Property Abandonment in Florida: Definitions and Remedies
As the economic impacts brought on by the COVID-19 pandemic continue, there has been a reduction in businesses and residential tenants’ who are able to pay their rent. As a result, businesses and residential tenants are resorting to property abandonment, “walking away” from their leases’ financial obligations.
This has been especially true in commercial real estate where the pandemic has thrown the market somewhat into disarray.
A Tough Year for Commercial Real Estate
While there are indications that the downturn may be headed for a recovery soon, the year-to-date statistics bear out a trend towards more financially strained landlord tenant relationships. According to the National Association of Realtors’ Commercial Real Estate Trends and Outlook survey for October Quarterly Market Survey:
- 52% of respondents reported increased repurposing of vacant and underutilized malls and shopping strips
- 43% reported a decrease in leasing transactions in central business districts as businesses adopt a work-from-home posture or move to suburban areas.
- 54% reported a decrease in on-time rental payments for leased industrial, office and retail spaces
- 65% reported that more of their tenants are receiving/have received rent concessions due to difficulty to meet their lease obligations.
Complicating matters for landlords are nationwide eviction moratoriums which may affect the ability to get a tenant out of a property for which they are no longer paying rent. However, there may be some scope for landlords and tenants to reach an agreement to re-let the property and eventually recover the arrears. Alternatively, landlords may be able to claim statutory abandonment in specific situations which will allow them to take back possession/occupation of the leased unit and re-let it to another tenant without the reaching an agreement with the tenant.
Determining Property Abandonment
In Florida, properties are strictly construed to be abandoned when certain statutory conditions are met.
In the typical lease, tenants are required to notify the landlord in advance if they anticipate being absent for more than seven consecutive days. Some commercial leases will stipulate a shorter time frame. Either way, this is a reporting requirement written into the lease agreement so that the landlord can determine if a property is vacant temporarily or whether there is a bonafide case of abandonment. Florida Statute § 83.595 is the section of Florida law that governs lessor abandonment of leased properties. According to Florida Statute § 83.595 that under the circumstances of rent payments not being current and also if there is an absence of written notice indicating that the tenant will be away, the landlord can presume abandonment if the tenant is not present on the premises for 15 consecutive days.
“… landlords may be able to claim statutory abandonment in specific situations which will allow them to take back possession…”
Remedies for Property Abandonment
When property abandonment occurs in Florida, there are laws that govern how landlords can take action, including how they should handle abandoned property.
Abandonment is considered a breach or early termination of the lease agreement on the part of the tenant. Therefore, the landlord, with the help of a competent legal counsel with experience in real estate law, could take one of several options:
- Consider the lease agreement terminated for all intents and purposes
- Retake possession of the property
- Terminate any further liability on the part of the tenant;
- Retake possession of the property
- Continue holding the tenant liable for the rent due. The amount recognized by law will be the difference between the rent outlined in the lease agreement and whatever sums the landlord actually recovers if he/she relets the property.
- Make a good faith attempt to re-let the premises. The law views “good faith” in this case as meaning that the landlord makes similar efforts to re-let the premises as were used in the initial rental. It also means that a similar effort must be made to re-let the property to efforts made for other properties that the landlord might also own. Either way, there is no requirement to especially feature or make extraordinary efforts to lease the property
- Do nothing, leaving the property in the state in which it is abandoned
- Continue holding the delinquent tenant liable for the rent as it comes due
- Charge “liquidated damages” or an early termination penalty, if such fees are outlined in the lease agreement according to specific legally defined formatting requirements. This option is a legal remedy as long as the amount does not exceed two months’ rent and the formatting requirements in the lease agreement had been followed when the lease was signed by tenant and landlord.
- Continue to collect rent “through the end of the month in which the landlord retakes possession”
- Charge the tenant for any damages to the unit.
Avoiding Property Abandonment Pitfalls
There are a number of areas in which a competent lawyer with local experience will be required in order to successfully take action as a landlord or defend against certain actions as a tenant.
If you find yourself in this situation as a landlord or tenant, some questions to ask are
Was the presumption of abandonment correct according to Florida law? Which option is the right legal remedy to take and what is in the ideal remedy for your best interests? Are there less costly and more effective ways to reach an agreement with your landlord or tenant?
South Florida Law
Are you a landlord or tenant who believes you may be involved in a dispute over an abandoned rental property? Exercise your right to legal counsel and ensure that you are equipped with the best team to represent you. Take proactive measures and consult an experienced real estate lawyer who can help you make the right decision for your business or dwelling. Reach out to South Florida Law at (945) 900-8885 or via our contact form.