Landlord-Tenant Disputes

September 9, 2020

Effects of CDC’s Evictions Ban on Residential Tenants, Landlords

by Oscar R. Rivera

Oscar R. Rivera

The recent order to halt residential evictions through Dec. 31, 2020, by the Centers for Disease Control is aimed at preventing the further spread of COVID-19 and protecting tenants impacted by the virus. Under the order, renters of single family, multifamily and mobile home residences who earn less than $99,000 a year ($198,000 for joint filers) may submit a declaration to their landlord asserting their eligibly to be protected from eviction.

For eligibility, renters must provide a declaration form to their landlord asserting their qualifications and inability to pay, and they will not be relieved of their obligations to pay rent nor any fees or interest due to nonpayment. In addition, residents can still be evicted for other reasons, like engaging in criminal activity, posing a health or safety risk, or damaging rental property.

The order also specifically excludes foreclosures of home mortgages from the moratorium, but it is unclear whether a foreclosed homeowner could seek protection from being removed from the property post-foreclosure sale.

Our firm’s real estate attorneys are helping our clients navigate through these challenging times and contend with the issues surrounding the current state of evictions, foreclosures and property transactions. We encourage those with questions to contact us, and we also recommend submitting your email address in the subscription box on the right to automatically receive all our future blog articles.

October 22, 2018

Good Guy Guaranty – What is It?

by Oscar R. Rivera

Oscar R. Rivera

Have you ever heard of this? If you are familiar with leases in the New York City area, you probably have. But if you are not, you might be a bit surprised by it. Like many legal issues that begin in either New York or California, the Good Guy Guaranty is now spreading beyond those borders, and if you are in the business of leasing space, you should become aware of it.

In essence, a Good Guy Guaranty is a pre-negotiated kick-out with the financial backing of a credit-worthy guarantor. The guaranty is in place while the tenant is in possession, but if the tenant gives the landlord sufficient notice that it intends to vacate the premises and subsequently leaves the premises in good condition and as otherwise required by the lease, the tenant and the guarantor are both released.

The landlord benefits from it because it has a guarantor that backs the tenant and a tenant that surrenders possession when they vacate, thereby avoiding the need for the landlord to undertake eviction or abandonment litigation. The tenant benefits in that if it gives the landlord advance notice of its intent to vacate (usually anywhere from six to nine months) and is otherwise in compliance with the lease, it can close, be relieved of future liability and not be sued for damages. And, the guarantor benefits in that if they make sure the tenant complies with the lease, the guarantor is never called upon to pay.

September 10, 2018

Florida’s Enforceability of Waivers of Defenses by Guarantors of Leases Protects Commercial Property Owners

by Siegfried Rivera

Siegfried Rivera

By: Oscar R. Rivera

For commercial real estate landlords, guaranty agreements requiring the principal owners of small businesses to personally guaranty the obligations of the corporate tenant are standard operating procedure. In addition, commercial landlords oftentimes also require the corporate guaranty of a parent or other affiliated company, if the creditworthiness of a corporate tenant or franchisee is questionable. One question that is often posed is whether waivers of defenses by guarantors in such guaranty agreements are enforceable? Fortunately, for property owners in Florida, if the waivers are properly drafted, the answer is yes.

The waiver of defenses paragraph helps property owners avoid costly and disruptive litigation if legal action becomes necessary to enforce a guaranty. Guaranty agreements containing language that clearly and unambiguously waives defenses to the enforcement of the guaranty have been strictly construed and enforced by Florida courts.

A typical waiver provision reads as follows:

“Guarantor hereby expressly waives (a) notice of acceptance of this Guaranty; (b) presentment and demand for payment of any of the Liabilities of Tenant; (c) protest and notice of nonpayment, nonperformance, nonobservance or default to Guarantor or to any other party with respect to any of the Liabilities of Tenant; (d) all other notices to which Guarantor might otherwise be entitled; (e) any demand for payment under this Guaranty; and (f) any and all defenses relating to Landlord’s failure to perfect a security interest in Tenant’s property and/or seize or attach any other collateral.”

July 28, 2015

Appellate Court Overturns Summary Judgment for Eviction of St. Petersburg Nightclub and Restaurant

by Oscar R. Rivera

Oscar R. Rivera

A ruling filed on July 22 by the Second District Court of Appeal overturned the circuit court’s summary judgment in favor of a landlord for the eviction of its tenant that operated a restaurant and a separate nightclub from its two spaces at the property. The ruling adds clarity to the burdens that must be met for summary judgments granting commercial evictions.

In the case of Atria Group v. One Progress Plaza, II, Atria Group took possession of the two suites in April 2010, and One Progress Plaza filed for eviction in September 2013 alleging that Atria had committed numerous nonmonetary violations including damage to the property, illegal activity, disregard of building rules and other lease requirements, unsanitary conditions, and failure to clean the premises.

Atria promptly filed its answer and affirmative defenses, as well as a request for mediation and a counterclaim. It denied the majority of the allegations regarding the claimed breaches, and it argued that One Progress Plaza failed to give the requisite notice of breach and opportunity to cure, and the eviction would cause an inequitable forfeiture based on Atria’s $2 million investment into the promotion and renovation of the premises and its payment of $25,000 per month in rent since 2010.

In pursuit of its motion for summary judgment, the landlord filed an affidavit which outlined the alleged violations of the lease. The circuit court granted summary judgment for eviction in favor of the landlord, and the tenant appealed.

The appellate panel’s opinion notes that the lease agreement between the parties provides an important caveat for the establishment of material defaults and breaches of the lease:

“(3) The failure by Lessee to observe or perform any of the covenants, conditions or provisions of this Lease to be observed or performed by Lessee . . . where such failure shall continue for a period of ten (10) days after written notice thereof from Lessor to Lessee; provided, however, that if the nature of Lessee’s default is such that more than thirty (30) days are reasonably required for its cure, then Lessee shall not be deemed to be in default if Lessee commences such cure within said 30-day period and thereafter diligently prosecutes such cure to completion.”

The appellate ruling concludes that the circuit court erred in granting the summary judgment for eviction because the landlord’s property manager acknowledged in his deposition that most of the alleged defaults or violations of the lease had, in fact, been corrected, and the affidavits provided by both parties raise issues of material fact about the occurrence of the alleged defaults and Atria’s curative acts within the terms of the lease. The panel also found that One Progress Plaza failed to establish that the alleged violations of the lease were material, given that Atria was remedying any problems as they arose, and the landlord failed to refute all of the tenant’s affirmative defenses or to establish that they were legally insufficient.

The court was also swayed by Atria’s assertions that eviction would cause an inequitable forfeiture based on its $2 million investment into the promotion and renovation of the premises and its continuous payment of the rent since 2010. It found that the tenant may be able to prove that it would be inequitable to terminate the lease in light of its significant investment in the property.

The appellate court’s opinion reiterates the stringent nature of the burdens that typically must be met for summary judgments for commercial evictions. In reversing the summary judgment for eviction, the appellate court remanded the case back to the circuit court for further proceedings, and its findings as to the validity of the tenant’s assertions and affirmative defenses should prove to be very influential in the case.