Have you ever heard the strange term “pith of the lease”? This odd designation, apparently unique to Florida law, describes improvements to commercial tenancies that are essential or “vital to the lease’s perpetuality.”[1]
Generally, a construction lien extends only to the “right, title and interest of the person who contracts for the improvement . . .”[2] However, absent action by the landlord, such a lien will extend to the landlord’s fee interest in the property if: (a) the lease required the work to be done; or (b) the lease by its terms made it obvious that the improvements were the “pith of the lease.”[3]
The Relevant Statute
Section 713.10, Florida Statutes, titled “Extent of liens,” provides a mechanism for landlords to protect their property from being liened when a tenant contracts for improvements to the leased premises. The statute also provides a path for lienors to protect themselves when performing work on behalf of a tenant.
How Can a Landlord Protect Itself From Liens When Work is Performed for its Tenant?
Even if tenant improvements are required by the lease or constitute the pith of the lease, a landlord can still protect itself by taking the following steps:
- Including lien prohibition language in the subject lease and recording the lease or a short form or memorandum of the lease containing the specific lien prohibition language in the official records book before the recording of a notice of commencement for the improvements”[4] OR
- Including lien prohibition language in the subject lease and recording a notice in the public records prior to recordation of a notice of commencement for improvements on the property that leases for the rental of premises on a specified parcel of land prohibit the fee interest from being subject to lien for tenant improvements. A notice recorded must contain: (a) the name of the landlord; (b) the legal description of the parcel of land to which the notice applies; (c) the specific language contained in the various leases prohibiting liens for tenant improvements; and (d) a statement that all or a majority of the leases entered into for premises on the parcel of land expressly prohibit such liability.[5]
The important thing to remember is that the lease itself must contain lien prohibition language and there must be something recorded in the public records (either the lease/memorandum of lease or a notice of lien prohibition) indicating that the fee interest of the property will not be subject to liens for work performed for the benefit of the tenant. Landlords usually go with the second option to avoid having to record a lease in the public records.
How Can a Lienor Protect Itself When Performing Work for a Tenant?
Lienors performing work for tenants can protect themselves by serving a demand on the landlord for a verified copy of the provision of the lease prohibiting liability for improvements made by the tenant. The demand must identify the tenant and the premises being improved, and must be in a document separate from the notice to owner required by §713.06, Fla. Stat.[6]
If the landlord fails to provide a copy of the lease provision verified under §92.525, Fla. Stat. within 30 days after the demand, or if the landlord serves a false or fraudulent copy of the lease provision, the landlord’s fee interest is subject to the lien for tenant improvements so long as the lienor did not have actual notice that landlord’s interest was not subject to a lien for improvements made by the tenant.[7]
A final point to note is that when a lease expressly provides that the interest of the landlord will not be subject to liens for improvements made by the tenant, the tenant has a statutory duty to notify the contractor making any such improvements of this provision.[8] The failure of a tenant to provide this notice renders the contract between the tenant and contractor voidable at the option of the contractor.[9]
No matter if you or your clients are commercial landlords or lienors, keeping this information in mind will protect your or their rights and help avoid situations that would be “aca-awkward.”
[1] 14th & Heinberg, L.L.C. v. Henricksen & Co., Inc., 877 So. 2d 34 (Fla. 1st DCA 2004).
[2] §713.10(1), Fla. Stat.
[3] 14th & Heinberg, 877 So. 2d at 39.
[4] §713.10(2)(b)(1), Fla. Stat.
[5] §713.10(2)(b)(2), Fla. Stat.
[6] §713.10(3), Fla. Stat.
[7] §713.10(3), Fla. Stat.
[8] §713.10(2)(a), Fla. Stat.
[9] §713.10(2)(a), Fla. Stat.
- Of Counsel
Jennifer P. Sommerville is an attorney in the Orlando office of Shutts & Bowen LLP, where she is a member of the Construction Litigation Practice Group. She has over 20 years of experience representing clients in complex commercial ...
- Partner
Todd F. Kobrin is a partner in the Orlando office of Shutts & Bowen LLP, where he handles real property litigation and transactional matters and is a member of the Construction Litigation Practice Group.
Todd is a Martindale-Hubbell ...
Search Blog
Follow Us
Recent Posts
- What You Need to Know About the U.S. Department of Transportation’s Build America TIFIA Loan
- Breaking News: Federal Judge Blocks Nationwide Implementation of the FTC’s New Rule Banning Noncompete Agreements
- September 4th is Almost Here: How Employers Can Prepare for the Upcoming Effective Date of the FTC’s Non-Compete Rule
- Florida’s New Statutory Home Warranty: What Home Builders Need to Know
- Orange County Proposes Temporary Suspension Ordinance on New Development Applications
- Raising the Roof: The U.S. Department of Labor Announces Rule Raising Salary Thresholds for Overtime Exemptions
- New Guidelines Anticipated Following HHS’s Health Cybersecurity Concept Paper
- SECURE 2.0 and Protecting Your Designated Beneficiaries
- Florida Appellate Court Provides Further Guidance Regarding New Summary Judgment Rule
- Pith? Perfect for Lienors, Not So Much for Landlords: Protecting Rights When Improvements Are Made to Commercial Tenancies
Popular Categories
- Employment and Labor
- Construction
- Business of Real Estate
- Litigation (Labor & Employment)
- Construction Litigation
- Competition
- Landlord-Tenant
- Real Estate Law
- Public Private Partnership
- Cybersecurity
- Intellectual Property
- Construction
- Appeals
- Development/Land Use
- Litigation
- Public Finance
- Contracts
- Trusts and Estates
- Data Security
- Business
- Supreme Court
- Privacy
- Technology
- Litigation (Appellate)
- IP Litigation
- Patents
- Business
- Regulatory Compliance
- Florida Government Contracts
- Health Care
- Foreclosures
- Trademark
- Contracting
- Financial Institutions
- Compliance
- Estate planning
- International Dispute Resolution
- Property Tax
- Conveyances
- Florida Public Contracts
- Government Contracting
- Government Contracts
- Government
- Lease
- Appellate Blog
- Patent Office
- Insurance
- Wealth planning
- Federal Government Contracting
- Cyber fraud
- Florida Bid Protests
- Public Contracts
- Infringement
- Proposal Writing
- Public Bidding
- GAO
- International Arbitration and Litigation
- Arbitration
- Bid Protest
- International
- Americans with Disabilities Act
- Restrictive Covenants
- Grant Writing
- Copyright
- Title
- Promissory Notes
- Small Business
- Florida Procurement
- Public procurement
- Consumer Privacy
- PTAB
- General Liability
- Technology
- International Arbitration
- Liens
- Liens and encumbrances
- Creditor's Rights
- Bidding
- Attorneys' Fees
- Inter Partes Review
- Power Generation
- Consumer Protection
- Regulation
- Contracting
- Government Vendor
- State Government Contracts
- Venue
- Ad Valorem Assessments
- Florida Administrative Law
- Attorneys' Fees
- Florida Rules of Appellate Procedure
- Bankruptcy
- Florida Public Procurement
- Russia-Related Arbitration
- Mortgages
- Eviction
- FINRA
- Record on Appeal
- Rehearing
- Loan guaranties
- Patents - Assignor Estoppel
- Dispute Resolution
- Statute of limitations
- Statute of repose
- Maritime
- Liens
- Damages
- Briefing
- Patents - Obviousness
- Request for Proposal
- Department of Labor
- Trade Secrets
- Commercial Brokerage
- Bid Writing
- Florida Bidding Strategies
- Renewal
- Attorneys' Fees
- Florida County Lands
- Florida Economic Incentive Packages
- Jury Instructions
- Stay
- Design Professionals
- Certiorari
- email hacking
- Forum Selection
- Offers of Judgment
- Prevailing Party
- Settlements
- Assignment of Contract
- Assignment of Proceeds
- Lis Pendens
- Banking
- Designer Liability
- Finality
- Fintech
- Appellate Jurisdiction - Deadlines
- Evidence
- Evidence
- Expert
- Expert Science
- Federal Rules of Appellate Procedure
- Federal Supply Schedule
- Florida Public Records Law
- Marketing/Advertising
- Mootness
- Preservation
- Socio-Economic Programs
- Sunshine Law
- Unlicensed Contracting
- Veteran Owned Business
- Partnerships and LLCs
- Homestead
- Standing
Editors
- Of Counsel
- Partner
- Partner
- Partner
- Partner
- Partner
- Partner
- Partner
- Partner
- Associate
- Partner
- Partner
- Partner
- Partner
- Senior Associate
- Partner
- Associate
- Partner
- Senior Associate
- Partner
- Associate
- Partner
- Partner
- Partner
- Partner
- Partner
- Partner
- Partner
- Partner
- Partner
- Partner
- Partner
- Partner
- Partner
- Partner
- Partner
- Partner
- Of Counsel
- Senior Associate
- Partner
- Associate
- Partner
- Partner
- Associate
- Partner
- Partner
- Partner
Archives
- September 2024
- August 2024
- June 2024
- May 2024
- February 2024
- November 2023
- August 2023
- July 2023
- June 2023
- May 2023
- April 2023
- February 2023
- January 2023
- December 2022
- November 2022
- October 2022
- September 2022
- August 2022
- July 2022
- June 2022
- May 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- October 2021
- September 2021
- August 2021
- July 2021
- June 2021
- May 2021
- April 2021
- March 2021
- February 2021
- January 2021
- December 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020
- January 2020
- October 2019
- August 2019
- July 2019
- May 2019
- April 2019
- March 2019
- February 2019
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- December 2016
- November 2016
- October 2016
- September 2016
- August 2016
- July 2016
- June 2016
- May 2016
- April 2016
- March 2016