Considerations for commercial landlords

| Jun 15, 2020 | Real Estate Law |

Governor DeSantis announced in April that it would be illegal to foreclose on homes or evict residents unable to pay rent during the pandemic. It provided peace of mind to non-essential workers who were laid off, furloughed or unable to make rent. These protections will not last long as Florida and the rest of the country open back up, nor were they ever extended to commercial tenants.

This means that commercial landlords can take action if the occupant does not pay its rent regardless of whether the business was closed or is trying to find a way to comply with new safety protocols for operating a business.

One option for landlords is to encourage tenants to apply for emergency loans from the federal government, which has a $2.2 trillion rescue package for the economy with $350 billion of this is earmarked for small businesses who can use it for rent, utilities and other essentials.

Working together may be the best option

Many landlords to small businesses are individuals who are themselves small businesses, which means that they find themselves in similar positions to their tenants. Rather than letting the tenant go out of business, the best option may be for the two sides to work together to find a solution. It includes applying for loans, but other actions include:

  • Deferring payments until the tenant’s business is up and running
  • Reducing payments (with the future promise to pay rents in full) until the tenant’s business is up and running.
  • Require the tenant to use a guarantor for an agreement.
  • The landlord should also consider requesting the tenant to waive all claims while services are not in place or changes to the property to become compliant occur.
  • The lease may also include provisions requiring any changes to be put in writing and signed by both parties.

If there is no option but to move forward with the eviction after default on the terms of the lease, landlords still need to comply with all rules for legally doing this. It starts with notifying the tenant of default and giving them time to respond by either paying or proposing a solution. It is important to remember that evictions will likely be delayed due to a backlog from court closures. So again, it may be in everyone’s best interests to negotiate a solution.

Legal guidance can offer a resolution

There are commercial real estate attorneys here in Florida that regularly represent landlord or tenants. They can help ensure that any actions are compliant with all applicable laws and know how best to protect their client’s obligations, rights and interests.