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Trade Fixtures Removed by Tenant

Posted on: December 10, 2013

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.

A trade fixture is installed by a tenant under the terms of a lease and is used in the business of the tenant. The tenant may remove these at the expiration of the lease; however, the tenant is liable for any damages caused by such removal. Trade fixtures are distinguished from other fixtures which are considered improvements to real property and which must be left intact when the tenant vacates the premises. In the absence of an express contract as to trade fixtures, there is an implied contract permitting the tenant to remove them at the proper time and in a proper manner.

The trial court found that (1) the tenant was entitled to retain its trade fixtures; (2) the tenant was entitled to a partial return of its security deposit; (3) the landlord was entitled to retain the remainder of the security deposit to repair the damages tenant caused by removing the trade fixtures; (4) the landlord was not entitled to judgment on its conversion and civil theft claims; and (5) neither party was “prevailing party” for purpose of recovering attorney’s fees and costs.

The Fourth District Court of Appeal agreed that the tenant was entitled to retain the trade fixtures because the lease contract was ambiguous. Additionally, the 4th DCA concluded that the tenant was the prevailing party in the case as entitlement to the trade fixtures and security deposit was the most significant issue. Further, the 4th DCA concluded that the tenant and tenant’s president were the prevailing parties on the landlord’s conversion claim. The Fort Lauderdale real estate lawyers at Schecter Law have experience in both commercial and luxury residential real estate.