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 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.

Dealing with a Problem Tenant or Unwelcome House Guest

By:  J. Matthew Kelly, Esq.
Clark, Campbell, Lancaster & Munson, P.A.

Are you dealing with a problem tenant or an unwelcome house guest? If so, Florida law provides three mechanisms for removing an individual from possession of real property – eviction, unlawful detainer, and ejectment.

Eviction

The most common way to remove an individual from possession of real property is an eviction proceeding. An eviction proceeding in Florida is governed by Chapter 83 of the Florida Statutes. An eviction is the appropriate proceeding to remove an individual who leased the premises but has violated the lease or has failed to pay rent.

The most common eviction example is against a tenant who has failed to pay rent. In a situation where a tenant has failed to pay rent, the first step in the eviction proceeding is to provide the tenant with a three-day notice. This is a document designed to inform the tenant that he has failed to pay rent and is indebted to the landlord. The three-day notice has certain legal requirements as to its content and method of delivery. If the three-day notice is defective in content or delivery it can significantly delay any eviction proceeding.

Once a three-day notice has been delivered, the tenant has three days (excluding weekends and legal holidays) to pay the demanded rent or to vacate the premises. If the tenant fails to pay the rent, or vacate the premises, the landlord may then file an eviction complaint with the court. Once a tenant is served with an eviction complaint, the tenant has five days to answer the complaint. If the tenant fails to answer the complaint the landlord can seek a default judgment; which would avoid the need for a trial. If a default occurs, the landlord can move for a final judgment and writ of possession to restore them to possession of the property.

If a tenant chooses to contest or defend against the eviction proceeding for grounds other than that the rent has been paid, the tenant is required to pay into the registry of the court alleged rent owed as described in the complaint. If the tenant fails to pay the alleged rent owed, or fails to challenge the rent amount, the tenant waives his defenses and the landlord is entitled to a default judgment in the eviction proceeding and a writ of possession to restore the landlord to possession of the property. A successful landlord is entitled to recover his reasonable attorney’s fees expended in the eviction process.

 

Unlawful Detainer

An unlawful detainer action is governed by Chapter 82 of the Florida Statutes. An unlawful detainer action can be used to remove an individual who is residing in a home, does not have a legal right to the home, and where there was never a lease agreement. The person bringing the unlawful detainer action must have a legal right to the residence or property; that is to say, the person bringing the action must own the property or be the legal tenant of the property.

The most common uses of this type of action involve a significant other who has moved in but a break-up occurs and the significant other refuses to leave, removal of a troubled family member who was invited in to get back on their feet but fails to obey house rules, removal of a friend who was once a welcome guest but has now refused to leave, or even squatters that have moved into a residence without permission.

Unlike an eviction, an action for unlawful detainer does not require specific notices prior to being able to file the action with the court. Like an eviction, an action for unlawful detainer requires the person you are attempting to remove to respond in five days.

The important thing to remember with an unlawful detainer action is that there must not be a landlord-tenant relationship or an agreement for payment of rent. If this kind of relationship exists an eviction proceeding is the proper mechanism for removal.

 

Ejectment

An ejectment action is governed by Chapter 66 of the Florida Statutes. An ejectment action is most commonly used in a similar manner to an unlawful detainer action. Like an unlawful detainer action, ejectment is commonly aimed at girlfriends, boyfriends, family members, friends, or other individuals who have overstayed their welcome where there is no landlord-tenant relationship.

There are two main distinctions between an ejectment action and unlawful detainer action. Ejectment actions are not summary proceedings, meaning ejectment may take longer to reach the goal of removal compared to an eviction or unlawful detainer action. Secondly, an ejectment is the appropriate action when the individual you are attempting to remove may claim some form of entitlement to the property. An example of this would be where the person you are attempting to remove claims some form of ownership of the property.

Florida law provides numerous mechanisms for removal of problem tenants or unwelcome house guests. It can often be difficult to determine which type of action is best for your situation. It is also easy to hit roadblocks throughout the removal process that can significantly delay any removal. If you are faced with taking legal action to remove an individual from your property I recommend hiring an experienced attorney to guide the process.

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

Occupants Who Don’t Sign the Lease Do So at Their Own Peril

By: Clark, Campbell, Lancaster & Munson, P.A.

A: When entering into a residential lease agreement, tenants may consider having one or more occupants not sign the lease. This issue often arises because tenants think it is unnecessary for all of them to sign, some tenants do not anticipate remaining in the residence for the entire lease term, or because a tenant’s credit may impact his or her ability to be approved. Tenants should consider the legal ramifications and potential costs of signing or not signing the lease.

Each tenant who signs the lease is bound by the terms of the lease and is liable for all rent due under the lease. Tenants who occupy the residence but have not signed the lease may not, depending on the lease terms, be liable for rent. If a non-signing tenant refuses to contribute, the signing tenant is still responsible for the rent, and the landlord is likely to pursue the signing tenant, and not the non-signing tenant, for that rent.

If the lease does not specifically provide that the non-signing tenants may reside in the residence, those tenants may be staying in the residence illegally. If the illegal tenants fail to leave upon the landlord’s demand, the landlord typically has the right to terminate the lease and evict all tenants, regardless of whether they have paid rent.

Finally, a non-signing tenant’s rights to remain in the residence are subject to the rights of the signing tenant. Depending on the lease or other agreements between the parties, the signing tenant may be able to evict the non-signing tenant. Non-signing tenants should consider his or her rights under the lease and whether it would be prudent to enter into a separate agreement with the signing tenant that sets forth the terms upon which the non-signing tenant can stay in the residence.

The February 26th edition of “The Law” will cover Florida dog bite laws and other pet ownership liability issues.