Typically, a realtor/property manager conducts a detailed investigation concerning the prospective buyer/tenant to ensure that this person is capable of performing his obligations under the subject transaction.  However, how many realtors/ property managers perform the same due diligence with their clients?  In this market, it is vital that you as a realtor/property manager perform proper due diligence when asked by an owner to sell and/or manage a residential property.  At minimum, prior to accepting the listing/management agreement you should perform the following due diligence of your potential client:

1.         Research the public records to ensure that your client is the title owner of record to the property.

2.         If you have a corporate client, make sure the person you are dealing with is the authorized representative of the company.

3.         Research the clerk of the county court records to verify your client does not have a pending foreclosure suit, Notice of Lis Pendens, or bankruptcy.

4.         Research the county tax records to determine if your client is current on his taxes.  If not, that is the first red flag.

5.         Call the homeowners association and find out if your client is current on his assessments.  This is also a sign that your client is experiencing financial difficulty.

6.         Request from your client proof of payment of the last 4-5 mortgage payments to determine whether he is delinquent or not.

7.         Request from your client a current certificate of insurance on the property.  You do not want to manage an uninsured property.

Florida real estate law and regulations are very comprehensive and contain very specific requirements that are constantly evolving.  It is imperative that a realtor or property manager consult with a competent real estate attorney concerning rental property issues.

– Henry M. Cooper, Esq., is a shareholder and handles the residential real estate practice of Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  He welcomes questions and comments regarding the above and can be reached at hcooper@boginmunns.com.

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest, and the firm determines that it is otherwise able to accept the engagement.

Have you heard in the news that you can get paid for letting your home go through foreclosure?  There is a new government program that does provide financial incentives to the borrower.  The U.S. Treasury Department issued Supplemental Directive 09-09 which is being called HAFA.  HAFA is a part of a previous program called HAMP (Home Affordable Modification Program).

HAMP provided guidelines for Loan Modifications while HAFA provides guidelines for Short Sales and Deeds-in-Lieu of Foreclosure.

• A “Loan Modification” is where the borrower keeps the house and the mortgage but the terms of the mortgage are changed to make the payment more affordable.
• A “Short Sale” is where the home is sold for less than is owed on the mortgage.  This is done with the mortgage lender’s approval.
• A “Deed-in-Lieu of Foreclosure” is where the borrower gives the home to the mortgage lender in exchange for canceling the mortgage loan.

The lender must first evaluate the borrower for a Loan Modification under HAMP.  The new HAFA directives will require lenders to then consider whether a borrower is eligible for a Short Sale or a Deed-in-Lieu.  The new HAFA directives will take effect on April 5, 2010, and expire on December 31, 2012.

All of the following criteria must be met to be eligible for HAMP and HAFA:

1. The home is the borrower’s homestead property;
2. The mortgage is a First Mortgage originated before Jan. 2, 2009;
3. The mortgage is delinquent or reasonably will be in the future;
4. The current mortgage balance is less than $729,750.01; and
5. The mortgage payment exceeds 31% of the borrower’s gross income.

If a borrower qualifies for a Short Sale under the new HAFA directives, the lender will be required to forgive any deficiency on the mortgage loan.  This will be a big help to borrowers because many borrowers who sold their home in a Short Sale are now being pursued by collections agencies to collect the deficiencies owed to the banks.  The HAFA Short Sale directives prohibit the lenders from reducing Realtor commissions below 6% and provide the following financial incentives:

1. • $1,500 for borrower relocation assistance
   • $1,000 for services to cover administrative and processing costs
   • $1,000 match for investors for allowing a total of up to $3,000 in short sale proceeds to be distributed to 2^nd mortgage holders

The new directives require the borrower to make an effort to sell the home through a Short Sale before they can sign a Deed-in-Lieu of Foreclosure.  If the lender accepts a Deed-in-Lieu (DIL) under the new HAFA directives, the lender may not require a cash contribution or promissory note from the borrower and must forfeit the ability to pursue a deficiency judgment against the borrower.

The borrower may request their lender evaluate whether they are eligible for a Short Sale or DIL.  If the borrower is not eligible, then the lender must notify them in writing and explain why.

Bogin, Munns & Munns, P.A. is a full-service law firm with experienced commercial lawyers who represent many banks and mortgage lenders.  If you are a loan servicer who is interested in legal representation and assistance with the HAMP and HAFA directives, you can call our office at (407) 578-1334 to schedule a consultation.

– Zana Dupee, Esq., is an experienced attorney with Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  Mrs. Dupee works out of the Gainesville office of the firm and welcomes questions and comments regarding the above and can be reached at zdupee@boginmunns.com

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest, and the firm determines that it is otherwise able to accept the engagement. The engagement would also be confirmed by a written agreement.

The residential leasing market has been dramatically changed due to the Great Recession that has given rise to new laws and regulations promulgated by the federal government.  Now more than ever, residential rental property managers need to be aware of these new laws and regulations to avoid unintended legal consequences for themselves and their clients.

The Fair Credit Report Act was amended to include new identity theft regulations.  Officially titled “Identity Theft Red Flags and Address Discrepancies Under the Fair and Accurate Credit Transactions Act of 2003” (the “Act”), this Act was created to detect, prevent, and mitigate identity theft for all users of credit and other consumer report information.  As this type of information is routinely used by residential property managers to verify the financial ability and background of a prospective tenant, the Act imposes certain requirements on residential property managers to detect, prevent, and mitigate “Red Flags”.  The Act defines a Red Flag as a “pattern, practice, or specific activity that indicates the possible existence of identity theft.”

The Act requires that the residential rental property manager have certain reasonable policies and procedures in situations where the residential rental property manager obtains a prospective tenant’s personal identifiable information from a credit or other consumer report.  These reasonable policies must include the ability to (a) identify relevant Red Flags that may occur when the residential rental property manager obtains the personal identifiable information from the prospective tenant, (b) detect any Red Flags upon review of the provided personal identifiable information from the prospective tenant, (c) appropriately respond to any detected Red Flags, and (d) update the policy to reflect changes in risks to the rental property owner and the residential rental property manager.  It is highly recommended that you document these policies and procedures in writing.

One of the more common Red Flags is an address discrepancy.  The residential rental property manager must have reasonable verification and fraud prevention policies in place to verify a prospective tenant’s identity when there is a discrepancy in the prospective tenant’s address.  In most circumstances, the Red Flag will occur when the residential rental property manager receives a Notice of Address Discrepancy from a consumer reporting agency.  This Notice informs the residential rental property manager that there is a discrepancy between the address found in the tenant’s credit report and the address listed on the rental application.  To comply with the Act, the residential rental property manager may (a) verify the information contained in the credit report directly with the prospective tenant, or (b) compare the information contained in the credit report with other information found in other reports or sources (e.g. drivers license).  The residential property manager, however, does not have a duty to report any discovered fraud.

Fortunately, the date for mandatory compliance for this Act has been extended until June 2010 by the Federal Trade Commission.  This enables the residential rental property manager to have sufficient time to retain the services of a real estate attorney to assist them with the development of these policies to ensure compliance with this Act.

– Henry M. Cooper, Esq., is a shareholder and handles the residential real estate practice of Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  He welcomes questions and comments regarding the above and can be reached at hcooper@boginmunns.com.

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest, and the firm determines that it is otherwise able to accept the engagement.

On February 11, 2010, the Florida Supreme Court made significant changes to the Florida Rules of Civil Procedure as they pertain to initiating new residential foreclosure actions in Florida’s Courts.  The Court’s opinion follows a series of changes that are being made on the local court level to stave off the glut of residential foreclosure filings that are clogging the court system.

In its recent opinion, the following rule changes are made applicable to new residential foreclosure filings:

• Fla. R. Civ. P. 1.110(b) is amended to require verification of mortgage foreclosure complaints involving residential real property. This means that the lender must swear to, or “verify”, the veracity of the factual allegations being made in the complaint.   The primary purposes of this amendment are (1) to provide incentive for the plaintiff to appropriately investigate and verify its ownership of the note or right to enforce the note and ensure that the allegations in the complaint are accurate; (2) to conserve judicial resources that are currently being wasted on inappropriately pleaded lost note counts and inconsistent allegations; (3) to prevent the wasting of judicial resources and harm to defendants resulting from suits brought by plaintiffs not entitled to enforce the note; and (4) to give trial courts greater authority to sanction plaintiffs who make false allegations.
• Form 1.924 – Affidavit of Diligent Search, is modified as follows.  First, the form is standardized and thus more user-friendly.  There is a new section for the affiant to insert the “Attempts to Serve Process and Results”.  There is also a “catch-all” section for the affiant to list all additional efforts made to locate defendant.   Furthermore, there is now a section which reads: “I inquired of the occupant of the premises whether the occupant knows the location of the borrower-defendant, with the following results: ________.”   A major change is also that the Affidavit of Diligent Search is now signed by the person who actually performed the search – likely a process server – and not the attorney on the case who may not have personal knowledge of the process server’s efforts.
• The opinion now requires the use of a new form, 1.996(b) – Motion to Cancel and Reschedule Foreclosure Sale.  A party cancelling a foreclosure sale is required to provide a reason for the cancellation.  Said the Court:     Currently, many foreclosure sales set by the final judgment and handled by the clerks of court are the subject of vague last-minute motions to reset sales without giving any specific information as to why the sale is being reset. It is important to know why sales are being reset so as to determine when they can properly be reset, or whether the sales process is being abused. . . . Again, this is designed at promoting effective case management and keeping properties out of extended limbo between final judgment and sale.
• The opinion adopted a new form of Final Judgment of Foreclosure.  This new form has many changes to include clarity, bring the form in line with current statutory provisions and requirements, increase readability, and to conform to prevailing practices in the courts.

These amendments went into effect upon release of the Court’s opinion on February 11, 2010.

Many people create a new business with 2 owners each owning 50%.  When times are good, usually at the start of the business, the equal ownership is generally not a troublesome issue.  However, when times get bad, or even when times are good, the 2 individuals may develop different ideas on how to run the company.  Without some ground rules on how to resolve these differences, a management deadlock will result.  If such a deadlock exists, in the extreme case, one of the owners can request a court to judicially dissolve the company.  If sufficient grounds exist, the court will order a dissolution with the company liquidating its assets, paying off its creditors and distributing the remaining moneys, if any, to the owners.

Such liquidation may not be in the best interest of all parties.  In that case, one of the owners may use this circumstance to leverage the other owner to buy him/her out at an above-market price.  This situation can be avoided if the owners sign an agreement at the outset of the business, or even thereafter, stating, among other things, the rules for breaking a management deadlock and/or for determining the price to be paid in the case of a buyout of an owner’s interest.  Such agreement may also include restrictions regarding the sale of the ownership interest to a third party and procedures for handling the death or disability of an owner.

Legal counsel can help business owners anticipate these and other issues and suggest ways to minimize their interruption of your business.

– John Wright, Esquire, is a corporate attorney with Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  Mr. Wright works out of the Melbourne and Kissimmee offices of the firm and welcomes questions and comments regarding the above and can be reached at jwright@boginmunns.com.

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest and the firm determines that it is otherwise able to accept the engagement. The engagement would also be confirmed by a written agreement.

People are often surprised to learn that there are no laws that require employers to be reasonable, polite, or even fair in their decisions regarding hiring, firing, promotions, demotions, discipline, and job duties.  Employers can legally make employment decisions for good reasons, bad reasons, or even for no reason at all.  For example an employer could announce that “everyone with brown shoes on” would be terminated at the end of the day and then do just that without risk of violating any employment laws.  Of course, such an odd circumstance might make the local news, but if the employer’s true reason for making the decision was truly based on shoe color, then it would not violate the law.

A different result might be forthcoming, however, if the employees that were fired took notice of the fact that they were all white males, were all over the age of 60, or were all disabled in some fashion.  If so, then the employer may have violated one or more of the various Florida and federal laws that protect against workplace discrimination.  Such laws prohibit, among other things, discrimination in employment decisions based upon race, national origin, color, sex, disability, religion, age or marital status.

If you feel that you have suffered an act of workplace discrimination, then you are likely best suited to speak to a qualified Orlando employment law attorney as soon as is practicable.  It should be noted that most discrimination claims cannot proceed immediately to court.  Typically, the employee has to first file a complaint (termed a “charge of discrimination”) with either the federal government (the Equal Employment Opportunity Commission or “EEOC”) or the Florida government (the Florida Commission on Human Relations or “FCHR”) and allow the government an opportunity to investigate their discrimination issues.

Once a charge of discrimination is filed, the government will send a copy of the charge to the employer and will typically offer to set up a mediation (informal settlement conference) wherein an impartial person tries to assist the parties resolve their dispute prior to the government investigation.  If, however, the dispute cannot be resolved through mediation or mediation does not occur, then the government will conduct an investigation as to the alleged discrimination.  At the end of the investigation, the government will notify the employee as to its findings and will provide the employee with instructions on how to seek available remedies under the law.  Such remedies could include either an administrative hearing or a civil action in a court of law.

Of course, as with any legal claim, time is of the essence as the law limits the time that you have to file.  Generally speaking, charges of discrimination in Florida must be filed no later than 365 days from the alleged discriminatory act.  The employment attorneys at Bogin, Munns, & Munns, P.A. have handled many such claims from the initial filing all the way through to federal trial and even appellate claims.  The firm employs several experienced employment attorneys that are available for consultations and assistance at any stage of employment law proceedings.

– Joseph Shoemaker, Esq., is an attorney with Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  Mr. Shoemaker works out of the Leesburg office of the firm and welcomes questions and comments regarding the above and can be reached at jshoemaker@boginmunns.com

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest, and the firm determines that it is otherwise able to accept the engagement. The engagement would also be confirmed by a written agreement.

If you are considering filing for divorce in Florida then you have probably been filled with lots of information from your friends, family members and acquaintances.  The purpose of this article is to provide general information regarding divorce to the general public.  It is by no means intended to comprehensively cover the subject.  It is merely being offered as a general source of information to address only the issues of divorce specifically addressed within it.

Because divorce or “Dissolution of Marriage” as it is technically referred to in Florida Courts is so prolific, there are many misconceptions and much confusion related to this area of the law.  This is largely because divorce is such an emotional, stressful and highly charged affair. As a result, the events surrounding it become shared with others and this leads people to believe that the results of one person’s divorce might or should be similar to someone else’s.  Nothing could be further from the truth.

Divorce is highly fact intensive and the only person with whom someone should consult with regarding a potential divorce is an attorney licensed by the Florida Bar with extensive experience in Family Law.  Only such an attorney can provide an individual with the advice and expertise that is necessary relative to seeking a divorce.  One of the most important things to remember with regard to filing for divorce in Florida is that Florida is a “no fault” divorce state.  This means that either spouse can file for divorce if that spouse can prove that the marriage is “irretrievably broken.”  The reasons for the marriage being irretrievably broken can range from infidelity or to the fact that one of the spouses simply isn’t in love with the other spouse anymore.  Regardless, from an evidentiary standpoint, proving that a marriage is irretrievably broken is not difficult.

Divorce in Florida has been largely codified within Florida Statutes Chapter 61.  Chapter 61 delineates the factors to be considered within the context of the major components of divorce.  These components or “areas” are:  equitable distribution; time-sharing with any minor children (formerly called custody); child support of any minor children; alimony (when applicable); enforcement of orders or judgments previously entered by the court as well as other areas.  These areas will be more fully explored in future articles by this author.

Divorce is consistently ranked by many sources as the second most stressful life event (after the death of a child or spouse) that could happen in one’s life.  It cannot be overstated enough that it is extremely important that one have a strong support system (family, counseling, clergy, friends, etc.) when dealing with divorce.  However, what is most tragic is the effect that divorce can have on children.

It is extremely important that regardless of what is sought by either party within a divorce proceeding, that the best interests of the children be put first.  Parents must quickly realize and accept that although they may not be married to each other; they will always be the parents of their children.   Courts in Florida severely frown upon parental alienation including disparaging the other parent in front of a minor child or not allowing a parent contact with a minor child.  In fact, alienating a child from a parent is so serious that it can lead to limiting the alienating spouse’s contact with a child.  Divorcing spouses with children must learn to co-parent effectively and with the best interests of the children in mind. This will ensure that the least amount of harm will be inflicted upon the minor children.  Learning how to co-parent during and after a divorce is an acquired skill and it is wise to seek counseling services and the advice of qualified professionals experienced with helping children and families of divorce.

In conclusion, divorce is a confusing, nebulous concept to individuals who have not had the benefit of consulting with an attorney licensed by the Florida Bar experienced in family law.  It is important to take the “high road” when going through a divorce as it will best allow one to get past it with dignity and with less stress and hurt feelings.  Most importantly, if one has minor children, it is paramount to consider the children’s needs first and to make the children’s well-being the primary consideration at the inception of any divorce proceeding.

– William Rosenfelt, Esq., is an Orlando family law attorney with Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  He welcomes questions and comments regarding the above and can be reached at wrosenfelt@boginmunns.com

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest, and the firm determines that it is otherwise able to accept the engagement.

Orlando employers are increasingly attempting to classify workers as independent contractors.  The upside for the employer is substantial in terms of avoiding payroll taxes, worker’s compensation insurance, minimum wages, overtime wages, and, even, compliance with anti-discrimination laws which apply to employees and applicants for employment and not to independent contractors of the employer.

The upside to the worker of an independent contractor arrangement (i.e., the illusory promise of higher wages unencumbered by payroll taxes) is often outweighed by the downside to this arrangement.  The worker will still be required to pay income tax on wages earned in an independent contractor scenario.  Furthermore, the worker may have to retain an accountant or CPA to keep track of receipts and complete their personal and “business” tax returns at the end of the fiscal year.  These are costs that are not readily apparent to the worker.

Furthermore, the downside to an independent contractor arrangement could entail diminished social security returns in the future, unpaid medical bills resulting from workplace injury not covered by medical or worker’s compensation insurance, lower wages for longer hours worked, and, even, exposure to discriminatory treatment or harassment.  These downsides are often unforeseen by the worker.  Therefore, the law applies two (2) tests to examine whether a worker was misclassified as an independent contractor.

The first test (i.e., the economic realities test) is applied to minimum wage, overtime, and Family Medical Leave Act situations.  The factors considered under the economic realities test are: (1) the employer’s degree of control over the worker’s job functions (i.e., the higher the degree of the employer’s control over the worker, then the more likely that the worker is, in fact, an employee); (2) the worker’s opportunity for profit or loss (i.e., if the worker is required to exclusively work for the employer or per the employer’s terms of pay, then the more likely that the worker is, in fact, an employee); (3) the relative investments of the employer vis-à-vis the worker (i.e., if the employer has invested more time and money into the enterprise than the worker, then it is more likely than not that the worker is, in fact, an employee); (4) the degree of skill and initiative required to perform the worker’s job (i.e., if the work requires average or below average skill or training, then it is more likely that the worker is, in fact, an employee); (5) the permanency of the relationship (i.e., if the worker is working for a specific period of time or completing a specific project (e.g., installing new plumbing for the employer) rather than working on an at-will basis, then the worker is more likely an independent contractor); and (6) the nature of the worker’s services to the employer’s business (i.e., to use the plumbing example again, if the employer’s business is a law firm, then the person retained to install the new plumbing is not likely to be construed as an employee of the business).

The second test used to determine whether a worker is an employee is the common law test.  The common law test has eight (8) factors which we will explore in part two of this article.  So, stayed tuned.  In the meantime, should you have any questions regarding your current arrangement, feel free to contact one of the employment attorneys at Bogin, Munns & Munns, P.A. to coordinate a consultation.

– Daniel Perez, Esq., is an attorney with Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  Mr. Perez works out of the Melbourne office of the firm and welcomes questions and comments regarding the above and can be reached at dperez@boginmunns.com

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest, and the firm determines that it is otherwise able to accept the engagement.

While most know that a promissory note and a mortgage are the two essential documents of a real estate loan, some don’t know the differences between them.  The note is evidence of indebtedness and a promise to repay the loan.  The mortgage is a pledge of security for the debt, usually specific realty.  If a borrower fails to meet its obligations to pay back the loan under the promissory note, the lender may exercise its remedies established in the mortgage to foreclose on the property that is the subject of the mortgage.

Be sure to understand the specific terms of the note, such as the loan amount, interest rate, maturity date, and repayment and prepayment provisions.  Additional noteworthy clauses in the note or mortgage include: due on sale, prohibition against junior financing, option to call or recast, and default.

– Spencer R. Munns, Esq., is a shareholder with the law firm of Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  He welcomes questions and comments regarding the above and can be reached at smunns@boginmunns.com.

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest, and the firm determines that it is otherwise able to accept the engagement.

There are many types of leases that can be structured for the leasing of real property.  The type of lease that is appropriate for any given transaction will depend on the parties’ objectives, financial strength, long term or short term intentions for the property and the management skills of the landlord.  One of the structures often used by landlord who do not have management capabilities or who desire to simplify and take the risk out of leasing is the triple net form of lease.

In triple net leases, generally, the tenant is required to pay for the utilities, taxes, insurance and maintenance.  This form of lease is often favored in sale-leaseback deals.  While it may be clear that the tenant has responsibility for payment of the real estate taxes, questions can arise as to rights and responsibilities of the parties related to disputes over taxes.

Let’s say that the real estate taxes assessed against the leased property are too high in the opinion of the landlord and/or tenant.  Both have a vested interest in keeping the taxes down.  By doing so the tenant saves money and the landlord prevents precedent for higher valuations in the future.

Many leases, however, fail to address the issues related to legal challenges made to a valuation deemed to be too high.  For example:  what rights does tenant have to challenge or appeal the assessment?  Is the tenant required to get the landlord’s approval to file an appeal or lawsuit disputing the taxes?  Does the landlord have the right to approve any settlement?  What if the landlord and tenant cannot agree on the terms of any settlement?  If there is a refund, who is entitled to the refund?

Leases can become long and laborious and many times the landlord and the tenant resist lengthy forms of leases.  Of course, its best to be cautious and not be overly verbose in lease drafting.  However, it is important to cover critical issues such as the rights and obligations of the parties related to real estate taxes imposed on the property subject to the lease.  As usual, while the tenant or landlord may not see the necessity of addressing such issues, they will surely thank their counsel when such an issue arises during the term of the lease.

– Rulon D. Munns, Esq., is a managing shareholder of Bogin, Munns, & Munns, P.A., a full service law firm with offices in Orlando, Clermont, Kissimmee, Deltona, Daytona Beach, Ocala, Melbourne, Gainesville, and Leesburg, Florida.  He welcomes questions and comments regarding the above and can be reached at rulon@boginmunns.com.

NO LEGAL ADVICE: This blog entry is not intended as legal advice nor should you consider it as such. It is intended only as general information.  You should not act upon this information without retaining professional legal counsel. Please keep in mind that merely subscribing to or reading this blog or otherwise contacting Bogin Munns & Munns, P.A. in the manner that you have will not establish an attorney-client relationship with our firm. Bogin Munns & Munns, P.A. cannot represent you until the firm knows there would not be a conflict of interest, and the firm determines that it is otherwise able to accept the engagement.