Giving Notice When a Lease Ends: How? When? Who?

A lease is about to end. Does Fla. law mandate that a tenant give the landlord 30-days notice? 60-days notice? Any notice? And flip the question around: Under Fla. law, is a landlord obligated to tell a tenant a lease won’t be renewed? Give any kind of warning?

ORLANDO, Fla. – Recently, there has been an uptick in calls to Florida Realtors® Legal Hotline regarding termination of a lease and how much notice one side needs to give the other if they’re vacating or not renewing.

These callers have a vast range of assumptions as to what “the rule is” for notification as parties approach the end of a lease. Let’s break down how this actually works:

Caller #1: “The tenant isn’t renewing their lease but never let the landlord know. Isn’t the tenant obligated to notify the landlord they’re leaving?”

Answer: I know this is your favorite one, but it depends. Here is how you determine the answer though – look to the lease.

Does the lease require a certain number of days notification by the parties in the event they aren’t renewing and/or leaving the property? If not, then the lease ends when the lease ends. In legalese, this is called a tenancy of a specific duration. Example? The parties have a lease that starts on Oct. 1, 2020, and ends on Sept. 30, 2021. There is nothing in the lease that mentions anything about notification as to non-renewal or vacating the premises. As such, the lease ends on Sept. 30, 2021 – and neither side has a legal obligation to notify the other.

Caller #2: “The law requires the tenant to give at least 60 days’ notice to the landlord that tenant is vacating the premises.”

Answer: This is a common misconception likely based on the language in Chapter 83, Part II, of the Florida Statutes, most commonly referred to as the Landlord/Tenant Act. Specifically, section 83.575(1) states, in pertinent part, that “a rental agreement with specific duration may contain a provision requiring the tenant to notify the landlord within a specific period before vacating the premises at the end of the rental agreement … However, a rental agreement may not require more than 60 days’ notice …

Let’s take a closer look at this one. First, it’s important to note that it says the rental agreement may contain a notification requirement. This means it doesn’t have to, but it could. So if the lease says nothing (see Caller #1 above), then there is no requirement.

Second, it says that if the agreement does contain this notification requirement, then it cannot require notice that is further out than 60 days. So this could mean there is a 25 day notice, a 30 day notice or a 58 day notice. It just can’t exceed 60 days. There is no generic rule of law that demands a 60-day notice.

Caller #3: “The tenant happened to run into the landlord, who said he would call him about a doing a walk through next week since the lease was ending. The tenant is panicking – he had no idea the landlord didn’t intend to renew the lease and didn’t intend to move out.”

Answer: As stated in the first example, look to the lease. If there is no notification requirement within the lease, then the tenant made a large assumption about being able to stay.

As I said before, the lease ends when the lease ends. Additionally, Florida Statute 83.575(1) states that if the lease requires notification from the tenant to the landlord as to vacating, there must be an equal requirement by the landlord to notify the tenant if the rental is not to be renewed. So once again, if the lease is silent on this issue, then there is no requirement for notification.

What to take away from this article? While the lease may contain a notification requirement by the parties, communication is still key. A “best practice” for property managers: Create a calendar reminder that a lease is ending soon. This gives you time to reach out to the landlord to inquire about interest in renewing so you can discuss this with the tenant. Maybe the landlord didn’t like that the tenant paid several rental payments late and never paid late fees. As such, the landlord has no interest in renewing with that tenant.

A wise property manager would convey the landlord’s intention of moving on with a new tenant and remind the current tenant that they’re expected to be out of the property by the end of the lease. This should be done early enough that the tenant has time to make alternate arrangements and move out. Calling a tenant the day before a lease ends isn’t the best way to handle this scenario.

It’s also recommended that a tenant interested in renewing a lease communicate that with the landlord before the end of the lease. Is the landlord willing to renew? If so, great. Get a new lease together for the parties to execute or enter into a month-by-month tenancy.

Regardless, it’s imperative for the parties to communicate even if the lease does not legally require it. Otherwise, you could have a situation where the tenant assumed they’d be able to stay, the landlord has no intention of renewing and, in fact, has signed a new lease with a new tenant to start next week. In short, a mess.

Meredith Caruso is Associate General Counsel for Florida Realtors

© 2020 Florida Realtors®

The Grove Retail Center in Miramar

  • New Built Retail Center in Highly Visible Flamingo Road Location
  • Strong Demographics and Neighborhood Mix with and Average Household Income of $75,848 within a 5 miles Radius.
  • Synergistic Mix of Educational , Medical, Service and Restaurant uses.
  • Value- Add Opportunity to Lease Remaining Vacancy

Available Commercial Spaces for Rent:
12250 Miramar Boulevard. Miramar. Florida 33025
For more information:info@novusre.com

THE GROVE SH2THE GROVE SH

Broward Home Prices Rise

Broward Home Prices Rise in June Due to Strong Demand and Limited Supply; Surging Pending Sales Reflect Market Recovery Following the COVID-19 Impact

                                                  Fort Lauderdale

by Chris UmpierreJuly 22, 2020
Fort Lauderdale

MIAMI — Broward County single-family home median prices year-over-year in June 2020 as home sales continued trending upward despite the global COVID-19 situation, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.

New pending home sales in June are up year-over-year. Pending sales are a future indicator of closings one to two months out. New pending sales for Broward single-family homes increased 21.2% year-over-year to 2,095. New pending sales for condos increased 1.6% in June to 1,708.

“The Broward County real estate market continues its remarkable recovery as evidenced by surging pending sales and increasing market activity,” Broward MIAMI President Sharon R. Lindblade said. “The robust fundamentals of the South Florida housing market, pent-up demand and low mortgage rates will lead to increased buying activity in the coming months.”

Pending sales started to surge in mid-April and are stronger than they were before the COVID-19 stay home orders. Home sales, however, are taking longer to close. Time to contract for Broward single family homes increased 12.8% year-over-year in June, from 39 days to 44 days. Social distancing and shelter-in-place orders in some cases are delaying the homebuying process —including home inspections, appraisals and walk throughs.

Mortgage applications, another indicator of future sales, are on the rise in South Florida and nationally, as the Miami mega region continues to see additional homebuying interest from the Northeast. The Mortgage Bankers Association (MBA) reported that mortgage applications rose by 5.1% week over week for the week ending July 10.

The COVID-19 situation has accelerated the trend of homebuyers from New York and other tax-burdened Northeastern states searching and purchasing homes in South Florida.

Before the COVID-19 situation, Broward real estate had record low delinquencies, no subprime mortgage crisis, strong demand/low supply, low interest rates, strong population growth, demand from foreign buyers and tax refugees from tax burdened states, high consumer confidence and a strong job market.

Broward Single-Family Home Median Prices Rise

Strong demand coupled with limited supply continue to drive price appreciation in Broward.

Broward County single-family home prices increased 5.4% year-over-year in June 2020, increasing from $369,900 to $390,000. Existing condo prices increased 13.8% year-over-year, from $174,500 to $198,500.

Broward Total Home Sales Decrease

Broward total home sales decreased 21% year-over-year in June 2020, from 2,954 to 2,333. Broward single-family home sales decreased 10.3% year-over-year in June 2020, from 1,464 to 1,313. Broward existing condo transactions declined 31.5% year-over-year in June 2020, from 1,490 to 1,020.

Dollar Volume Decreases

Single-family home dollar volume decreased 4.3% year-over-year, from $683.4 million to $654.1 million. Condo dollar volume decreased 28.4% year-over-year, from $337 million to $241.3 million.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 3.16% in June, down from 3.23% in May. The average commitment rate across all of 2019 was 3.94%.

Lack of access to mortgage loans continues to inhibit further growth of the existing condominium market. Of the 9,307 condominium buildings in Miami-Dade and Broward counties, only 13 are approved for Federal Housing Administration loans, down from 29 last year, according to Florida Department of Business and Professional Regulation and FHA.

A new condo approval process is expected to increase sales. The new guidance, which went into effect in October 2019, extends certifications from two years to three, allows for single-unit mortgage approvals, provides more flexibility with owner/occupancy ratios, and increases the allowable number of FHA loans in a single project. The changes, many of which MIAMI and NAR has championed, are expected to generate increased homeownership opportunities.

Broward Distressed Sales Stay Low, Reflecting Healthy Market

Only 3.8% of all closed residential sales in Broward County were distressed last month, including REO (bank-owned properties) and short sales, compared to 2.9% in June 2020.

Total Broward distressed sales decreased 2.3%, from 87 to 89.

Short sales and REOs accounted for 0.6% and 3.3% year-over-year, respectively, of total Broward sales in June 2020. Short sale transactions decreased 43.5% year-over-year while REOs increased 18.8%.

Nationally, distressed sales represented 3% of sales in June, about even with May but up from 2% in June 2019.

Broward Real Estate Selling Close to List Price

The median percent of original list price received for single-family homes was 96.5% in June up 0.2% from 96.3% last year. The median percent of original list price received for existing condominiums was 94.6%, up 0.2% from 94.4% last year.

The median number of days between listing and contract dates for Broward single-family home sales was 44 days, a 12.8% increase from 39 days last year. The median number of days between the listing date and closing date for condos was 67 days, a 17.5% increase from 57 days.

The median time to sale for single-family homes was 89 days, a 7.2% increase from 83 days last year. The median number of days to sale for condos was 111 days, a 15.6% increase from 96 days.

Home sales are taking longer to close. Social distancing and shelter-in-place orders are delaying every step of the home closing—including home inspections, appraisals and walk throughs.

National and State Statistics

Nationally, total existing-home sales transactions jumped 20.7% from May to a seasonally-adjusted annual rate of 4.72 million in June. Sales overall, however, dipped year-over-year, down 11.3% from a year ago (5.32 million in June 2019).

Statewide, last month’s closed sales of single-family homes statewide rose 1.3% year-over-year, totaling 27,650, while condo-townhouse sales decreased 10.9%, for a total of 8,996. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

The national median existing-home price for all housing types in June was $295,300, up 3.5% from June 2019 ($285,400), as prices rose in every region. June’s national price increase marks 100 straight months of year-over-year gains.

In June, the statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year for 102 consecutive months. The statewide median sales price for single-family existing homes was $282,000, up 4.4% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $210,000, up 7.7% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

Broward Cash Buyers Top National Figure

Broward cash transactions comprised 27.3% of June 2020 total closed sales, compared to 33.5% last year. The national figure for cash buyers is 16%.

Broward’s high percentage of cash sales reflects South Florida’s ability to attract a diverse number of international homebuyers, who tend to purchase properties in all cash.

Condominiums comprise a large portion of Broward’s cash purchases as 41.9% of condo closings were made in cash in June 2020 compared to 15.9% of single-family home sales.

Seller’s Market for Single-Family Homes, Balanced Market for Condos

Inventory of single-family homes decreased 27.7% in June from 5,652 active listings last year to 4,089 last month. Condominium inventory decreased 0.8% to 8,002 from 8,062 listings during the same period in 2019.

Months supply of inventory for single-family homes decreased 20.9% to 3.4 months, which indicates a seller’s market. Inventory for existing condominiums increased 11.9% to 6.6 months, which indicates a balanced market. A balanced market between buyers and sellers offers between six- and nine-months supply.

Total active listings at the end of June decreased 11.9% year-over-year, from 13,720 to 12,091. Active listings remain about 60% below 2008 levels when sales bottomed.

New listings of Broward single-family homes decreased 5.8% to 1,772 from 1,882. New listings of condominiums increased 4.5%, from 1,931 to 2,018.

Nationally, total housing inventory the end of June totaled 1.57 million units, up 1.3% from May, but still down 18.2% from one year ago (1.92 million). Unsold inventory sits at a 4.0-month supply at the current sales pace, down from both 4.8 months in May and from the 4.3-month figure recorded in June 2019.

To access June 2020 Broward Statistical Reports, visit http://www.SFMarketIntel.com

Note: Statistics in this news release may vary depending on reporting dates. MIAMI reports exact statistics directly from its MLS system.

About the MIAMI Association of Realtors

The MIAMI Association of Realtors was chartered by the National Association of Realtors in 1920 and is celebrating 100 years of service to Realtors, the buying and selling public, and the communities in South Florida. Comprised of six organizations, the Residential Association, the Realtors Commercial Alliance, the Broward-MIAMI Association of Realtors, the Jupiter Tequesta Hobe Sound (JTHS-MIAMI) Council, the Young Professionals Network (YPN) Council and the award-winning International Council, it represents 52,000 total real estate professionals in all aspects of real estate sales, marketing, and brokerage. It is the largest local Realtor association in the U.S. and has official partnerships with 223 international organizations worldwide. MIAMI’s official website is www.MiamiRealtors.com

SBA: EIDL Loan Program Reopens to All Small Businesses

news media
After EIDL money grew tight, the Small Business Admin. offered less disaster-loan money and limited it to agriculture, but now it’s reopened to all small businesses.

WASHINGTON – The U.S. Small Business Administration reopened the Economic Injury Disaster Loan (EIDL) and EIDL Advance program portal to all eligible applicants experiencing economic impacts due to COVID-19.

In early May, SBA placed new restrictions on Economic Injury Disaster Loans (EIDL) as demand skyrocketed and funding evaporated. The changes stopped many real estate pros from applying for aid because it not only capped the amount available, but SBA limited it to agricultural businesses.

On Tuesday, however, SBA sent out an email saying the program was expanding again to “further meet the needs of U.S. small businesses and non-profits.”

“With the reopening of the EIDL assistance and EIDL Advance application portal to all new applicants, additional small businesses and non-profits will be able to receive these long-term, low interest loans and emergency grants – reducing the economic impacts for their businesses, employees and communities they support,” says SBA Administrator Jovita Carranza.

Carranza says SBA has improved the application and closing process with new technology and automated tools.

EIDL offers long-term, low interest assistance for a small business or non-profit. The loan can be used to cover payroll and inventory, pay debt or fund other expenses. EIDL Advance will provide up to $10,000 ($1,000 per employee) of emergency economic relief to businesses experiencing temporary difficulties – and the emergency grants don’t have to be repaid.

SBA’s COVID-19 Economic Injury Disaster Loan (EIDL) and EIDL Advance

  • The low-interest federal disaster loans offer working capital to small businesses and non-profit organizations suffering substantial economic injury as a result of COVID-19. They’re available in all U.S. states, Washington D.C., and territories.
  • The loans may be used to pay debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact – and that are not already covered by a Paycheck Protection Program loan. The interest rate is 3.75% for small businesses and 2.75% for non-profits.
  • Loans generally have long repayment terms – up to a maximum of 30 years – and the first payment is deferred for one year.
  • Small businesses and non-profits may request, as part of their loan application, an EIDL Advance of up to $10,000. The EIDL Advance provides emergency economic relief to businesses that are currently experiencing a temporary loss of revenue. It does not have to be repaid, and small businesses may receive an advance even if they aren’t approved for a loan.
  • The SBA will also help small businesses and non-profits access the federal forgivable loan program, the Paycheck Protection Program, which is currently accepting applications until June 30, 2020.

For additional information about SBA’s response to the COVID-19 pandemic, visit its website.
By Kerry Smith

© 2020 Florida Realtors®

FSU Study: 15.2% of U.S. Small Businesses Won’t Be Back

FLAREALTORSBy Kerry Smith

A survey of small U.S. businesses and nonprofits found that 14.5% closed temporarily and 31% are operating below 40% capacity. But Fla. businesses weren’t hurt as much.

TALLAHASSEE, Fla. – A survey of U.S. small businesses by Florida State University (FSU) researchers found that 15.2% of those studied have closed their doors permanently as a result of the COVID-19 shutdown.

Assistant Professor of Management Samantha Paustian-Underdahl led the research team that examined the effects of the COVID-19 pandemic on 567 small businesses and nonprofit organizations (NPO) throughout the United States. Funded by the Jim Moran Institute for Global Entrepreneurship in the College of Business, the survey asked participants to provide feedback on employee layoffs, government loan programs, operating capacity and stress levels, among other factors, to measure how businesses have changed daily operations during the global pandemic.

It found that 15.2% of participants closed permanently, and 14.5% of participants closed temporarily. Another 31% of participants are operating below 40% capacity, while almost 40% of participants are operating at 40% or higher.

Participants also were asked if they laid off employees during COVID-19, and 46.7% reported doing so, while 51% reported that they did not. The average number of employees laid off was 10.5.

“Small businesses and nonprofits have taken a huge hit during this time, with nearly 30% of our sample needing to close temporarily or permanently as of early May,” says Paustian-Underdahl. “The good news is that most organizations are getting some help.”

Of the participants who applied for government funding, nearly 92% received some type of financial assistance.

Florida seems to be faring better than other parts of the country, as only 10% of the 137 Florida businesses in our sample have temporarily or permanently closed, and only 32% have laid off any employees,” Paustian-Underdahl says.

Government loan programs

Participants were surveyed about their experience applying for and receiving funds from the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL). Overall, business owners and non-profit leaders received funding from one of the government loan programs – but not both.

Of the respondents, 75.5% applied for one or both types of government aid. Of participants who applied, 28.9% received PPP funding only, 26.8% received EIDL only, 11.3% received both PPP and EIDL, and 8.3% didn’t receive anything.

COVID-19 and personal stress

“Consistent with recent research by Gallup, we found that women who own small businesses are experiencing higher levels of stress and burnout during COVID-19 compared to men,” Paustian-Underdahl says. “While some may assume this could be due to higher work-family-conflict, we found the men surveyed are reporting higher work-family-conflict than women.”

One reason could be that women are already used to juggling work with family, but men may be making more of an adjustment during COVID-19, Paustian-Underdahl says.

“Despite being more stressed, the women in our sample are more satisfied with their performance and that of their organizations during COVID compared to men, so maybe their hard work is paying off,” she adds.

Through a series of open-ended questions, participants were asked to share strategies and solutions they’ve implemented to meet the challenges faced during COVID-19.

The most common strategies included:

  • Increased communication with employees to ensure tasks are followed and support is given during these difficult times
  • An increased focus on implementing technology and creating online content in greater frequency than before the pandemic
  • Shifting from actively seeking new clients and instead creating unique ways to contact and keep existing clients
  • Adopting cost-cutting strategies, including reducing full-time employees to part-time, layoffs, furloughs and/or implementing creative new tasks for employees
  • Pivoting into new services, goods and customers
  • Increasing their focus on healthy living, exercise and mental health for employees and customers

© 2020 Florida Realtors®

Fla.’s Ban on Evictions Extended Through June

evictionsBy Kerry Smith
Just hours before the moratorium on evictions and foreclosures was set to expire, Gov. Ron DeSantis issued a new executive order that extends the current ban to July 1.

TALLAHASSEE, Fla. – Hours before a ban on Florida evictions and foreclosures was to go into effect, Gov. Ron DeSantis extended the current moratorium a second time. On Monday night around 8 p.m., the governor issued a new order that extends the ban until 12:01 a.m. on July 1.

DeSantis announced the extension without comment via an email, according to the Orlando Sentinel.

“I hereby extend Executive Order 20-94, as extended by Executive Order 20-121, until 12:01 a.m. on July 1, 2020,’’ the executive order reads (Executive Order 20-137).

The extension puts Florida’s foreclosure moratorium on track with a federal moratorium for loans held by entities such as Fannie Mae and Freddie Mac. The Federal Housing Finance Agency (FHFA) announced earlier that the eviction moratorium on single-family home foreclosures was extended to June 30.

While the order impacts evictions and foreclosures until July 1, it does not change Florida law, nor does it relieve tenants or parties to a transaction from their obligations under existing contracts.

The original order itself makes that clear, saying, “Nothing in this Executive Order shall be construed as relieving an individual from their obligation to make mortgage payments or rent payments.”

© 2020 Florida Realtors®

Why Home Prices May Be Rising During the Pandemic

MiamiRealtors

Many sellers are reluctant to cut prices. Realtor.com: About 4% of sellers cut their prices in the week ended April 25, down from 5.7% in the same week last year.

WASHINGTON – The median home price rose 8% year-over-year in March, according to the National Association of Realtors (NAR). While buyer demand has softened and sales fell 8.5% from February, recent preliminary data indicates that the supply of homes on the market is contracting even faster.

The March NAR data largely reflects purchase decisions made in February or January. Even by the end of last month, many sellers were reluctant to cut prices. Only about 4% of sellers cut their prices in the week ended April 25, down from 5.7% during the same week last year, according to Realtor.com. Some sellers believe their homes aren’t moving because buyers haven’t viewed them in person or do not want to make offers right now, not because the asking price is too high.

Redfin Corp. said its measure of home-buying demand was down 15% in the week ended April 26, while total listings of homes for sale have hit a five-year low and the median listing price was up 1% from last year at $308,000.

While many economists expect home sales to tumble this year, many forecasts call for prices to climb slightly or hold flat. A new forecast from CoreLogic predicts that nationwide home prices will rise 0.5% between March 2020 and March 2021.

CoreLogic forecast annual price declines in some cities including Houston, Miami, and Las Vegas. It is unclear if mortgage-forbearance policies will prevent a wave of distressed sales.

“In the next 12 months it’s hard to anticipate price declines because of the mortgage forbearance in place,” said NAR chief economist Lawrence Yun. “You would have to see continuing job losses for a prolonged period leading to foreclosures and even then we may not have oversupply.”

Source: Wall Street Journal (05/05/20) Friedman, Nicole

© Copyright 2019 INFORMATION, INC. Bethesda, MD (301) 215-4688