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10 Things You Need to Have in a Rental Lease Agreement

If you are new to leasing investment property to tenants, you need to be sure that your rental lease agreement covers all the bases so you can protect your investment properly.  Here are 10 terms you will definitely need to include in your rental lease agreement:

1.Names of all adult tenants and parties to the agreement.  If there is more than one adult tenant occupying the property, be sure to include the names of all adult tenants in the agreement. This will ensure that all adults who will be living on your property are responsible for living up to the terms of the agreement, including the payment of rent. It also provides you with the right to terminate the agreement if any of the tenants violates the lease terms.2. Tenancy and termination terms.  Specify the length of the agreement — whether it is month-to-month or for a fixed term. Typically, lease terms are for one year with options to renew. Specify the termination options for all parties as well.

3. Rent amount.  Detail the amount of the rent, when the rent is due and the forms of payment you will accept.

4. Subleasing and occupancy limits.  Make it clear that only those who have signed the lease, along with their minor children, may occupy the property.  Also include whether or not you will allow tenants to sublease — and if you do, be sure to include that subleasing is only allowed with your prior approval.

5. Security deposits.  Probably one of the single largest sources of disagreements between landlords and tenants has to do with security deposits. To protect yourself, be sure you detail exactly how the property must be left at the end of the lease in order for the tenant to receive his or her security deposit back. Florida law on security deposits specifies that these must be returned within 15-60 days after the tenant has left and returned the keys to you. If there are deductions, you must notify your former tenant in advance and provide details on those deductions. Florida has other laws regarding security deposits, so it is wise to check with a Florida real estate attorney for the proper notice in your rental lease agreement.

6. Repairs/maintenance.  The terms of your agreement should specify the maintenance obligations for you and your tenant, and require that your tenant notifies you immediately of any repairs that need to be made to the property.

7. Entry rights.  Your agreement should detail the conditions under which you are permitted to enter the property and what kind of notice is required before you do. Florida law allows landlords to enter a rental lease property in the case of an emergency, to make needed repairs or inspections, to show the property to prospective new tenants or contractors, if there is reasonable cause to believe a tenant has abandoned the property, and pursuant to a court order. Unless it’s an emergency, you must give your tenant 12 hours’ notice of your intent to enter and do so at a reasonable time, which has been defined as between 7:30 a.m. and 8 p.m.

8. Prohibited behavior.  You obviously don’t want someone dealing drugs out of your rental lease property and you probably don’t want noisy tenants either. Whatever your criteria for prohibited behavior, spell it out in your lease agreement.

9. Pets.  You should state whether or not you allow pets and any restrictions as to the size or number of pets allowed or if you charge a pet deposit or fee.

10. Damages/alterations.  Your agreement should specify who is responsible for damages to the property as well as what types of alterations — if any — a tenant may make to the property and whether your permission or approval is necessary to make those alterations.

About Stefan McHardy: Stefan is a Florida licensed attorney, real estate agent and a foreclosure auction investment specialist.  He practices in the areas of real estate, foreclosure, business litigation, and contract law from his Pembroke Pines and Miami Beach offices.  He frequently consults on general real estate and investing matters.  You can find out more about Stefan at DSALegalGroup.com/stefan or by visiting StefanMcHardy.com

Do You Know How The Fair Foreclosure Act Will Affect You?

 

Florida was among the hardest hit states in the national housing crisis, and state courts are still dealing with the flood of foreclosures crowding dockets. The Florida Fair Foreclosure Act (“FFFA”) was signed into law in attempt to unclog the court system with an expedited foreclosure process that both hurts and helps distressed homeowners.

Florida is a judicial foreclosure state, which means all foreclosure actions must be handled in a state court. The Florida Fair Foreclosure Act did not change that. However, there were some significant changes in the Florida foreclosure process that homeowners facing foreclosure need to know.

How the Florida Fair Foreclosure Act Helps Homeowners.

Lender Must Prove Ownership of Note. Before the Florida Fair Foreclosure Act was enacted, lenders were able to file foreclosure actions without having to prove they owned the promissory note. This led to a number of abuses and wrongful foreclosures. Now, lenders must prove they have the right to foreclose on a property by producing the promissory note or documentation that shows ownership of the debt has been legally transferred to them.

Reduction in Deficiency Judgment Statute of Limitations. If a homeowner owed more than his or her house was worth, the difference is known as a deficiency. In Florida, lenders can pursue a personal judgment against a homeowner for the deficiency amount. With the passage of the Florida Fair Foreclosure Act, the time a lender has to pursue a deficiency judgment has been reduced from five years to one year. In addition, a deficiency judgment cannot be more than the difference between the judgment amount and the fair market value of the home on the day it was sold.

How the Florida Fair Foreclosure Act Hurts Homeowners.

Any Lienholder May Request Expedited Foreclosure. The Florida Fair Foreclosure Act makes it possible for any lienholder — a homeowners association or condo association — to petition the court for an expedited foreclosure. This means that homeowners may have less time to seek a loan modification or other workout that could avoid foreclosure.

Foreclosure Judgments Final. Under the Florida Fair Foreclosure Act, foreclosure judgments in Florida are final. Any legal challenges are limited to monetary damages when certain conditions are met by the lender, including:

- Homeowner was served properly in the foreclosure action;
- Final foreclosure judgment was entered;
- Appeal period has been exhausted; and
- Home has been purchased by someone unaffiliated with the lender or former owner.

For more information on the Fair Foreclosure Act, visit our website www.dsalegalgroup.com.

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6 Ways to Stop Foreclosure

There are several ways that homeowners can help guard against foreclosure so that they can keep their homes and avoid the negative consequences of this action.

Reasons for Foreclosure

When a person acquires a mortgage on his or her property, the loan is secured with the mortgage. If the person gets behind on the payments or otherwise fails to meet his or her obligations under the mortgage contract, the lender can take steps to foreclose on the home.

Consequences of Foreclosure

In addition to losing the residence, the homeowner faces many additional consequences if the property is foreclosed upon. The homeowner can be charged for the expenses related to dispossession and other charges allowed by law. In many states, the lender can still pursue a deficiency judgment for any difference between the amount owed on the loan and the sale price. Additionally, the homeowner’s credit will likely be significantly impacted by this event.

There may be several options available to avoid foreclosure depending on the circumstances, including:

Foreclosure Settlement

Rather than selling the house at auction, the bank may be willing to work out some type of settlement that will allow the homeowner with the loan. In Florida, this usually happens before or during the lawsuit that is filed.  It is always a good idea for homeowners to act sooner than later if this is their goal.

Loan Modification

The lender may agree to modify the loan rather than foreclosing the property. A loan modification can make an existing loan more feasible by resulting in lower monthly payments, lower interest rates, more time to pay or unpaid payments added to the back end of the loan. In some loan modifications, the amount of the loan may be reduced. The lender may be more willing to work with a homeowner who has taken additional steps to try to meet the financial obligation, such as reducing other expenses or getting an additional job.

Deed in Lieu of Foreclosure

A deed in lieu of foreclosure results when the person whose name the home is in voluntarily signs the deed to the property back over to the lender. This can help the homeowner avoid the additional expenses related to foreclosure and the public nature of the proceedings. There are some disadvantages to this approach, so it is important that a person in this situation seek legal counsel.

Short Sale

One common way that a person can avoid foreclosure is by having a short sale of the property. Many lenders during the real estate crisis used short sales as an exit plan so that they would get more proceeds from the sale of the house than they would have received through a public auction. Once the homeowner receives a Notice of Default or otherwise suspects that he or she may have trouble meeting the obligation, he or she may consider a short sale. A short sale occurs when the homeowner sells the property for less than the current value of the property. The lender may agree to this arrangement rather than having to proceed with a foreclosure. However, the lender may still be able to seek a deficiency judgment for the unpaid portion of the loan. Some states do not permit this while others do. Individuals who are considering a short sale should be careful to negotiate an acceptance by the lender of the purchase amount and to accept it as payment in full. Even with this scenario, there may be tax implications to a short sale, so it is important

Bankruptcy

Filing bankruptcy can sometimes help avoid bankruptcy. When a person files bankruptcy, an automatic stay is issued which prevents further collection efforts. Therefore, a bankruptcy works to effectively freeze a foreclosure. However, the homeowner may still wind up losing the home in the bankruptcy proceedings if he or she cannot show that the debt can be repaid. So bankruptcy often works as a mere delay of the foreclosure. However, during bankruptcy, the debtor and the creditors may be able to work out an arrangement that will allow the debtor to repay some of the loan. The secured debt has priority over unsecured debts. Bankruptcy has many ramifications of which the debtor should be aware and seek counsel.

Hiring a Foreclosure Defense Attorney

Individuals who believe that they may be in fear of a foreclosure may wish to contact a lawyer. A real estate lawyer can help explain the process of foreclosure and evaluate the individual’s circumstances to determine whether there are any alternatives to foreclosure. He or she can explain the pros and cons of these potential alternatives.

Source: HG.org

3 Foreclosure Myths That Can Cost You Your Home

by Stefan McHardy, Esq.

For anyone faced with the prospect of losing their home to foreclosure, the pressure alone is enough to drive you up a wall.  Now throw in the reality of it all; the high-powered bank suing you in court (if you live in a judicial foreclosure state, that is), their high-priced lawyers, and the convoluted mess of a system we've come to know as the loan modification process.

Now I can very easily start out by claiming mistake number one is not hiring an attorney to represent your legal rights, etc., etc., etc.  But, besides being far too cliché for anyone's liking, the simple fact is this: it’s your home and however you choose to defend it is up to you.  There aren't many countries in the world that give you the rights to defend yourself and your property as this one.  But for the record, you should at least consult with a foreclosure defense attorney.

With that said, if you're going to get all Matthew McConaughey/Lincoln Lawyer about it, then at the very least give yourself a fighting chance and proceed in an informed way.  Lets bust a few myths.

Myth: If I'm Doing a Loan Modification They Can't Sell My House at Foreclosure Auction.

Yes they can.  Unless you have a court order, signed by a Judge, ordering that foreclosure sale canceled, the foreclosure sale will not be stopped simply because your modification package is under review.  The loan servicer that is reviewing your application is under no legal obligation to ask the court to cancel the foreclosure sale.  It's up to you, to notify the court by filing a motion and setting a hearing.  Once you get in front of the judge for that hearing, then you can bring it to his or her attention that the loan modification application is still pending review and that you would like the foreclosure sale canceled.

Now, I know many of you who have been through this are saying that you've had the bank's lawyers cancel the sale for you.  Well, congrats to you.  You have the friendliest opposing counsel the bank's money can buy.  But, if your legal strategy is to depend on the kindness of the lawyer who is being paid to take your house, then my friends, you have a tougher road ahead of you than you think.

Myth: If I'm Doing a Short Sale They Can't Sell My House at Foreclosure Auction.

Again, not true.  And if your realtor tells you this, then shame on you for taking legal advice from a realtor.  Unless your realtor just happens to also be a seasoned, skilled, and [quite charming] attorney. In that case, this savvy realtor-lawyer would never tell you such a thing.

Short Sales, much like loan modifications, need to be negotiated with and approved by the lender.  In fact, if you've ever seen the paperwork you have to fill out for a short sale approval, it is virtually identical to the loan modification paperwork.  And just like the above myth with the loan modification application, it's not a guarantee or a requirement on the part of the bank to cancel any upcoming sale just because your application is pending approval or currently listed for [short] sale.  And more importantly, the clock is always ticking; meaning, if your home isn't selling, or isn't getting approved for short sale, even the most patient of judges will eventually tell you it's "too little, too late."

Myth: Filing Bankruptcy Will Stop The Foreclosure.

Well maybe you're a better Lincoln Lawyer than we all thought because you are distorting the word "stop" more than Bill Clinton distorted the word "relations".  Although bankruptcy can delay foreclosure, if done correctly, that alone will certainly not make the problem go away.  What you are actually doing here is having the foreclosure delayed in state court while a federal judge in the bankruptcy court weighs the merits of your bankruptcy claim. (So now you are taking on a federal court case as well, Lincoln Lawyer.  Time to increase your retainer fee!).  If the federal court determines that you do not qualify for bankruptcy, or if your case is dismissed for any other reason, then the state court will reset your foreclosure sale date.

I'm not saying it's impossible to get out of trouble if you go about a bankruptcy correctly, but quite honestly, federal bankruptcy court is not a playground for the inexperienced.

-Stefan McHardy, Esq.

Unpaid HOA assessment can lead to foreclosure

Question: What can happen if several homeowners in [an] association do not agree with a special assessment and refuse to pay it?

Answer: Homeowners who do not pay their regular and special assessments are subject to foreclosure. They also could have a personal money judgment entered against them.

If the community takes action, the homeowner would be responsible for attorney fees, interest and administrative fees, in addition to the assessment amount. These costs can add up, and I have seen many instances in which the costs are much more than the unpaid assessment.

This is a serious matter, and many homeowners don't understand the consequences. If you receive a bill you don't agree with, contact the association. If it is not quickly corrected, in writing, pay the bill before continuing to fight the charge. This will stop additional costs from accruing.

I know how frustrating it is to pay for something that you're disputing, but it's important to stop additional fees from building up. You can continue to seek reimbursement without digging yourself into a deeper hole on the chance that the charge is indeed valid.

If enough members of your association dispute a special assessment, or if you think it might have been levied improperly, you should contact an attorney to discuss your options.

Copyright © 2016 Sun Sentinel (Fort Lauderdale, Fla.), Gary M. Singer. Distributed by Tribune Content Agency, LLC. source