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Possible Unjust Forfeiture, Cured Defaults Impede Florida Landlord’s Effort to Evict Restaurant-Nightclub Tenant

one-progress-plaza-st-peteFor commercial landlords, evicting a tenant can require proving many things. In the case of one Florida landlord, even if it had enough proof that its tenant committed the sort of transgressions that were valid grounds to permit an eviction, it might still not be entitled to force the tenant out. The 2d District Court of Appeal reversed a summary judgment in the landlord’s favor, in part because the tenant raised a viable defense that an eviction would lead to an unfair and unjust forfeiture on the tenant’s part.

The commercial lease in question involved Atria Group, the tenant, and One Progress Plaza, II, LLC, the landlord. The two sides completed a commercial lease agreement in 2010 for Atria to rent a pair of spaces within the landlord’s high-rise tower in downtown St. Petersburg. From its spaces, Atria planned to run a restaurant and nightclub. By the fall of 2013, the business relationship had deteriorated, and the landlord sought to evict Atria. In its court filing, the landlord accused the tenant of several violations of the lease, none of which were related to paying rent. The alleged misdeeds included damage to the property, illegal activity, and cleanliness issues.

The trial court sided with the landlord and ordered Atria to vacate the premises. The tenant appealed, however, and was successful. In order to be entitled to terminate the agreement early and evict Atria, the landlord had to show that the tenant was in material default and had breached the lease. Under the terms of the lease agreement, this meant that, once the landlord identified misconduct by the tenant, it was required to submit written notice to the tenant and could only pursue a breach claim if the tenant did not cure the violation within an appropriate amount of time after receiving the notice.

In Atria’s case, the landlord’s own representative testified that the tenant had corrected most of the violations. He also testified that when he contacted Atria about a problem with a needed repair or clean-up, or improper activity by Atria customers or employees, the tenant addressed the problem.

Additionally, even if the landlord could prove that the tenant committed the type of material violations that could trigger a termination of the lease, and establish that the tenant did not address the violations in a timely fashion, the landlord might still not be entitled under the law to evict Atria. One of the tenant’s defenses was that allowing the landlord to evict would be legally unfair, creating an inequitable forfeiture. The law allows a court to decline to order an eviction, even if the tenant has committed an evictable act, if evicting the tenant “would be unconscionable, inequitable or unjust under the circumstances.” Atria had allegedly spent roughly $2 million of its own money on renovating its two spaces in the landlord’s tower. The landlord had reviewed and accepted each improvement. Throwing Atria out after it made such a large investment in the property potentially could constitute such an inequitable and unjust outcome.

Whether you are a commercial landlord or tenant, the skilled Florida real estate attorneys at Stok Folk + Kon have the knowledge and ability you need to protect your business interests. Contact our attorneys today to get the advice and representation you need with regard to your eviction or other commercial leasing issues.

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

More blog posts:

Restaurant Entitled to Enforce 20-Year Exclusivity Provision within Amelia Island Resort’s ‘Shopping Village’, Florida Business Lawyers Blog, Sept. 23, 2015

When You Can (And Cannot) Escape Your Florida Commercial Lease Early Under Constructive Eviction, Florida Business Lawyers Blog, June 4, 2015