Commercial Tenant Resources

Your lease agreement contains the key terms and conditions which will control the handling of property damage and continuing the tenancy. Some of these include:

• Determination of casualty damage - at which point will the premises be considered totally damaged or not fit for tenancy such that the lease must be terminated, and at this level of damage what should happen with the current month's rent and security deposit.
• Repair and replacement responsibilities - what structures, fixtures, and damage are the responsibility of the landlord to repair or replace versus the tenant.
• Timeframes for repair - how long the landlord or tenant have to commence and complete the repairs needed and whether these timeframes are extended for large projects.
• Business losses - whether any losses resulting from a landlord's delays in completing repairs are their responsibility or these claims have been waived by the tenant.

 If there is no lease or no provision in the lease covering damage, the following law applies:

Section 83.201, Florida Statutes - "when the lease is silent on the procedure to be followed to effect repair or maintenance and the payment of rent relating thereto, yet affirmatively and expressly places the obligation for same upon the landlord, and the landlord has failed or refused to do so, rendering the leased premises wholly untenantable, the tenant may withhold rent after notice to the landlord. The tenant shall serve the landlord, in the manner prescribed by s. 83.20(3), with a written notice declaring the premises to be wholly untenantable, giving the landlord at least 20 days to make the specifically described repair or maintenance, and stating that the tenant will withhold the rent for the next rental period and thereafter until the repair or maintenance has been performed. The lease may provide for a longer period of time for repair or maintenance. Once the landlord has completed the repair or maintenance, the tenant shall pay the landlord the amounts of rent withheld. If the landlord does not complete the repair or maintenance in the allotted time, the parties may extend the time by written agreement or the tenant may abandon the premises, retain the amounts of rent withheld, terminate the lease, and avoid any liability for future rent or charges under the lease. This section is cumulative to other existing remedies, and this section does not prevent any tenant from exercising his or her other remedies."

Major points under this law for commercial tenancies:

• The tenant may issue landlord a notice providing 20 days for repair and notifying of intent to withhold rent for the next rental period (typically the following month) until repair is complete. 
• Note, both parties consent is required to extend the timeframe, but the tenant has the right, after that timeframe, to terminate the lease. 
• This part of the statute does not explain the landlord's right, but tenants should be aware that the landlord may disagree regarding tenability (ability to use the property) and in that event the landlord may file suit against the tenant and guarantor for eviction and/or breach of contract. There is no way for the tenant to prevent the landlord from filing suit. 

In the event of a dispute between the landlord and tenant regarding handling damaged property, this author recommends first attempting to negotiate and doing so with the assistance of legal counsel. Negotiations are typically monetary, involving trade-offs such as partial rent payment in exchange for certain repairs or forfeiting a security deposit in exchange for an agreed termination date. While these trades may be frustrating, reaching a compromise is generally less costly and risky than allowing an equally frustrated landlord to take legal action.

The landlord or tenant, after careful review of the lease agreement and/or statutes, and ideally with advice of counsel, may decide to issue a rent withholding notice or termination of tenancy for substantially damaged and untenable property. This can be a risky proposition as the other side may not agree that the property is untenable or whether current and future rents are due. This author advises that any party looking at this option be prepared for the dispute to escalate to litigation and ultimately be resolved by a judge.