Business Law 101 / How Hurricanes and evacuations affect rent

Business Law 101 / How Hurricanes and evacuations affect rent

By Albert L. Kelley

One of the most commonly asked questions in the Keys these days is whether tenants must pay rent for the time they evacuated or for the time their units are damaged.

Evacuation: For those tenants who heeded the mandatory evacuation order, there is no rent set-off.  Although you were ordered by the State to vacate your home and business, the evacuation order does not affect your contractual responsibilities.  You are still obligated to pay your entire month’s rent (As discussed last week, for residences you may be entitled to rent assistance from FEMA and businesses may seek SBA loans, but these do not offset or delay the rent obligation).

Damage: Residential Leases: The first question is whether there is a written lease or not. As a general rule, written leases take priority over the statutes.  As every written lease is different, it is incumbent upon the landlords and tenants to read their leases carefully to ensure they are complied with.   If there is no written lease, the statutes control.  Florida has a specific statute that addresses what happens when a residential property is damaged by a casualty.   Florida Statute 83.63 states that if the property is damaged to the point it is no longer habitable, the tenant may move out immediately, terminate their lease and have no further rent obligation.  If only part of the property is rendered uninhabitable, then the tenant must immediately move out of that section of the property and their rent will be reduced by the amount of the unit that is uninhabitable.  If however, the property is damaged, but still habitable, the tenant remains responsible for the full rent amount. So if a tree falls and caves in the living room roof, the tenant can move out and not pay rent. But if the tree only caves in the carport roof, the tenant will likely be responsible for the full rent.  The question is whether the house or apartment can be lived in.  As long as it can be lived in, the tenant still must pay rent.  The related question is how long does the landlord have to repair the property?   Under the statutes, Landlords are responsible for ensuring that the property complies with proper building codes. This means that after the hurricane passes, the landlord must start taking reasonable steps to correct any deficiencies.  This does not mean they need to restore the building the next day or even restore it to the condition it was in prior to the storm.  They just need to bring it to code within a reasonable time. If they fail to make necessary repairs in a reasonable time, the tenant can provide the landlord with a seven day notice that they intend on terminating the lease.  What is a reasonable time? That is a question for the courts based on the circumstances.

Commercial Leases: Every commercial lease should be in writing. While the statutes control residential leases, there are no similar statutes for unwritten commercial leases.  As a general rule, if the commercial lease is a triple net lease, the Tenant is not only responsible for all rent, but also the cost of all repairs.  This can sometimes include structural costs.  If the lease is not triple net, the repair and maintenance clause needs to spell out who must pay for which repairs.

Can a tenant withhold rent if the property is not repaired?  There is no residential statute allowing the withholding of rent, however for commercial leases a tenant may withhold rent only if there is a written lease that places the maintenance obligation on the Landlord, if the premises are wholly untenantable and the landlord does not make the repairs within 20 days of receipt of the notice that the tenant intends to withhold rent (Once the repairs are done, the tenant must bring the full rent amount current). Many leases also contain a force majeur or Act of God clause to specify what the parties obligations are after a hurricane passes. In general, most Key West commercial leases allow additional time for any obligation delayed by an Act of God- except the payment of rent. This means that the tenant may still have to pay the full rent within the time required by the lease, or be subject to eviction.

Al Kelley is a Florida business law attorney located in Key West and previously taught business law, personnel law and labor law at St. Leo University.  He is also the author of “Basics of Business Law” “Basics of Florida’s Small Claims Court” and “Basics of Florida’s Landlord/Tenant Law” (Absolutely Amazing e-Books). This article is being offered as a public service and is not intended to provide specific legal advice.  If you have any questions about legal issues, you should confer with a licensed Florida attorney.

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