Florida’s Governor signs into law HB 469, which streamlines the execution of Florida real property leases by eliminating all statutory witness requirements.
On June 27, 2020, Florida Governor Ron DeSantis signed into law House Bill 469 (HB 469), which amends Section 689.01 of the Florida Statutes, eliminating the requirement for two subscribing witnesses to validate a landlord’s execution of a lease with a term exceeding one year. The new law took effect on July 1, 2020.
This Article discusses the issues a landlord confronts when its commercial tenant files for bankruptcy protection. It also considers pre- and post-bankruptcy options available to a landlord to mitigate the impact of a tenant’s bankruptcy filing.
Section 365 of the Bankruptcy Code allows commercial tenants, as debtors, to take actions on their leases that greatly impact landlords. Subject to court approval and certain limitations, a debtor-tenant can use its reasonable business judgment to reject burdensome and unfavorable leases and assume leases that are beneficial to the debtor-tenant’s bankruptcy estate (11 U.S.C. § 365).
Section 365 of the Bankruptcy Code governs assuming, assuming and assigning, and rejecting commercial leases. These provisions serve to:
Further the federal bankruptcy goal of rehabilitating troubled companies while balancing the interests of all parties.
Maximize the value of the debtor-tenant’s estate (which includes the tenant’s interest in unexpired leases).
Provide some protection to non-debtor landlords.
In weighing the competing interests of the parties, Congress attempted to strike a balance, but the result is a system that favors the interests of the debtor-tenant (and its creditors) and leaves the landlord at a legal and practical disadvantage.
Q. IF A TENANT BREACHES THE LEASE:
In commercial leases in Florida, if a tenant fails to pay rent when due, a landlord has a right to obtain possession of the premises (§ 83.05(1), Fla. Stat.). A landlord has the statutory right to demand double the monthly rent when a tenant fails to give up possession of the premises at the end of the tenant’s lease (§ 83.06, Fla. Stat.).
The landlord does not have the right to accelerate rent unless the lease specifically includes an acceleration of rent provision.
Q. ARE THERE ANY LEGAL RESTRICTIONS ON:
How much rent the landlord may charge?
Whether certain operating expenses (or other additional rent) may be passed through to the tenant?
Maximum Rent
Under Florida law, there are no restrictions on the rent a landlord may charge on commercial leases.
Operating Expenses
There is no limit to the operating expenses that may be passed through to the tenant, but almost all pass-through amounts are considered additional rent and are subject to Florida sales tax.
Q. FOR SECURITY DEPOSITS:
Must the landlord maintain security deposits in a separate bank account for each tenant?
Must a security deposit be in an interest bearing account?
Must the landlord pay all interest earned to the tenant or can the landlord retain a percentage of the interest earned as an administrative fee?
Q. DESCRIBE ANY LAWS ALLOWING THE TENANT TO ASSIGN ITS LEASE, OR SUBLEASE ITS PREMISES, WITHOUT THE LANDLORD’S CONSENT. IS A REASONABLENESS STANDARD IMPLIED WHEN THE LEASE IS SILENT ON WHETHER THE LANDLORD’S CONSENT TO AN ASSIGNMENT OR SUBLEASE MAY BE REASONABLY OR UNREASONABLY WITHHELD?
Under Florida law, the tenant may assign its lease or sublease its premises without the landlord’s consent if the lease is silent on assignments and subleases (Frissell v. Nichols, 114 So. 431, 434 (Fla. 1927)). If a lease requires the landlord’s consent to an assignment but is silent on the standard for the landlord’s consent, then an implied term is that landlord’s consent will not be unreasonably withheld and is subject to an implied covenant of good faith (Fernandez v. Vazquez, 397 So. 2d 1171, 1174 (Fla. 3d DCA 1981)). As a result, and because of concerns that criteria other than the ability to pay rent may not be considered in determining whether consent is reasonably required, it is expected commercial practice to include criteria for the granting or withholding of consent in a commercial lease. Continue Reading ›
As mentioned in our previous post, the number of COVID-19 coronavirus (“Coronavirus”) cases continues to increase, and with the World Health Organization raising its threat assessment of Coronavirus to its highest level, businesses in Miami-Dade and Broward Counties are becoming increasingly aware of the many challenges that are ahead.
At ESQ.title, we have established a Legal/Real Estate Task Force focused on Coronavirus-related issues. Our aim is to provide guidance and plan for solutions to clients’ business and legal needs. Below, we address some of the important issues business owners and individuals should consider:
Real Estate Transactions
General:
Effective January 1, 2020, the Florida state tax imposed rate per Florida Statutes section 212.031 on the total rent charged for renting, leasing, letting, or granting a license to use real estate property in the State of Florida is decreased from 5.7% to 5.5%. This includes lease rent collected from retail spaces, offices, warehouses, and self-storage units or warehouse office combinations.
The reduction only applies to the state level tax – the local county option taxes are still in full effect.
You aced torts and contracts, but no one in law school explained the business of running a law firm. So, here you are in a solo or small firm trying to manage important cases while hiring a receptionist or selecting office furniture. As the price per square foot of office space for Class A office space continues to skyrocket in areas like Coral Gables and Downtown Miami, Florida, overhead costs for fixed operating expenses such as office lease and rent expenses become extremely challenging to budget for many solo practitioners, small and mid-sized law firms and legal professionals.
Shared office space may be the solution to give you more free time and the opportunity to network with attorneys from a variety of fields.
Attorneys only
Going with a solo or small practice doesn’t mean you have to go it alone. Office sharing means attorneys like you will be just across the hall for consultation on a case or a discussion of the impact of a new law. These associations could lead to referrals from esq.suitemates that recognize your expertise in a particular field.
By: Alejandro E. Jordan, Esq.
When you work as an attorney, client confidentiality and service is vital to your success. If you don’t have a professional office, or you need additional conference space than what you have, it’s time to consider creative ways to enhance your ability to serve your clients. With flexible law office space in Downtown Miami and Coral Gables, Florida, you have choices. Esq.suites offers a professional environment exclusive to legal professionals who need an efficient space in which to work.
For small to mid firm attorneys, solo practitioners or attorneys who are from out-of-town, esq.suites is ready to help. They offer short-term or long-term rentals for lease to attorneys who already have a home office but need a space in the area to conduct business, or solo practitioners and small firms that need a new place to call their headquarters. The team at esq.suites understands how important legal work is, and are ready to support your business in a professional, headache-free environment.
In a professional where one mistake can ruin your career, shared office space for legal professionals is the answer. Instead of trying to get your work done on the fly, spending time in your car or local coffee shops, esq.suites offers a community to attorneys with flexible rental Continue Reading ›
This Article provides you with tips to create a concise and effective negotiation checklist and the key points you should consider when negotiating a lease in a multi-tenant office building.
This Article also highlights key provisions you should pay close attention to often found in office leases.
At initial glance, a 20, 30 and sometimes 40 page commercial office lease agreement may seem daunting. However, with a properly drafted checklist, a savvy negotiator can swiftly navigate this legal document by making sure that all of the key provisions of the lease have been accounted for (or at least, that you know what you are getting yourself into before you are bound by its terms). A wise person once said, “Organization is the key to success.”
A good summary or checklist can be a useful tool for tenants to:
Florida Real Estate Lawyers Blog