As South Florida begins its return to normalcy and the courts reopen, Brickell is likely to become the hot spot for commercial evictions. Commercial real estate such as office building, warehouses, free-standing retail shops, and shopping malls are not protected under the eviction moratorium issued by Governor Ron DeSantis.
In the last few months, commercial tenants and landlords have been dancing around the issue of eviction, nonpayment of rent, and collection fees. With so many unknowns resulting from COVID-19 no landlord wanted to be the insensitive landlord to put undue pressure on their hurting tenants.
Commercial owners and their tenants have been anxiously navigating their way through decimated incomes and unpayable rent. However, ignoring rent payment delays is a practice that is unsustainable by commercial landlords for long. With the reopening of businesses and the court system, they are now putting pressure on tenants to pay balances or renegotiate their lease.
Since Florida has permitted most businesses to reopen in phase one, more companies are opening their doors to customers, leading landlords to demand outstanding payments that are rightfully theirs.
To increase pressure on tenants, commercial landlords are now proceeding forward and filing suits on breach of lease, and potential evictions. Landlords aren’t the only ones suing. Tenants are also suing for breach of lease terms, citing that they have not been able to use their commercial location due to current economic conditions in an attempt to make their leases unenforceable.
Claims made by tenants include that the pandemic is outside of their control and prevents them from meeting their contractual obligations. In theory, this argument would permit a tenant to avoid paying rent while the business was required to close by state of county orders. Property owners contend that this is not a force majeure; thereby, tenants are still responsible for rent under their lease.
Our Miami foreclosure attorneys are preparing for what comes after this lull. There is no set precedent owing to the uniqueness and novelty of the current situation that has no equal in history. Commercial tenants should carefully review their lease agreements and search for provisions regarding force majeure, or provisions excusing or reducing rent obligations when there is a government taking or casualty to the premise.
It is also possible that commercial tenants could use the legal doctrines of “frustration of purpose” and “temporary impracticability.” It will be necessary to evaluate each of these on an individual basis and await final verdicts from the judges who will interpret and establish the case law.