Tenancy Archives - Makris Legal

Things Landlords Should NEVER Do To Their Tenants

Bill Makris — Thu, 05 Jun 2025 11:00:21 +0000

Being a landlord in Florida comes with certain rights and responsibilities. While landlords have the authority to manage their properties, it is crucial to understand and respect the statutes in place to protect tenants’ rights. Florida statutes have been designed to ensure fair and equitable treatment of tenants and landlords. In this blog, we will discuss some actions that landlords should never do as they conflict with Florida statute and can cause major problems for landlords.

Self-help Evictions:

Self-help evictions, also known as “do-it-yourself” evictions, involve landlords taking matters into their own hands to forcibly remove tenants without going through the property legal proceedings. Engaging in this kind of eviction can lead to severe legal consequences for landlords.

Retaliatory Evictions:

Landlords in Florida should never engage in retaliatory evictions. Retaliatory evictions involve terminating a tenancy or increasing rent as a response to a tenant’s legitimate complaint or exercise of their legal rights. Florida statute prohibits landlords from retaliating against tenants who have reported housing code violations, requested necessary repairs, or participated in tenants’ associations. Engaging in such behavior can lead to legal consequences and potential liability for the landlord.

Illegal Entry or Lockouts:

Landlords must respect the privacy and security of their tenants. Unauthorized entry into a tenant’s rental unit, changing the locks without notice, or shutting off the utilities is strictly prohibited in Florida. Landlords must provide reasonable notice before entering a rental property, typically 12 to 24 hours, except in cases of emergency. Unlawful entry or lockouts can disrupt a tenant’s peace and quiet enjoyment of the property, potentially leading to legal action against the landlord.

Failure to Maintain Safe and Habitable Conditions:

Florida statute requires residential landlords to maintain their rental properties in safe and habitable conditions. This includes providing basic utilities (water, electricity, and heating), keeping the premises free from hazards, and conducting necessary repairs promptly. Landlords should never ignore repair requests or fail to address issues that affect a tenant’s health and safety. Failure to meet these obligations can result in legal liabilities and even rental abatement, where tenants are entitled to withhold rent until the issues are resolved.

Discrimination and Fair Housing Violations:

Discrimination against tenants based on their race, color, national origin, religion, sex, disability, or familial status is strictly prohibited by both federal and Florida fair housing laws. Landlords should never refuse to rent, deny housing benefits, or impose different rental terms based on these protected characteristics. It is important for landlords to have a comprehensive understanding of fair housing laws to ensure they comply with all applicable regulations.

Retention of Personal Belongings:

When a tenant vacates the rental property, landlords must follow Florida’s laws regarding the disposal of personal belongings left behind. Landlords should never discard or sell a tenant’s belongings without following the proper legal procedures. Instead, landlords must allow tenants a reasonable time to reclaim their belongings. If the tenant fails to collect their belongings, landlords should follow the appropriate steps to legally dispose of the items.

As a landlord in Florida, it is essential to familiarize yourself with the state’s landlord-tenant laws and regulations. By understanding and adhering to these laws, landlords can maintain positive relationships with their tenants while avoiding legal disputes and potential liabilities. This article highlighted some actions that landlords should never engage in, as they conflict with Florida statute and can harm tenants. To speak to an attorney, click here.

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The Basics of a 1031 Exchange and The Different Kinds of 1031 Exchanges

Bill Makris — Mon, 26 May 2025 11:00:50 +0000

At some point in your life, you may either encounter some money or work your tail off to make enough money in order to start purchasing real estate for investment purposes. Whether it is a single-family house, condominium, office building, or a plaza, one thing these properties all have in common is that they are types of properties that a real estate investor would be looking to buy. One tool that real estate investors use to help them save, or put off, capital gains taxes is to do a 1031 exchange. What exactly is a 1031 exchange and why is it important if you plan on dealing with investment properties?

A while back, the Internal Revenue Service (“IRS”) released rules governing deferred exchanges, which can be found in Section §1031. Under these rules, real estate owned as an investment or used in a trade or business can swap their property tax-free for “like-kind” real estate. Typically, when a property is sold, the seller of the property will usually be stuck paying the capital gains they receive from the sale. However, under a 1031 exchange, the seller is allowed to prolong paying capital gains taxes by essentially “swap out” the properties for another like-kind property.

For example, Igor the Investor has bought a commercial plaza for $500K and decided to spruce it up and get some better tenants with long leases. A few years down the road, Igor sees another commercial plaza hit the market for $800K and realizes he has to have it. With the work Igor put into his plaza, he was able to sell it for $800K and then a few weeks later, he buys the new plaza for $800K. By doing a 1031 exchange, Igor avoided paying a capital gains tax of about $300K.

When performing a 1031 exchange, there are three (3) basic steps to follow:

1. Identify the property you want to buy and sell.

2. Choose a qualified intermediary.

3. Tell the IRS about your transaction.

As mentioned above, the first step requires you identify the property type. Although it does not have to be the same exact type, quality, or grade of property, it must be similar. This would mean that you cannot use proceeds from a single-family rental property to buy a commercial plaza. Next, you must choose a qualified intermediary, which is also known as an exchange facilitator. The qualified intermediary will hold the funds in escrow until the exchange is complete. This is important because you do not want to lose money and miss important deadlines which could cause you to pay a lot of money in taxes sooner rather than later.

Lastly, you need to tell the IRS about your transaction. This is done through Form 8824 with your tax return. On the form you will describe the properties, the timeline of when the properties were sold and bought, who was involved and also the money that was involved with the transaction. There are certain requirements that must be met for the properties you sell and the property you buy.

There are a few common ways to do a 1031 exchange in Florida. The different kinds of exchanges are:

Delayed exchange
Reverse exchange
Simultaneous exchange
Improvement exchange

A delayed exchange is typically the most common 1031 exchange not only in Florida but throughout the country. In this 1031 exchange, you sell the property and then you purchase another property The timeframe for this exchange has a forty-five (45) day identification period, which gives the seller time to identify the property to buy, and then a one hundred eighty (180) day completion period, to complete the exchange.

The reverse exchange is essentially the opposite of a delayed exchange. The seller would first buy a replacement property and then sell the original property. This 1031 exchange is less common because it requires the seller to use their own cash up front to purchase the new property. For example, Igor sees that new plaza for $800K. Although he is trying to sell his current plaza, he is not getting any real interest. So, Igor decides to buy the new plaza first and was able to negotiate the price down to $700K in order to not miss the opportunity. In order for Igor to do a reverse 1031 exchange, he will need to sell his plaza within the required timeframe.

The next 1031 exchange is a simultaneous exchange. This 1031 exchange is very risky because the closings of both selling the property and buying the new property must happen at the same time. If there is even a slight delay, it can result in full taxation. For example, Igor found a buyer for his plaza and already has an offer on the new plaza. He was able to get a buyer for his plaza for $700K and he received an accepted offer for the new plaza for $700K with both closings to take place on September 1, 2022. If there are no delays and both properties close on September 1, 2022, then Igor will have completed a simultaneous 1031 exchange.

Lastly, the improvement exchange, or construction exchange, is a 1031 exchange that allows the seller to improve their replacement property with the profits from the original property. For example, Igor ended up finding a buyer for his plaza for double of what he paid for it, $1,000,000! He sold his plaza and bought the new plaza he has been eying for a long time for $750K. However, right before he closed in the new plaza, he discovered it needed more work than anticipated. Igor decided to use the profits from selling his old plaza and fix up the new plaza he just bought.

At the end of the day, when buying and selling investment properties, there are ways to avoid having to pay taxes upon the sale of investment properties, so long as the requirements are met and the timelines are strictly followed. Although Makris Legal, P.A. is a real estate and business law firm, we primarily do NOT issue tax advice. The information in this blog post is strictly informational and shall NOT be construed as legal advice. It is highly recommended to consult with a tax professional for tax advice.

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What is an Administratively Dissolved Entity and What Does it Mean?

Bill Makris — Fri, 25 Apr 2025 11:00:13 +0000

The time has come where you decided to make your dream a reality by hiring Makris Legal, P.A. to open your entity, to serve as your entity’s designated registered agent, and to help set up your business for success. Whether you have a for profit corporation, limited liability company, limited liability partnership, a limited liability limited partnership, or another entity structure, there are certain requirements that must be met in order to avoid your entity from being administratively dissolved.

To start, what exactly does it mean when an entity is administratively dissolved? An entity is administratively dissolved by the Florida Department of State Division of Corporations whenever the entity does not meet certain requirements. There are different requirements for each entity structure, but the common requirements that all for-profit entity structures share are:

1. If the entity does not deliver its annual report to the department by 5 p.m. Eastern time on the third Friday in September of each year;

2. Pay a fee or penalty due to the department;

3. Appoint and maintain a registered agent and registered office; and

4. Deliver for filing a statement of change within thirty (30) days after the change occurred for the registered agent.

Whenever an entity is administratively dissolved, the entity still continues in existence, but it may only participate in activities necessary to wind up its activities and affairs, liquidate and distribute assets, and notify claimants with claims against the administratively dissolved entity. If an entity does any other activities outside of these specific activities, then there could be consequences for the entity owners, officers, and managers. The biggest consequence of operating under an entity that has been administratively dissolved is that the officer, owner or manager who continues to operate under the administratively dissolved entity will incur personal liability and lose the benefit of the “limited liability” protection through the doctrine of “piercing the corporate veil.”

For example, Larry has a Limited Liability Company where he operates his bakery. Larry did not hire Makris Legal, P.A. to serve as his designated registered agent and decided to be his own. He forgot to file his annual report before the cut off dates and his Limited Liability Company is now administratively dissolved. Shortly after, Larry made a batch of his most popular and best selling cookies. Unknown to Larry, his supplier supplied him with bad eggs. Shortly after selling out of those cookies, multiple customers ended up getting sick and sued Larry and Larry’s company, and those customers won the lawsuit and were awarded damages against Larry personally. Since Larry’s company was administratively dissolved, Larry was not able to utilize the benefits of having an active limited liability company to absorb the liability for unknowingly using bad eggs and making his customers sick.

Another consequence of an administratively dissolved entity is that the entity cannot bring a lawsuit or proceeding against another party. For example, after Larry was found personally liable for getting his customers sick, he decided to go after the egg supplier. Unfortunately, since Larry never reinstated his entity, he is unable to bring a lawsuit against the egg supplier to recover damages.

In Florida, an entity’s annual report is due before May 1st. If the entity is reinstated after that date, the entity is required to pay a $400 late fee along with their annual report. Additionally, if an entity does not file their annual report before the third Friday in September, then the entity will be administratively dissolved. It is important to remember these dates in order to avoid more headaches. If you would like more information or would like to retain Makris Legal, P.A. to serve as your designated registered agent, click here.

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Are You Practicing Law Without A License?

Bill Makris — Mon, 17 Feb 2025 11:00:11 +0000

Many individuals out there put in the blood, sweat, and tears (lots and lots of tears) that it takes to graduate law school, and then put in new blood, sweat, and tears (again, lots and lots of tears) into studying for their state’s bar exam and passing the bar. At the end of the day, all of that work bestows the honor upon those individuals the ability to practice law. Unfortunately, there are people out there that intentionally attempt to practice law every day, and there are others who are unintentionally practicing law without a license. The unlicensed practice of law can have serious consequences for both the perpetrator and the person receiving the advice and/or services, regardless of whether the unlicensed practice of law was intentional or unintentional. So how exactly would one determine whether they are practicing law?

According to the Supreme Court of Florida, a two-part analysis must be made in order to determine whether someone is performing the activity of unlicensed practice of law. First, is whether the activity is the practice of law, the second is whether the practice is authorized. If one performs an activity that is authorized and also the practice of law, the activity is not considered the unlicensed practice of law and may be conducted by a nonlawyer.

When looking at the first question, whether the activity is the practice of law, the Court created a test to determine whether an activity is considered the practice of law. This test is known as the Sperry test. In The Florida Bar v. Sperry, 140 So. 2d 587, 591 (Fla. 1962), the Court found that setting a broad definition of the practice of law was too broad and nearly impossible and decided to develop the following test to determine whether an activity is considered the practice of law:

If the advice and the performance of service affect an individual’s important rights of a person under the law, and if the reasonable protection of the rights and property of those advised and served requires that the person giving such advice possess legal skill and knowledge of the law greater than that possessed by the average citizen, then the giving of such advice and the performance of such services by one for another as a course of conduct constitute the practice of law.

The most important reason for this test is to protect the public from incompetent, unethical, or irresponsible representation. So, what exactly is considered the unlicensed practice of law? Below are a few examples.

Real Estate

When it comes to Real Estate, one of the most common activities that is considered the unlicensed practice of law is when a real estate licensee drafts a purchase agreement and changes and/or consults a buyer or seller of the terms of the agreement. For example, Frieda is a friend of Sally the Seller who is selling her beautiful beachfront property to Bill the buyer. Frieda, who has a background in real estate and is unlicensed, but works as a surgeon at a hospital, decides to help Sally with the sale of her beachfront property. Frieda drafts up the agreement with all of the terms that Sally and Bill agreed on, from scratch. Since Frieda has drafted the contract and is not licensed to practice law, she has performed the unlicensed practice of law. An exception to this is that real estate licensees are allowed to use a Florida Supreme Court form and they are allowed to fill out the form.

Evictions

Since the pandemic started, evictions have been skyrocketing, and more nonlawyers have been trying to file evictions on behalf of others. When it comes to evictions, it is considered the practice of law for a nonlawyer to represent a third party in an eviction and if a nonlawyer prepares eviction forms for another. However, the exception to this is that a nonlawyer can fill out the information if they are using a Supreme Court Approved form. Another exception is for property managers. Property managers are allowed to sign and file complaints for evictions and motions for default in an uncontested residential eviction for nonpayment of rent so long as the property manager is using a Supreme Court Approved form.

Corporate Documents

Florida does not allow a nonlawyer to prepare any corporate documents for another person. For example, Eleni the entrepreneur wants to start a bakery in his hometown. Instead of going to her favorite entity formation attorney at Makris Legal, P.A., she decided to ask one of her friends to form it for her that used to work as a secretary at a law firm, including filing the articles of organization and drafting an operating agreement. It not only puts Eleni and her new bakery at risk, but it also is improper for her friend to form the entity and prepare the corporate documents.

Probate

When it comes to Probate the Florida Supreme Court has held that it is the unlicensed practice of law for a nonlawyer to draft a living trust and related documents for another person. For example, Gary the grandpa wanted to create a will in order to pass down his assets to his children and grandchildren upon his death. Gary calls his friend who recommends a man who drafted a will for him. Gary’s friend met the man at his local grocery store where the man works. Knowing better, Gary decided to not use the man after finding out that the man works at a grocery store, and decided to call his local estate planning attorney instead. This is a wise decision for Gary because the man is a nonlawyer who is practicing law. Additionally, Florida does not allow a nonlawyer to draft a will for a third party.

Although it is not only improper for nonlawyers to participate in the practice of law, it also can create many issues for the individuals or companies that could be substantially harmed by it. At the end of the day, it is always best to contact a licensed attorney. To reach an attorney with Makris Legal P.A., click here.

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Tips For Naming Your Corporation

Bill Makris — Fri, 25 Oct 2024 11:00:14 +0000

Earlier you may have seen Makris Legal’s blog post regarding tips for naming your limited liability company, if not you can click here to check it out. When the time comes to forming a new corporation, many people first think about what they want to name the corporation. Like all entities, Florida sets out the minimum requirements for the name of a corporation pursuant to Florida law.

Pursuant to Florida Statute § 607.0401, Florida has requirements on what must be included and what cannot be included in the name of a corporation. The first and most common requirement, which is different from naming an LLC, is the entity must contain the word “corporation”, “company”, or the abbreviation “Corp.”, “Inc.”, or “Co.”. Additionally, the name can also include the designation “Corp”, “Inc”, or “Co” or indicate that it is a corporation instead of a natural person, partnership, LLC or some other entity. For example, Larry the Landlord one day decides that he wants to diversify his investments and decided to open Greek restaurant with a focus on desserts, and he names the corporation “Larry’s Loukoumathes, Inc.”. Since Larry’s corporation has the abbreviation “Inc.” it complies with the first naming requirement pursuant to Florida law. However, if Larry tried to form the corporation calling it “Larry’s Loukoumathes” the entity would most likely not form and instead he would need to use the original name and then file a fictious name/DBA.

When it comes to naming a corporation, the name cannot contain language that states or implies that the corporation is organized for a purpose other than that permitted by Florida law or the articles of incorporation. The corporation is also not allowed to state or imply that the corporation is connected with a state or federal agency or a corporation or other entity chartered under the laws of the United States.

Similar to the requirements for naming an LLC, a corporation name must be distinguishable from the names of other entities or filings that are on file with the department of state. Florida law sets out the ways that a name is not considered distinguishable from another entity:

1. If the name has a suffix.

2. If the name has a definite or indefinite article.

3. If the name contains the word “and” and the symbol “&”.

4. If the name is the singular, plural, or possessive from of a word.

5. If the name has a punctuation mark or a symbol.

After going through Florida’s minimum requirements for a corporation’s name, there are also practical tips that should be followed to get the most out of the name of the corporation. To start, it is wise to avoid names that are hard to spell and names that can limit the business as it grown. When it comes to getting potential customers, they may get confused when trying to search for the corporation. Additionally, when it comes to choosing a name for the corporation picking a narrow name can cause problems down the road when trying to expand. For example, Larry the Landlord opened his dessert-focused Greek restaurant, “Larry’s Loukoumathes, Inc.” and notices business is booming. Larry then decides he wants to expand his business to cater to the lunch and dinner crowd and starts offering lunch and dinner options. After a few weeks, Larry notices his restaurant is not attracting a lunch or a dinner crowd. One reason for this is because the name of Larry’s restaurant sounds like the name of a dessert-focused restaurant and not a restaurant that offers different kinds of foods. One way Larry can fix this is by renaming his restaurant to “Larry’s Greek Restaurant, Inc.” which would help clear up his customers’ confusion and attract new customers.

Another way to decide the name of a corporation is to create a few different names and get feedback on those names. When choosing a name, choose about 5 or 10 names and then run them by friends, family members, trusted colleagues, etc. One can also test the name with their target audience. By doing this, it gives the corporation owner the opportunity to see if the name they are choosing is good. For example, when General Motors unveiled the Chevy Nova, General Motors did not realize that “Nova” in Spanish translates to “not going” or “no go” which could have negatively impacted sales for the car. Additionally, it is best to do research on the name to make sure that the name of the corporation does not translate into anything negative in another language.

In essence, when choosing the name of a new corporation and after understanding Florida’s minimum requirements for corporation names, it is always best to conduct research on the name and test it out in order to choose the best name for the corporation. By doing this it will help a new corporation owner choose a name that is not confusing, translates to a negative meaning or phrase, and help customers choose a name that will help grow their corporation. For help choosing a name for your corporation and help set up the entity, click here to contact an attorney.

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Tips For Naming Your New Limited Liability Company

Bill Makris — Mon, 14 Oct 2024 11:00:14 +0000

One of the many decisions that people make when forming a new limited liability company (“LLC”) is the actual name of the entity itself. For some it is the very first thing they think of when forming a new business or opening an entity to buy real estate, and others have a harder time thinking of what they might want their entity to be called. Along with practical tips for choosing a name for an LLC there are also regulations pursuant to Florida law that must be followed when choosing a name for your LLC.

Pursuant to Florida statute § 605.0112, Florida has requirements on what must be included and what can and cannot be included in the name of the LLC. The most common requirement of forming an LLC is that the name must include the words “limited liability company” or the abbreviation “L.L.C.” or “LLC”. This will clearly indicate that the entity is a limited liability company and not a corporation, partnership, or other business entity. For example, Larry the landlord is looking to buy another investment property. He hires his attorney to open the LLC for him and Larry wants to name the entity Larry’s Investments, LLC”. In this example it complies with the naming requirement because it uses the abbreviation “LLC” in the name. However, if the entity “Larry’s Investments LLC” is already being used, then Larry may not be able to use “Larry’s Investments, LLC” as the name for his entity.

Another requirement is that the name must be distinguishable from the names of other entities or filings that are on file with the department of state. Florida law sets out the ways that a name is not considered distinguishable from another entity:

1. If the name has a suffix.

2. If the name has a definite or indefinite article.

3. If the name contains the word “and” and the symbol “&”.

4. If the name is the singular, plural, or possessive from of a word.

5. If the name has a punctuation mark or a symbol.

Additionally, the name is not allowed to contain language that states or implies that the LLC is organized for a purpose other than a purpose authorized by Florida law or in the articles of organization. Further, Florida law prohibits the name of an LLC to state or imply that the LLC is connected with a state or federal government agency or a corporation or other entity chartered under the laws of the United States.

In addition to conforming to Florida law, there are also practical aspects that can help one get the most out of their LLC name. Depending on what the purpose of the entity will be will help decide what to name the entity. For example, if someone is opening an LLC to start a business selling gyros, one may want to incorporate the word “Gyro” into the name or if it is a restaurant, one may want to pick something that the consumer will instantly know the purpose of the entity because it will be the first thing a consumer will see when they look up the business. Another option could be forming an LLC with a basic and generic name for the official business and then filing for a fictious name, or a DBA, which can then be used for promoting the business. For example, Larry the landlord wants to promote his business of buying investment properties and already has the entity “Larry’s Investments, LLC” but he wants to use a different name to promote his business and that sounds nicer to attract customers. Larry the landlord may want to file for a fictious name so that way he can promote his business under the fictious name while keeping the original entity name for official business.

If the purpose of the entity is not for promoting a business or yourself, such as buying real estate, asset protection, or anonymity, then one may want to choose something that does not stand out. Generic names are typically best for real estate and asset protection. For example, if someone is buying a property on 1234 Night Owl Court one might want to name the LLC something like “Night Owl LLC” or “Owl Night LLC” or even as generic as “Owl Night Group LLC”. This name can also be beneficial for one who may have multiple LLCs and other entities so they can distinguish it from the others more easily.

In the end there is a lot of creativity that can happen when choosing a name for your LLC while still complying with Florida law regardless of if the purpose is to promote yourself and/or your business, or if the purpose of your entity is for asset protection or anonymity. For help choosing a name for your LLC and to help set up an LLC, click here to contact an attorney at Makris Legal, P.A.

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A Basic Overview Of Residential Security Deposits

Bill Makris — Mon, 23 Sep 2024 11:00:12 +0000

When it comes to renting a residential property to a future tenant, a landlord will want to consider charging a security deposit prior to the tenancy commencing. A security deposit is a payment required by a landlord to ensure that a tenant pays rent on time and keeps the rental unit in good condition. The most common reason why a landlord would charge a tenant a security deposit is to cover any damages the tenant may cause during their tenancy. When it comes to security deposits there are procedures that landlord must follow pursuant to Florida Statute. Failure to follow the procedures set forth in Florida Statute §83.49 can result in a claim against the landlord and even the landlord being forced to forfeit their right to the security deposit.

When determining how much to charge a tenant for a security deposit, a landlord will consider many factors, including but not limited to state laws governing security deposits, price of the rental unit, the amenities a property provides the tenant, the tenant’s creditworthiness, and what the competition charges. Florida has no laws governing how much a landlord can charge for a security deposit. However, landlords typically charge between one to two months’ worth of rent as a security deposit. Additionally, a security deposit is not to be mistaken as rent, and is never considered a rent payment. Although tenants may ask their landlord to apply the security deposit as a rental payment in the event they are unable to pay in a timely manner, a security deposit should be held and not counted as rent.

Pursuant to Florida Statute a landlord has fifteen (15) days after the termination of the tenancy to return the security deposit unless the landlord intends to make a claim on the security deposit for damage to the property, then the landlord has thirty (30) days to make a claim, in writing, to the tenant’s last known address. For example, Larry the Landlord and Terry the Tenant end their tenancy and Terry vacates the property. Larry does a walkthrough three (3) days after Terry vacates and notices that Terry has left the place a mess with holes in the wall. Larry then sends a certified letter to Terry informing him that Larry is imposing a claim on his security deposit for the damages. Here, Larry has met the notice requirement for imposing a claim on Terry’s security deposit. However, should the landlord fail to provide notice within thirty (30) days of the tenancy concluding, the landlord forfeits their right to impose a claim on the tenant’s security deposit.

Although a landlord forfeits their right to the tenant’s security deposit should they fail to meet the notice requirement, a landlord may still file an action against the tenant after the landlord sends the tenant their deposit back. Florida courts have held that there is no fifteen (15) day statute of limitations for a landlord to file suit for damages to a rental property. For example, Larry sent Terry his deposit back five (5) days after the conclusion of the tenancy and after Larry’s initial inspection of the property. Twenty days later, Larry inspects the property and finds damages that were not visible during his initial inspection, including damage to the air handler and plumbing. Due to the excessive damages left by Terry, Larry is able to file suit against Terry to try to recover the damages he left at the property.

Should a tenant not raise an objection to landlord’s claim for the security deposit, the landlord must deduct the amount they are claiming and send the tenant back the rest of the security deposit. If the landlord fails to do this, they are not able to make a claim on the tenant’s security deposit, and if judicial intervention is necessary to cover damages, the landlord will most likely have to file a separate lawsuit against the tenant for damages.

At the end of the day, the main reason security deposits exist is to ensure the tenant pays their rent on time and as a security cushion for landlords in the event a tenant damages the property upon the conclusion of the tenancy. Florida statute helps guide the path for the procedures for landlords on what they need to do and when they need to do it in order to pursue a claim on a security deposit. To learn more about security deposits, click here to contact an attorney.

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Why You Should Own Your Real Estate In An LLC

Bill Makris — Sat, 31 Aug 2024 11:00:09 +0000

You may have reached the point in your life where you are ready to earn some passive income and become a landlord or you want to buy your first vacation condo to unwind on the weekends and to move into once you retire. One thing you should think carefully about is how you own the property. When it comes to owning real estate, there are multiple ways it can be owned, such as in your personal name, in a trust, or in a limited liability company (LLC). Each type of ownership has its benefits. Whether you own one property or one hundred properties, owning it an LLC is beneficial and to your advantage.

The main benefits of putting your real estate into an LLC or multiple LLCs is to reduce your personal liability and to keep your information private. The first reason to put your real estate into an LLC is to reduce your personal liability. In the eyes of the law, when a property is owned in an LLC, it is viewed as a separate legal entity. If the property creates liability, then an LLC would be best to protect you from lawsuits against the property. A rental property is a prime example of a property that can create a liability. For example, Patrick the property owner rents property to Terry the tenant. Carl the customer comes onto the property but falls down the steps leading into the building due to their age and deterioration. If Carl sues Patrick for his damages, Patrick could be personally liable for Carl’s damages and Carl could go after Patrick’s personal assets such as his wages, income, and other properties he may own personally. However, if Patrick put the property into an LLC, then the LLC would be responsible for Carl’s damages and Patrick’s personal assets would generally be protected.

Going off of the prior example, Patrick owns an art collection worth about $250,000. Carl sues Patrick for his medical bills and lost wages due to not being able to work and the Court renders a judgment against Patrick for $400,000. If Patrick does not have the money to pay the judgment, Carl can potentially go after the art collection and force it go to auction to pay off the judgment. However, if Patrick owns the property in an LLC, then Carl will generally not be allowed to go after Patrick’s art collection and force it to go to auction to pay off the judgment.

Another benefit to owning your property in an LLC is your assets will be more private. In modern times it is easy to look up information using the internet. When someone owns property in their personal name, their information is recorded with the property appraiser in the county where the property is located. Since property appraisers generally have an online search function, someone can go on any county’s property appraiser’s website, type your name in and a list of all the properties you own will come up. When a property is in an LLC, your personal name will not show up on the property appraiser’s website

Additionally, the privacy benefit ties into reducing the benefit of reducing your personal liability in the event of a lawsuit. One factor a Plaintiff may use in deciding to sue you for damages is what assets does the Defendant own. If a Plaintiff finds that the would-be Defendant owns multiple properties, cars and takes lavish trips then the Plaintiff will most likely sue them whereas if the property is owned under an LLC the Plaintiff will only be able to go after the LLC’s assets. For example, Patrick the property owner has five rental properties each titled in a separate LLC with separate bank accounts. Carl the customer comes to one of the properties and is injured and sues Patrick the property owner for his medical expenses. Assuming that Patrick has no other assets in each of the LLCs Carl is only allowed to go after the one LLC that the property is titled under and he cannot go after the other properties.

Although there are numerous benefits to owning your property under an LLC, the two main benefits are privacy and limiting your personal liability in the event of a lawsuit. When transferring your property into an LLC or multiple LLCs it helps avoid headaches down the road and can save your personal assets. To speak to an attorney about transferring your property into an LLC, click here to contact an attorney.

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What is a Registered Agent and Why Should I Hire One For My Entity?

Bill Makris — Sat, 24 Aug 2024 11:00:58 +0000

When it comes to forming an entity, one of the requirements in the state of Florida is to have a registered agent. A registered agent is an individual residing in Florida or a business entity that has an active Florida filing or registration. However, an entity cannot serve as its own registered agent. The registered agent agrees to accept legal notifications on behalf of the entity and they get the notification of the annual report, which is another requirement in order for an entity to maintain an active status in Florida. The registered agent will also receive all official documents and notices related to your entity. It is important that your entity has a registered agent prior to filing the articles for your business entity to ensure your entity is in compliance with the applicable rules and regulations.

When it comes to serving as a registered agent, you can do it yourself or you can retain a professional registered agent. There are many benefits to hiring a professional registered agent. One of the main benefits is privacy. If you serve as your own registered agent, your personal information can become public record. For example, if you are buying a property under an entity you will want to have a professional registered agent because it will keep the owner(s) information private for both the entity’s owner(s) and/or the property’s owner(s). If you serve as your entity’s registered agent, your personal address will be visible to anyone who looks up the entity. Additionally, a registered agent is not allowed to use a P.O. Box nor a virtual office as their address. The location has to be a physical address and can be a home, business, or office suite.

Another benefit to hiring a professional registered agent is that you will not have to worry about being interrupted with official notices and service of process. One of the requirements of a registered agent is that they need to be available during normal business hours. A professional registered agent will be available during normal business hours to accept official notices and service of process for your entity. For example, if someone goes to sue your entity, they will serve the registered agent at the registered agent’s address. If the registered agent is yourself, then they will serve you at your personal or business address whereas if you retain a professional registered agent, the registered agent will be served at their office. This can also prevent potential embarrassment because if an entity is served with notice of litigation, their customer’s reaction will not be favorable to the entity. It can also prevent exposure of private entity matters to other members or employees of the entity. For example, if an employee sees that an entity is being served with litigation, the employee may get scared and jump ship.

When it comes to entities that run on an online-only business, they can benefit from hiring a professional registered agent. When a business is online-only, they generally do not have a place of business that can accept service of process or official notices. Many business are starting to transition to an online-only business due to the COVID-19 pandemic. For example, Tracy decides to open an online flower shop, where she can display her flowers on her website and customers can pick and order the flowers. Tracy does not have a physical address because she is running an online-only business. If Tracy were to become the registered agent herself, she would be required to use her personal residence as her address and she would have to be present during normal business hours. However, if Tracy were to retain a professional registered agent, she would not have to worry about being available during normal business hours and she would not need to worry about taking time out of her busy day to receive official notices or service of process.

So, what happens if an entity does not have a designated registered agent? If you fail to list a registered agent when you file your articles for your entity, the State will reject the entity filing. If you have an entity set up already and for some reason you drop your registered agent, the Department of State Division of Corporations can administratively dissolve your entity. This means that the entity is temporarily not allowed to conduct business in Florida and they are only allowed to liquidate assets and notify creditors. This is typically the first step in terminating an entity’s right to do business in Florida. Another way an entity can be administratively dissolved is by failing to file the annual report in a timely manner.

At the end of the day the only thing an entity/business wants to do is succeed. By retaining a professional registered agent, such as Makris Legal, P.A., you will have peace of mind that you will not miss a crucial filing or endanger your business’ good standing and its right to defend itself in court. By retaining a professional registered agent, you can ensure your entity stays on top of its compliance obligations. To retain Makris Legal, P.A. as your registered agent, click here.

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A Basic Overview of Commonly Formed Entities

Bill Makris — Fri, 16 Aug 2024 11:00:33 +0000

Congratulations! You had an epiphany and finally decided to start the process of quitting your dead-end job and to fulfill your life-long dream of become an entrepreneur. As you work to turn your dream into a business, there are a few things you need to do in order to get set up. One of those things is to decide how you want to set up your entity. There are advantages and disadvantages when deciding which entity to form to start your new business. When picking what kind of entity to form for your startup business or if you are buying real estate, it is not the case of one-size-fits-all. Everyone has different needs which is why there are different forms of entities to choose from. Below is a general overview of the most common entities.

Sole Proprietorship

One of the common ways to set up an entity is by forming a sole proprietorship. This entity is generally known as the default entity formation. When forming a sole proprietorship, it usually requires less paperwork and legal filings. This entity is ideal for the person who does not plan on growing the business outside themselves and if the plan on self-financing the business. However, since sole proprietorships are legally indistinguishable from yourself you are liable for your business debts, liabilities, and losses. In the event something goes wrong, someone can sue the business and the business’s assets and your personal assets will be at risk.

Limited Liability Company

The most popular business entity people use when starting their business is forming a Limited Liability Company (“LLC”). This entity is more flexible compared to the others and allows for a flexible management structure. With an LLC, it provides a similar protection that a corporation has to its shareholders. It protects the owners from personal liability for business debts and claims, which means that if the business cannot pay a creditor, the creditor generally cannot come after an LLC member’s personal assets. However, there are exceptions to this where an LLC member can be personally liable to someone else.

Another common use for forming an LLC is for buying assets, such as real estate. Many people put their assets under entities in order to shield that asset from liability. For example, Terry decided to rent a property from Larry the Landlord. Terry falls behind on his rent because he has bought a few properties. Larry is trying to go after Terry and discovers the properties he purchased. However, Terry formed an LLC and titled the properties to the LLC. Generally, Larry would not be able to go after the properties Terry purchased because they are titled to the LLC.

Corporation

Another common entity is a corporation. A corporation shares some similarities with an LLC, such as certain limited liability and the ability to elect as an S Corp for tax purposes to avoid double taxation. However, Corporations have a lot less flexibility than an LLC. Corporations require a lot of administrative duties in order to retain corporate status, such as holding annual shareholder and director meetings, keeping minutes of shareholder and director meetings, maintaining separate bank accounts from their owners, and so on. Corporations also require articles of incorporation and corporate bylaws for formation.

A corporation could be more appealing due to the ability to raise capital. When banks look to give small businesses a loan, they typically want the busines to be incorporated. Additionally, a corporation has stock unlike an LLC. A corporation can sell its stock in order to raise capital for the business. A corporation also has unlimited life, meaning the life of the corporation is not contingent on its owner(s) staying alive. Should the corporation’s owner(s) die, or if they decide to sell their interest in the entity, the company will continue to exist and do business as usual.

In the end, there is not one right answer on how to form an entity to suit your needs. Whether you want to start up a new business or you want to protect your assets, forming an entity is the best way to go and there are different options to achieve your goals. To contact an attorney to discuss your options, click here to contact Makris Legal, P.A.

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