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Voluntary Use of the Court Registry in a Florida Commercial Landlord-Tenant Dispute

Audio volumeIn commercial landlord-tenant disputes, one aspect of your case that may become involved is the use of the court registry as a place for the tenant to pay rent monies that are in dispute in the case. The standards of whether a trial court can order payment of rent into the court registry vary significantly, depending on whether the payment is compulsory or something that the tenant voluntarily asks of the court. In a recent constructive eviction case from Miami-Dade County, the Third District Court of Appeal upheld a trial court’s order allowing the tenant to pay rent to the registry. The tenant voluntarily sought to pay the registry, which meant that the trial judge had broad discretion in using or not using the registry.

The underlying dispute in this case involved the lease of a piece of commercial property in Miami-Dade County. The landlord, Tixe Designs, Inc., leased the space in question to two tenants. One tenant, Green Ice, Inc., ran a men’s clothing and apparel business. Unfortunately for Green Ice, its neighbor and fellow Tixe tenant was a gym. Having grown unhappy with the noise pollution arising from the neighboring gym’s sound system, Green Ice sued the landlord for breach of contract, constructive eviction, and fraud in the inducement. In its lawsuit, Green Ice argued that the infiltration of the gym’s loud music into its shop harmed its business and was so bad that it effectively made the space unsuitable for continuing to operate a clothing store there.

Once the tenant filed its lawsuit, it took another step. It requested permission to pay, for the duration of the litigation, its rent to the court’s registry instead of to the landlord. The tenant contended that, even though it believed it had been constructively evicted, it was willing to pay rent to the court registry as a show of good faith. The trial court entered the order.

The landlord appealed but lost. The Florida Rules of Civil Procedure, specifically Rule 1.600, say that a party can seek permission to deposit voluntarily rent into the court registry if that rent is “the subject of the litigation.” The appeals court ruled that Green Ice’s rent was the subject of this litigation. The tenant sought, in addition to damages, costs, and attorneys’ fees, a ruling that the lease was terminated as of the date of the constructive eviction, that its rent was abated as of the date of the constructive eviction, and that it was entitled to the return of its security deposit. From these pleadings filed by the tenant, it was entirely appropriate for the court to conclude that one of the purposes of the lawsuit was to decide whether the landlord was still entitled to continue charging and receiving rent after the date that the tenant alleged that it was constructively evicted, making rent most definitely a “subject of the litigation.”

Another element that worked in Green Ice’s favor was that it was voluntarily seeking to place the rent money into the court registry. Many of the cases that Tixe presented to the appeals court in support of its opposition to the use of the registry were cases in which the depositing of the funds was mandatory, rather than voluntary. Since this was a situation of voluntary, rather than compulsory, depositing of funds, Rule 1.600 applied, and that rule gave the trial court wide discretion in approving the use of the registry.

When your commercial landlord-tenant relationship becomes so problematic that litigation becomes needed, there are several vital strategic and tactical decisions you will need to make as part of your case. The experienced Florida landlord-tenant attorneys at Stok Folk + Kon can help throughout the process in charting a path that is appropriate for your business.

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

More blog posts:

Florida Mall Tenant Launches Class-Action Attack Against Commercial Landlord Over Utility Charges, Florida Business Lawyers Blog, Oct. 21, 2016

Possible Unjust Forfeiture, Cured Defaults Impede Florida Landlord’s Effort to Evict Restaurant-Nightclub Tenant, Florida Business Lawyers Blog, Feb. 19, 2016