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When You Can (And Cannot) Escape Your Florida Commercial Lease Early Under Constructive Eviction

Office_space_in_140_WilliamAs a commercial tenant, any time you sign a lease for a new space, you almost certainly begin the relationship expecting success. Sometimes, success is not the outcome that unfolds, though. When it doesn’t, it is important to know exactly what options are (or are not) available to you under the law. One Broward County tenant attempted to escape its lease early, claiming that its landlord constructively evicted it, only to lose in both the trial court and the 4th District Court of Appeal because the events that occurred did not constitute a constructive eviction, leaving the tenant on the hook for a considerable sum in damages for defaulting on the lease.

The origins of the case dated to 2007, when Griffin Industries, LLC, leased a space in Davie from Dixie Southland Corporation starting in November 2007.

In April 2009, the Town of Davie sent the tenant a notice demanding that it cease using a pipe that pumped storm water into the street. Dixie addressed the issue. Not satisfied with the landlord’s solution, the tenant terminated the lease early and vacated the property in June 2009. The tenant did not make rent payments for July or any month after that.

The landlord sued, and the tenant countersued, each claiming that the other breached the lease. The trial court sided with the landlord and ordered the tenant to pay damages amounting to rent and sales tax for 12 months. Griffin appealed, arguing that Dixie constructively evicted it by failing to maintain the property’s stormwater and drainage systems properly.

The appeals court was not persuaded. Constructive eviction requires that the tenant prove that the leased space was “unsafe, unfit, or unsuitable for occupancy for the purposes for which” the space was leased. The tenant’s case at trial lacked any evidence that the stormwater and drainage situation ever presented a safety issue, or made the space unfit or unsuitable for Griffin’s continued use and operation of its business.

However, the appeals court did not uphold the trial court’s ruling on damages. When a tenant defaults, as Griffin did in this case, the landlord has three options:  (1) consider the lease terminated and retake possession for its own purposes, (2) re-rent the space and hold the defaulting tenant responsible for the difference between what the defaulting tenant would have owed and what the landlord received from the replacement tenant, or (3) do nothing and sue the defaulting tenant for the full amount of rent.

Dixie elected to re-rent the space, securing a new tenant in December 2009. The new tenant paid a lower rental rate than Griffin, however. As a result, the proper amount of damages Dixie incurred actually equaled the full amount of rent and taxes for the months of July-November 2009, along with the difference between Griffin’s rent and the new tenant’s lease from December 2009-October 2012. The appeals court sent the case back to the trial court to calculate what that damages sum totaled.

Before you take the extreme step of terminating your commercial lease and vacating the premises you’ve rented, you should make certain that the law allows you to proceed in this manner. For advice and representation you can count on regarding your commercial lease, talk to the Florida real estate attorneys at Stok Folk + Kon. Our skilled, diligent attorneys can help you assess all your options and which ones do, or do not, make business sense for you.

Contact us online or by calling (305) 935-4440 to schedule your consultation.

More blog posts:

Florida Court Blocks Subtenant’s Request for Information About Tenant’s Commercial Lease Terms With Landlord, Florida Business Lawyers Blog, April 7, 2015

Dealing With a Property Subject to Covenants, Conditions and Restrictions, Florida Business Lawyers Blog, Feb. 10, 2015

Photo credit: Orderinchaos at Wikimedia Commons.