Tenants MUST Send A 7 Day Notice Before Claiming Less Rent Due in Eviction

There are many common misconceptions the public has about eviction.  The most common issue we see is one regarding repairs; namely landlord’s refusal to repair the property.

As a tenant you must be EXTREMELY careful and follow Florida Statute strictly.  Florida law requires that tenant send the landlord a 7 day WRITTEN notice about the non-compliance and must afford landlord those 7 days to repair.

Some common errors are:

  • sending text messages
  • talking to landlord on the phone about it
  • leaving landlord voicemails

Florida law requires WRITTEN notice.  The best choice is to spend the $6 and send it certified mail so landlord must sign for it that he/she received the notice.

If landlord files an eviction lawsuit after a 3 day notice because tenant refused to pay rent due to landlord’s failure to repair, and tenant did not issue a 7 day notice and engages in self-help by withholding rent (or repairing him/herself and withholding rent), landlord WILL win the eviction.  See Lee v. Schweizer , 7 Fla L. Weekly Supp 750a, County Court Sarasota 2000.

Tenants are urged to seek counsel when landlord refuses to repair or comply with any provisions of the lease.

Contact us today at 754-900-1LAW (1529) or info@HKLegalGroup.com for your FREE consultation.

5th DCA Holds Surrender In Bankruptcy and You Forfeit The Right To Defend Foreclosure

The 5th DCA decently dismissed an appeal by a borrower after the borrower admitted that borrower stated their intent to surrender the property in the bankruptcy case; and thus waved any further right to defend foreclosure.  Opinion here.

The borrower filed for bankruptcy while his appeal of the foreclosure action was still pending in state court.   The 5th DCA keyed on the point that the bankruptcy court entered an order confirming the debt and the borrower’s surrender of the property.   Citing a recent bankruptcy court ruling from the Middle District of Florida Bankrutcy Court with a similar holding (In re Metzler, 530 B.R. 894, 900 (Bankr. M.D. Fla. 2015), the appeal was dismissed.

The 5th DCA held that in bankruptcy “the term ‘surrender’ means that a debtor must relinquish secured property and make it available to the secured creditor by refraining from taking any overt act that impedes a secured creditor’s ability to foreclose its interest in secured property.”

The 5th DCA found that the borrower’s “actions and the orders of the bankruptcy court have fully resolved this matter.”

This ruling is in stark contrast to a recent Southern District of Florida Bankruptcy Miami Division ruling by Judge Isicoff which found that “c]ompulsory surrender of real property collateral by a debtor to a lienholder in chapter 7 is not supported by, and indeed ignores, the express provisions of the Bankruptcy Code.”.  Opinion here.

Judge Isicoff, refusing to follow the other rulings finding that a surrender meant that borrower forfeited the right to defend the underlying foreclosure action, held that because “[t]hat result is what the Bankruptcy Code provides, and any modification to that result is up to Congress, not the courts”, a chapter 7 debtor who “indicates surrender of real property in his statement of intention is not obligated to surrender that property to the lienholder, whether or not the property is administered by the chapter 7 trustee. Compulsory surrender of real property collateral by a debtor to a lienholder in chapter 7 is not supported by, and indeed ignores the express provisions of the Bankruptcy Code.”

Foreclosure cases with bankruptcy components are very fact and area specific.  Please contact us to discuss the facts of your case today.

The U.S is Set Up for Another Housing Crash.

Even today, the United States is readying another housing crisis.

DS News found that while the the mortgage default rate  was rising as of the end of last year, it was not enough to become a crisis- yet.

“The first mortgage default index – one of four indices that make up the composite – ticked up by two basis points from 0.82 percent up to 0.84 percent. December marked the third consecutive month with an increase for the first mortgage default rate, which climbed by one basis point in November and five basis points in October,” they said. But, “Even after the three straight months of increases, December’s first mortgage default rate was still down by 18 basis points from December 2014’s rate of 1.02 percent.”

But banks AND buyers are setting themselves up for another crash.  Recently, all major banks (Bank of America, Chase and Wells Fargo) announced new 3% down mortgage loans.  This means that buyers have even less skin in the game than an FHA loan which requires 3.5% a down-payment.

The new BOA package, Affordable Loan Solution Mortgage, has a 3% down-payment and no PMI, or private mortgage insurance.  To qualify, borrowers can’t make more than the HUD area median income and must have a credit score of 660 or higher.   So if these loans go belly-up, the banks are not covered by any insurance and surely will be coming after consumers for the debts; unlike most of the banks during the crash who et the borrowers walk away as the lenders were paid by the PMI insurance.

SoFi, an online lender initially focused on offering a student loan refinancing product, now originates mortgages in 25 states and Washington D.C. SoFi’s mortgages allow borrowers to put down as little as 10% without requiring PMI,” they said.

Even more concerning: “While traditional lenders may have firm debt-to-income limits (generally up to 45%), SoFi has more fluid debt-to-income limits, which may allow borrowers to ultimately qualify for more financing, up to a maximum of $3 million.

Refinancing is also another controversial area.  “The FHA Streamline is a refinance mortgage loan available to homeowners with existing FHA mortgages,” said The Mortgage Reports. “The program simplifies home refinancing by waiving the documentation typically required by a bank, including income and employment verification, bank account and credit score verification, and an appraisal of the home.”

The Streamline Refinance does take into account a borrower’s payment history.  All of the other requirements that banks require to judge the worthiness of a buyer and a purchase are gone. Again, great for a borrower, maybe not so much for the lender.

Adjustable rate mortgages also appear to be making a comeback   So for now people can get a relatively cheap mortgage while rates are low and at a low introductory rate on an ARM.  But come 5 years when the rates adjust, borrowers could find themselves with unaffordable payments yet again; a replay of the prior crash.

ARMs and requiring 3-3.5% down really tests the  market.  If values tank and you only had 3-3.5% equity int he property, there will be tens or hundreds of thousands of homeowners back underwater again into a whole new crash.

Only time will tell.