Commercial Leases in Florida: A Tenant’s Guide to the Fine Print

By John M. Jorgensen, Esquire
Scott, Harris, Bryan, Barra & Jorgensen, P.A.

Signing a commercial lease is one of the largest financial commitments a business will make — and for most tenants, it is also one of the most lopsided. Unless you are a well-known or well-established company, the lease your prospective landlord hands you will be a one-sided document drafted decidedly in the landlord’s favor. That is not a knock on landlords; it is simply how the commercial leasing market works. The lease is the landlord’s paper, and the starting draft protects the landlord.

What surprises many South Florida business owners is how little the law does to even things out. Residential tenants in Florida enjoy a long list of statutory protections. Commercial tenants do not. In a commercial tenancy, the contract you sign controls almost everything — which means the terms you negotiate, or fail to negotiate, before you sign will govern your rights, your liability, and your exposure for years.

This guide walks through the provisions that matter most to a commercial tenant in Palm Beach Gardens, throughout Palm Beach County, and across Florida: personal guarantees, acceleration clauses, the “additional rent” hidden in CAM charges, the insurance you will be required to carry, and what actually happens if things go wrong — default, eviction, and the landlord’s powerful collection tools. The goal is not to talk you out of leasing space. It is to make sure you understand what you are signing.

Why a Commercial Lease Is Different From a Residential Lease

Florida’s landlord-tenant law lives in Chapter 83 of the Florida Statutes, and that chapter is split in two. Part II gives residential renters a detailed set of protections — limits on deposits, habitability requirements, strict notice rules, and more. Part I, which governs nonresidential (commercial) tenancies, is far thinner.

The practical consequence is simple but important: in a commercial lease, the lease contract itself is the rulebook. Where residential law would fill gaps in a tenant’s favor, commercial law largely defers to whatever the parties wrote down. If the lease is silent on something, you usually do not get a statutory backstop — you get a dispute over what the contract meant. That is why every clause discussed below deserves real attention before signing.

A “nonresidential tenancy” simply means space leased for business rather than as a home — offices, retail storefronts, warehouses, restaurants, and medical suites.

Personal Guarantees: Putting Your Own Assets on the Line

Most business tenants lease through an entity — a limited liability company (LLC) or a corporation. One of the main reasons owners form these entities is the liability shield: the company, not its owners, is responsible for the company’s debts. A personal guarantee punches through that shield. It is a promise — signed by an individual, usually the owner or a principal of the business — to personally pay the lease obligations if the business does not.

If you are not an established company, expect the landlord to require one, and expect it to be broad. Many guarantees are “joint and several,” meaning the landlord can pursue any one guarantor for the entire amount, not just that person’s share. Your home, your savings, and your other personal assets can be on the line. Also, the guarantees do not require the landlord to first go after the tenant LLC or corporation. Rather, the landlord can immediately sue on the guarantee.

The candid reality is that a personal guarantee usually cannot be avoided entirely. But its scope is negotiable, and that is where a tenant should focus. Common ways to limit a guarantee include:

• A durational limit. The landlord agrees to release the guarantee after the initial lease term — so renewals are not personally guaranteed — or releases it once the tenant has paid on time for a set period.
• A dollar cap. The guarantee is limited to a fixed amount — for example, one year’s rent — rather than every dollar that could come due over the life of the lease.
• A “good guy” or “rolling” guarantee. A good guy guarantee limits personal liability to the period you actually occupy the space, ending once you surrender the premises in good condition and current on rent; a rolling or burn-down guarantee caps exposure at a set number of months and shrinks over time.
• Release on assignment. If you sell the business and the landlord approves the new tenant, your guarantee is released rather than left hanging.

One Florida-specific point is worth knowing: a guarantee does not automatically extend to lease renewals or extensions unless it expressly says so. A guarantee intended to be “continuing” — covering future extensions — generally must say so in clear terms. Tenants should read the guarantee with that in mind; landlords, for their part, draft around it.

A note on Florida homestead: Florida’s constitutional homestead protection generally shields a primary residence from most creditors, which can limit what a landlord reaches even under a guarantee. It is not a substitute for negotiating the guarantee, and its application depends on the facts — but it is part of the picture.

A quick example. Suppose you sign a five-year lease at $6,000/month and personally guarantee it without limit. If the business fails in year two and the landlord obtains a judgment for the remaining rent plus fees and costs, your personal exposure could run well into six figures. Negotiate a one-year cap, and the same default exposes you to roughly $72,000 plus fees — still serious, but a very different order of risk. (Figures illustrative.)

Acceleration Clauses: How One Default Can Trigger the Entire Lease

An acceleration clause lets the landlord declare the entire remaining rent for the whole lease term immediately due if the tenant defaults. Instead of owing this month’s rent, a defaulting tenant can suddenly owe every remaining month at once, reduced to present value.

Most commercial leases contain one, and most landlords will not waive it. Couple an acceleration clause with a personal guarantee, then add the attorney’s fees and costs that commercial leases almost always shift to the losing tenant, and a single default can become a judgment large enough to threaten not just the business but the guarantor personally. This is exactly why the owner of a new venture should take a hard, honest look at the company’s prospects before leaping into a long lease backed by a personal guarantee.

Two points of Florida law make acceleration less absolute than it looks on the page, and a tenant should understand both:

• Acceleration must be written into the lease. Florida provides no statutory right to accelerate rent. If the lease has no acceleration clause, the landlord generally cannot collect future, unaccrued rent in a lump sum.
• No double recovery. A landlord cannot both collect accelerated rent and keep the space to relet for its own profit. If the landlord relets, the new rent is credited against what the former tenant owes.

For a tenant, the takeaways are practical. Try to negotiate the clause — a full waiver is unlikely, but a cap is worth asking for. And if you ever face an acceleration demand, remember that the landlord still has to account for rent it collects, or reasonably could collect, from a replacement tenant.

Base Rent vs. Additional Rent: CAM, Taxes, Insurance, and the “Triple Net” Trap

The rent number you negotiate is rarely the rent you pay. Most commercial leases break rent into two parts: base rent (the headline figure) and additional rent (everything else the lease makes you responsible for). The largest piece of additional rent is usually CAM — common area maintenance.

In a triple net (NNN) lease — common in retail and shopping centers — the tenant pays base rent plus a proportional share of three categories of building cost: property taxes, building insurance, and CAM. (Other structures exist: a gross lease bundles most costs into a flat rent; a modified gross lease splits the difference. Know which one you are signing.)

How CAM works

CAM covers the cost of maintaining shared areas — parking lots, landscaping, lighting, lobbies, restrooms. Your share is typically your leased square footage as a percentage of the property’s total leasable square footage. CAM is usually billed monthly as an estimate, then reconciled once a year against actual costs — and under current conditions, that annual recalculation usually means an increase. CAM has risen sharply lately, driven largely by climbing insurance premiums and higher property taxes.

Two features tend to catch tenants off guard:

• Anchor-tenant discounts. In a shopping center, a large “anchor” tenant may pay reduced CAM or none at all. That shortfall does not disappear — it shifts onto the smaller tenants.
• What landlords load into CAM. Landlords are inclined to push as much as they can into CAM — management fees, security, and more. CAM charges should be reviewed line by line.

What to negotiate

This is where a tenant has real leverage, even when the NNN structure itself is fixed:

• A cap on annual CAM increases. The single most valuable protection. Insist on a non-cumulative cap — increases limited to a set percentage over the prior year’s actual amount, with no “banking” of unused increases. A cumulative cap lets the landlord save unused headroom and hit you with a large catch-up increase later.
• Audit rights. The right to inspect the landlord’s actual expense records each year so you can verify the bill.
• Exclusions. Keep capital expenditures (a new roof, a parking-lot repave, HVAC replacement), leasing commissions, and the landlord’s corporate overhead out of CAM.
• Gross-up limits. If the lease “grosses up” expenses to full-occupancy levels, make sure that applies only to genuinely variable costs.

Insurance You Will Be Required to Carry

Commercial leases also require the tenant to carry insurance on the leased premises. Expect, at a minimum, commercial general liability coverage of $1 million per occurrence and $2 million in the aggregate, plus property insurance on the space and on the tenant’s improvements and contents. (“Per occurrence” is the most the policy pays for a single incident; “aggregate” is the most it pays over the policy period.)

Leases commonly also require the landlord to be named as an additional insured, and may include a waiver of subrogation — an agreement that each party’s insurer will not pursue the other after paying a claim. Read these provisions against the policy you actually buy; gaps between what the lease demands and what your policy provides are a common and avoidable problem.

Default and the Landlord’s Remedies in Florida

Default clauses in commercial leases are often draconian — that is, unusually harsh. Understanding how default works, and what the landlord can and cannot do, is essential.

A commercial landlord is not required by law to give notice of default before filing for eviction but only if the lease expressly and clearly waives notice of default. Otherwise Fla. Stat. § 83.20(2) and caselaw requires that, for nonpayment of rent, a commercial landlord must serve a written three-day notice before filing an eviction.

If there is an express waiver of notice of default in the lease, a tenant should insist the lease be revised to include a written notice-of-default clause giving at least five to seven days to cure before the landlord can act.

What a Florida landlord cannot do is help itself. Even though many commercial leases purport to let a landlord remove a tenant “without process of law,” self-help is not permitted — a landlord cannot change the locks or shut off utilities to force a tenant out. The landlord must go through the courts: file an eviction action and obtain a court judgment for possession, and typically damages. A landlord who resorts to self-help can be liable for wrongful eviction. However, if the tenant has abandoned the leased premises, and the landlord has actual knowledge of abandonment, or if the landlord has reason to believe the tenant has been absent for 30 days, and the rent is not current, and a notice for nonpayment has been served, then the landlord can retake possession.

If the case goes to court, expect the summary procedure rhythm: the tenant generally must pay disputed rent into the court registry — the court’s holding account — while the case proceeds, and failing to do so can cost the tenant its defenses.

When a tenant defaults, a Florida landlord generally chooses among three paths — worth knowing because they shape what you might owe:

1. Terminate and retake for the landlord’s own account — end the lease, take the space back, and use or relet it for the landlord’s benefit; the tenant’s future-rent liability generally ends.
2. Retake and relet for the tenant’s account — take possession but keep the lease alive, reletting as the tenant’s agent and holding the tenant liable for any shortfall. This is the most common path.
3. Stand by and sue as rent comes due — leave the lease in place and pursue the tenant installment by installment.

Distress for Rent and the Landlord’s Lien

There is one more tool that makes Florida commercial leases especially serious for tenants, and few tenants know about it until it is used against them.

By statute, a commercial landlord has a lien on the tenant’s personal property kept on the leased premises — equipment, furniture, inventory — to secure unpaid rent. To enforce it, the landlord can bring a distress for rent proceeding and ask the court to issue a distress writ, which directs the sheriff to seize the tenant’s property to satisfy the rent owed. Because the remedy is powerful, the law builds in safeguards: the landlord must file a verified complaint and post a bond — generally double the amount demanded — to cover the tenant’s costs and damages if the distress turns out to be improper, and certain basic property is exempt.

The distress-for-rent statutes (§§ 83.08–83.19) allow for a prejudgment seizure of the tenant’s personal property via the distress writ (sheriff levy, double bond), and are a separate and distinct, and powerful, remedy that the landlord may exercise, instead of the standard eviction procedure.

For a tenant, the lesson is concrete: in a Florida commercial tenancy, it is not only the space at risk — the assets you keep inside it can be too.

Before You Sign: A Tenant’s Checklist

Pulling it together, here is what a careful commercial tenant does before signing:

• Assess the business honestly. A long lease backed by an unlimited personal guarantee is a bet on the company’s future. Make sure the prospects justify it.
• Negotiate the guarantee — duration, dollar cap, release on assignment.
• Scrutinize acceleration — and remember the landlord must credit reletting income.
• Model the real rent — base rent plus CAM, taxes, and insurance — and push for a non-cumulative CAM cap, audit rights, and exclusions.
• Confirm the insurance you are required to carry, and that your policy actually matches.
• Demand a written cure period in the default clause.
• Have the lease reviewed before you sign. It is far cheaper than litigating it later.

Reviewed and approved by John M. Jorgensen, Esq.