Strategies for Commercial Building Owners and Property Managers to Avoid Litigation Over Lease Agreements and to Protect Against Liability Claims

By:  Bart R. Valdes, Esq. and Aaron Baroff, Esq.

Commercial building owners and property management companies often face complex legal issues that arise from disputes with tenants and premises liability claims.  To minimize the risk of costly litigation, owners and property managers should focus on utilizing up-to-date and comprehensive lease agreements with specific attention to unique circumstances at the property.  It is also critical to maintain open communication avenues with tenants, and implement reasonably adequate processes, procedures, and personnel training as to maintenance issues and security measures to protect tenants and all visitors.

A well-drafted lease agreement is the foundation for avoiding contractual disputes, enforcing the lease, and collecting all amounts owed in the event of default.  Commonly litigated lease provisions often involve unclear language related to rent escalation, maintenance responsibilities (including HVAC systems, plumbing, and structural components), and exclusive use clauses.  It is also very important to look carefully at the definition of “rent” and “additional rent” (and whether the definition includes late-fees, utilities, default interest, common area maintenance and the proportionate share of insurance and real estate taxes) in the event that the tenant defaults and eviction becomes necessary.

Disputes over security deposits are also a frequent source of litigation.  One way to avoid issues is to itemize allowable deductions and clearly delineate the conditions under which amounts will be deducted from the security deposit.  It is also important to document the condition of the property, and any damage, as part of the move-out process.  This actually starts with the move-in inspection report, and includes photographs, video recordings, vendor or contractor estimates to repair any damage beyond normal wear and tear and documenting the move-out condition through written reports.

One area of potential tort liability is negligent security claims.  Building owners and property managers can face significant exposure to a large judgment if inadequate security measures result in foreseeable criminal acts on the property.  Crime will happen and there is no way to completely prevent a crime from occurring in a building, parking lot or common area.  Ways to mitigate risk include conducting security assessments, regularly evaluating the property to identify and address potential security risks, and installing and maintaining reasonable security measures.  What is considered “reasonable” depends on the location of the property and the instances of criminal conduct in the applicable crime grid over the past several years.

Another risk for building owners and property managers are premises liability claims for injuries to tenants and visitors.  Accidents happen, and as such, there is no way to prevent all incidents from occurring.  In order to limit risk, it is important to regularly inspect and identify hazards that include problems with flooring, leaks, standing water, code issues and poor lighting.  Complaints about maintenance issues or potentially dangerous conditions should be addressed promptly and professionally. Just as important, it is critical to document the resolution of maintenance issues in common areas and tenant complaints.  It is also a good idea to regularly review and reinforce training and safety protocols with employees, vendors and independent contractors who work at the property.

There is no way to avoid all litigation.  Instead, these strategies are meant to help avoid lawsuits, and also protect the rights and interests of building owners and property managers when litigation is required.

Bart Valdes and Aaron Baroff are Partners at DSK Law in Tampa and provide comprehensive legal services to building owners, landlords and property managers in regard to evictions, contract disputes, liability cases (i.e., slip and fall, negligent security and premises liability), collection matters, code enforcement, eminent domain, and many other types of litigation.