Empathy List Archives

RR

RPPTL Real Estate Leasing Committee

Thu, Oct 1, 2020 5:00 PM

Greetings! A novel issue has been presented and I would like some thoughts, please.

Residential multi-family landlord wants to lease units to tenants with marginal credit ratings. In order to do so, they have a surety company that for a premium will bond the amount of rent for a year. The landlord proposes to pass the cost of the premium along to the tenant, who will pay that in addition to the market rent.

This is similar to PMI for a mortgage with a high LTV ratio.

Question: Do the premiums constitute security under 83.49?

David Weisman
Partner
Board Certified Real Estate Lawyer
Greenspoon Marder LLP
200 E. Broward Blvd., Suite 1800
Fort Lauderdale, FL 33301
Phone 954-491-1120 Ext. 1015
Direct Phone 954-343-6941

David.Weisman@gmlaw.com mailto:David.Weisman@gmlaw.com
www.GMlaw.com http://www.gmlaw.com/

[gm-horizontal-bw_nolaw2 (2)]

GREENSPOON MARDER LLP LEGAL NOTICE
The information contained in this transmission may be attorney/client privileged and confidential. It is intended only for the use of the individual or entity named above. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited. If you have received this communication in error, please notify us immediately by reply e-mail.

Unless specifically indicated otherwise, any discussion of tax issues contained in this e-mail, including any attachments, is not, and is not intended to be, "written advice" as defined in Section 10.37 of Treasury Department Circular 230.

A portion of our practice involves the collection of debt and any information you provide will be used for that purpose if we are attempting to collect a debt from you.

Greetings! A novel issue has been presented and I would like some thoughts, please. Residential multi-family landlord wants to lease units to tenants with marginal credit ratings. In order to do so, they have a surety company that for a premium will bond the amount of rent for a year. The landlord proposes to pass the cost of the premium along to the tenant, who will pay that in addition to the market rent. This is similar to PMI for a mortgage with a high LTV ratio. Question: Do the premiums constitute security under 83.49? David Weisman Partner Board Certified Real Estate Lawyer Greenspoon Marder LLP 200 E. Broward Blvd., Suite 1800 Fort Lauderdale, FL 33301 Phone 954-491-1120 Ext. 1015 Direct Phone 954-343-6941 David.Weisman@gmlaw.com<mailto:David.Weisman@gmlaw.com> www.GMlaw.com<http://www.gmlaw.com/> [gm-horizontal-bw_nolaw2 (2)] GREENSPOON MARDER LLP LEGAL NOTICE The information contained in this transmission may be attorney/client privileged and confidential. It is intended only for the use of the individual or entity named above. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited. If you have received this communication in error, please notify us immediately by reply e-mail. Unless specifically indicated otherwise, any discussion of tax issues contained in this e-mail, including any attachments, is not, and is not intended to be, "written advice" as defined in Section 10.37 of Treasury Department Circular 230. A portion of our practice involves the collection of debt and any information you provide will be used for that purpose if we are attempting to collect a debt from you.

RR

RPPTL Real Estate Leasing Committee

Thu, Oct 1, 2020 5:49 PM

No. Because this bond is to secure only the payment of rent, it is in the
nature of advance rent. It is not a security deposit to cover damages to
the premises and such other applications as may be addressed in the lease.
The landlord would still want to require a normal security deposit.

Warren P. Gammill, Esq.

Warren Gammill & Associates, P.L.

Suite 400, Courthouse Plaza

28 West Flagler Street

Miami, Florida 33130

Telephone: 305-579-0000

Telecopier: 305-371-6927

mailto:Gammill@MiamiLawOffice.com Gammill@MiamiLawOffice.com

Website: http://www.gammilllaw.com/ www.gammilllaw.com

From: landten-bounces@lists.flabarrpptl.org
landten-bounces@lists.flabarrpptl.org On Behalf Of RPPTL Real Estate
Leasing Committee
Sent: Thursday, October 1, 2020 1:00 PM
To: landten@lists.flabarrpptl.org
Subject: [RPPTL Leasing Committee] Tenant credit enhancement issue
[IWOV-Active.FID8106045]

Greetings! A novel issue has been presented and I would like some thoughts,
please.

Residential multi-family landlord wants to lease units to tenants with
marginal credit ratings. In order to do so, they have a surety company that
for a premium will bond the amount of rent for a year. The landlord
proposes to pass the cost of the premium along to the tenant, who will pay
that in addition to the market rent.

This is similar to PMI for a mortgage with a high LTV ratio.

Question: Do the premiums constitute security under 83.49?

David Weisman

Partner

Board Certified Real Estate Lawyer

Greenspoon Marder LLP

200 E. Broward Blvd., Suite 1800

Fort Lauderdale, FL 33301

Phone 954-491-1120 Ext. 1015

Direct Phone 954-343-6941

mailto:David.Weisman@gmlaw.com David.Weisman@gmlaw.com

http://www.gmlaw.com/ www.GMlaw.com

GREENSPOON MARDER LLP LEGAL NOTICE
The information contained in this transmission may be attorney/client
privileged and confidential. It is intended only for the use of the
individual or entity named above. If the reader of this message is not the
intended recipient, you are hereby notified that any dissemination,
distribution or copying of this communication is strictly prohibited. If you
have received this communication in error, please notify us immediately by
reply e-mail.

Unless specifically indicated otherwise, any discussion of tax issues
contained in this e-mail, including any attachments, is not, and is not
intended to be, "written advice" as defined in Section 10.37 of Treasury
Department Circular 230.

A portion of our practice involves the collection of debt and any
information you provide will be used for that purpose if we are attempting
to collect a debt from you.

No. Because this bond is to secure only the payment of rent, it is in the nature of advance rent. It is not a security deposit to cover damages to the premises and such other applications as may be addressed in the lease. The landlord would still want to require a normal security deposit. Warren P. Gammill, Esq. Warren Gammill & Associates, P.L. Suite 400, Courthouse Plaza 28 West Flagler Street Miami, Florida 33130 Telephone: 305-579-0000 Telecopier: 305-371-6927 <mailto:Gammill@MiamiLawOffice.com> Gammill@MiamiLawOffice.com Website: <http://www.gammilllaw.com/> www.gammilllaw.com From: landten-bounces@lists.flabarrpptl.org <landten-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL Real Estate Leasing Committee Sent: Thursday, October 1, 2020 1:00 PM To: landten@lists.flabarrpptl.org Subject: [RPPTL Leasing Committee] Tenant credit enhancement issue [IWOV-Active.FID8106045] Greetings! A novel issue has been presented and I would like some thoughts, please. Residential multi-family landlord wants to lease units to tenants with marginal credit ratings. In order to do so, they have a surety company that for a premium will bond the amount of rent for a year. The landlord proposes to pass the cost of the premium along to the tenant, who will pay that in addition to the market rent. This is similar to PMI for a mortgage with a high LTV ratio. Question: Do the premiums constitute security under 83.49? David Weisman Partner Board Certified Real Estate Lawyer Greenspoon Marder LLP 200 E. Broward Blvd., Suite 1800 Fort Lauderdale, FL 33301 Phone 954-491-1120 Ext. 1015 Direct Phone 954-343-6941 <mailto:David.Weisman@gmlaw.com> David.Weisman@gmlaw.com <http://www.gmlaw.com/> www.GMlaw.com GREENSPOON MARDER LLP LEGAL NOTICE The information contained in this transmission may be attorney/client privileged and confidential. It is intended only for the use of the individual or entity named above. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited. If you have received this communication in error, please notify us immediately by reply e-mail. Unless specifically indicated otherwise, any discussion of tax issues contained in this e-mail, including any attachments, is not, and is not intended to be, "written advice" as defined in Section 10.37 of Treasury Department Circular 230. A portion of our practice involves the collection of debt and any information you provide will be used for that purpose if we are attempting to collect a debt from you.

RR

RPPTL Real Estate Leasing Committee

Thu, Oct 1, 2020 6:10 PM

These companies who guaranty rent have come and gone many times over the
years. Be careful.

The 2 main ones now are Steady and Surevestor and both are licensed
insurance companies.

The charge to the tenant is often predatory. The owner is supposed to pay
it BUT it is passed onto the tenant by way of a "fee".

Another one is a "risk mitigation fee". Property manager charges an extra
$200 to tenant if credit is bad and pockets the money.

I know some managers of SFH who are charging tenants $200 a month so the
tenant does not have to pay a $1500 security deposit up front and they
actually continue the charge when the tenant renews! So tenant in there
for 2 years? Property manager pockets $4800 and will use $1500 of it in
case there are damages. The property managers are pocketing huge sums each
month.

It is predatory and the property manager is self insuring the whole deal.
The property owner does not even know!

Obligo, Rhino and SureDeposit are all doing this stuff where the tenant does
not have to pay a full security deposit.

My clients want me to give a stamp of approval on it but I just can't do it.

Harry

LAW OFFICES OF
HEIST, WEISSE & WOLK P.A.
PH: 1 800 253 8428
FAX: 1 800 367 9038
"Serving the Property Management Professional"
Website: http://www.evict.com/ www.evict.com
Email: mailto:harry@evict.com harry@evict.com

https://www.facebook.com/pages/Heist-Weisse-Wolk-PA/343965575625870

Visit us on Facebook

THIS E-MAIL MESSAGE IS CONFIDENTIAL, ATTORNEY-CLIENT PRIVILEGED, AND
INTENDED FOR THE PERSONS NAMED ABOVE ONLY. ALL OTHER USE, COPYING, OR
DISTRIBUTION IS STRICTLY PROHIBITED.

From: landten-bounces@lists.flabarrpptl.org
[mailto:landten-bounces@lists.flabarrpptl.org] On Behalf Of RPPTL Real
Estate Leasing Committee
Sent: Thursday, October 01, 2020 1:50 PM
To: landten@lists.flabarrpptl.org
Subject: Re: [RPPTL Leasing Committee] Tenant credit enhancement issue
[IWOV-Active.FID8106045]

No. Because this bond is to secure only the payment of rent, it is in the
nature of advance rent. It is not a security deposit to cover damages to
the premises and such other applications as may be addressed in the lease.
The landlord would still want to require a normal security deposit.

Warren P. Gammill, Esq.

Warren Gammill & Associates, P.L.

Suite 400, Courthouse Plaza

28 West Flagler Street

Miami, Florida 33130

Telephone: 305-579-0000

Telecopier: 305-371-6927

mailto:Gammill@MiamiLawOffice.com Gammill@MiamiLawOffice.com

Website: http://www.gammilllaw.com/ www.gammilllaw.com

From: landten-bounces@lists.flabarrpptl.org
landten-bounces@lists.flabarrpptl.org On Behalf Of RPPTL Real Estate
Leasing Committee
Sent: Thursday, October 1, 2020 1:00 PM
To: landten@lists.flabarrpptl.org
Subject: [RPPTL Leasing Committee] Tenant credit enhancement issue
[IWOV-Active.FID8106045]

Greetings! A novel issue has been presented and I would like some thoughts,
please.

Residential multi-family landlord wants to lease units to tenants with
marginal credit ratings. In order to do so, they have a surety company that
for a premium will bond the amount of rent for a year. The landlord
proposes to pass the cost of the premium along to the tenant, who will pay
that in addition to the market rent.

This is similar to PMI for a mortgage with a high LTV ratio.

Question: Do the premiums constitute security under 83.49?

David Weisman

Partner

Board Certified Real Estate Lawyer

Greenspoon Marder LLP

200 E. Broward Blvd., Suite 1800

Fort Lauderdale, FL 33301

Phone 954-491-1120 Ext. 1015

Direct Phone 954-343-6941

mailto:David.Weisman@gmlaw.com David.Weisman@gmlaw.com

http://www.gmlaw.com/ www.GMlaw.com

gm-horizontal-bw_nolaw2 (2)

GREENSPOON MARDER LLP LEGAL NOTICE
The information contained in this transmission may be attorney/client
privileged and confidential. It is intended only for the use of the
individual or entity named above. If the reader of this message is not the
intended recipient, you are hereby notified that any dissemination,
distribution or copying of this communication is strictly prohibited. If you
have received this communication in error, please notify us immediately by
reply e-mail.

Unless specifically indicated otherwise, any discussion of tax issues
contained in this e-mail, including any attachments, is not, and is not
intended to be, "written advice" as defined in Section 10.37 of Treasury
Department Circular 230.

A portion of our practice involves the collection of debt and any
information you provide will be used for that purpose if we are attempting
to collect a debt from you.

These companies who guaranty rent have come and gone many times over the years. Be careful. The 2 main ones now are Steady and Surevestor and both are licensed insurance companies. The charge to the tenant is often predatory. The owner is supposed to pay it BUT it is passed onto the tenant by way of a "fee". Another one is a "risk mitigation fee". Property manager charges an extra $200 to tenant if credit is bad and pockets the money. I know some managers of SFH who are charging tenants $200 a month so the tenant does not have to pay a $1500 security deposit up front and they actually continue the charge when the tenant renews! So tenant in there for 2 years? Property manager pockets $4800 and will use $1500 of it in case there are damages. The property managers are pocketing huge sums each month. It is predatory and the property manager is self insuring the whole deal. The property owner does not even know! Obligo, Rhino and SureDeposit are all doing this stuff where the tenant does not have to pay a full security deposit. My clients want me to give a stamp of approval on it but I just can't do it. Harry LAW OFFICES OF HEIST, WEISSE & WOLK P.A. PH: 1 800 253 8428 FAX: 1 800 367 9038 "Serving the Property Management Professional" Website: <http://www.evict.com/> www.evict.com Email: <mailto:harry@evict.com> harry@evict.com <https://www.facebook.com/pages/Heist-Weisse-Wolk-PA/343965575625870> Visit us on Facebook THIS E-MAIL MESSAGE IS CONFIDENTIAL, ATTORNEY-CLIENT PRIVILEGED, AND INTENDED FOR THE PERSONS NAMED ABOVE ONLY. ALL OTHER USE, COPYING, OR DISTRIBUTION IS STRICTLY PROHIBITED. From: landten-bounces@lists.flabarrpptl.org [mailto:landten-bounces@lists.flabarrpptl.org] On Behalf Of RPPTL Real Estate Leasing Committee Sent: Thursday, October 01, 2020 1:50 PM To: landten@lists.flabarrpptl.org Subject: Re: [RPPTL Leasing Committee] Tenant credit enhancement issue [IWOV-Active.FID8106045] No. Because this bond is to secure only the payment of rent, it is in the nature of advance rent. It is not a security deposit to cover damages to the premises and such other applications as may be addressed in the lease. The landlord would still want to require a normal security deposit. Warren P. Gammill, Esq. Warren Gammill & Associates, P.L. Suite 400, Courthouse Plaza 28 West Flagler Street Miami, Florida 33130 Telephone: 305-579-0000 Telecopier: 305-371-6927 <mailto:Gammill@MiamiLawOffice.com> Gammill@MiamiLawOffice.com Website: <http://www.gammilllaw.com/> www.gammilllaw.com From: landten-bounces@lists.flabarrpptl.org <landten-bounces@lists.flabarrpptl.org> On Behalf Of RPPTL Real Estate Leasing Committee Sent: Thursday, October 1, 2020 1:00 PM To: landten@lists.flabarrpptl.org Subject: [RPPTL Leasing Committee] Tenant credit enhancement issue [IWOV-Active.FID8106045] Greetings! A novel issue has been presented and I would like some thoughts, please. Residential multi-family landlord wants to lease units to tenants with marginal credit ratings. In order to do so, they have a surety company that for a premium will bond the amount of rent for a year. The landlord proposes to pass the cost of the premium along to the tenant, who will pay that in addition to the market rent. This is similar to PMI for a mortgage with a high LTV ratio. Question: Do the premiums constitute security under 83.49? David Weisman Partner Board Certified Real Estate Lawyer Greenspoon Marder LLP 200 E. Broward Blvd., Suite 1800 Fort Lauderdale, FL 33301 Phone 954-491-1120 Ext. 1015 Direct Phone 954-343-6941 <mailto:David.Weisman@gmlaw.com> David.Weisman@gmlaw.com <http://www.gmlaw.com/> www.GMlaw.com gm-horizontal-bw_nolaw2 (2) GREENSPOON MARDER LLP LEGAL NOTICE The information contained in this transmission may be attorney/client privileged and confidential. It is intended only for the use of the individual or entity named above. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited. If you have received this communication in error, please notify us immediately by reply e-mail. Unless specifically indicated otherwise, any discussion of tax issues contained in this e-mail, including any attachments, is not, and is not intended to be, "written advice" as defined in Section 10.37 of Treasury Department Circular 230. A portion of our practice involves the collection of debt and any information you provide will be used for that purpose if we are attempting to collect a debt from you.