Commercial leases in Florida and many other states tend to be more complicated than residential leases. Considering a commercial lease involves the usage of the premises for business activities, it also involves certain extra rules that both the landlord and tenant must be aware of.
On the contrary, a residential lease agreement tends to be simpler due to the fact that renting a home doesn't involve as many additional steps, such as disclosing particular information that could damage a business, sign placement, advertising, how security deposits will get used, and others.
Today, we'll cover how the Florida commercial lease agreement works and everything that landlords must keep in mind before renting their property, according to Florida statutes.
Before we dive into the specifics of a lease agreement in Florida, it's vital to note that landlords can work with one out of three options for the leased premises. All three are valid, and it's up to the landlord to decide which one goes in their best interests.
- Gross Lease: In a gross lease, the tenant will pay an established amount of rent for the leased premises. On the other hand, the landlord will be responsible for paying 'business nets,' which are namely the property's taxes, common area expenses, and insurance. Gross leases are considered to be more tenant-friendly.
- Triple Net Lease: Here, the tenant, aside from having to pay rent, will have to cover the costs of taxes, area expenses, and insurance. Triple net leases are considered to be more landlord-friendly since it's up to the tenant to pay for everything.
- Modified Gross Lease: You can consider this as a combination of the other two lease types we mentioned. Here, the landlord and tenant will need to come to an agreement regarding the lease term.
Landlords must ensure that all of the conditions for renting their commercial space are as clear as possible in this legally binding document; that way, they can avoid several legal problems in the future.
Lease agreements are different in every state, and Florida isn't the exception to this rule. When it comes to renting commercial spaces in Florida, there's a wide set of special rules you must consider before signing the lease agreement document.
The following section will outline everything that a commercial lease agreement in Florida should include, as well as the consequences if the landlord/tenant fails to comply with any of these rules.
Introduction | Primary Factors
- Introduction: In this first part of the lease agreement document, you will include the names of each party involved in the agreement. Moreover, the document should include the name of the business that will occupy the commercial spaces and the property address.Finally, if the tenant works with a management company for their business, they must list it on the lease agreement.
- Description of the Commercial Property: Include a detailed description of the property, including the type of commercial property and its square footage.
- Use of Premises: The tenant must explain how they will use the property for their business activities.
- Lease Term: This is one of the most important parts of commercial lease agreements. Here, the landlord must state the start and end date of the lease. Moreover, there should be a clause that explains what will happen if the business fails at any point in the term.
- Type of Lease: The landlord must include a clause that explains what type of lease they're using (Gross, triple net, or modified gross lease).
- Utilities: Lease agreements must include a clause that specifies all of the utilities that the business will use to operate and who will pay for them. Those utilities include water, internet, gas, electricity, and more.
- Maintenance and Repairs: In Florida, repairs and maintenance sessions are usually done by the landlord. However, landlords can decide to let the tenants do all the necessary repairs with lent money. If there are any special circumstances surrounding this section, the landlord must provide the tenant written notice in the lease agreements.
Rent, Security Deposit, and Renewal
When it comes to lease terms in Florida, there aren't many specific rules regarding rent and the security deposit. The landlord must include a clause specifying the rent amount, when it's due, and where it can be paid. In case the landlord wants to include late fees in the lease agreements, they can have an extra clause with the amount and the date in case the tenant refuses or fails to pay rent on time.
In most cases, tenants have to pay the first month of rent before they move into the property.
Regarding the security deposit, the tenant is responsible for any damages caused to the property during the term. The landlord can include the amount they consider appropriate for the security deposit and where it will be paid.
Finally, we have renewals. Typically, a commercial lease agreement will be much longer than a residential lease agreement since most business owners will not want to change business locations every few months. The landlord must include a clause that specifies what the tenant can do to renew the lease or if they're going to work with automatic renewals.
Licenses and Permits
Every business property in Florida must comply with Florida laws in general. Moreover, the business must have all the documentation, permits, and licenses necessary to operate in the state. The commercial leases must include this information.
The following is a list of other factors that should never go missing in your lease agreements in Florida. Make sure to add all of them to prevent any legal problems in the future.
Improvements to the Leased Property: In case the tenant must provide the property with any improvements to fit their business needs, the landlord must include information in the lease agreements regarding what they can and cannot do.
Some landlords provide their tenants with a build-out period where they can make improvements without having to pay rent during that period. However, this is up to the landlord.
Depending on the business, the tenant may need a parking space for them and their employees. These parking spaces should be near the store building. Some landlords charge an extra amount of money for any additional parking spaces the tenant needs.
All commercial lease agreements must include a final section for the landlord and tenant to sign. While lease agreements don't necessarily need to get notarized in Florida, some landlords prefer to go through that process.
Breaches of the Lease Agreement
There are three legal options every landlord can take if the tenant breaches the commercial lease agreement:
- Terminate the lease agreement immediately.
- Hold possession of the property and seek compensation for all the damages caused and any money that doesn't get recovered by re-renting the property under the tenant's account.
- Sue the tenant.
Evictions from the Property
Landlords can evict their tenants for any of the following reasons:
- Violating the lease
- Not paying rent
- Committing a crime
However, if the landlord wants to start eviction proceedings, they must first send a written notice to the tenant. In case the tenant doesn't vacate the premises within a reasonable time period, the landlord may start the eviction lawsuit.
When the tenant's possession term for the property ends, they must vacate within a reasonable period. However, if they fail to do it by the end of the term, landlords are legally allowed to seek any of the following options:
- Charging the tenant twice the amount of monthly rent at the end of the month (according to the Florida Statutes, section 83.06).
- Suing the tenant for any damages caused to the landlord for not surrendering the property.
- Increasing rent for the new lease term.
- Starting eviction proceedings.
Other vital clauses include:
- Amendment Statements
- Bankruptcy Statements
- Indemnification Statement
- Subleasing Requirements
- Insurance Requirements
Although these aren't strictly necessary for all business purposes, landlords may choose to include one of the following in the official document for the lease:
- Pet Policies
- Advertising Requirements
- Sign Placement Requirements and Restrictions
The following is a list of particular considerations that landlords in Florida must include in the commercial lease:
Landlord-Tenant Rights and Responsibilities
In essence, every tenant in Florida must comply with the following rules:
- Surrendering possession of the property once the commercial lease ends.
- Paying rent for occupying a commercial property
- Returning the commercial property in the same condition it was delivered when the lease started (this excludes regular wear and tear).
On the other hand, each landlord must comply with the following:
- Providing the tenant with the quiet enjoyment of the property.
- Delivering possession of the property at the designated time.
If either the tenant or landlord fails to comply with these rules, they may experience legal problems in the future.
Landlord's Liability of a Property's Suitability and Fitness
Florida law states that landlords aren't required to ensure the suitability and fitness of a property. Tenants must check the condition of the property before signing the lease. Otherwise, the landlord cannot be held liable for any injuries sustained by something that was present since the lease started.
Landlords can include a clause on fitness and suitability to prevent these problems from happening. On the other hand, if the commercial lease includes a future renovation, the landlord can provide an implied warranty of fitness and suitability.
Statute of Frauds
According to Florida law, specifically, the Statute of Frauds, any verbal commercial lease that goes for over a year is considered void. To prevent this issue from happening, any commercial lease that goes for over a year must be put in writing.
Every rental agreement in Florida must include the following disclosures to avoid problems with the future tenant:
Radon Gas Disclosure
All landlords in Florida must include a warning in the document if there's any radon gas in the property, as well as its current levels. Moreover, they must include information regarding the health risks that come from getting exposed to this gas, as well as the address of sites where people can get tested for exposure.
Lead Paint Disclosure
If the property was built before 1978, landlords must include a clause in the lease regarding the presence of lead-based paint in the property. Overall, lead paint can be dangerous for children and pregnant women, so it's vital for the tenant to be aware of all the risks.
Drafting a rental application contract tends to be time-consuming, especially with commercial properties. Thankfully, you can now download a Florida commercial lease agreement template today to make things easier.
To download the template, you can select the "Commercial Lease Agreements," option, find your preferred state, and choose the format you like. You can choose to download the template in either Word or PDF format.
Moreover, you can choose to customize your commercial lease agreement template document so that it's perfect for your particular renting needs.
Florida laws aren't as complicated as they seem, so all it takes for you to draft a contract that benefits all parties is a matter of time and patience. Still, if you don't want to spend time writing everything yourself and focus on choosing an appropriate base rent amount, rules for security deposits, and other factors, you may download a template today and fill it out with the information that best suits your rental space.
In the end, remember that the point of a commercial lease is to protect the rights of both the tenant and landlord, which is why it's so important that the document outlines every small detail that all parties should know before signing.
Can You Write Your Own Lease in Florida?
Absolutely! Having a written lease is much better than an oral agreement if you want to prevent any legal issues in the future. You can decide to write everything yourself, but if you don't want to take the time of figuring everything out yourself, feel free to download one of the free templates available today.
Do Commercial Documents Need to Be Notarized in Florida?
No, your lease document doesn't have to be notarized in Florida. However, if the landlord or tenant decides that they want to notarize the document, they can make the request.
Is There a Rent Cap in Florida?
Currently, there's no limit regarding how much landlords can raise rental prices; this means that landlords are free to raise the rent to any amount of money they consider appropriate.