How a Call to Service Can Impact Rights and Obligations Under a Lease
While the missiles have paused from North Korea and the bombings have slowed in Afghanistan, the world is still a dangerous place. As a result, at any time our military of approximately 2 million men and women may be called into action. If it is, the impact could be felt right here at home by our commercial landlords especially those whose tenants are composed of businesses owned or operated by a sole proprietor or one or two employees.
May 15, 2019 at 02:10 PM
7 minute read
While the missiles have paused from North Korea and the bombings have slowed in Afghanistan, the world is still a dangerous place. As a result, at any time our military of approximately 2 million men and women may be called into action. If it is, the impact could be felt right here at home by our commercial landlords especially those whose tenants are composed of businesses owned or operated by a sole proprietor or one or two employees. When the owners of such businesses or their employees are called into service, many times there is no one left behind to operate the businesses, resulting in the tenant closing temporarily or even permanently. When that occurs, can these individuals be held accountable for the unpaid rent during the time that their businesses close or, if permanently, for the duration of the lease term? During periods of economic expansion, landlords may have less concern about filling the space and making up the lost rent. But in times of economic hardship, the empty space may create a personal hardship for the landlord in meeting the financial obligations related to the property.
Residential tenants who are called to service can rely on Florida Statutes Section 83.682, which gives a service member the right to terminate his rental agreement with written notice at least 30 days after the landlord's receipt of such notice provided certain criteria enumerated in the statute are met. However, this statute only applies to residential tenancies and does not protect the service member who is bound by a commercial lease. Accordingly, the landlord would still be able to hold those who serve accountable under their commercial leases.
One law commercial landlords may need to address is the Servicemembers Civil Relief Act (SCRA), 50 U.S.C.A. Section 3901 et.al. The SCRA was enacted to protect those who are called to serve and as a result have been forced to drop their own affairs, whether personal or business-related. Florida courts have applied the SCRA even where there was not strict compliance with the statute such as failing to furnish proof from a commanding officer stating that military duty prevented an appearance in a legal proceeding. Under the SCRA, if a tenant is called to active duty and he cannot be present to defend himself or through counsel and the requirements of the act are met, legal proceedings against that individual are automatically stayed for a period of not less than 90 days. Moreover, under 50 U.S.C.A. Section 3933, if a stay is imposed, a penalty cannot accrue against the tenant for failure to comply with the terms of the lease during the period of the stay. This could impact a landlord's ability to assess default interest on unpaid balances or late fees. Furthermore, a court has discretion under such section of the statute to reduce or waive fines or penalties imposed unrelated to any action.
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