Wednesday, August 21, 2013

Commercial Lease Default

Miami bankruptcy lawyer Jordan E. Bublick has over 25 years of experience in filing chapter 13 and chapter 7 bankruptcy cases. Office: 1221 Brickell Ave., 9th Fl., Miami, Florida. Tel.: (305) 891-4055.

The case of Quntero-Chadid Corp. v. Gersten, 582 So. 2d 685 (3rd DCA, 1991) dealt with the issue of a landlord's damages upon a commercial lease default. The Court held that a landlord has three alternative courses of action upon a commercial tenant's default:

      1. Treat the the lease as terminated and retake possession for the landlord's account, ends further tenant liability

      2. Retake possession for the account of the tenant and hold him liable for the difference of the rent due under the lease and what in good faith the lessor may recover from releting the property

      3. Do nothing and hold the tenant liable for all rent due if the lease contains an acceleration clause which is exercised
The Court noted that if the landlord exercises an acceleration clause, it cannot collect the full amount due and also relet to a third party. The exercise of the acceleration clause itself does not terminate the lease, it only requires all future rent to be paid in advance. Once a lessor accelerates the rent, it cannot also demand possession of the premises. The Court also cited with approval a case that held that a landlord's future monetary losses must be reduced to present money value.