County Civil Court: LANDLORD/TENANT – Landlord’s notice of termination of commercial lease for failure to pay rent and taxes was not deficient – Landlord’s inclusion of delinquent insurance premiums in notice under Florida Statutes, section 83.20(2), was not erroneous – inclusion of late fees does not render notice of default invalid under 83.20(2) as long as demand is not prejudicial - Dismissal reversed.  Clant, Inc. v. Specialty Restaurant Group, LLC, Appeal No. 05-0049AP-88B (Fla. 6th Cir. App. Ct. April 25, 2006). 

 

 

IN THE CIRCUIT COURT FOR THE SIXTH JUDICIAL CIRCUIT

 IN AND FOR PINELLAS COUNTY, FLORIDA

APPELLATE DIVISION

 

CLANT, INC., as successor in

interest to LINCOLN COMMERCIAL

PROPERTIES, INC., a Florida

corporation,

                        Appellant,                                                Appeal No. 05-0049AP-88B

                                                                                       UCN 522005AP000049XXXXCV

vs.                                                                                  

                                                                                   

SPECIALTY RESTAURANT GROUP,

LLC, a Delaware limited liability company

as Tenant and TIAS FLORIDA, LLC, a

Florida limited liability company as

Sub-Tenant,

                       

                        Appellees.

______________________________________/

 

Opinion Filed  ______________

 

Appeal from Final Order

Pinellas County Court

Judge Walt Fullerton

 

Ladd H. Fassett, Esq.

William H. Beaver, II, Esq.

Attorneys for Appellant

 

Dana A. Clayton, Esq.

Carolina Maharbiz, Esq.

Attorneys for Appellee Tias Florida, LLC

 

ORDER AND OPINION

 

            This matter is before the Court on the appeal of Clant, Inc., from an Order of the Pinellas County Court entered June 9, 2005, dismissing Clant’s Complaint for Eviction against Specialty Restaurant Group and Tias Florida (“Tias”).  Having reviewed the briefs, the record, and pertinent legal authority, and being otherwise fully advised, this Court reverses the trial court’s order as set forth below.

            Tias leased commercial property for a restaurant in Clearwater from Clant.  Under paragraph 17 of the parties’ written agreement, an “Event of Default” occurs if, inter alia, the Tenant fails to pay “any installment of rent as and when the same shall become due and shall not cure such default within ten (10) days after written notice thereof is given by Landlord to Tenant.”  Upon the occurrence of an Event of Default, “Landlord shall have the option to pursue [any remedies provided by law] without any notice or demand whatsoever . . . .”

            Further, the lease provides, “Tenant shall pay as additional rent, before they become delinquent, all real estate taxes . . . .”  (emphasis added).  Additionally, under the section of the lease entitled “Rent,” “If any part of the rent is not paid within ten (10) days after it is due, Tenant shall pay Landlord a late charge of five percent (5%) of the amount due.”

            On April 11, 2005, Clant sent Tias a “Formal and Statutory Default Notice” (Notice) stating that Tias had failed to make the following payments:

            (1)        a $375 late fee for March rent;

(2)               the $8,025 rent due in April;

(3)               a $375 late fee for April rent; and

(4)               $27,443.84 in 2004 real estate taxes due March 31, 2005.

The Notice demanded payment of $8,775 plus direct payment of the real estate taxes or possession within ten days.  Tias has not alleged that it failed to receive this Notice or that it was not properly served.

            On April 28, 2005, Clant sent Tias a “Formal Notice of Termination of Lease,” stating that it was terminating the parties’ lease due to Tias’ failure to timely cure the defaults listed in the April 11 Notice.  On May 16, 2005, Clant initiated the present action through a Complaint for Eviction.

            Tias responded with a Motion to Dismiss, claiming among other points that the Default Notice was deficient under both the lease and section 83.20(2), Florida Statutes, because it contained late fees, which do not constitute “rent” under either the statute or the lease, and real estate taxes, which were not delinquent.  

            The trial court granted Tias’ motion, finding that the “notice of termination was deficient.”  Unfortunately, however, the trial court’s order does not specify whether it found the Notice deficient under the lease or section 83.20(2).  Also, neither party has filed a transcript of the hearing on the motion to dismiss, either.  The Court notes that both the inclusion of findings of fact and the transcript would have expedited this appeal.

            From the parties’ briefs, though, it appears that the trial court’s primary concern was the inclusion of the late fees in the Notice.  As discussed more fully below, the Court finds that the inclusion of the real estate taxes did not render the Notice invalid under either the lease or the statute.  Further, because the inclusion of the late fees did not invalidate the Notice under the statute, the Court need not consider whether the inclusion of the late fees was consistent with the lease terms.

            Section 83.20(2) provides that, with regard to nonresidential leases, a tenant may be removed from the premises where it

holds over without permission . . . after any default in the payment of rent pursuant to the agreement under with the premises are held, and 3 days’ notice in writing requiring the payment of the rent or the possession of the premises has been served by the person entitled to the rent on the person owing the same.

 

Tias maintains that Clant did not comply with this provision because the Notice contained the real estate taxes, which were not delinquent and therefore incapable of being defaulted upon.  Further, Tias argues that the notice was invalid because it contained late fees, which do not constitute “rent.”

                Regarding the real estate taxes, Tias notes that the Ad Valorem Tax Notice issued by the Pinellas County Tax Collector provides an escalating payment figure through May of 2005, thus indicating that a payment in May would not be considered delinquent.  However, under section 197.333, Florida Statutes, “[t]axes shall become delinquent on April 1 following the year on which they are assessed or immediately after 60 days have expired from the mailing of the original tax notice, whichever is later.”  Simply because the Pinellas County Tax Collector chooses to provide taxpayers with the appropriate figure for May payments does not mean that those payments are not considered delinquent.   In fact, the Court takes judicial notice that the Pinellas County Tax Collector’s website states, “Real estate taxes become delinquent on April 1 of the year following the year of assessment.” 

                Further, the lease clearly defines real estate taxes as “additional rent.”  In Boudreau v. M & H Food Corp., 895 So. 2d 501 (Fla. 2d DCA 2005), the Second District determined that where a commercial lease defined delinquent insurance premiums as rent, their inclusion in a notice under section 83.20(2) was not erroneous.  Therefore, the fact that the Notice contained delinquent real estate taxes does not render it invalid under either section 83.20(2) or the lease.

            Turning to the late fee, Tias correctly points out that it is not defined as rent under the lease, and Tias further argues that it is not considered rent under the statute.  In accepting Tias’ argument, it appears that the trial court analogized the lease at issue here—a commercial one—to a residential lease, where the statutory definition of “rent” does not include late fees unless the lease specifically designates them as such.  § 83.43(6), Fla. Stat.  Thus, in the residential context, there is authority for the proposition that the inclusion of late fees would render a notice invalid. 

            However, the section of Florida Statutes governing nonresidential leases does not contain a definition of “rent.”   This omission is consistent with recognition of the relative sophistication of the commercial versus the residential tenant.  See Community Video Store v. Walker Miller Equip. Co., 10 Fla. L. Weekly Supp. 760a (Fla. 9th Cir. App. Div. June 30, 2003) (noting that cases cited in support of argument that late fees invalidated notice dealt with residential tenancies, and that such tenancies “are afforded greater protections, unlike the commercial tenancy . . . which result[s] from an arms length transaction by sophisticated parties”).

            Further, at least two sister circuits have held that in the commercial lease context, the inclusion of late fees does not render a notice of default invalid under section 83.20(2) as long as the demand is not prejudicial and does not impose any “greater obligation than already owed under the lease and the law.”  Nato Emilo Corp. v. Tabache, 7 Fla. L. Weekly Supp. 172a (Fla. 11th Cir. App. Div. Dec. 29, 1999); see also Community Video.  Under such circumstances, the inclusion of late fees is “a minor and technical” defect at most that does not invalidate compliance with notice requirements.  See Nato Emilo (citing Kaplan v. McCabe, 532 So. 2d 1354, 1357 (Fla. 5th DCA 1988); Manzo v. Patch Pub. Co., 403 So. 2d 469, 472 (Fla. 5th DCA 1981)).

            In the present matter, the Notice clearly itemized all monies due under the lease, and Clant did not demand any monies not already owed under the terms of the lease or Florida law.  Therefore, even assuming that late fees are not technically within the definition of “rent” under section 83.20(2), their inclusion in the Notice at issue here did not render the Notice invalid under the statute.   Indeed, it is difficult to comprehend how Clant’s Notice could have failed to adequately put Tias on actual notice of what monies it would have to pay to avoid eviction.

            Finally, Tias argues that even if the Notice complies with section 83.20(2), it is nonetheless invalid because it fails to comply with the terms of the lease.  In particular, Tias asserts that late fees would have to be sought under a provision of the lease covering matters “other than the payment of rent” and requiring a 30-day notice.

            However, even assuming that Clant failed to comply with the lease, “[a] lease may be terminated either by statutory landlord and tenant proceedings or by compliance with stipulations incorporated in the written lease by the parties themselves.”  6701 Realty, Inc. v. Deauville Enter., Inc., 84 So. 2d 325, 328 (Fla. 1956).   As demonstrated above, Clant properly terminated the lease through the statutory mechanism, which was Clant’s prerogative to pursue.  Id.

            Therefore, it is

            ORDERED AND ADJUDGED that the Order Dismissing Case entered June 9, 2005, is REVERSED, and that this cause is remanded to the trial court for action consistent with this Order and Opinion.

            It is further

            ORDERED AND ADJUDGED that Appellee Tias’ Motion to Tax Attorney’s Fees and Costs is DENIED.

            It is further

            ORDERED AND ADJUDGED that Appellant Clant’s Motion for Attorney’s Fees and Costs pursuant to paragraph 37(i) of the parties’ agreement is GRANTED.  The trial court shall determine the amount of such fees and costs.

            It is further

            ORDERED AND ADJUDGED that Appellant’s Motion for Oral Argument is DENIED.


            DONE AND ORDERED in Chambers, at St. Petersburg, Pinellas County, Florida this ________ day of _____________, 2006.

 

                                                ________________________________

                                                DAVID A. DEMERS

                                                Circuit Judge, Appellate Division

 

 

 

___________________________                             ______________________________

PETER RAMSBERGER                                         ANTHONY RONDOLINO

Circuit Judge, Appellate Division                                   Circuit Judge, Appellate Division

Copies to:

Judge Walt Fullerton

Ladd H. Fassett, Esq.

William H. Beaver, Esq.

Fassett, Anthony & Taylor, P.A.

1325 W. Colonial Dr.

Orlando, FL  32804

 

Dana A. Clayton, Esq,

Carolina Maharbiz, Esq.

Akerman Senterfitt

One Southeast Third Ave.

28th Floor

Miami, FL  33131-1714