SS248: Tenant Abandoned Property

SS248: Tenant Abandoned Property

When a tenant abandons your property, a specific legal process must be followed, which varies by state, for the property owner to regain control of the apartment. In this episode, Charles discusses tenant-abandoned properties and tenant-abandoned personal property, as well as the actions to take in each situation.

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Talking Points:

    • The legal process for regaining control of an apartment after the tenant disappears or has been detained by legal authorities varies greatly by state and local jurisdiction and is covered under the state or county abandonment laws. 
    • As a real estate investor, it is advisable to be familiar with the local code, including language on how abandonments will be handled and the requirements for tenants to give written notice of planned absence greater than seven days.
    • Since I’m located in Florida, I will give you a quick overview of Florida law regarding abandonment. During my research for this episode, I noticed that many states have similar laws to Florida regarding abandonment. However, it is always essential to thoroughly research your state’s and local abandonment laws.
      • In Florida, landlords may presume abandonment if the tenant has been absent from the property for at least 15 consecutive days, provided there is no written notice from the tenant about the absence and the rent balance due is not current.
    • First off, if the tenant is not behind on rent, it really doesn’t matter at this point since they could be on vacation or simply out of town. This becomes more of an issue when they are behind on rent and no one is at their unit. 
    • A few reasons why your tenant might have left the unit could include:
      • They already alerted you that they were moving out at the end of their lease.
      • They can’t afford rent
      • They are in the hospital
      • They were arrested.
    • It is rare when tenants abandon their apartments in my experience, but when they have, I am going to do a few things:
      • Contact every person who is on the lease and application; reach out to any other contacts or emergency contacts.
      • Check to see if they were arrested.
      • Check to see if their utilities are still on in their name.
      • Speak to other tenants and neighbors.
      • Reach out to local hospitals; possibly call the police.
      • At this point, if you have not found them, I would call my real estate attorney and discuss the next steps they suggest, but this usually will include mailing them.
      • Send regular mail and certified mail to the tenant asking them to contact you. After the time frame required by law, I would do this again for their abandoned property, which I will talk about next.
      • The main goal is to find the tenant and speak to them. If they are gone, try to obtain written confirmation from them stating that they are gone for your records.
  • What Happens to Their Personal Belongings?
      • The easiest way for landlords to handle abandoned personal property is by including language in the lease that states the landlord is not responsible for property left behind. 
  • For example, in Florida, property owners can make the situation easier by including language in the lease regarding responsibility for property left in the apartment. 
  • Florida law allows landlords to include a specific clause in the lease stating that the landlord has no responsibility for handling abandoned property. For this stipulation to be valid, it must be clearly indicated in the lease agreement, either by being bolded and underlined or by being in a separate section. I would also suggest that you have the tenant initial the paragraph.
      • As a side note, always have your attorney review your lease agreement before you use it and have them review it after each revision. As you become a more experienced rental property investor, you will regularly add language to your lease as situations arise.
  • What Happens if You Do Not Have an Abandonment Clause in Your Lease?
    • If you do not have a clause stipulating that you are not responsible for property left behind, and you end up left behind and you end up with personal property in an abandoned apartment, and you are in Florida, for example, you must follow these steps:
      • When you first go into the apartment, take pictures and videos of all of the property left behind
      • Mail the tenant a detailed list of the property you are holding and where it is being stored, giving them 15 days to claim the property
      • If applicable, notify the tenant that they will be charged a reasonable fee for storage
      • If, after 15 days, you still have the property, you need to document and estimate the aggregate value: 
        • If you believe the property is worth less than $500, you can keep, sell, or throw away all the personal items
        • If you believe the property is worth more than $500, you must advertise a list of the items to be sold for two consecutive weeks in a newspaper. After the sale, you can reimburse yourself for expenses related to the sale, but you must submit the balance to the county treasurer. At any time up until the sale, the tenant can claim the property.
  • If you want to avoid all of the complexities involved with handling abandoned property, ensure that you have a well-written lease that stipulates you are not responsible for abandoned personal property. Have your attorney review it prior to use. Make sure that you document all steps in the abandonment process and your efforts to contact the tenant and their other contacts listed on the lease and application, so that you are protected if the tenant files legal challenges against you, and make sure you thoroughly understand your local laws regarding abandoned apartments and property before renting your property.

Transcript:

Charles:
What do you do when your tenant hasn’t been to the apartment in weeks, hasn’t paid rent and hasn’t returned any of your calls over the years, our team has dealt with tenant abandonment and the correct process is not always straightforward, and that’s what we’re covering today. Welcome to Strategy Saturday, I’m Charles Carillo, and today we’re discussing a topic that catches most landlords off guard and it’s what to do when a tenant abandons your property. So let’s discuss how to stay protected, act legally and avoid costly mistakes. So let’s get started. Legal process for regaining control of an apartment after a tenant disappears or has been detained by legal authorities. It varies greatly by state and local jurisdiction and is covered under the state or county abandonment laws. So as a real estate investor is advisable to be familiar with the local code, including language on how abandonment will be handled and the requirements for tenants to give written notice of planned absences greater than seven days.

Charles:
So since I’m located in Florida, I will give you a quick overview of Florida law regarding abandonment. And then really during my research for this episode, I noticed that many states have similar laws to Florida regarding abandonment. However, it’s always essential to thoroughly research your state and locals counties abandonment laws. But in Florida, landlords may presume abandonment if the tenant has been absent from the property for at least 15 consecutive days, provided there is no written notice from the tenant about the absence and the rent balance due is not current. So first off, if the tenant is not behind on rent, it really doesn’t matter at this point since they could just be on vacation or they’re simply out of town. This really becomes an issue when they’re behind on the rent and no one is in their unit and no one is responding to any of your communications.

Charles:
So a few reasons why your tenant might have left the unit would include they’ve already alerted you and they’ve given you notice that they’ve moved out and it’s in the end of the lease and they’ve moved out. Maybe they can’t afford the rent, they’re in the hospital or they were arrested. So it’s rare intent to abandon their apartments in my experience. But when they have, I’m gonna do a few things. Number one is that I’m gonna contact every person who is on the lease and the application. You’ll reach out to any other contacts or emergency contacts that you might have. And this is why it’s really important when you, when you buy a property to update the rent roll, who’s actually in the unit? What is their contact information? Where do they work? Because once you get this information, you’re probably gonna be able to find them immediately just using the contact information that you have.

Charles:
Next I’m gonna see if they were arrested. That’s probably one of the big things that you wanna check too. And then my third thing I wanna do is really check to see if utilities are still in their name. So when you’re doing rental properties with most electric companies out there, what they’re gonna do is once a tenant of yours leaves the property, they’re gonna put the electricity back to the landlord’s name, okay? And once that’s done, you most likely will get alerted that that’s been done. But you also can call the power company and ask them, Hey, is this tenant’s power still in their name? Is it in my name? And if it comes back to your name, that’s pretty much a dead giveaway that they’re gone, right? They’ve stopped paying power, you know, that’s a huge thing that they’ve probably moved out or something else is happening and they haven’t most likely paid their bill either.

Charles:
I’m gonna speak to other tenants and neighbors, okay? So the tenants and neighbors are gonna really know, especially in like apartment buildings, they’re gonna know exactly what’s going on. For the most part. They’re gonna know if stuff was being moved, they’re gonna know if there’s a moving truck, they’re gonna know if there was people that they haven’t seen before in the hallways what the conversation was. I mean, you’re living right next to these people. You’re gonna understand this. Next, I’m gonna reach out to local hospitals and possibly call the police directly and see, hey, do you know I’m looking for this person, one of my tenants? Do you have their name, anything information like this? So at this point, if you have not found them, I would call my real estate attorney and discuss the next steps they suggest. But this is usually we’ll include them, mailing them, and I would send regular mail and then certified mail to the tenant asking them to contact you.

Charles:
And you can get the correct language from your real estate attorney. But what you really wanna do is why I’m gonna send it both ways is because if they’re not there or there’s someone not staying at the apartment, which most likely they’re not, or you’d already speak to that person, the certified mail they’re gonna have to sign for. If they’re not at the department, there’s no one there. They can’t sign for it. So regular mail though, because they might have someone like picking up their mail, checking that if they’re, if they’ve gone somewhere for an extended period of time, if they’re in the hospital, there’s probably someone stopping by and checking their mail most likely. And they’re gonna have that regular mail that you’ve sent out to them and they might say, Hey, you’ve gotta call your landlord and let ’em know what’s going on.

Charles:
Now, after the timeframe required by law, I would do this again for their abandoned property, which I’ll talk about next. But the main goal is to find the tenant and speak to them. If they’re gone, try to obtain written confirmation from them stating that they are gone for your records, right? So you can, you know, so the lease is gone pretty much similar language I would say. Like if someone was doing cash for keys, okay? And hey, we’re gonna terminate the lease right now it’s over. And that, that’s where we stand. Now, what happens to their personal belongings? Again, this changes by municipality, but the easiest way for landlords to handle abandoned personal property is by including the language in the lease that states the landlord is not responsible for property left behind. For example, in Florida, property owners can make the situation easier by including language in the lease regarding responsibility for the property left in the apartment.

Charles:
And Florida law allows landlords to include a specific clause in the lease stating that landlord has no responsibility for handling abandoned property. Now, for this stipulation to be valid, it must be clearly indicated in the lease, either by being bolded or underlined or being in a separate section. But I would also suggest that you have your tens initial this paragraph. And this is why we want our attorney to review any leases we’re using because this is the stuff that they’re gonna pick up on. So we can do this by the book, but having this type of language in your lease will really help with abandoned property because now you not have to store it or any other thing like this. And as a side note, always have your attorney review the lease agreement before you use it and each revision, that’s the other thing too.

Charles:
If you start adding stuff to leases or changing things, have them review every revision. And as you become a more experienced rental property investor, you’ll regularly like add all different clauses into your lease as situations arise. So we had one before where second apartment building, I owned some snow, came off the roof, hit someone’s car. So it was one of those things where it’s like, hey, this is now taken care of by your car insurance. This is not something that’s on us. And you put that into the lease, right? We had our attorney review it, you put it in there. And so we didn’t have that issue again after that. But these are like little things that you learn that happen that you wanna say, Hey, this is, this is not our, you know, our fault. This is one thing if you’re parking on the property, you are taking this risk.

Charles:
So what happens if you do not have an abandonment clause in your lease? Okay, so it’s the first time it’s happened. You didn’t even think about this. You don’t have any type of language in your lease about this. So if you don’t have a clause stipulating that you are responsible or not responsible for what’s left the property behind you end up with personal property in an abandoned apartment. And if you’re in Florida, for example, you must follow lease steps. You know, when you first go into the apartment, take pictures and videos of all the property left behind, mail the tenant a detailed list of the property you’re holding and where it’s being stored, giving them 15 days to claim the property if applicable, notify the tenant that they’ll be charged a reasonable fee for storage. And if after 15 days and you still have the property, you need to document and estimate the aggregate value.

Charles:
And if you believe the property is worth less than $500, you can keep it, sell it or throw it away. All the personal items. And if you believe the property is worth more than $500, you must advertise a list of the items to be sold for two consecutive weeks in a newspaper. And after the sale, you can reimburse yourself for the expenses related to the sale. But you must also submit the balance to the county treasurer and, and any time up to the sale, the tenant can claim the property. So if you want to avoid all these complexities involved with handling abandoned property, ensure that you have a well-written lease that stipulates that you’re not responsible for any of this abandoned personal property and have your attorney review it prior to use, make sure that you document all the steps in the abandonment process and your efforts to contact a tenant and their other contacts listed on the lease and applications so that you’re protected if the tenant files any legal challenges against you.

Charles:
And make sure you thoroughly understand the local laws regarding abandon properties and properties before renting your property at all. I hope you enjoyed. Please remember to rate, review, subscribe, submit comments and potential show topics@globalinvestorspodcast.com. If you’re interested actively investing in real estate, please check out our courses and mentoring programs@syndicationsuperstars.com. That is syndication superstars.com. Look forward to two more episodes next week. See you then.

 

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