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How a Flawed Duration Clause May Leave You With a Florida Commercial Lease that Won’t Protect You in the Event of Termination

A Broward County business that was a party to a commercial lease agreement found out the hard way recently one of the many ways that such an agreement can go wrong and leave you with no recourse in the courts. That problem, in the Broward business’s situation, was an imperfectly drafted lease agreement. Don’t let that pitfall ensnare you. Be sure that the commercial lease agreement you sign will protect your business interests fully and be recognized as enforceable by the courts. To be sure you are executing the right commercial lease agreement, start by retaining the services of a skilled South Florida commercial lease attorney.

Z.C. was the owner of that Broward County business, which rented wave runners, parasails and scuba diving equipment. In 2007, the rental business inked a lease with a hotel’s owner that allowed the business to operate on a beach adjacent to the hotel. The lease agreement stated that the term of the lease was from September 18, 2007 until “the demolition of the property.” The parties worded the contract that way because the owner allegedly desired to allow the equipment rental business to stay as long as he operated a hotel there. (The owner allegedly was considering demolishing the hotel and converting the property into condominiums and, if that happened, then the equipment rental business would be expected to leave.)

Three years after the parties signed the lease, the owner sold the property rather than converting it into condos. Several months after the transaction, the new owner and operator of the hotel terminated the lease. The rental business sued the new hotel owner for breaching the lease, but the hotel owner emerged successful from the lawsuit.

The hotel owner won because the lease was terminable at will. If a lease has a properly drafted duration term in it, then the lease lasts for the period stated in that clause. If it doesn’t have a defined duration, then the lease that is established is considered to be terminable at will. The trial judge in this hotel’s case concluded that this lease fit into the latter category, so the new hotel owner committed no actionable breach by ending the agreement.

The equipment rental business, in addition to asserting a claim for breach of the lease, also asserted claims for conspiracy and tortious interference. In Florida, if a lease lacks a definite duration term, then the parties to that lease cannot, as a matter of Florida law, “breach, conspire, or tortiously interfere with” it.

A lease of uncertain or indefinite duration may be unenforceable in Florida

That’s because a lease that lacks a “clear, definite” and “certain” duration is unenforceable in Florida. When it comes to the duration term, there are two ways that a lease can fail and become unenforceable, possibly leading to a landlord tenant dispute. One is if the duration term is not clear, certain and definite, or is not stated at all. The other is if the duration term is clearly stated and clearly demonstrates that the duration of the lease is indefinite. A lease with a duration that runs in perpetuity is disfavored by Florida law and Florida courts will interpret it as an at-will tenancy.

A successful commercial lease begins with a successful negotiation of terms and the creation of a clear, accurate and enforceable contract that protects the terms for which you negotiated. To ensure you’re getting those things (either as a landlord or a tenant,) rely on the knowledgeable South Florida commercial lease attorneys at Stok Kon + Braverman. Our attorneys have many years of helping our clients, both landlords and tenants, get the leases they need to protect and advance their business interests.

Contact us online or by calling (954) 237-1777 to schedule your consultation.

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