Covid19 - signing a new lease amid Florida Eviction Moratoria

General Landlording & Rental Properties
5yFollow

Covid19 - signing a new lease amid Florida Eviction Moratoria

Mary Joe
Investor · Brooklyn, NY · Member since 2013 · 254 posts · 28 votes

Hi All,  need some good advice here.

Is it wise to sign a new lease with a new tenant the end of this month amid COVID 19 eviction Moratoria law in Florida?

It sounds like almost any tenant can invoke this law and avoid eviction in FL for as long as the eviction Moratoria is in effect. 

What are my options?

1. Don't sign a new lease. Just keep my place vacant until the law goes away?  

2. Sign the new lease but ask for 3 or 4 months of security deposit or final months rent to buffer potential loss ?

3. Sign the new lease and pray that tenant will not invoke the anti eviction law?

Any other options to avoid an unpleasant situation down the road?

Any advice would be appreciated.

Thanks

0Reply
44 views

Most Popular Reply

Tommy Brant
Investor · Nashville, TN · Member since 2020 · 38 posts · 57 votes
5y

@Mary Joe I love this question. Short story, option 3 is how I'd operate my business. I'd exercise option 2 depending on applicant's credit score.

I came across the same dilemma when I was trying to fill up a rental property late last year. My mind was mostly at ease, and here's why.

In my tenant screening process, they would need a verifiable income. I would expect someone with a employment at this point in the pandemic to have the ability to consistently earn. I know it's all day to day, but if they have a job today, good references, and decent credit, then why not?

I'm not saying the worst of the worst can't happen, but be mindful to exercise your network. If your tenant stops paying for 6 months, then you'd better be in communication with your lender to let them know what's [not] coming down the pipe. Work with them. They don't want to foreclose on you.

Last tip I have -  if your tenant loses his jobs, stops paying rent, etc., then you're BEST option is to and coach them how to find money. How to file for unemployment, how to withdraw from 401k if they were infected with COVID, how to file for small business assistance programs, etc.

Hoping there's something in there to help you out. Best of luck!

1Reply
See this reply in the discussion

15 Replies

Jump to latestLatest
  • Tommy Brant
    Investor · Nashville, TN · Member since 2020 · 38 posts · 57 votes
    5y

    @Mary Joe I love this question. Short story, option 3 is how I'd operate my business. I'd exercise option 2 depending on applicant's credit score.

    I came across the same dilemma when I was trying to fill up a rental property late last year. My mind was mostly at ease, and here's why.

    In my tenant screening process, they would need a verifiable income. I would expect someone with a employment at this point in the pandemic to have the ability to consistently earn. I know it's all day to day, but if they have a job today, good references, and decent credit, then why not?

    I'm not saying the worst of the worst can't happen, but be mindful to exercise your network. If your tenant stops paying for 6 months, then you'd better be in communication with your lender to let them know what's [not] coming down the pipe. Work with them. They don't want to foreclose on you.

    Last tip I have -  if your tenant loses his jobs, stops paying rent, etc., then you're BEST option is to and coach them how to find money. How to file for unemployment, how to withdraw from 401k if they were infected with COVID, how to file for small business assistance programs, etc.

    Hoping there's something in there to help you out. Best of luck!

    1Reply
  • Mary Joe
    OP
    Investor · Brooklyn, NY · Member since 2013 · 254 posts · 28 votes
    5y

    @Tommy Brant

    Thanks Tommy, appreciate the feedback.  I will ask for income and employment verification etc for sure, I do that whether with or without covid. I am inclined  to ask for extra months in security deposit/last month rent etc as a cushion. I guess I need to find out whether that is against landlord-tenancy law in FL to ask for extra month in security deposit/last month rent. 

    1Reply
  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    5y

    I am writing 7 month leases and going MTM after that. You can also ask for prepaid rent. 

    0Reply
  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    5y

    Screen well, trust your gut if you think something is fishy and don't rent to them.  Verify employment (ideally call the company directly not using the number they give you).  I'm in Canada but had to fill a place as soon as the eviction ban was lifted and so far they seem to be okay tenants.  You are always going to have some bad apples, but who knows how long the eviction ban will last.  We are going to be dealing with covid for most of 2021.

    0Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y

    If you feel there's a risk of them not paying, I would recommend using a month-to-month agreement until things settle down.

    The DIY Landlord Book4.7247 Reviews
    WebsiteView Page
    1Reply
  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    5y

    Per Florida statute: any lease of less than six months and one day requires collection of sales tax. That is why I recommended a 7 month lease. Collecting advance rent, if the tenant is able to pay, seems like a great way to mitigate any future problems of non-payment. Also, if they pay quite a bit in advance, it shows goodwill on their part. 

    0Reply
  • Mary Joe
    OP
    Investor · Brooklyn, NY · Member since 2013 · 254 posts · 28 votes
    5y
    Originally posted by @John Thedford:

    I am writing 7 month leases and going MTM after that. You can also ask for prepaid rent. 

     Thanks John, I am thinking of doing the same; ie asking for prepaid rent or 3 months of security deposit as a cushion. 

    I see that you are a hard money lender, I am trying to educate myself the risks involved as a hard money investor and where to start for beginners, just sent you a invitation to connect if you have time. 

    MJ

    0Reply
  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    5y

    @Mary Joe the risks are to the lender most of the time. Failure to property vette the borrower, failure to properly underwrite the property. Most HML will NEVER take a 2nd.

    0Reply
  • Mary Joe
    OP
    Investor · Brooklyn, NY · Member since 2013 · 254 posts · 28 votes
    5y
    Originally posted by @John Thedford:

    Per Florida statute: any lease of less than six months and one day requires collection of sales tax. That is why I recommended a 7 month lease. Collecting advance rent, if the tenant is able to pay, seems like a great way to mitigate any future problems of non-payment. Also, if they pay quite a bit in advance, it shows goodwill on their part. 

     Thanks for the heads up about sales tax, have no idea.  Will keep that in mind.

    Question:  would a shorter lease really help under FL's covid anti eviction law?  I would think a shorter lease may not help here.  I would assume no eviction means no eviction regardless of whether the lease has expired or not.  For as long as COVID Eviction moratorium is in effect, no landlord can evict their tenants regardless of whether the lease has expired or not. 

    A shorter lease may make it a little easier for the tenant to prepay rent in advance, but when it comes down to eviction, I would assume that would not make any difference for as long as the eviction moratorium is in effect. 

    0Reply
  • Mary Joe
    OP
    Investor · Brooklyn, NY · Member since 2013 · 254 posts · 28 votes
    5y
    Originally posted by @Nathan Gesner:

    If you feel there's a risk of them not paying, I would recommend using a month-to-month agreement until things settle down.

     Thanks Nathan.  I would assume no eviction means no eviction regardless of whether the lease has expired or not. For as long as COVID Eviction moratorium is in effect, no landlord can evict their tenants regardless of whether the lease has expired or not.

    I am still reading up on the regulations, hope to get some clarity on this. 

    0Reply
  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    5y

    @Mary Joe not true. Evictions are moving forward in some cases. If you have a holdover tenant, they are NOT protected. Plus you can STILL file, and some people don't want that filing to follow them. 

    0Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y
    Originally posted by @Mary Joe:
    Originally posted by @Nathan Gesner:

    If you feel there's a risk of them not paying, I would recommend using a month-to-month agreement until things settle down.

     Thanks Nathan.  I would assume no eviction means no eviction regardless of whether the lease has expired or not. For as long as COVID Eviction moratorium is in effect, no landlord can evict their tenants regardless of whether the lease has expired or not.

    I am still reading up on the regulations, hope to get some clarity on this. 

    The eviction moratorium is only for non-payment of rent and it's only applicable to homes that are financed with a government-backed loan (FHA or VA). If the tenant is on a month-to-month, you can give them a 30-day notice of termination - for any reason - and part ways.

    Of course, check your local laws because your state, county, or city may have more restrictive rules.

    The DIY Landlord Book4.7247 Reviews
    WebsiteView Page
    0Reply
  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    5y

    You need to print out Chapter 83 Part II. Keep it to reference.

    0Reply
  • Mary Joe
    OP
    Investor · Brooklyn, NY · Member since 2013 · 254 posts · 28 votes
    5y

    @Nathan Gesner @John Thedford   Thanks both, much appreciated. 

    Just downloaded Chapter 83 Part II  :) 

    0Reply
  • Mary Joe
    OP
    Investor · Brooklyn, NY · Member since 2013 · 254 posts · 28 votes
    5y

    Just came across this on another site, more reaffirmation that shorter lease is the way to go to minimize potential headaches over eviction moratorium law.

    1. "Allow the lease to expire (including the landlord’s provision of any required notice), and do not renew the lease. In Florida, a tenant who remains in possession after expiration of the lease agreement without the permission of the landlord is considered a “holdover tenant” and is subject to eviction and double rent under Section 83.58, Florida Statutes. While the CDC Order may prevent eviction of the holdover tenant over his or her objection, the tenant may be more motivated to voluntarily vacate the property due to their liability for double rent."

    original link

    https://www.jdsupra.com/legaln...

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free