Constructive Eviction of a Commercial Tenant

Katz Deli v. Waterways Plaza, 3D12-3409 & 3D13-124 (Fla. 3d DCA 2013):

This appeal and cross-appeal contested the amount of damages awarded for a breach of contract that led to the constructive eviction and ultimate destruction of Katz Deli. Katz Deli expanded by leasing a space in the Waterways Plaza of Aventura. The lease required monthly rental payments of $25,000, contained lease renewals that could potentially extend until 2022, and required the landlord to make all necessary repairs to the structure and roof. The lease was negotiated before Waterways Plaza purchased the property. Hiring an experienced South Florida commercial real estate attorney for lease negotiations can help avoid disputes arising from complicated commercial leases.

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H. Allen Homes, Inc. and Henry Allen Holmes v. Jim Molter, Inc., 4D13-217 (Fla. 4th DCA 2013):

This appeal arose from a landlord-tenant dispute involving commercial real estate. The tenant removed its trade fixtures when it vacated the leased premises after the parties’ lease contract expired. For this reason, the landlord retained the security deposit. The tenant filed a breach of contract claim against the landlord of the commercial real estate for the alleged improper retention of the security deposit. The landlord filed claims for breach of contract, conversion, and civil theft against the tenant and the tenant’s president for the alleged improper removal of the trade fixtures.

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Real estate Developer Jeff Berkowitz has plans for a 1,000 foot high tower in downtown Miami. The tower, SkyRise Miami, would be located behind Bayside Marketplace. The tower would be the tallest building in Florida. While the tower still has to go through the permit process, the FAA has already approved the building height. Additionally, testing has been completed to determine that the design will withstand hurricane force winds.

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Florida Statute §624.608 defines title insurance as “[i]nsurance of owners of real property or others having an interest in real property or contractual interest derived therefrom, or liens or encumbrances on real property, against loss by encumbrance, or defective titles, or invalidity, or adverse claim to title.” Our Ft. Lauderdale real estate law firm provides title examination and insurance. It is important to eliminate risk and prevent losses that may be caused by defects in title for both luxury residential and commercial properties.

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AGBL Enterprises, LLC v. Girlcook, Inc., 96 So.3d 1058 (Fla. 4th DCA 2012):

AGBL Enterprises (“Lessor”) leased a commercial building in a shopping plaza to be used as a full service restaurant to Girlcook (“Lessee”). The lease contained an integration clause that stated, “[T]he entire agreement between the Lessor and Lessee consists solely of the terms in this lease and the accompanying rider. The agreement between the lessor and lessee will not consist of any verbal or implied statements which are not specifically written in this lease or the accompanying rider.” Despite the shopping plaza undergoing major renovations at the time the lease was signed, no provision in the lease required the renovations to be completed by any specific date. Moreover, Lessee agreed to accept the premises, which included the building being leased and the entirety of the plaza, in the current condition at the beginning of the rental period. The lease also required Lessee to make monthly rent payments before the first day of each month. Lessor was responsible for maintaining the roof, foundation and exterior of the building, and all parking areas in decent repair for their intended use.

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Casino Investment, Inc. v. Palm Springs Mile Associates, Ltd., 3D12-2257 (Fla. 3d DCA 2013):

Casino appealed a partial final summary judgment entered in favor of Palm Springs which permanently enjoined Casino from constructing a building on its own property. In 1993, Palm Springs created and recorded a Declaration of Easement covering their entire Shopping Center property. In 1999, Casino acquired title to a parcel contained within the Shopping Center. In 2007, Casino sought to construct a building on the north end of its property.

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Brokerage commissions should be established by a written listing agreement between the seller and their listing broker. The commission split between listing broker and cooperating brokers in the event of a buyer’s default, or in the event of closing, should also be established by writings between the licensees involved. Additionally, whether commercial or luxury residential real estate, the buyer’s broker may agree to rebate part of the purchase price to their clients. (more…)

Senate Bill 176 has been filed by Sen. Dorothy L. Hukill (R-Port Orange). If passed by the Florida Legislature and signed by Gov. Rick Scott, the Bill would reduce the sales tax on commercial leases. A similar bill (HB 11) was filed by Rep. Greg Steube (R-Sarasota) in the House in August.

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The South Florida Business Journal reported that over 3.6 million square feet of leases in South Florida commercial properties are set to expire over the next 12 months. Included in the 3.6 million square feet is 1.91 million for retail, 1.15 million for office, and 484,225 for industrial. South Florida is home to approximately 40% of Florida’s expiring leases. The lease expirations could cause trouble for properties that are unable to obtain new leases on terms that are as favorable as deals in place now.

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When signing a commercial lease, it is essential to understand and agree to all of the provisions. Provisions are usually designed to favor the landlord; however, a landlord may be willing to negotiate. Experienced luxury real estate attorneys should be consulted before entering a commercial lease. Here are a few essential provisions that should be clearly understood prior to signing:

Term – A short-term lease provides a tenant with more flexibility for changing needs. A tenant may decide to change locations or move to a space with more or less square footage. If a tenant is confident in the location they are choosing, it may be advantageous to negotiate a long-term lease. With a long-term lease, a tenant does not have to worry about the landlord renewing the lease and may receive a better rent payment or other concessions. An additional option is to negotiate a short-term lease with an option to extend or renew. While an extension gives the existing lease a new end date, a renewal results in both a new beginning and end date.

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