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

Mike Workman

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