USA - FLORIDA Law and Practice Contributed by: Jeffrey R Margolis, Marc S Shuster, James L Berger and Evan Rosenberg, Berger Singerman LLP
the two, including their interest in the property and ability to transfer. 6.2 Types of Commercial Leases Commercial leases can be categorised into four types – net, double net, triple net and gross – with the main difference between them being how the rent is calculated: • in a net lease, a tenant pays some of the landlord’s real estate taxes, insurance and maintenance expenses, in addition to rent; • in a double net lease, a tenant pays the landlord’s real estate taxes and insurance, in addition to rent; • in a triple net lease, a tenant pays all the landlord’s real estate taxes, insurance, and maintenance, in addition to rent; this type of lease is typical for a ground lease; and • in a gross lease, the tenant only pays rent and the landlord pays directly for all of its costs of owning and maintaining the property. 6.3 Regulation of Rents or Lease Terms In Florida, leases are governed by Chapter 83, Florida Statutes. Regulations relating to the leasing of residen - tial property are more extensive than regula - tions relating to commercial leases, which are limited to matters such as rights and remedies upon default, landlord lien rights and actions for removal. The regulations for residential leases include these matters as well as “consumer pro - tection” provisions. 6.4 Typical Terms of a Lease Except for a lease that has an unlimited term, the length of a lease is not regulated by the state. The typical length of a commercial lease is three to five years. Ground leases are typically for 99 years.
Tenants are typically responsible for the mainte - nance and repair of the real property occupied by the tenant, other than the roof and exterior walls of a structure, which are typically the main - tenance responsibility of a landlord. Landlords typically collect rent payments month - ly. Florida law provides that, if there is no written lease, the duration of the lease is based on the frequency of the rental payments. For example, if rent is payable weekly, then Florida law provides that the tenancy is from week to week. 6.5 Rent Variation Whether rent payments remain the same for the duration of a lease depends upon the terms of the lease agreement. Typically, commercial leases in Florida contain rent escalation clauses pursuant to which the amount of rent payments increase on the annual anniversary of the rent commencement date or other specified date. The rent increase is usually tied to a specific percentage increase. 6.6 Determination of New Rent Lease agreements typically contain provisions relating to rent increases, typically on a per - centage basis, and usually occur on the yearly anniversary date of when the rental payments commenced. If a tenant has an option to extend the term of the lease, payments are typically adjusted for the extended term to fair market value based on an appraisal or other stated for - mula or process. Changes or increases in rental payments are contractual in nature and not gov - erned or regulated by the State. 6.7 Payment of VAT Florida imposes sales tax on lease agreements and licences to use real estate, except certain tenancy rights which are specifically exempt from sales tax, such as non-transient, residential
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