USA – FLORIDA Law and Practice Contributed by: Eduardo M. Soto and Fabio Giallanza, Weiss Serota Helfman Cole + Bierman, P.L
meetings and recordkeeping, while LLCs tend to have lower ongoing governance costs once the operating agreement is in place. Accounting and tax compliance costs are often the most significant recurring expense and depend on factors such as number of properties, financing arrangements, intercompany transactions and report - ing requirements. These typically include bookkeep - ing, preparation of federal and state tax returns, and financial reporting to investors or lenders. Larger or multi-entity real estate structures commonly central - ise accounting but still budget several thousands of dollars annually per active entity for compliance and professional services. 6. Commercial Leases 6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time Florida law recognises several arrangements permit - ting the occupation and use of real estate for a limited period without ownership. These include commercial and residential leases, licences, subleases, ground leases, easements for limited uses, and concessions. Leases are the most common structure and may grant exclusive possession. Licences are more limited con - tractual rights, typically revocable and non-exclusive. Ground leases allow long-term use while preserving fee ownership. Temporary occupancy may also arise through management or operating agreements. 6.2 Types of Commercial Leases While such lease types are not codified in a statute, common forms used in Florida leasing practice include gross leases, triple-net (NNN) leases, modified gross leases, percentage leases (typically retail), ground leases and build-to-suit leases. Office and industrial properties often use gross or modified gross struc - tures, while retail assets commonly use NNN and per - centage rent arrangements. The lease type is largely driven by asset class, bargaining power and market standards rather than statute. 6.3 Regulation of Rents or Lease Terms Commercial rents and lease terms in Florida are gen - erally freely negotiable and not subject to rent control
or statutory caps. There is no voluntary commercial leasing code. Parties may allocate risks and respon - sibilities as agreed, subject only to general contract principles and limited statutory overlays, such as zoning, building codes, and health and safety laws. Residential leases are more regulated, but commer - cial leasing remains largely governed by freedom of contract. 6.4 Typical Terms of a Lease Commercial lease terms vary by asset class and mar - ket. Lease lengths typically range from three to ten years for office and retail, with longer terms for indus - trial or ground leases. Tenants usually maintain and repair the premises they occupy, while landlords retain responsibility for structural elements unless otherwise agreed. Rent is most commonly payable monthly in advance, though some ground or specialised leases require quarterly or other periodic payments. 6.5 Rent Variation In most commercial leases, rent does not remain static for the full lease term. Leases typically provide for scheduled rent increases, such as fixed annual steps, consumer price index adjustments or percent - age increases. Retail leases often include percent - age rent tied to gross sales in addition to base rent. Whether rent changes and how frequently is entirely contractual, as Florida law imposes no automatic rent adjustment mechanism for commercial leases. 6.6 Determination of New Rent Where rent adjustments apply, new rent is determined based on mechanisms agreed in the lease. Common approaches include predetermined fixed increases, inflation-based indices, open-market resets deter - mined by appraisal, or revenue-based formulas in retail leases. Ground leases often use periodic revalu - ations based on fair market rent. If the lease provides no rent-setting methodology, Florida courts generally will not imply one, and disputes may arise. 6.7 Payment of VAT Florida does not impose VAT. Until 1 October 2025, rent charged for the use of commercial property was subject to the Florida Sales Tax at a rate of 2%. House Bill 7031 (2025) eliminated the sales tax on commer - cial leases. No sales tax applied to residential property
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