USA – FLORIDA Law and Practice Contributed by: Eduardo M. Soto and Fabio Giallanza, Weiss Serota Helfman Cole + Bierman, P.L
6.12 Insurance Issues Landlords typically insure the building and common areas against casualty risks such as fire, windstorm and other insured hazards. Tenants usually carry general liability insurance and insurance for personal property and improvements. Business interruption insurance is commonly required of tenants. During the COVID-19 pandemic, many tenants sought recovery under business interruption policies, but coverage was frequently denied absent physical damage, lead - ing to significant litigation with mixed results. 6.13 Restrictions on the Use of Real Estate Landlords may impose contractual restrictions on per - mitted use, hours of operation, signage and compli - ance with exclusive use clauses. These restrictions are enforceable if clearly stated. In addition, zoning laws, environmental regulations, building codes, and health and safety requirements impose statutory limits on how property may be used. Tenants must comply with both lease restrictions and applicable govern - mental regulations. 6.14 Tenant’s Ability to Alter and Improve Real Estate Tenants are generally permitted to make alterations and improvements with the landlord’s prior written consent, except for minor non-structural changes. Landlords typically require approved plans, licensed contractors and compliance with building codes and permitting requirements. Conditions often include restoration obligations at lease end, limits on struc - tural changes, lien waivers and insurance coverage. Improvement allowances are commonly negotiated in office and retail leases. 6.15 Specific Regulations Residential leases are heavily regulated under Flori - da’s Landlord and Tenant Act, particularly regarding habitability, notices and remedies. Commercial leases are far less regulated and are largely governed by con - tract law. Special rules apply to certain asset classes such as hotels, condominiums, mobile home parks and agricultural land. Pandemic-related legislation did not materially alter commercial leasing law but tem - porarily affected eviction enforcement.
rentals. Accordingly, as of the date of writing, no sales tax is payable on rent in Florida. 6.8 Costs Payable by a Tenant at the Start of a Lease At lease commencement, tenants typically pay a security deposit, the first month’s rent and sometimes the last month’s rent. Additional costs may include advance common area maintenance charges, insur - ance deposits, utility deposits and fees for permits or inspections. In retail and office leases, tenants often pay for build-out contributions, architectural review fees and professional fees related to lease negotiation. 6.9 Payment of Maintenance and Repair In multi-tenant properties, landlords typically manage and maintain common areas such as parking lots, landscaping, lobbies and shared systems. The cost is passed through to tenants as common area mainte - nance (CAM) charges, usually allocated on a pro rata basis by square footage. The scope of recoverable costs and any caps or exclusions are negotiated in the lease and are not statutorily prescribed. 6.10 Payment of Utilities and Telecommunications Utilities and telecommunications are typically sepa - rately metered and paid directly by each tenant. Where individual metering is impractical, landlords often allocate costs proportionally through operating expense charges. Telecommunications services are typically arranged directly by tenants with service pro - viders, subject to building rules and access rights. In larger assets, landlords may contract master services In triple-net and many retail leases, tenants reimburse landlords for property taxes on a proportionate basis. In office and gross leases, landlords typically pay tax - es directly and pass them through as part of operating expenses. Ground leases often require tenants to pay all real estate taxes directly. Allocation of tax respon - sibilities is contractual and varies by asset class and market norms. and pass costs through under the lease. 6.11 Payment of Property Taxes
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