Priority of Tenant Payments

Three Day Notices to Pay or Vacate are legal notices that Florida Statute (FS), section 83.56(3) requires landlords to delver to tenants who have failed to pay rent before they can file an eviction action. That statute states,

If the tenant fails to pay rent when due and the default continues for 3 days, excluding Saturday, Sunday, and legal holidays, after delivery of written demand by the landlord for payment of the rent or possession of the premises, the landlord may terminate the rental agreement. Legal holidays for the purpose of this section shall be court-observed holidays only. The 3-day notice shall contain a statement in substantially the following form:

You are hereby notified that you are indebted to me in the sum of   dollars for the rent and use of the premises   (address of leased premises, including county)  , Florida, now occupied by you and that I demand payment of the rent or possession of the premises within 3 days (excluding Saturday, Sunday, and legal holidays) from the date of delivery of this notice, to wit: on or before the   day of  ,   (year)  .

  (landlord’s name, address and phone number)

Florida courts have interpreted this provision to require landlords to include only rent in the 3 day notice demand and not other monies owed, unless those monies are deemed “additional rent” in the lease. If the lease does not define other monies owed as “additional rent” and the landlord includes them in the 3 day notice to pay or vacate, this could potentially serve as a defense to the eviction. So, landlords must be cautious about this rule and not include monies that are not additional rent in the 3 day notice.

However, if a lease provides that a landlord shall apply payments towards outstanding balances first and then towards rent, the landlord may be able to avoid a defective legal notice. Here is an illustration of how this lease provision works in practice.

Let’s assume rent is $1,000.00, the lease provides for a $50.00 late fee if rent is paid after the first of the month, and the tenant owes the landlord a $25.00 water utility charge. Let’s also assume those fees are not deemed “additional rent” in the lease. January 1 happens, and the tenant fails to timely pay rent but instead pays late on January 5 in the amount of $1,000.00.

In this case scenario, the landlord could apply the $1,000.00 towards the $50.00 late fee and $25.00 water utility charge first and then apply the balance of $925 towards January’s rent. This would, of course, leave a balance of $75.00 for January’s rent. The landlord would be able to serve a 3 day notice to pay or vacate demanding the $75.00 January rent balance, even though the lease does not define the late fee and water utility charge as “additional rent”, because the lease defines the order of payment to be applied to outstanding balances first, and then towards rent.

Here is an example of such a lease provision,

All payments made shall first be applied to any outstanding balances of any kind, including late charges or any other charges due under this lease, whether or not they are deemed “additional rent”, and then towards outstanding rent.

The landlord simply needs to be able to account for all monies owed, paid and applied in case he has filed an eviction and the tenant challenges the legal sufficiency of the 3 day notice. The money demanded in the 3 day notice must be correct in terms of what the tenant actually owes in rent. Failure to calculate the rent correctly could serve as a defense for the tenant.