Landlords May Be Financially Liable For Tenant’s Improvements

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For many, owning rental property is part of the American dream and a path to retirement. Receiving that monthly check is a source of pride and financially stability. However that financial stability can quickly be taken away as a result of improvements made by the tenant during his or her tenancy. While this may not be common with short term tenants, landlords’ legal and financial liability dramatically increases when the tenancy is for a period of one year or more.

For example, many landlords enter into agreements with their tenants, whether formally or informally, that they will not raise the rent so long as the tenant makes all repairs or improvements to the property. This could include painting, fixing electrical and plumbing issues, installing a fence for a pet, or landscaping. Many times tenants also take it upon themselves to make major repairs to the property, such as installing a new roof or fixing an air conditioning unit after a major storm since the landlord may be hard to get in touch with.

Many times landlords think that these improvements are the financially responsibility of the tenant only, since the tenant was the party that entered into the contract and promised to pay the contractor. However, contrary to common belief, landlords are legally and financially liable to third-parties for improvements made by their tenants.

So what can landlords do to protect themselves? The answer is simple: Landlords must comply with Florida’s lien statutes by: (1) having specific language in their leases prohibiting their property from being subject to a lien as a result of tenant improvements; and (2) record in the public records a specific notice putting the public at large that they are not liable for tenant improvements. This one-time proactive step by landlords can save them thousands of dollars in not only the cost of the improvement but also tens of thousands of dollars in attorney’s fees and costs in a lien foreclosure lawsuit.

So, if you own rental property, whether commercial or residential, and want to protect yourself and your investment from legal and financial liability, contact the attorneys at Barry Miller Law via email at info@BarryMillerLaw.com or via telephone at 407-423-1700 for a consultation to see how Barry Miller Law can assist you!