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Florida Mitigation for Commerial Lease

Discussion in 'Moving In & Out, Movers' started by MattK, Sep 10, 2016.

  1. MattK

    MattK Law Topic Starter New Member

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    Hello,

    We are starting our small business and are at the stage of renting an office/warehouse. I tried searching for this answer but got mixed views:

    If at some point in our lease we can no longer make rent payments due to, for example, not enough profit and we decide to leave the lease. Is the commercial landlord (in Florida) required to use reasonal resources & efforts to rent the space to someone else before trying to obtain the remainder of the lease or sue us for rent? Or can they just sit back and collect rent from us for the remainder of the lease?

    Thank you.
     
  2. army judge

    army judge Super Moderator

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    All landlords are required to make an honest, persistent effort to mitigate damages when a tenant defaults on the lease.

    If you enter into a lease, any lease, you're obligated to hone the lease.

    No tenant is legally allowed to break the lease without a financial penalty, unless such terms are negotiated into the lease.


    The landlord won't just collect, if you abandon the property.

    He or she would have to go to court and petition the court for a judgment to begin collection activity against a tenant who defaults on a lease.

    Absent a court order, there's nothing a landlord can do legally to collect a dime.

    The tenant is afforded an opportunity for due prices, in that he or she can defend the lawsuit.

    One legal exception exists for residence leases, and that protects active duty military personnel.
     
  3. MattK

    MattK Law Topic Starter New Member

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    Thank you for your reply.

    And they are required to make the honest efforts to re-lease before seeking court action? Only if that fails, then they're allowed to go to court and seek a court order to collect anything?

    And this applies for Florida correct? I read some states differ so i just wanted to make sure.
     
  4. army judge

    army judge Super Moderator

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    None of that is what I said.
    I said that every landlord is required to mitigate damages.
    Some landlords don't care, and will simply let it go.
    I was that type of landlord.

    Other landlords will sue you the moment your breach becomes known.
    No, a landlord need not wait to bring a lawsuit on the breach.
    Yes, a landlord must make efforts to mitigate.

    If any of this worries you, be smart, don't lease until your financial position improves.
    In most cases, you should have at least three to six months of monthly expenses in reserve to use for that rainy day.

    Other financial experts suggest one year or more.

    If you plan to operate with the expectation of making $5,000 each month to cover your $2,000 of expenses, don't even start your business.

    Why?

    You have no understanding of the free enterprise process.
     
  5. adjusterjack

    adjusterjack Super Moderator

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    Not exactly. There are some circumstances where Florida law excuses the landlord from mitigation.

    The Florida District Court of Appeals explains:

    "Coast Federal is quite correct in its argument that a lessor has no duty to mitigate damages upon breach by a lessee of the terms of a lease agreement. It is well established in Florida that, upon breach by a lessee, a lessor has the choice of three alternative courses of action. The lessor may treat the lease as terminated and retake possession for his own account, thus terminating any further liability on the part of the lessee; or the lessor may retake possession of the premises for the account of the lessee, holding the lessee liable for the difference between rental stipulated to be paid under the lease agreement and what, in good faith, the lessor is able to recover from a reletting; or the lessor may stand by and do nothing, holding the lessee liable for the rent due as it matures, which means all remaining rent due if there is an acceleration clause and the lessor chooses to exercise the right to accelerate." Coast Fed. Sav. & Loan Ass'n v. DeLoach, 362 So. 2d 982 - Fla: Dist. Court of Appeals, 2nd Dist

    Google Scholar

    The Florida mitigation doctrine has been cited in dozens of cases since Coast, as recent at 2014:

    Google Scholar[23]

    And 2016:

    Google Scholar

    You'd best be damned careful in negotiating leases and reading and understanding them. While doing so try to negotiate a strict mitigation requirement on the part of the landlord.
     

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