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With record inflation and fears of an economic recession causing financial problems for all types of businesses, commercial lease evictions are on the rise. While commercial tenants do not enjoy all of the same statutory protections as residential tenants in Florida, the Florida Statutes still impose certain restrictions on when commercial lessors can evict (or “remove”) tenants that are in default. Here is an overview of what Florida landlords (and tenants) need to know about commercial lease evictions:
Restrictions on Commercial Lease Evictions Under Florida Law
Many commercial lessors are surprised to learn that Florida law restricts their ability to evict tenants that are in default. While many lawyers draft their clients’ commercial lease agreements to reflect Florida’s statutory restrictions, before evicting their tenants, commercial lessors should ensure that they are complying with all applicable statutory requirements—as prematurely initiating eviction proceedings is almost certain to lead to litigation.
The statutory requirements for commercial lease evictions are set forth in Section 83.20 of the Florida Statutes. Specifically, Section 83.20 establishes mandatory notice periods with which commercial lessors must comply before a lessee “may be removed from the premises”:
- Commercial Lease Rent Defaults – For rent defaults, commercial lessors must provide three days’ written notice and an opportunity to cure. Regardless of the lease’s notice provisions, the lessor must serve this notice “by delivery of a true copy thereof, or, if the tenant is absent from the rented premises, by leaving a copy thereof at such place.”
- Failure to Cure Material Breaches (Other Than Nonpayment of Rent) – When a commercial lessor seeks to evict a tenant for failure to cure any material breach other than nonpayment of rent, the lessor must provide 15 days’ notice and opportunity to cure. In this scenario, the lessor may provide notice in compliance with the lease’s notice provisions; or, in the absence of such provisions, by mail, hand delivery, or posting at the leased premises if the tenant is absent.
The only circumstance in which a statutory time restriction does not apply to a commercial lessor’s right to evict is when a lessee holds over following the expiration of the parties’ agreed lease term. In this scenario, Section 83.20 provides that the lessor may initiate eviction proceedings immediately.
The written notice requirements in Section 83.20 establish the minimum notice periods for commercial lease evictions in Florida. If a commercial lease establishes a longer cure period (i.e., a seven-day cure period for nonpayment of rent), the lessor must still comply with the terms of the lease prior to evicting.
Common Grounds for Commercial Lease Evictions
Commercial lessors can pursue evictions under various circumstances. As referenced in Section 83.20, evictions typically fall into one of three categories: (i) evictions for holding over post-expiration; (ii) evictions for non-payment of rent; and (iii) evictions for failure to cure other material breaches. Some examples of common grounds for lease evictions that fall into this third category include:
- Nonpayment of common area maintenance (CAM) charges and other lessee obligations
- Noncompliance with lease covenants and restrictions
- Significant damage to the leased premises
- Use of the leased premises for illegal activities
- Failure to maintain required insurance coverage
Commercial Lease Evictions Often Lead to Litigation
To initiate eviction proceedings, commercial lessors in Florida must file an unlawful detainer complaint in the appropriate state court. The tenant then has the right to respond and raise any objections to the lessor’s stated grounds for removal. As a result—and as you might expect—commercial lease eviction proceedings often lead to litigation between the lessor and lessee.
Commercial lessors can mitigate their risk of eviction litigation by planning ahead. By strictly complying with the terms of the lease and the requirements of Section 83.20 and by anticipating any issues the tenant may raise in court, lessors can avoid unnecessary litigation in many cases. However, tenants may still seek to use the eviction process strategically to negotiate a settlement that limits their liability. Both parties must carefully consider their opportunities and risks, and they must pursue the eviction litigation strategies that make the most sense in light of the realities at hand.
What Does Your Company’s Lease Say About Default, Cure Rights and Removal?
If your company needs to evict a commercial tenant, or if you are a commercial tenant facing removal, what should you do? At this point, your next step is to review the relevant terms of your lease. Some of the key issues that require consideration include:
- Does the breach at issue constitute a “material” breach? Aside from lease expiration and nonpayment of rent, Florida law only allows for eviction in the case of a “material” breach (for non-material breaches, lessors typically must pursue other remedies). Does your lease designate the breach at issue as a material breach? If not, is a judge likely to consider the breach material in light of the relevant terms of the lease and the circumstances involved?
- Does the lease provide a right to cure? If the lease provides a right to cure, then the lessor must afford the lessee its full opportunity to come into compliance. Note that while commercial leases often provide an opportunity to cure some breaches, they will often specify that certain breaches constitute grounds for immediate termination.
- Does the lease specify a notice period prior to removal? If a commercial lease includes a provision requiring greater notice than that required under Section 83.20, then the lessor must comply with the lease’s extended notice requirement. Likewise, if a lease includes provisions requiring mediation, arbitration or other intermediate action before the lessor can initiate eviction proceedings, the lessor must generally comply with these requirements as well.