In Florida, there are 3 basic types of commercial tenancy agreements. The leases are organized around two methods of rent calculation, namely gross and net. A net lease has a smaller base rent and the tenant pays all other expenses. A gross lease means the tenant pays a lump sum for rent and the landlord uses that to cover expenses.
Navigating a commercial tenancy agreement can be a daunting prospect. Below, we explore the most important ins and outs.
A Landlord’s Duties and Obligations
It’s the landlord’s duty to deliver possession of the property to the tenant. This should be done on the date stated in the commercial tenancy agreement.
According to the duty of quiet enjoyment, the landlord is the title owner of the property and there are to be no disturbances in the tenant’s possession of the property.
Landlords are typically not liable for any injuries that occur from the tenant’s activities on the premises and the tenant is granted full use of the commercial property. It’s up to the tenant to maintain safe property conditions.
There are a few situations where a landlord may be liable for the cause of an injury if the incident is a law violation. For example, if a defect on the property existed when the agreement was entered into.
A Tenant’s Duties and Obligations
Naturally, the tenant’s number one responsibility is to pay rent. It’s also up to tenants to keep the property in the same condition as it was when leased.
Tenants are also obliged to return possession of the commercial property at the end of the agreement term unless the agreement renews automatically or by agreement with the landlord.
You’ll find the principle of “let the buyer beware” in Florida commercial tenancy agreements. This means tenants must inspect the property before signing on the dotted line. Landlords can’t be held responsible for any defects that existed at the time of the agreement if the tenant doesn’t comply with their duty to inspect the property before signing a lease.
There is an exception, and that comes into play when a commercial lease involves a brand-new building. In this case, the landlord has a duty of implied fitness and there is an implied warranty that the building is appropriate for its intended use. If either the tenant or landlord breaches the implied warranty, either party is permitted to abandon the premises or defend an unpaid rent claim based on the premise’s unfitness.
Landlords Can Take Possession to Recover Damages
It’s important for landlords to clearly state what will happen should the tenant default. The landlord can then follow the terms of the agreement accordingly.
In Florida, landlords have several options. They can take possession of the property and hold the tenant responsible for unpaid rent. In this case, the landlord is entitled to rent the property to someone else to recover costs as soon as possible. In fact, landlords should re-let the premises as early on as they can.
The landlord may then reach out to the defaulted tenant for past due rent and rent that may have been due for the remainder of the commercial tenancy agreement. But whatever new tenants pay during that term should be deducted from the total amount owed.
Commercial Tenancy Agreements Don’t Allow for Self-Help Eviction
If a landlord’s income suffers due to a defaulting tenant, it’s tempting to want to remove the tenant without going through the appropriate channels and Florida eviction laws.
Self-help eviction comes in a couple of different forms, including ordering the power to be cut off, changing locks on the premises and removing the tenant’s property without an appropriate court order. All of these are illegal.
If a landlord does evict a tenant illegally, they can be held liable for the tenant’s legal fees, court costs and even any lost profits from the tenant’s business.
Whether you’re a tenant or a landlord, make sure you have a legal professional on the side. He or she can help you go through your commercial tenancy agreement and to assist should anything go wrong.
Book your consultation at Principal Law today and make sure you’re on the right side of commercial law in Florida.
Image: Pexels
