An Overview of Limited Liability Companies

By: Zachary Brown

A limited liability company, commonly referred to as an “LLC”, is a type of business entity that has become popular in the United States because of some of the benefits it provides to business owners.  This article shall serve as an overview of the LLC, what it is, its advantages, and some disadvantages.  Hopefully this article will show why so business owners have elected to start a business using this type of entity.

An LLC is a business entity that is owned by its members and governed by an operating agreement.  A typical operating agreement will, at a minimum, determine how the LLC is organized, how it is to be managed, the financial distributions of the LLC, and how the LLC may be dissolved. 

An LLC shares advantageous traits of other business entities.  For example, LLCs share an advantageous trait with corporations – limited liability.  Limited liability means that a member’s liability is almost always limited to that member’s investment in the LLC.  The result of this, except in rare circumstances, is that a member’s personal assets are not at risk if the LLC is sued or goes bankrupt.

LLCs also share an advantageous trait with other types of entities in the way it elects to be taxed.  The LLC will elect how it wishes to be taxed for federal tax purposes.  Subject to the number of members, the LLC may elect to be taxed as a sole proprietorship, partnership, S corporation, or C corporation.  If the members elect to be taxed as a sole proprietorship, partnership, or S corporation, they are usually considered a “pass-through” entity.  That means the income will be taxed at the individual level on the member’s personal tax return.  This allows an LLC to avoid the double taxation incurred by a C-corporation (a common form of corporation) which are taxed first at the corporate level, then again at the individual level. 

In addition to certain tax benefits and limited liability, there several other advantages associated with forming an LLC.  The LLC is controlled by an operating agreement rather than bylaws, so typically there are no corporate minutes or resolutions, making it administratively more efficient and easier to manage.  When forming LLCs, there are usually no restrictions on the number or type of members allowed (i.e. an S corporation may be a member of an LLC).  Lastly, members have great flexibility in structuring the initial operating agreement governing the LLC.

There are a few notable drawbacks when selecting the LLC as a business entity.  Typically, it is more difficult to transfer a member’s ownership interest in comparison to a corporation.  If the LLC works with international companies, the LLC may be treated as a corporation in the countries where the LLC is doing business.  The annual filing fees for LLCs are more expensive than most other business entities.  Lastly, there are a number of legal complexities with LLCs, so legal issues involving tax, management, dispute resolution, and buyouts tend to arise if the operating agreement that governs the LLC is poorly drafted. 

An LLC is something that a prospective business owner will want to consider when forming a business.  As always, consulting with a local attorney is the best option to make sure this is the right business entity.

Real Estate

The Impact of Easements on Real Property

By: Kyle H. Jensen

A person interested in purchasing real property should always determine whether any easements burden or benefit the real property and the impact such easements have on the real property. An easement is a right held by a person to use another person’s real property, or portion thereof. Generally, easements provide non-owners with the right to have access over, run utilities through, or drain onto a portion of an owner’s real property. Easements can be granted to specific individuals or for the benefit of the owners of other real property not burdened by the easement. An easement burdens real property when the real property is subject to and restricted by the rights granted by the easement. An easement benefits real property when the real property and its owner are benefitted by and entitled to use the rights granted by the easement.

It is important for purchasers to determine if there are any easements that burden the real property they are interested in because such easements may restrict or even prohibit a purchaser’s intended use or development of the real property. If, for example, an access easement runs over a portion of the real property where the purchaser wants to construct a building, the purchaser would be prohibited from constructing such building because it would block the access easement rights granted to another party. There may be ways to work around the easement, such as relocating the easement area or constructing improvements that do not block the easement; however, a purchaser should always resolve these issues before closing to avoid purchasing real property that cannot be operated or developed for its intended use.

It is also important for prospective purchasers to determine if there are easements that benefit the real property they are interested in, or if they need to obtain a beneficial easement, especially when purchasing vacant property. If a purchaser is interested in real property that does not have access to a public road, then such purchaser must either confirm the real property is benefited by an access easement that provides the real property with sufficient access to a public road or require the seller to obtain an access easement. A purchaser should remember that even if the real property has access to a private road, there is no guaranty that the owner of the real property has the right to use such private road unless there is an easement that grants such rights. Furthermore, when purchasing vacant property, a purchaser should determine whether the real property has access to utilities, and, if not, require the seller to obtain utility easements from the adjacent real property to provide necessary access. Accordingly, purchasers should always carefully inspect all easements that burden or benefit the real property they intend to purchase. Failure to do so may result in purchasing real property that cannot be used or developed in the manner the purchaser intended.

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.

Estate Category

What is Probate?

by Kevin R. Albaum

Probate is the legal process through which a deceased person’s debts are paid and assets are distributed to their heirs or designated beneficiaries via a court process. This article will outline the options that are available to the deceased person’s heirs or beneficiaries. If a person has a validly executed Last Will and Testament (more commonly called a “Will”), they are able to name the individuals, trusts, and/or charities they choose to receive their assets when they die. This is known as dying “Testate”. If a person does not have a valid Will in place when they die, then Florida law dictates who their heirs are that will receive the deceased person’s assets. There are four (4) different types of probate administration available under Florida law when a person dies residing in Florida (or owning real property in Florida). These different probate administrations are as follows: Formal Administration, Summary Administration, Disposition without Administration and Ancillary Administration.

Formal Administration: This method is the most common type of probate administration and often the preferred method by lawyers and courts. The process starts by the filing of a petition for administration. The court will admit the Will to probate (if there is one) and will also determine the person entitled or preferred to administer the estate. This person is known as a “Personal Representative”. The Personal Representative is issued “Letters of Administration” which is a document that gives them authority to act on behalf of the deceased person, so they can handle their final affairs such as paying creditors, filing tax returns, and transferring assets. An inventory is prepared by the Personal Representative, debts are paid (if properly presented to the court), and remaining assets are eventually distributed to heirs or beneficiaries. The formal probate is a lengthy process which will typically take anywhere from 6 months to several years. A probate attorney should be consulted to conduct a formal administration to ensure proper legal procedures are followed.

Summary Administration: This is an abbreviated court process to transfer a deceased person’s assets to the proper heirs or beneficiaries. It is available when the value of an estate is under $75,000 (not counting the homestead property and other exempt assets in the valuation). Summary administration also requires that there are no creditors owed any funds by the deceased person and/or that the individual has been dead for at least two (2) years. A petition for summary administration (and a few other pleadings) are prepared and filed with the Court. If the Court believes that the estate qualifies for summary administration, then an order is entered directing the distribution of the assets to the proper heirs or beneficiaries. The order is then presented by the heir or beneficiary to those individuals and/or companies in possession of the assets to transfer and/or re-tile them to the new owner. However, no personal presentative is appointed to administer a summary administration which can be a logistical problem sometimes if a company holding funds of the deceased person is requiring to see a document called “Letters of Administration” (which are only issued in a formal or ancillary administration).

Disposition without Administration: This type of probate isn’t technically a form of probate because there is no administration that even occurs. This method is also sometimes known as a small estate disposition and is rarely used. Most of the time no attorney is involved in the process and an individual goes to the county courthouse with all required documentation to complete. This method can be utilized if the only items a person dies owning are certain assets exempt from the claims of creditors and non-exempt personal property when the value of which does not exceed the sum of the funeral expenses and necessary medical and hospital expenses of the last 60 days of the last illness before death. If that is the scenario, an interested party may be able to submit a disposition form along with a death certificate, paid funeral bill, paid receipts of all medical and hospital expenses of the last 60 days prior to death, and the original will (if one exists) to accomplish a disposition without administration.

Ancillary Administration: This form of probate administration is available if the deceased person owned property in Florida but was not a Florida resident. The most common time this is needed if an individual owns real property in Florida but resides in another state or country. An ancillary administration often will run parallel and concurrently to a primary probate administration taking place in the deceased person’s state of residence. The procedure follows the formal administration track and it is important to work with an experienced probate lawyer.

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.

DOCUMENTARY STAMP TAXES

By: Michael E. Workman, Esq.

If you have bought or sold real property in Florida, or if you have borrowed money in Florida, then you have probably seen references to the collection and payment of documentary stamps taxes. You may have heard them referred to as doc stamps or the stamp tax. Documentary stamps taxes have nothing to do with the preparation of the documents for a real estate closing or a loan, although you may have to pay a separate fee for such services. Instead, they are an excise tax on documents that is payable to the Florida Department of Revenue on documents executed and/or delivered in the State of Florida.

Section 201.01, Florida Statutes (2018), lists the documents that are generally subject to the documentary stamp tax. Common examples of documents subject to the stamp tax are deeds, promissory notes and mortgages. Deeds and other documents that transfer an interest in real property are taxed at a rate of 70 cents per $100, or any fraction thereof, of taxable consideration. Additionally, Miami-Dade County imposes an additional surtax on some transfers of real property. For purposes of calculating documentary stamp taxes on deeds, taxable consideration can include money paid or agreed to be paid, the discharge of an obligation, and the amount of any mortgage or other encumbrance on the real property. Promissory notes and mortgages are taxed at a rate of 35 cents per $100, or any fraction thereof, of the amount of the indebtedness indicated in the document; however, unsecured promissory notes are subject to a maximum documentary stamp tax of $2,450.

Prior to March 31, 1997, the Department of Revenue issued adhesive stamps that were affixed to documents in the appropriate amounts denoting that the documentary stamp taxes had been paid. When these adhesive stamps were used, they were initialed and dated so that they could not be used again. Now, the amount of the documentary stamp taxes is typically calculated and collected by the closing agent and remitted to the Clerk of Court with the deed or mortgage for recording. For unrecorded documents, documentary stamp taxes are remitted to the Department of Revenue using a form prescribed by the department. One of our experienced attorneys can help you with your doc stamp questions, as well as closing your transactions that trigger the payment of doc stamps.

Michael E. Workman is a shareholder with the law firm of Clark, Campbell, Lancaster & Munson, P.A., in Lakeland. Questions can be submitted to thelaw@cclmlaw.com

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.

landlord category

Landlord Remedies upon a Breach of a Residential Lease by Tenant

By: Zachary H. Brown

Landlords can be put into precarious situations upon a breach by a tenant. Normally the contract, or lease agreement, signed by the landlord and tenant will spell out what constitutes a breach, and what remedies may be available to the landlord in the event a lease is terminated. This article will serve as a basic overview of what remedies are available to landlords when structuring residential leases.

A landlord must be cautious to only exercise the remedies that are available to it upon termination of the lease. A lease is terminated when the tenant has breached, abandoned, or renounced the lease before the expiration of the term of the agreement. It is important to know how and when a lease is terminated, what the proper notice requirements are, and if the tenant has effectuated a cure. Lease terminations are strictly governed by the contract and Florida Statutes.

Once the lease has been terminated, the landlord usually has a variety of options it can pursue when deciding on a proper remedy. It is important to note that if the lease agreement dictates what path the landlord must take, then the landlord will be bound to that contractual provision. Common landlord remedies are: (a) treat the lease as terminated and retake possession of the dwelling unit, thereby terminating any further liability of the tenant; (b) retake possession of the dwelling unit for the account of the tenant, holding the tenant liable for the difference between the rent stipulated to be paid under the lease agreement and what the landlord is able to recover from reletting the premises; (c) do nothing and hold the tenant liable as the rent comes due; or, (d) charge liquidated damages or an early termination fee to the tenant, as provided by a provision in the lease agreement.

If the landlord chooses to retake possession of the dwelling unit for the account of the tenant (option (b) above), the landlord has a duty to exercise good faith when he or she attempts to relet the premises. Any rent the landlord receives after reletting the premises will be deducted from the balance of rent due from the tenant.

Landlords also must be careful not to take any action that may be considered a waiver of one of the available remedies. Florida courts have held that a landlord’s failure to exercise a remedy option available to it under a lease will constitute a waiver. For example, this is most commonly seen when a landlord accepts rent payments from a tenant after a lease has already been terminated.

Lastly, by statute in any civil action to enforce the provisions of a lease, Florida law dictates that the party in whose favor a judgment or decree has been rendered may recover reasonable attorney’s fees and court costs from the non-prevailing party. So, if a landlord is forced to take a tenant to court over the issue of a proper remedy, the landlord will recover attorney’s fees if it is successful in its lawsuit.

Electing a proper remedy for landlords can be a complicated issue. If you’re a landlord and have experienced what you think may be a tenant breach, or outright termination of a lease, it is probably best to consult with a local attorney about the best option you can pursue moving forward.

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.

Real Estate

Eminent Domain and Just Compensation

By: Zachary H. Brown

How does government acquire the land it uses to install utilities or construct new roads? It exercises an authority that is called eminent domain. Eminent domain allows the government to take private property if it is for a “public use.” The phrase “public use” is contentious since, depending on who is defining it, could greatly limit or increase the government’s authority to take private property. This article gives some background on what eminent domain is, and how property owners can either fight it or at least be fully compensated for it.

The Fifth Amendment to the United States Constitution, in part, reads that no person shall be “deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.” Courts have usually deferred to what the legislature defines as “public use” rather than deciding for themselves. A generic definition of a public use is that the property does not have to be used by the public, but rather the property must be taken for a public purpose. Courts have ruled that this public purpose can be served through a governmental department, or even a private enterprise, and still satisfy the “public use” requirement.

Governments use eminent domain for a number of different reasons. Some are obvious, but others are somewhat surprising. Eminent domain is most commonly used when governments have to do things such as acquire land for roads, or build power lines, where the government is providing an important function to the local community. However, government will, in some cases, acquire downtrodden or “blighted” areas of the community and attempt to redevelop them in order to increase the economic and cultural output of those areas. Governments can do this because positive economic development is a good for the public, therefore the taking of private property is done for a public purpose.

As mentioned, government can only take property using eminent domain when it gives the property owner just compensation. What exactly is just compensation? Most people would say the fair market value of whatever land the government is trying to take. However, the question can be more difficult than that. What if the property has structures on it, connects one piece of the property owner’s land to another, or the taking negatively impacts the use of the remainder of their property? Florida law dictates that the answer to those questions is something that is decided by  a jury selected from citizens in the local community.

If a property owner feels that the compensation offered was not just, challenging the government can get expensive. That’s why the Florida Legislature has enacted a law that states the property owner has a right to reasonable attorney’s fees and appropriate expert costs for eminent domain proceedings in the Circuit Court. There are limits on this right, and courts have held that this right only extends to fees that are “incurred in the defense” of eminent domain proceedings. It is important to consult with an attorney before deciding if an eminent domain case is worth fighting in court.

Eminent domain is a powerful, but very necessary, tool the government uses to provide important functions for its constituents. However, it can be an infringement on private property owner’s rights unlike anything else the government does. If you become aware of or receive notice of an eminent domain action that may impact your property, it is important to consult with a local attorney about the rights and remedies that you may have.

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.

Retroactive Medicaid in Florida Has Been Eliminated: Is This Good or Bad?

By: Kevin R. Albaum, Esq.
Clark, Campbell, Lancaster & Munson, P.A.

Medicaid is a joint federal and state health insurance program that will help many people with limited income and resources pay for their health care. For those with disabilities or illness and no funds available to pay for care, Medicaid health insurance is often the only option available to pay for their medical services.

Since 1972, Retroactive Medicaid Coverage (“RME”) has been available for individuals to receive Medicaid coverage up to three (3) months before they have even submitted an application for Medicaid benefits. The goal of RME was to protect people that were eligible for Medicaid benefits but did not know to apply for assistance until after they had received medical services or because a sudden injury or illness prevented them from applying timely for assistance. RME meant that individuals (that truly had minimal assets or income) who ended up in a health crisis would be able to receive benefits to pay providers for care they had received. However, Florida RME is no more.

The State of Florida requested and received authority from the Centers for Medicare and Medicaid Services to eliminate RME. Effective February 1, 2019 Florida has eliminated RME for most Medicaid programs in the state. RME will only remain in effect for pregnant women or children under age 21. However, everyone else that may need coverage (such as an elderly woman in a nursing home or a 30-year-old in a catastrophic car accident) will not have this option to pay for their medical services. To receive Medicaid benefits, a person must now file for benefits in the month they received medical services.

The goal of cutting RME is to save the state and federal governments substantial funds in their annual budget appropriations. It is estimated that cutting RME in Florida will save the state and federal government footing the bill for Medicaid approximately $98 million per year. However, the government’s savings will result in medical providers almost certainly not receiving any private pay or insurance payment for many services they are providing to these people (as people who need Medicaid have very limited income or resources). In turn, this may lead to higher future costs for medical services to those of us that are able to pay for our medical services.

As an elder law attorney, I often come across seniors (sometimes incapacitated seniors) with minimal or no assets that are not even aware that they need Medicaid to pay for their nursing home care. They might not find out until after their primary insurance benefits (Medicare and/or Tricare) have been fully exhausted and when insurance companies refuse to pay for any further skilled nursing care. RME is vital for these seniors to avoid discharge from the nursing home for non-payment. Only time will tell if the elimination of RME was a good thing that saved our state and federal governments (and us as taxpayers) substantial money or a bad thing that financially harmed our medical service providers (with large accounts receivable from people that cannot afford to pay their medical bills) and those people who already had no means to pay for their own medical services.

It is more imperative now than ever to have a basic understanding of Medicaid programs for senior care so that family can act quickly to gain eligibility for these benefits if they are ever needed in the future. Elder law attorneys typically specialize in this area of the law and can assist in proactive planning to pay for senior care in the future.

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

landlord category

PROTECTING LANDLORDS FROM LIENS FOR TENANT IMPROVEMENTS

By Michael E. Workman, Esq.
Clark, Campbell, Lancaster & Munson, P.A.

Often a tenant will want to make improvements to the premises that it is leasing from a landlord, and sometimes the lease agreement will require the tenant to make improvements. When the tenant contracts for the construction of such improvements, construction liens can attach to the tenant’s leasehold interest in the leased premises pursuant to Florida’s Construction Lien Law. However, the Construction Lien Law also provides a way for the landlord to protect its fee simple interest in the leased premises from the tenant’s construction liens.

A lot in a mobile home park leased to the owner of a mobile home will not be subject to tenant liens. In other instances, the landlord’s interest in the leased premises will not be subject to construction liens for the tenant’s improvements if: a) the lease agreement expressly states that the landlord’s interest shall not be subject to liens for tenant improvements; and b) the lease agreement or a memorandum of the lease that contains the express language prohibiting liens for tenant improvements is recorded in the public records where the leased premises are located prior to the recording of the Notice of Commencement for the tenant improvements.

If the lease agreement expressly states that the landlord’s interest shall not be subject to liens for tenant improvements, then the tenant is required to notify its contractor of the provisions in the lease agreement. The knowing or willful failure of the tenant to provide such notice to the contractor makes the contract between the tenant and contractor voidable at the contractor’s option. A tenant’s contractor may make written demand upon the landlord for a copy of the lease provisions prohibiting liens for tenant improvements, and the copy provided by the landlord must be verified in writing as being true under penalties of perjury.

It is critical that a landlord strictly comply with the provisions of the Construction Lien Law to protect the landlord’s interest in the leased premises from tenant liens. Negotiating lease terms can be a complicated process, and an experienced real estate attorney can help guide you along the way.

Michael E. Workman is a shareholder with the law firm of Clark, Campbell, Lancaster & Munson, P.A., in Lakeland. Questions can be submitted to thelaw@cclmlaw.com

landlord category

Landlord Considerations in Leasing Commercial Property

By: Kyle Jensen, Esq.
Clark, Campbell, Lancaster & Munson, P.A

A commercial lease agreement is an agreement between an owner of commercial real property, known as the landlord, and a third-party desiring to rent such commercial property, known as the tenant. The lease agreement provides the tenant with the right to use the property, sets forth the terms and conditions of such use, and imposes certain rights and obligations on both the landlord and the tenant. Accordingly, it is in the best interest of the landlord to ensure the lease agreement accurately and unambiguously sets forth the terms, conditions, rights and obligations the landlord desires to impose and properly protects the rights and interests of the landlord.

When preparing a lease agreement, a landlord should confirm its lease agreement complies with all legal requirements established by Florida law to ensure the lease agreement is enforceable. For example, any lease agreement in excess of one year must be in writing and must be signed before 2 subscribing witnesses.

A lease agreement should clearly define the beginning and end of the lease term and provide the landlord with sufficient remedies if the tenant refuses to vacate the leased premises once the lease term is over. The lease agreement should also set forth the base rent obligations a tenant must pay to occupy the premises and include any additional rent obligations the landlord desires to impose upon the tenant, such as payment for (i) the utilities the tenant consumes, (ii) a portion or all of the property taxes assessed against the landlord’s property, (iii) a portion of the costs to maintain the common areas (areas used by all tenants) of the landlord’s property, and (iv) janitorial and waste collection services for the premises. It is also important that the rent provisions of the lease agreement impose upon the Tenant the obligation to pay all sales tax that may be due on the rent paid under the lease agreement.

Maintenance obligations are another important item a landlord must consider. Generally, but not always, a landlord will maintain the exterior, foundation, and roof of the building the tenant is occupying. The landlord will want to impose most, if not all, other maintenance obligations on the tenant. A landlord may also want to require the tenant enter into a maintenance agreement for maintenance of certain items in the premises, such as the HVAC unit, to ensure the tenant is properly fulfilling its maintenance obligations.

Lastly, a landlord should ensure the lease agreement clearly and broadly defines what actions, or failure to act, will cause a breach of the lease agreement, such as failure to pay rent, and provides the landlord with sufficient remedies upon such breach. For example, unless otherwise provided in the lease agreement, a landlord is only entitled to collect rent as such rent becomes due. Accordingly, a landlord will want the lease agreement to provide that if the tenant breaches the lease agreement, then the landlord can accelerate and collect all future rent due under the lease agreement. Such a provision allows the landlord to, upon the tenant’s breach, immediately collect all future rent due under the lease agreement, subject to present value calculations and reimbursement obligations if the premises is re-let, without waiting each month for such rent to become due.

The above items are only a few of the numerous matters a landlord should consider when preparing a lease agreement. Furthermore, the content of the lease agreement will depend on, among other things, the use, condition, and location of the commercial property and the long-term goals of the landlord. Therefore, a landlord should seek the services of an experienced commercial real estate attorney to assist with the preparation of the lease agreement.

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.