A Florida Landlord’s Guide to Commercial Leasing

Commercial leasing in Florida presents a wealth of opportunities for landlords, but it also requires a thorough understanding of state laws and best practices to avoid potential legal disputes. Whether you own retail, office, or industrial spaces, being informed about key legal issues in Florida can help ensure smooth leasing transactions. This guide offers Florida landlords a roadmap to navigating commercial leasing, with a focus on common challenges and best practices under Florida law.

Hiring a Full-Time Property Manager in Florida

For commercial landlords in Florida, managing properties—especially larger portfolios—can become a time-consuming task. This is why many landlords opt to hire a full-time property manager or property management firm to handle the daily operations, such as collecting rent, conducting maintenance, and dealing with tenant issues.

Pros of Hiring a Property Manager in Florida:

• Local Expertise: A property manager familiar with Florida-specific issues such as hurricane preparedness, mold remediation, and local permitting requirements can help avoid compliance problems.
• Tenant Relations: Property managers often excel in tenant communications, ensuring that minor disputes do not escalate and that leases are enforced without constant oversight from the landlord.
• Hands-Free Operations: Property managers handle everything from rent collection to evictions, freeing landlords to focus on business expansion.

Cons:

• Expense: Property managers generally charge a percentage of gross rent, typically between 5% and 10%. This can be costly, particularly for smaller commercial properties.
• Lack of Direct Control: While a manager can streamline operations, it also means landlords may not be fully aware of daily issues unless a robust reporting system is in place.

Best Practice Tip:

Florida has stringent landlord-tenant laws, especially regarding security deposits, property maintenance, and eviction procedures. Ensure that any property manager you hire is well-versed in Florida’s legal requirements for commercial properties. Be clear about responsibilities and the frequency of reporting.

Common Pitfalls for Florida Commercial Landlords

Being a landlord in Florida comes with its own unique set of challenges. From environmental regulations to dealing with the occasional hurricane, understanding potential pitfalls can save landlords significant time and money.

Common Pitfalls Include:

• Inadequate Lease Drafting: Florida law requires specific language in certain commercial leases, particularly regarding the remedies available to landlords in the event of a tenant default. Not having these provisions clearly defined could limit your legal recourse.
• Failing to Address Environmental Concerns: Florida's humid, hurricane-prone climate means that landlords need to consider environmental risks such as mold, flooding, and storm damage. Failing to include these issues in a lease could lead to disputes over repair responsibilities.
• Tenant Vetting Issues: Florida has specific guidelines for handling tenant screening and selection. Landlords should be careful not to violate state fair housing laws, even though commercial leases are less regulated than residential ones.

Real-World Example:

A Miami landlord rented office space to a new company without running a thorough background check. When the tenant failed to pay rent, the landlord discovered that the company had a history of commercial evictions and vendor disputes. In Florida, evictions can take weeks if not months if litigation becomes involved, leaving the landlord with unpaid rent and legal fees. This situation could have been avoided with proper tenant vetting, including a credit and background check.[1]

Best Practice Tip:

Work with an attorney to ensure your commercial leases meet Florida’s legal standards, including clauses related to tenant default, security deposits, and maintenance responsibilities. Perform thorough tenant screening to avoid problems down the road.

Key Lease Provisions for Florida Commercial Landlords

Commercial leases in Florida need to include several critical provisions to ensure that landlords are protected and that both parties are aware of their rights and obligations.

Lease Term and Renewal:

• In Florida, the lease term and any renewal options should be clearly defined. Landlords often provide incentives for longer leases (e.g., tenant improvement allowances). Make sure the lease outlines the process for renewing, including any notice periods the tenant must observe.

Rent and Escalation Clauses:

• Ensure your lease includes not only the base rent but also how often rent will increase. Florida landlords commonly use Consumer Price Index (CPI) adjustments or fixed percentage increases to account for inflation.

Maintenance and Repairs:

• Florida’s commercial leases often follow a "triple-net" model, where tenants are responsible for property taxes, insurance, and maintenance. Clearly define the scope of these responsibilities, particularly regarding property repairs after hurricanes or other natural disasters.

Subleasing and Assignment:

• In Florida, landlords have the right to restrict tenants from subleasing or assigning their lease. Make sure the lease includes a clause that gives you final approval on any subleases, ensuring that you maintain control over who occupies your property.

Default and Remedies:

• Florida law allows for several remedies in the event of tenant default, such as the right to accelerate rent or recover possession. Make sure your lease outlines what constitutes default and the specific remedies available to you, including the right to recover unpaid rent and legal fees in the event of a lawsuit.

Best Practice Tip:

Include a "force majeure" clause that addresses unforeseeable events such as hurricanes or floods, which are more common in Florida. This clause should specify how lease obligations will be impacted in such events, protecting both landlord and tenant from liability for circumstances beyond their control.

E-Signatures and Signature Requirements Under Florida Law

In Florida, both traditional and electronic signatures are legally binding in commercial leases, but landlords must ensure they comply with state laws governing the use of e-signatures.

Traditional Wet Signatures:

• Historically, Florida required "wet" (physical) signatures for all leases to be enforceable in court. This is still a common practice for higher-value or long-term leases, particularly when older properties or tenants are involved.

E-Signatures:

• Florida adopted the Uniform Electronic Transactions Act (UETA), which makes electronic signatures just as enforceable as wet signatures in most commercial leasing transactions. However, all parties must agree to the use of e-signatures, and the lease must explicitly state that it is being executed electronically.

Best Practices for Using E-Signatures in Florida:

• Use a trusted e-signature platform like DocuSign, which complies with UETA and ESIGN (the federal Electronic Signatures in Global and National Commerce Act).
• Clearly specify in the lease agreement that the parties consent to the use of electronic signatures.
• Retain copies of signed leases with time-stamped records of the e-signature to avoid disputes over validity.

Keys to Success for Commercial Landlords in Florida

To successfully manage commercial leases in Florida, landlords must focus on fostering good tenant relationships, adhering to state laws, and employing best management practices.

Maintain Strong Tenant Relations:

• Good tenant relations reduce turnover and the likelihood of disputes. Regular communication, timely repairs, and clear lease terms foster positive relationships. In Florida’s hurricane-prone environment, keeping tenants informed of hurricane preparedness measures is particularly important.

Keep Up with Legal Changes:

• Florida’s landlord-tenant laws are subject to change, particularly in areas related to environmental regulations and property damage. Stay informed by consulting legal professionals or subscribing to industry news relevant to Florida’s commercial real estate market.

Utilize Property Management Technology:

• Property management software can help track rent payments, maintenance schedules, and lease renewals, reducing administrative burden. Some platforms also integrate with Florida-specific legal forms and compliance checklists, streamlining the leasing process.

Work with Florida Real Estate Attorneys:

• While commercial landlords can often manage standard leases on their own, high-value or complex transactions should be handled with the assistance of an experienced real estate attorney. Florida’s unique regulations and environmental challenges can make navigating commercial leases difficult without legal guidance.

Conclusion

Commercial leasing in Florida is both an opportunity and a challenge. By carefully drafting your leases, adhering to state laws, and staying proactive with property management, you can mitigate risks and protect your investments. Whether it’s deciding whether to hire a property manager, utilizing e-signatures, or crafting ironclad lease provisions, a thorough understanding of Florida’s commercial real estate landscape will ensure success as a landlord. If you have questions about commercial leasing in Florida, contact the Business lawyers at MSD Business for a free consultation.

About the Author:

Chase Carpenter is a partner in the Business Division of Law Offices of Moffa, Sutton, & Donnini, P.A. His practice revolves around business transactions and business litigation. Mr. Carpenter handles a wide range of cases including contract drafting, partnership disputes, commercial leases, and construction litigation. These cases encompass diverse industries, including healthcare, technology, real estate investment, and government contracting. You can learn more about Mr. Carpenter in his firm bio HERE and you can call him directly at 813.515.9392.

About the Firm:

The Law Offices of Moffa, Sutton, & Donnini, P.A., also known as MSD Business, is a local business law firm in Tampa, FL, serving clients throughout Fort Lauderdale and statewide. Our firm has a long history of helping clients navigate all types of complex legal matters, including local and state tax issues. In our business law practice, we assist clients with everything from mergers and acquisitions to contract disputes, business litigation, general counsel, and more. Contact us for a FREE INITIAL CONSULTATION to confidentially discuss how we can help.