12 © 2017 Kaplan, Inc.
Community Associations • Residential homeowners’ association in which membership is required • Authorized to impose a fee that may become a lien on the property • Community Association is defined to have more than 10 units or a budget greater than $100, 000 • Manager of community association must be licensed with the DBPR 13 © 2017 Kaplan, Inc.
Evaluating the Rental Market • Regional market analysis – Demographic and economic information • Neighborhood market analysis – Boundaries and land use – Transportation facilities – Economy – Supply and demand • Neighborhood amenities and facilities 14 © 2017 Kaplan, Inc.
Property Analysis • Exterior Inspection – Check for deferred maintenance • Interior inspection – Estimate redecorating and replacement expenses • Compare with competing properties – Unit sizes, amenities, condition 15 © 2017 Kaplan, Inc.
Advertising Methods • • • Signs and billboards Internet and social media—one of the principal tools Newspapers—classifieds losing favor Apartment guides—more powerful than classifieds Broadcast media—best for large, new properties Direct mail—a good mailing list is key to success 16 © 2017 Kaplan, Inc.
Showing the Property • Qualify the prospect – Application, credit report, rental references – Compatible, stable, and financially able to pay • Create interest and desire – Don’t show too many units – Give prospect time to inspect the property • Handling objections – Valid objections means show another unit – Sometimes objection is simply a negotiating tool © 2017 Kaplan, Inc. 17
Tenant Policies • Tenant relations – Make sure they understand rules and regulations – Communicate clearly • Tenant complaints – Most common complaint is service requests • Provide prompt service if it is owner’s responsibility • If not owner’s responsibility, tell tenant immediately – Noise, parking, and sanitation also rank high on list of complaints 18 © 2017 Kaplan, Inc.
Tenant’s Failure to Pay Rent 1. Landlord gives 3 -day notice to vacate 2. Landlord gives written notice to vacate May not change locks, remove doors, etc. 3. Landlord files complaint in court 4. After getting final judgment, landlord gets a writ of possession to have sheriff evict the tenant 19 © 2017 Kaplan, Inc.
Standard Lease Clauses • • Term and parties Address and list of appliances and furniture Rent payment amount and frequency Deposits, advance rent, and late charges Use of premises Maintenance Utilities Default © 2017 Kaplan, Inc. 20
Maintenance Programs for • Physical integrity – Structural elements such as roof, exterior walls • Functional performance – HVAC, plumbing, and electrical systems • Housekeeping – Clean and well-maintained • Merchandising – Carpet replacement, decorating, and landscaping © 2017 Kaplan, Inc. 21
Maintenance • Staff vs. contract maintenance • Schedules and inspections • Supervising security 22 © 2017 Kaplan, Inc.
Accounting and Recordkeeping • Operating budget • Manager must – Organize records – Retain records – Keep license records – Maintain equipment warranties – Retain escrow account reconciliations 23 © 2017 Kaplan, Inc.
Risk Management • Identify the risks – Inspect property • Avoid the risks – No aggressive dogs, remove diving boards • Control the risks – Security patrols, stair rails, safety glasses • Transferring the risk – Buy insurance, outside contractors, hold-harmless agreements © 2017 Kaplan, Inc. 24
Types of Risk • Business risk—two types: – Static risk—from fire, flood, theft • Protect with insurance – Dynamic risk—from economic changes, tax code changes, etc. • Can’t be insured—requires due diligence before purchase • Financial risk – Mortgage payments increase risk © 2017 Kaplan, Inc. 25
Property Insurance • The property manager should check for insurance policies covering – Fire, flood, theft – Loss of income – Worker’s compensation – Commercial auto liability • Property manager should be named as an additional insured in the owner’s insurance © 2017 Kaplan, Inc. 26
Owner/Manager Relationship • • Management agreement Compensation for services Personal communications Evaluating management performance 27 © 2017 Kaplan, Inc.
Staffing and Employee Relations • • Recruitment and selection Training Retaining personnel Job descriptions 28 © 2017 Kaplan, Inc.
The End 29 © 2017 Kaplan, Inc.
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