landlord category

Tenant Considerations in Leasing Commercial Property

By: Kyle H. Jensen

Tenants determining whether commercial property is suitable for their business often consider the location and appearance of the property, the cost to rent the property, and other similar business factors. Unfortunately, many tenants, especially those new to leasing property, fail to consider numerous other issues that, while perhaps not directly related to the operation of their business, have a significant impact on their business.

One of the most important steps a tenant must take when considering whether to lease property is to read the entire lease provided by the landlord before signing. A tenant may trust the prospective landlord; however, what is agreed to verbally may not be enforceable unless it is put in writing and included in the lease. Therefore, it is important to review the lease to confirm the agreed upon terms, such as amount of rent, length of term, and size and location of the leased premises, are included in the lease.

It is also important to confirm there are no terms within the lease that are harmful to the tenant or its business. For example, landlords often include a provision in their lease that allows them to relocate the tenant. This may be acceptable to some tenants, but other tenants have chosen a property because it is uniquely suited to their purposes and relocation could significantly harm or even destroy their business. If there are any terms within the lease that are harmful to a tenant, the tenant must determine whether such terms can be removed or if the tenant must walk from the property.

The allocation of maintenance obligations between the tenant and landlord is another important term for tenants to consider. Landlords often place most if not all of the maintenance obligations on the tenant. This can be appropriate, especially in stand-alone buildings with one tenant; however, when there is shared space and multiple suites, such as in a shopping center, it is important that the landlord, at the very least, be obligated to maintain the foundations, exterior walls, roof, and any common spaces (such as parking lots), for the benefit of all the tenants on the property. Tenants should also consider whether the they want the landlord responsible for maintenance of expensive systems serving the property, such as the heating, ventilation and air- conditioning system.

Some questions a tenant should when reviewing a lease are: (i) who is responsible for payment of utilities to the property, (ii) what is the grace period for failing to pay rent on time and are there late fees, (iii) what are the landlord’s remedies if the tenant defaults, (iv) does the tenant’s obligation to pay rent abate if the premises is not tenantable, (v) does the lease authorize tenant’s intended use of the property, and (vi) does the lease provide for sufficient parking for the tenant’s use? In addition to the foregoing questions, tenants should consider whether they want to include any tenant favorable provisions such as: (i) an option to extend the term of the lease, (ii) an early termination right, or (iii) an option to lease additional space in the property when such space is available.

While it is important that tenants review their lease, it is also important that tenants carefully and thoroughly inspect the prospective property, especially if the tenant has broad maintenance obligations. Generally, a lease provides the tenant is taking the property in its “as-is” condition. Accordingly, it is important that tenants inspect the property to confirm it is in good condition and suitable for tenants needs. If there are any issues with the property, the tenant should require the landlord remedy such issues before the tenant takes possession of the property. Properly investigating the property before entering into the lease will protect the tenant from costly and unforeseen repairs or maintenance bills after taking possession of the property.

Kyle Jensen is an attorney with the law firm Clark, Campbell, Lancaster & Munson, P.A. in Lakeland. Questions can be submitted to thelaw@cclmlaw.com.

Real Estate

Distinguishing Land Use and Zoning

By Zachary H. Brown

When trying to develop property for certain uses, it is likely that a local government has placed restrictions on how that property may be developed. Local governments do this in order to take advantage of a more efficient use of resources, plan for future growth, and for the general safety and welfare of the public. Two of the most common forms of restrictions are known as land use and zoning. These two tools of regulation shape how a community evolves, but the two restrictions are commonly confused for one another. The following shall serve as an overview of what land use and zoning are, and how these two regulatory controls compare and contrast.

Land use is a shortened phrase for what professionals in planning refer to as the future land use map, which is typically located in a local government’s comprehensive plan. The land use map is one of the most important features contained in the comprehensive plan, which is regarded as the blueprint for growth and development for the community. Local governments, when drafting the future land use map and comprehensive plan, will take into account population projections, safety, morals, and the general welfare of the citizens in how best to plan future growth over a long-range planning horizon. The ultimate goal of the comprehensive plan and future land use map is usually to engage in sustainable development so that local governments avoid common issues like urban sprawl or inefficient us of utility and transportation resources. If a property owner wants to change the comprehensive plan and future land use map, he or she will typically go through a more stringent amendment process than a property owner seeking a zoning change.

Zoning is a tool used by local governments whereby the government will spell out the specific uses that are permitted on a property if it were to develop today. Zoning is not as much geared towards future growth like land use is (although it can have an impact on the future of the property), but is focused on how a piece of property may be able to contribute to the rest of the community, and whether development of that property is compatible with the surrounding uses. Zoning isn’t limited to just specific uses, but also a number of different restrictions that include location of utilities, setbacks from the streets or property lines, size and height of structures, etc. The Florida Legislature and Courts have established rights and obligations for property owners, impacted neighbors and local governments. Each local government has its own comprehensive plan and land development code, so each local government uses a different set of regulations when developing property. When trying to develop property, it is important to recognize what kind of land use and zoning designations apply to your property and what entitlements are necessary to accomplish your intended use of your property, and the restrictions that come along with those designations. It is wise to consult with experienced land use/zoning counsel to help you understand and navigate the process.

Zach Brown is an attorney with the law firm Clark, Campbell, Lancaster & Munson, P.A. in Lakeland. Questions can be submitted to thelaw@cclmlaw.com.

Estate Category

Crafting an Estate Plan to Include Disabled Family Members

By: Kevin R. Albaum

Without proper planning, leaving an inheritance (or making a gift) to a disabled family member can cause the disabled person to lose their means-based government benefits such as Supplemental Security Income (“SSI”) and/or Medicaid. SSI is a federal government program that pays monthly cash ($771.00 maximum per month in 2019) to blind or disabled adults and children. To qualify for SSI, an individual must have under $2,000.00 of countable assets and very limited income. Medicaid is a Federal and State funded health insurance program that helps people with limited assets and income pay for their medical costs. A large portion of the Medicaid programs in Florida require a person to be disabled to receive benefits.

It is common for an individual to name their spouse and/or children as beneficiaries in their Last Will and Testament (“Will”) or Trust. However, what if your spouse and/or child is disabled… does the estate plan still accomplish your goals if you were to die? Unless you have created some form of a special needs trust to protect your disabled family member’s inheritance, your death could result in an unexpected loss of SSI and/or Medicaid to them.

A special needs trust (“SNT”) is a specific type of trust that is designed for disabled beneficiaries. A SNT is written so cash, real property, and other assets are available for the disabled person’s benefit while still allowing the disabled person to receive their means-based government benefits such as SSI and/or Medicaid. There are a few different ways to create a special needs trust. A Testamentary Special Needs Trust is a trust that is created within your own Will or Trust that only goes into effect when the creator of the Will or Trust dies. You can also create and fund a SNT for a disabled beneficiary during your lifetime instead of waiting for the testamentary SNT to go into effect upon your death.

The trusts I have discussed so far in this article are Third-Party Special Needs Trusts. This means they are set up by someone other than the disabled person and funds can be contributed to the trust by other donors as well. A Third-Party SNT can be named as the beneficiary of life insurance policies and retirement accounts, own investment accounts, or real property. A Third- Party SNT’s assets which not used for the disabled beneficiary during their lifetime can pass to other non-disabled beneficiaries upon the death of the disabled beneficiary (free from Medicaid Recovery Liens as the property in a Third-Party SNT never belonged to the disabled beneficiary).

Unlike the trusts discussed in this article, First-Party Special Needs Trusts are set up and funded with the assets (or injury settlement proceeds) belonging to a disabled person and no other funds can be contributed to this type of trust by any other donors. First-Party Special Needs Trusts are subjected to Medicaid Recovery Liens to reimburse the state of Florida upon the death of the disable person. Special Needs Trusts are complex to draft, fund, and administer without professional guidance at the onset. Therefore, if a SNT would be a beneficial part of your estate plan it is recommended that you discuss with a qualified estate planning or elder law attorney.

Kevin Albaum is an attorney in the Elder Law Practice at Clark, Campbell, Lancaster & Munson, P.A. Questions can be submitted online to thelaw@cclmlaw.com.