W. Mason – Fox Rothschild LLP – March 7, 2014
When entering into a lease, especially for commercial property, the parties often contemplate that the tenant will make improvements to the leased premises. The question arises: is the property subject to a construction lien where the contract for improvements is with the tenant? The Florida Supreme Court answered this question with the following test:
If, as part of the consideration for the lease, the tenant is required to make improvements under circumstances that the landlord could enforce that promise, then the leased property should be subject to the liens of parties contracting with the tenant to perform such improvements. See Anderson v. Sokolik, 88 So. 2d 511 (Fla. 1956).
While this test is fairly restrictive, Florida courts only enforced construction liens prior to Anderson where the lease expressly required the tenant to make improvements. As such, Anderson actually reflects the Florida Supreme Court’s relaxation of the requirement that the tenant’s improvement be specifically mentioned in the lease.
Post Anderson, in order for a construction lien to arise out of a work perfromed or material provided pursuant to a contract with a teant, the work must have been performed and improvements made in accordance with an enforceable contract between a landlord and a tenant. However, the contract does not need to be incorporated in the lease itself and it may be subject of subsequent negotiations and agreements between parties and may be oral as well as written. See Tim Joyce Realty Corp. v. Popkin, 111 So. 2d 707 (Fla. 3rd DCA 1957).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.