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Florida Vacation Rental Managers Teach Liens
(News Item #0282, Published: 02/20/13) FreeLineMediaOrlando.com
The vacation home industry has started teaching its members “Property Management for Dummies.” (Photo by Michael Freeman).
CELEBRATION- Since the housing market crashed in 2008 and Florida found itself in the unenviable position of leading most other states when it comes to home foreclosures, it’s been a common practice for banks to impose liens against customers who have fallen well behind on their mortgage payments.
But it isn’t just banks that have to deal with homeowners who have stopped making payments. This is also a challenge for the tourism and hospitality industry.
Dealing with the delinquent owners of homes that are rented out on a short-term basis to tourists has become such a common problem that the trade association representing managers of vacation homes recently hosted a workshop called “Property Management for Dummies,” to assist those members coping with an owner who hasn’t kept up with their payments.
The workshop sponsored by the Central Florida Vacation Rental Managers Association, and held at the Mystic Dunes Golf Resort in Celebration, was designed to help educate property managers on how to place a lien, the out-of-pocket cost of doing it, and how quickly it takes for a lien to become active.
David Leather, the past president of the CFVRMA, said the first thing to do when dealing with a delinquent owner is to understand exactly what is required by the courts.
“The paperwork has to be very precise,” said Leather, who operates Hayes Vacation Homes in Kissimmee, and who said he’s had to place liens in the past against delinquent property owners.
Property management firms often specialize in vacation homes. These are fully furnished houses, typically in resort communities across Central Florida, that are rented out on a short-term basis to tourists and business travelers. The homes offer multiple bedrooms, a kitchen, private pool and game room- far more space than a family would expect to get in a hotel room.
These firms have two clients to service: the guests who book stays in the vacation homes, and the owners of the homes that they manage.
But as Leather noted, in this rough housing market, some property owners either don’t, or can’t, keep up their payments, creating financial headaches for the property managers, and forcing them in some cases to take legal action. Leather said he’s already filed four liens against delinquent owners.
"My score so far has been four to one,” he said. “I won four and lost one.”
Liens are not actually difficult to file, said Charo Quiles, the chief financial officer at USA Vacation Homes and Spa, the vacation home property management firm in Four Corners.
“I’ve done them many times, and it’s very simple,” she said. “Once the homeowner pays you, you have to release the lien.”
A challenge — and major inconvenience — for property managers, she said, is that many of their companies and the actual vacation homes are concentrated near the theme parks in Northeast Polk County and Northwest Osceola County- but the local courthouses are miles away.
In Polk County, the courts are nearly an hour away in Bartow, and in South Lake County around Four Corners, it requires a drive to Tavares, also about an hour away.
That’s a big drain on the property management firm’s time, she said.
“It’s bad enough that these courthouses are very far away,” Quiles said.
Keep in mind, Leather added, that property managers can’t wait forever to file a lien.
“You’ve got to be careful on this,” he said. “You’ve got exactly 12 months to file.”
And even if the property manager wins, Leather added, a major annoyance is “Guess who gets paid first- the tax office, then the bank. And you hope at the end there’s some left for you.”
Quiles added that the property owner might also owe money to vendors like landscaping and housekeeping firms that do work on the house, setting up a scramble to divide up whatever money is brought in from the legal action.
“The property manager is not the only one who can place a lien on a house,” she said. “A vendor can place a lien on the house as well.”
The Central Florida Vacation Rental Managers Association will continue to offer workshops on Property Management for Dummies at its monthly meetings, including the next one on Thursday at the Legoland Florida theme park in Winter Haven, starting at 9 a.m. To learn more, visit CFVRMA.