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How to Turn up the Heat on Freeloading Tenants Through Aggressive Litigation
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How to Turn up the Heat on Freeloading Tenants Through Aggressive Litigation

May 9, 2016 Real Estate Development, Sales and Leasing Industry Legal Blog

Reading Time: 9 minutes

In a Landlord-Tenant relationship, there is always the possibility of bad blood emerging between the owner/lessor of the real estate and the tenant/lessee who leases that real estate.  One of the most common causes for such bad blood results from disagreements surrounding the payment, or lack thereof, of rent.  Landlords should be aware that once a landlord files a complaint against a tenant, a tenant must pay money and attention.  The purpose of this blog post is to provide an overview of the “pay-to-play” system of eviction litigation in Florida, practical steps, and analysis for landlords to efficiently evict a defaulting tenant, while at the same time maximizing their potential to recover rent owed under the lease.  This blog will explore § 83.232, Florida Statutes, as well as its significantly similar residential counterpart, § 83.60(2), Florida Statutes.

I. Pay to Play

Let’s say a dispute culminates in an action for eviction over the tenant’s failure to pay rent.  After the tenant answers the complaint, the landlord then should file a motion to determine the amount of rent due under the lease pursuant to § 83.232, Florida Statutes.  This section provides, in part, that

the tenant shall pay into the court registry the amount alleged in the complaint as unpaid, or if such amount is contested, such amount as is determined by the court, and any rent accruing during the pendency of the action, when due, unless the tenant has interposed the defense of payment or satisfaction of the rent in the amount alleged as unpaid.  Unless the tenant disputes the amount of accrued rent, the tenant must pay the amount alleged in the complaint into the court registry on or before the date on which his or her answer to the claim for possession is due.  If the tenant contests the amount of accrued rent, the tenant must pay the amount determined by the court into the court registry on the day that the court makes its determination.  (emphasis added).

The landlord and tenant have two options.  The parties may have a hearing where the court determines the amount of rent due into the registry immediately and the amount due monthly “on or by the first day of each month.”  The parties also may forgo the hearing and agree to an order that determines the amount to be paid immediately and monthly.  Either way, let’s assume that a couple of months down the road, the landlord becomes aware that the tenant was two days late with one of the monthly payments.  The landlord may now take advantage of § 83.232(5), which states that the tenant’s failure to pay as specified by the court’s order “shall be deemed an absolute waiver of the tenant’s defenses.  In such case, the landlord is entitled to an “immediate default for possession without further notice or hearing thereon.”  (emphasis added).  The landlord then submits to the court an ex parte motion for default and a proposed final judgment of possession.  The court then enters the judgment of possession.  The case, first destined for protracted litigation, instead meets a swift end thanks to the tenant’s failure to pay.  This was the outcome of Park Adult Residential Facility, Inc. v. Dan Designs, Inc., 36 So. 3d 811 (Fla. 3d DCA 2010).

This “pay-to-play” system of eviction litigation is a system in Florida in which a tenant must pay rent in order to retain possession of the premises the tenant currently occupies.[1]  The money is not paid directly to the landlord, but to the court’s registry for as long as the litigation lasts.  Once the litigation concludes, the money is then distributed according to the court’s final order.  Either the tenant pays the amount due each month or immediately loses the eviction proceedings, and the premises.

In commercial real estate leases, § 83.232, Florida Statutes, provides that the failure to pay constitutes an absolute waiver of all of the tenant’s defenses.  This allows the landlord to move for immediate default for possession without further notice or hearing.  Regardless of the merits of the suit or the tenant’s excuses, the failure of the tenant to pay the monthly rent due is fatal to the tenant because the tenant loses the right to defend itself.  Where there may be a grace period in the lease agreement providing a tenant with a few days to pay rent, there is nothing of the sort in § 83.232.[2]  This section does not merely suggest settlement, but almost forces it upon tenants.  Even a financially stable tenant is likely to agree to an unfavorable settlement because an eviction would cut off a critical source of income and could cause liabilities to accrue.  The landlord may subsequently negotiate a favorable settlement of any related claims in the suit.  Conversely, the tenant may welcome settlement negotiations with the landlord once the tenant is evicted and loses possession of the premises.

Sections 83.232 and 83.60 provide a stern penalty to tenants who fail to adhere to the court’s “play-to-play” order.  Once the tenant violates the order, the court has no option but to enter an immediate default for possession without further notice or hearing.  Missed or late payments waive all of the tenant’s substantive and procedural defenses.  For example, one of the most asserted defenses used by tenants is that a landlord has failed to comply with a condition precedent to suit.  However, to assert this defense, the tenant must comply with the pay-to-play order for as long as the order remains effective.  Nothing can preclude application of §§ 83.232 and 83.60, not even allegations of fraudulent inducement or a counterclaim for damages.  These statutes expressly state that the “filing of a counterclaim for money damages does not relieve the tenant from depositing rent due into the registry of the court.”

Courts must treat the violation of a “pay-to-play” order much like a blown jurisdictional deadline, such as the deadline to move for a new trial.  The court in Poal Wk Taft, LLC v. Johnson Medical Center Corp., 45 So. 3d 37, 38 (Fla. 4th DCA 2010) stated that these statues are a “ministerial duty” for a court to issue a writ of possession for the landlord if a tenant’s payment is late or unpaid.  Further, trial courts cannot consider the reasons why the deposit was not timely made, even if there seems to be “unusual circumstances.”  Park Adult Residential Facility, 36 So. 3d at 811.  The plain language in the statute does not allow tenants to explain what occurred because the entry of writ of possession by default is automatic.  A hearing held on a landlord’s motion for default of possession is unauthorized.  Kosoy Kendall Assoc., LLC v. Los Latinos Restaurant, Inc., 10 So. 3d 1168 (Fla. 3d DCA 2009).  The trial court is unauthorized to decline to follow the statutes or controlling precedent because the court finds the application “inequitable in [a] particular case.”  Courthouse Tower, Ltd. v. Manzini & Assoc., 683 So. 2d 215 (Fla. 3d DCA 1996).  Further, a trial court is unauthorized to set aside a default upon a finding that the late payment was the result of excusable neglect.  214 Main Street Corp. v. Tanksley, 947 So. 2d 490 (Fla. 2d DCA 2006).

II. A powerful remedy that is distinctive in nature

As a unique statutory scheme, pay-to-play landlord-tenant litigation replaces many rules of civil procedure.  For example, it prohibits the tenant from obtaining relief from judgment like those provided by Florida Rule of Civil Procedure 1.540, in which excusable neglect is usually a factor.  Further, instead of a traditional motion for extension of time under Florida Rule of Civil Procedure 1.090, F.S. §83.232(3) allows tenants to pursue extra time to pay only if they do so before the date the money is due.  In addition, unlike a default under Florida Rule of Civil Procedure 1.500, [3] a tenant who violates a pay-to-play order is not allowed to notice of a motion for default, even if it is actively defending the action.  Indeed, the policy of the Florida Supreme Court of liberally setting aside defaults in favor of trials on the merits is not followed in this context.  See, e.g., N. Shore Hospital, Inc. v. Barber, 143 So. 2d 849, 851-53 (Fla. 1962).

The most distinguishing facet of §§ 83.232 and 83.60 is their ex parte relief mechanism.  It does not require a bond.  Bonds are normally mandatory to attain relief without notice.[4]  However, §§83.232 and 83.60(2) excuse the lack of notice regardless of the reason of the pay-to-play violation.  Seeing this as an inequitable result, this is why courts are oftentimes tentative to enforce the plain language of these statutes.

III. Conclusion

In conclusion, pursuant to §§ 83.232 and 83.60, tenants must continue to pay rent monthly “on or by the first day of each month” if tenants wish to pursue the merits of the landlord’s suit.  If the tenant is but one day late, the landlord has the right to file a default for possession and the court must grant the default, without further notice or hearing.  The tenant is given no opportunity to explain to the court why the tenant could not pay on time.  No matter what the circumstances, the court is required to grant the landlord immediate possession of the premises.  The statutes provide the landlord with serious ammo against potentially delinquent tenants, and foreclose freeloading tenants from living rent-free on the premises while the eviction litigation plays out.  A landlord’s full understanding of this statutory scheme provides a concrete way to turn up the heat on potentially delinquent and free-loading tenants.

[1] The Legislature enacted §§ 83.232 and 83.60 to prevent delinquent tenants from unjustly enriching themselves at their landlord’s expense by occupying the premises without paying rent during eviction litigation.  The statutes prevent the common situation in a residential mortgage foreclosure: while the foreclosure suit is pending, delinquent mortgagors continue to live in their homes mortgage-free, often for years at a time.

[2] A similar penalty exists in residential real estate leases in § 83.60(2).

[3] Florida Rule of Civil Procedure 1.500 states that a party “shall be served with notice of the application for default,” if it has filed or served any paper in the action.

[4] This is the case with procuring writs of attachment, Florida Statute § 76.12, pre-judgment garnishment, Florida Statute § 77.031, and replevin and most injunctive relief, Florida Statute § 78.068.

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