Commercial Landlords: Discretionary termination clauses are important when drafting commercial leases if you want to retain the right to evict a tenant in the absence of a tenant’s material breach of the lease.
There are many reasons why a commercial landlord may want to evict a tenant in the absence of a tenant’s material breach of the Lease. However, in the absence of a carefully drafted broad discretionary termination provision in the parties’ lease, commercial landlords may be left without any recourse.
The Second District Court of Appeal in Dolphin Aviation, Inc. v. Heli Aviation Florida, LLC, 2020 WL 6937752 (Fla. 2d DCA Nov. 25, 2020), recently reversed a trial court’s involuntary dismissal of a landlord’s eviction claim based upon a discretionary termination provision in the lease. In doing so, the Second District Court of Appeal recognized that the plain language of the discretionary termination provision in the parties’ lease allowed the landlord discretion to terminate the lease without the tenant’s actual violation of the lease. The provision in Dolphin Aviation stated:
DISCRETIONARY TERMINATION: Should the Lessee break any of the terms or conditions of this lease or should the Lessee operate its facility in a manner that reflects unfavorably upon Lessor or its operation, then Lessor shall have the right to terminate this lease upon 30 days’ written notice and Lessee agrees to promptly and peacefully surrender possession of the premises to Lessor in a neat and reasonably condition.
The Court recognized that the discretionary termination provision was “not a tenant favorable provision . . . [but acknowledged] that’s what the lease says. It must be enforced as written.”
Drafting commercial lease agreements is critical. Rosenthal Law Group can assist you with drafting and reviewing commercial lease agreements and can provide litigation assistance if faced with commercial lease disputes.