Commercial Evictions in the Wake of COVID-19
By Austin T. Hamilton, Esq.
COVID-19 will affect nearly every business in the State of Florida in one way or another. When tenants cannot pay their rent, landlords cannot meet their ongoing mortgage obligations. This results in a domino effect. As a result, Florida (and many other states) will see an increase in commercial evictions and landlord-tenant disputes in the wake of COVID-19.
On April 2, 2020, Governor DeSantis signed Executive Order 20-94 and suspended residential foreclosures and evictions through May 17, 2020. However, at least as of the date of writing this article, commercial evictions have not been suspended.
While the federal government has not imposed a national moratorium on commercial evictions, some states and local governments have imposed such moratoriums. For example, the state of New York has issued a temporary moratorium on commercial evictions. In California, cities such as Los Angeles, San Francisco and San Diego have all passed moratoriums on commercial evictions. This is a fluid situation and if Florida follows the lead of other states and local governments, there is a possibility that subsequent executive orders either at the state or local level may temporarily suspend commercial evictions.
However, even if a moratorium is subsequently placed on commercial evictions, such moratorium will likely be short-lived. As such, all corporate counsel and business owners need to have a general understanding of the commercial evictions process.
Evictions/Removal actions under Section 83.20, Florida Statutes.
The commercial landlord-tenant act is set forth in Sections 83.001-83.251 of the Florida Statutes. Unlike the residential portion of the statute, the commercial portion of the statute does not use the term “eviction” except under Section 83.202. Instead, the commercial statute uses the term “removal.”
Section 83.20 provides a cause of action for removal of a commercial tenant under the following circumstances:
- The tenant continues in possession of the premises after expiration of the rental without the permission of the landlord;
- The tenant holds over without permission after default in the payment of rent provided that three (3) days written notice has been properly served on the tenant; and
- The tenant holds over without permission after failing to cure a material breach of the lease or oral agreement (other than nonpayment of rent) provided that fifteen (15) days written notice has been properly served on the tenant and the tenant fails to cure such material breach.
§83.20, Fla. Stat. (2019). Notwithstanding the foregoing, if a written lease agreement provides for a longer notice period than that prescribed in Section 83.20, the longer notice period will apply. See Stephenson v. National Bank of Winter Haven, 39 F.2d 16, 17-18 (5th Cir. 1930).
Default Notice Requirements.
Unless the lease agreement provides for a longer period of time, for nonpayment of rent, the landlord must provide three (3) days written notice to the tenant. §83.20(2). The notice must require the payment of rent or possession of the premises. §83.20(2). Service of the three (3) day notice must be made by delivering a true copy of the notice, or, if the tenant is absent from the rented premises, by leaving a copy of the notice at such place. §83.20(2).
For a material breach of the lease agreement, other than the nonpayment of rent, the landlord must provide fifteen (15) days written notice. §83.20(3). The notice must require the cure of such breach or the possession of the premises. §83.20(3). In the absence of a lease provision prescribing the method for serving notice, the fifteen (15) day notice must be served by mail, hand delivery, or if the tenant is absent from the rental premises or the address designated by the lease, by posting. §83.20(3).
Summary Procedure and Removal Complaints.
A commercial eviction/removal action is summary in nature and allows the commercial landlord fast relief. See §83.21, Fla. Stat. (2019); §51.011(1), Fla. Stat. (2019); See Dade Realty Corp. v. Schoenthal, 6 So. 2d 845, 846 (Fla. 1942). This summary procedure is an expedited process to determine the right to possession of the premises promptly without the necessity of deciding all other issues between the parties. See Camena Invs. and Prop. Mgmt. Corp. v. Cross, 791 So. 2d 595, 596-97 (Fla. 3d DCA 2001).
The Removal Complaint.
The summary removal complaint is to be filed in the county where the premises are located and must state the facts which authorize the removal of the tenant and must describe the premises. §83.21. It is also recommended that a complaint for removal attach a copy of the lease agreement (if applicable) and attach a copy of the default notice (if applicable).
The tenant must answer the complaint within five (5) days after receiving service of process. §51.011(1), Fla. Stat. (2019). However, this five (5) day period does not include the day of service or any intervening Saturdays, Sundays or legal holidays. See Pro-Art Dental Lab, Inc. v. V-Strategic Group, LLC, 986 So. 2d 1244, 1248 n.6 (Fla. 2008). The tenant’s answer should contain all defenses of law or fact and, if the tenant has a counterclaim, the tenant should incorporate the counterclaim into the answer. §51.011(1). In the event the tenant incorporates a counterclaim, the landlord must respond to the counterclaim within 5 days after service of the counterclaim. §51.011(1).
A landlord is entitled to file a complaint for eviction/removal and a separate action for damages. See Camena Invs. and Prop. Mgmt. Corp., 791 So. 2d at 597; Scovell v. Delco Oil Co., Inc., 798 So. 2d 844, 846 (Fla. 5th DCA 2001). However, in practice, attorneys routinely file eviction/removal actions that also include other causes of action such as distress for rent, breach of contract or breach of a guaranty. See infra.
The requirement of rent to be paid into the registry of the court.
Section 83.232, Florida Statutes, requires that in an action by a commercial landlord for possession of real property, unless a tenant alleges a defense of payment or satisfaction of the rent alleged in the complaint, on or before the date for answering the complaint, the tenant must pay into the court registry the amount alleged in the complaint as unpaid and all rent accruing during the pendency of the action when it becomes due. §83.232(1). The filing of a counterclaim for money damages does not relieve the tenant from its obligation of depositing rent due into the court registry. §83.232(4). If the tenant contests the amount of rent due, then the court shall determine the amount due and the tenant must pay that amount into the court registry on the day that the court makes such determination. §83.232(1). Further, even if the tenant alleges a defense of payment or satisfaction of rent, the court may still order the tenant to pay into the court registry the rent that accrues during the pendency of the action. §83.232(1).
Critically, the statute provides that “[f]ailure of the tenant to pay the rent into the court registry pursuant to court order shall be deemed an absolute waiver of the tenant’s defenses. In such case, the landlord is entitled to an immediate default for possession without further notice or hearing thereon.” §83.232(5) (emphasis added); see 214 Main St. Corp. v. Tanksley, 947 So. 2d 490, 492 (Fla. 2d DCA 2006) (relying on the plain meaning of Section 83.232(5) and holding that the trial court does not have discretion to excuse the late payment of rent into the court registry based on a finding of excusable neglect); Key Largo Watersports, Inc. v. Whitehurst Family P’ship, 954 So. 2d 1278, 1278 (Fla. 3d DCA 2007) (same). However, while the landlord is entitled to an immediate default and a writ of possession as to the premises, the default for failure to pay rent pursuant to Section 83.232 does not apply to a claim for money damages. See Premici v. United Growth Props., L.P., 648 So. 2d 1241, 1243-44 (Fla. 5th DCA 1995) (holding that after the tenant failed to pay the past due rent, the landlord was entitled to obtain a default for possession but was not entitled to a default final judgment on the landlord’s claim for money damages).
Commercial tenants who intend to contest a commercial eviction action must be familiar with Section 83.232 and must be prepared to deposit rent money into the registry of the court.
Defenses to an eviction/removal action.
The most common defenses to an eviction/removal action are payment and/or satisfaction under Section 83.232 or waiver under Section 83.202. Specifically, Section 83.202 provides that the landlord’s acceptance of the full amount of past due rent (despite knowledge of the tenant’s breach of the lease by nonpayment) is considered a waiver of the landlord’s right to proceed with an eviction claim for nonpayment of that rent. §83.202. Acceptance of rent includes conduct by the landlord concerning any tender of the rent by the tenant which is inconsistent with reasonably prompt return of the payment to the tenant. §83.202.
Discovery and entitlement to a jury trial.
Florida’s summary procedure statute allows for limited discovery without a court order. Specifically, depositions may be taken at any time but other discovery is only permitted by obtaining an order setting the time for compliance. §51.011(2). However, discovery is not to postpone the time for trial except for good cause shown or by stipulation of the parties. §51.011(2). These summary procedures apply to the eviction/removal action and would not necessarily apply to other related causes of action such as breach of the lease agreement. See §83.231.
Additionally, parties are entitled to a trial by jury under the summary procedure rules. §51.011(3). However, many written lease agreements will include a waiver of the right to a jury trial. Nevertheless, if a party is entitled to a jury trial and desires a jury trial, the requesting party must comply with the time requirements of Section 51.011(3).
Judgment.
If the issues are found in favor of the landlord, judgment will be entered permitting the landlord to recover possession of the premises. §83.231. Additionally, upon successfully prevailing in the action, the landlord will be entitled to recover its costs. §83.251.
Self Help.
While commercial landlords may be inclined to engage in self-help, such as by changing the locks on the premises, self-help is not permitted under the statute. §83.05, Fla. Stat. (2019); Vines v. Emerald Equip. Co., 342 So. 2d 137 (Fla. 1st DCA 1977) (holding that the landlord breached the lease agreement by engaging in self-help and changing the locks on the premises; and reversing the trial court’s denial of the tenant’s counterclaim for damages for breach of the lease agreement and unlawful eviction). Section 83.05, Florida Statutes, governs the method by which a landlord may retake possession of leased premises.
Other considerations.
In addition to commercial evictions/removal actions, causes of action that commonly accompany eviction/removal complaints include claims for distress for rent as provided under Section 83.11, Florida Statutes; claims for damages for breach of the written lease agreement; and claims for damages against the guarantor(s) of a commercial lease for breach of the guaranty.