Tips to Avoid Damages in Commercial Lease Disputes

Commercial landlords may encounter situations where a tenant’s rent payment is due and there is no sign of the check. Weeks may pass without any indication of whether rent will be paid. Unfortunately, scenarios like this are not uncommon in the commercial real estate world, particularly during down markets like we’ve experienced over the last several years. The inability to pay may be voluntary, in protest to the landlord’s alleged breach of contract, or involuntary, as a result of a business loss or even bankruptcy. The important aspect is whether a breach of the lease agreement has occurred.

There are careful considerations landlords should take into account to avoid any legal implications for property owners if the matter is not handled correctly. If you are involved in a tenant dispute or have what appears to be an abandoned premises, it can be a serious matter, and taking the wrong steps can expose you to damages and costs. First and foremost, you should speak to an attorney who can provide guidance as to the appropriate steps you should take.

A properly executed lease should provide the landlord the right to seek damages if a tenant fails to properly vacate or leaves behind unwanted items such as equipment, materials or furniture. Under Florida law, if a commercial tenant fails to pay rent, landlords are required to give the tenant at least three days’ notice before beginning eviction proceedings. With respect to unwanted items left behind, the landlord typically has the right to collect from the tenant the cost of removing the items. There is an obligation of the landlord to properly notify the tenant about personal property left behind. The landlord must contact the tenant at the address they have on file to inform them of the unwanted property. It is important to note that a landlord is not allowed to physically remove the tenant’s property or lock them out until they have assistance from police officials by means of a Court Order and Writ of Possession.

To summarize, below are the key steps a landlord should consider when evicting a tenant:

• Three-day notice: A landlord must provide to the tenant, in writing, notice that he or she has three days to comply with the lease or vacate. Such notice must comply with the lease notice and applicable Florida statute notice requirements.
• Complaint filed and served: If a tenant fails to respond to a three-day notice, the landlord can proceed with filing a complaint for commercial eviction with a local court and serve tenant with a summons accordingly.
• Litigation or default judgment: The tenant may challenge the allegations in the complaint. If there is no response to the complaint, the landlord can obtain a default judgment.
• Writ of possession: If the landlord wins in court or obtains a default judgment, a writ of possession will be issued, which allows the sheriff to remove the tenant from the premises, including any items left behind.

Avoiding mistakes under default

A default does not necessarily mean a lease is being terminated. In a case where a default has occurred under a commercial lease, a landlord should follow certain guidelines to prevent any missteps. In addition to having a proper lease in place, landlords should follow the lease when exercising remedies and mitigate damages after a tenant default.

While it may seem obvious that you should abide by the lease, failure to follow the default and remedy process as outlined in the lease could prevent the eviction altogether. Or worse, it may lead to a claim by the tenant for a wrongful eviction. This type of claim could cause costly damages to be incurred by the landlord.

Following the default process in a proper lease allows the landlord to exercise its remedies, yet a landlord must also mitigate its damages. This minimization may seem unfair, but the law requires the landlord lessen damages after a tenant default. One example of mitigation is the duty to re-lease the premises after a tenant abandons the property. A lease should offer flexibility such as allowing the landlord to re-let the property at fair market value, even if higher than rent specified in the lease and for a shorter or longer term to meet financial requirements.

For more information on the rights and duties of landlords and tenants in Florida, click here.

If you are weighing the options under a commercial lease default and wish to get input from an experienced attorney, McIntyre Thanasides Bringgold Elliott Grimaldi & Guito P.A. can help. Contact attorney Blake Bringgold today for a consultation.

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