It’s an unfortunate but harsh reality for commercial landlords that they will inevitably face an eviction at some point during their ownership of their commercial property. However, while no landlord wants to experience an eviction scenario, they should all be prepared for, and have a basic working knowledge of, the eviction process. This blog and the posts to follow will tell every commercial landlord what it needs to know about the process.
The first decision to be made is how to deal with the tenant who has defaulted on its rent. If the landlord chooses eviction, it generally has three options upon the tenant’s default:
It can retake possession and try to rent out the property, and then hold the former tenant liable for any difference between the former tenant’s rent and the new tenant’s rent;
It can retake possession of the property for its own use; or
It can do nothing and proceed with an action for damages against the tenant as each rent payment comes due, or at the end of the tenancy for the entire sum remaining under the lease’s term.
The first option is the generally preferable option. It is attractive because it allows the landlord to get a new, paying tenant in the space, while also knowing that former tenant will remain liable if the landlord is unable to negotiate a rent equal to what the former tenant was paying. While this option requires the landlord to make a good faith effort to re-let the property, this is what the landlord is likely going to do anyway, so that requirement is not much of a burden. The second option is usually not attractive because it is rare that a landlord will have the need to use its own commercial property. The third option is generally not chosen by landlords.
However, the landlord may choose to try and work with the tenant before proceeding to eviction. In this scenario, the landlord should nonetheless make sure to follow a few simple steps to protect itself in the event the efforts to get the tenant caught up on its outstanding rent are unsuccessful. First, the landlord should make sure to communicate to the tenant, in writing, that there has been no waiver of the default and no change in the terms of the parties’ lease. Under some circumstances, Florida law will deem a lease orally modified, which stands to affect the landlord’s ability to evict, a scenario landlords obviously want to avoid.
Second, the landlord should serve the tenant, via process server, with a statutory notice of default, regardless of whether the default is for failure to pay rent or for some other non-monetary violation of the lease’s terms. If the lease’s terms are silent on the issue of notice, the landlord must provide a three-day notice to the tenant prior to institution of eviction proceedings for a failure to pay rent, and must provide fifteen days’ notice if the default is for a non-monetary reason. All notices, whether three-day or fifteen day, should include:
The basis for default;
The outstanding rent owed (if any) and where it is to be paid;
Date of default and the time to cure (if any); and
Any other information required by the terms of the lease. Having served the notice, if the parties are subsequently unable to resolve the default, the landlord is ready to instantly move for eviction.
The next blogs in this series will discuss ways for the landlord to secure fixtures on the property, considerations to be made when pursuing eviction in the courts, and the damages available to landlords upon a tenant’s default.