With brick-and-mortar retail businesses struggling, commercial landlords have a lot to worry about. A commercial landlord with a tenant who can no longer pay its rent faces a complicated eviction process.
Florida rental laws can impact a landlord’s remedies if the landlord doesn’t conduct the eviction in the right way. Therefore, to limit loss of revenue, a commercial landlord should know how to evict a tenant in Florida before a problem arises.
If a tenant has defaulted on its lease, here are seven things a landlord should know about Florida eviction laws:
1. Commercial and Residential Florida Rental Laws Are Different
The rules are different for residential and commercial tenants. Florida law has separate procedures and protections for residential tenants, so a landlord should take care to follow the right set of rules.
The limitations placed on commercial evictions are less stringent than those for residential evictions. While residential tenants have some additional protection built into the statutes, the rights of a commercial tenant depend largely on what is in the rental agreement.
Attorney’s fees for evictions of residential tenants are provided by law, but they are not for commercial tenants. The landlord can only collect attorney’s fees if the commercial lease agreement provides for them.
For that reason, commercial rental agreements should be very detailed. the landlord should cover every foreseeable scenario in the contract so that if the tenant defaults, the landlord’s remedies will be clear.
If a commercial tenant agrees to the terms, it will have a difficult time refusing to abide by those terms later.
2. Landlords Can Take Possession and Recover Damages
If the landlord has taken care to spell out what will happen in the event a tenant defaults, the landlord will follow the terms of the contract.
Usually, that will mean the landlord has three options. One of those is to take possession of the premises, then hold the tenant responsible for any unpaid rent.
Once the landlord retakes possession of the property, the property can be rented to another tenant. In fact, the landlord has to make a reasonable effort to re-let the property.
Landlords have to attempt to mitigate their damages by getting a new tenant into the space as soon as possible.
The landlord can then pursue the delinquent tenant for any past due rent and the rent that would have been due for the remaining term of the contract. However, any amount the new tenant pays during that term must be deducted from the total amount due.
3. Landlords Can Recover Damages Only
Florida eviction laws also allow a landlord to leave the tenant in the space and sue for rent either as it becomes due or once the contract term is up.
That option isn’t ideal and is rarely used. It allows a tenant who is in default to continue to benefit from the tenancy. If the default results from failure to pay rent, the landlord is denied income from the property and is unable to mitigate its damages.
4. Landlords Can Take Possession and Waive Future Rents
Florida eviction laws also allow a landlord to evict the tenant and forgo any rent that the contract would have allowed after the eviction occurs.
In this scenario, the landlord removes the tenant and is entitled to all rent that came due up until the removal. The landlord then waives any remaining rent that would have been due under the contract.
This usually occurs only if the landlord takes over the property for its own use, such as if the landlord turns the space into an office for itself.
5. Communications Between the Landlord and Tenant After Default Can Modify the Lease
Litigation is an expensive and time-consuming process that many landlords try to avoid by working things out with the tenant. However, in making those arrangements, the landlord has the potential to waive the default and change the terms of the lease.
For instance, consider a lease that requires the tenant to pay in full on the first day of the month. If the landlord allows a tenant to pay on the tenth for several months, it is possible that the lease has now been modified to allow all future payments on the tenth of the month.
When negotiating payment arrangements with tenants, the landlord should take care to clearly state that any modification is only for the instance under discussion. Other parts of the contract and any payments due afterward should be unaffected.
For that reason, all communications should be in writing.
6. Self-Help Eviction Is Not Allowed
When a landlord’s income suffers as a result of a defaulting tenant, the landlord might be tempted to remove a tenant without going through the legal process outlined in the Florida eviction laws.
Self-help eviction can take several forms. Changing the locks on the premises, ordering the power to be shut off, and removing the tenant’s property without a court order are all illegal.
A landlord who evicts a tenant without legal process can be liable to the tenant for attorney’s fees, court costs, and lost profits from the tenant’s business.
7. A Tenant Who Is Sued For Unpaid Rent Must Pay Rent During the Litigation
While eviction is pending, a commercial tenant must tender unpaid rent into the court’s registry while litigation is pending. Florida law will not allow a tenant to remain in the space during the litigation without paying rent.
If the tenant disputes the amount due, the court will then determine that amount.
Education Is Key
If a landlord abides by Florida rental laws, it can remove a tenant who has failed to comply with its lease and recover both possession of the property and any rent that the contract would otherwise have allowed.
If the landlord manages the eviction improperly, the landlord can be liable to the tenant for damages.
Understanding and complying with Florida eviction laws will help protect the landlord’s investment and limit the landlord’s losses from a defaulting tenant. Have questions about your commercial eviction? Contact McKenna, McCausland & Murphy, P. A. today.