Jeffrey Gilbert, a partner with Cozen O'Connor in Miami; and Harsh Arora, partner at Kelley Kronenberg in Fort Lauderdale

Attorneys say the last two months have been a delicate balance between commercial tenants and their landlords regarding payment of the rent due under their leases.

But now, some tensions are heating up in some parts of South Florida where landlords are increasingly putting pressure on their business tenants to pay up or renegotiate their leases.

Jeffrey Gilbert, a partner with Cozen O'Connor in Miami, said perception and court closures played a major role in the recent change in business relationships between commercial tenants and landlords amid the coronavirus pandemic.

"Landlords did not necessarily want to be the first jerks to go into court when everything was uncertain, and people were reeling from the coronavirus," Gilbert said. "Courts were closed and there were plenty of orders in place about only emergencies being heard."

But things are changing.

Harsh Arora, a partner at Kelley Kronenberg in Fort Lauderdale, said that since Florida has permitted most businesses to reopen in phase one of the four-phase reopening plan, more businesses are opening their doors to customers, leading landlords to demand their fair share of the revenue.

"Landlords want to make sure they get paid, or create some pressure on tenants to proceed forward and file suit on breach of lease, potential eviction," Arora said. "If that is not agreed upon or some pressure is not created where they enter into an arrangement, landlords want to proceed forward and resort to court intervention."

Arora has seen another trend where the tenants are "jumping the gun" and suing for breach of lease terms, bringing up the issue that they have not been able to use their storefronts because of the current economic conditions. Since many tenants have been unable to recover money from their insurance companies or invalidate their leases, tenants have resorted to claiming that their lease terms are unenforceable, the attorney said.

For instance, a common claim tenants have made is that the pandemic is outside of their control and prevents them from meeting their contractual obligations. This argument might permit a tenant to avoid paying rent that accrued while the business was required to close by state or county administrative orders, Arora said. The expectation is that by making this force majeure argument, the tenant will be able to renegotiate the terms of its lease. Property owners have responded that the government ordered closures are not a force majeure, and the tenant still owes rent under the lease, he said.

Brickell will be litigation hot spot

Arora pointed to mixed-use communities, like the Brickell area, where he said landlords are having problems collecting rent from their commercial tenants. He said they are unable to obtain writs of possession, due to an interpretation of Florida Gov. Ron DeSantis' Executive Order 20-94, as extended by Executive Orders 20-121 and 20-137, despite that order only applying to residential leases. The Florida Supreme Court has suspended the issuance of writs of possession by Supreme Court Administrative Order No. AOSC20-23.

Without a writ of possession, the landlords cannot evict tenants from rental property and replace the defaulting tenants with new tenants.

The attorneys say with courts previously closed to the public, the challenge to enforce lease terms becomes nearly insurmountable. When the clerks of the courts are permitted to issue writs of possession, Arora predicts the courts will be flooded with commercial property eviction actions.

"In the Miami and the Brickell area, we've got bigger tenants that have not been paying rent. The rent is high," Arora said. "That area in South Florida will be affected more than any area in Palm Beach County or Broward County."