A commercial landlord may seek to evict a tenant for a number of reasons, such as nonpayment of rent or breaking their lease agreement in some way. Commercial evictions should always be the last resort and other efforts to resolve the issues should be attempted. If evicting a commercial tenant is necessary, you will be required to follow the legal procedures in your state as well as the terms set forth in your commercial lease agreement.
What is a Commercial Tenant?
A commercial tenant is a business that does not own its store, office space, warehouse, or another place of business. Generally, a business cannot conduct business within the owner’s house, so they must turn to commercial property to rent or lease. In the U.S., commercial zones are more limited than the surrounding residential areas and these zoning laws are strictly enforced.
These businesses rent their business space from commercial landlords. Private residents differ from commercial tenants in that there are limitations as to how and when a tenant can be evicted. Commercial tenants are deemed to be able to negotiate lease agreements and the law does not want to restrict the rights to negotiate their own terms.
What Commercial Landlords Should Know
The commercial lease agreement should be written in a way that would make it difficult for a tenant to dispute an eviction. When certain points in an agreement are vague or unclear, it can easily result in a dispute between the landlord and the tenant.
There are three important questions that should be addressed when writing the commercial lease agreement. They are:
- Will the lease be a triple net lease or an all-inclusive lease?
- Will there be a rent escalation clause in the lease?
- Will the tenant be offered the ability to extend or renew their lease (and if so, what rate will be charged)?
Please read An Overview of Commercial Landlord Rights
Commercial landlords can take possession and recover damages if they have taken the time to spell out what will happen if the tenant defaults. The commercial landlord will follow the terms of the contract and usually has three options”
1. Take possession of the space and hold the tenant responsible for unpaid rent.
Once the commercial landlord has taken possession of the property, the space can be rented to another tenant. Under this scenario, the landlord must attempt to mitigate their damages by getting a new tenant into the space as quickly as possible. The landlord can then pursue the delinquent tenant for any past due rent, plus rent due for the remainder of the contract. Any amount that the new tenant pays during that term must be deducted from that total amount.
2. Leave the tenant in the property and sue for rent as it comes due or once the contract is up.
This option is rarely used because it benefits the tenant more than the landlord. In this scenario, the landlord would be denied income from the property and would not be able to mitigate its damages.
3. Evict the tenant and forgo any rent that the contract would have allowed after the eviction occurs.
With this option, the landlord evicts the tenant and is entitled to all rent that came due up until the eviction. The landlord then waives any remaining rent that would have been due under the lease agreement. This option usually is taken when the landlord wants to use the property for his/her own use, such as turning the space into an office for themselves.
Steps to Take When Evicting a Commercial Tenant
When a commercial landlord needs to evict a tenant, they are required to abide by the rules of the Forcible Entry and Unlawful Detainer (FED) statute. In Florida, and many other states, self-eviction is not allowed. A commercial landlord who evicts a tenant without legal process can be liable to the tenant for attorney’s fees, court costs, and lost profits from the tenant’s business.
Under Florida law, a tenant may not remain in the space during the litigation without paying rent. So while eviction is pending, a commercial tenant must tender unpaid rent into the court’s registry. If the tenant disputes the amount due, the court will decide the amount that is needed to be paid.
To be able to evict a commercial tenant boils down to whether the landlord abides by the law and complies with the lease agreement. If for any reason, the landlord handles the eviction process improperly, the landlord can be liable to the commercial tenant for damages.
In most commercial lease evictions, the following steps need to be applied:
- The commercial tenant will be provided a notice
- Once that notice has expired, the landlord can file a complaint with the court. The court will then issue a summons, beginning the process of judicial eviction. A disinterested party must deliver the summons to the tenant.
- The tenant must respond to the summons within the stated deadline. If the tenant issues no response, the court will usually judge that the tenant can be evicted.
Should I Consult a Lawyer About Evicting a Commercial Tenant?
Commercial tenants generally do not have access to the same protections as residential tenants, yet commercial landlord-tenant law can still be complex and technical. A commercial landlord must still follow the legal procedures that are required from the state.
I’m Rob Robinson, and I have been practicing law in Florida for over 30 years. As a 5th generation Floridian, I have assisted commercial landlords with protecting their rights, as well as their property. In some cases, that means assisting with commercial evictions. If you need legal help with commercial real estate law, please don’t hesitate to contact my law office. I will provide sensible legal advice that can go a long way towards defending your interests and protecting your assets...