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Florida lease dispute forces owner into bankruptcy

Disputes between commercial landlords and tenants can become rancorous as they disagree over the other’s obligations. Both parties can often interpret the terms of the lease in diametrically opposed ways, leading to impasses that can ultimately harm everyone involved. When these gridlocks occur, an attorney may need to be brought in to mediate or even litigate if the case winds up in court.

A Florida land owner recently had to file for bankruptcy over what he calls an undervalued lease with a restaurant that operates on one of the parcels of his land. He was unable to make payments on the loan because, he contends, the restaurant defaulted on their lease in 2002. The lease was originally signed in 1980 and the owner claims the restaurant failed to correctly assign its lease when it was purchased by new owners in 2002, automatically putting them in a month-to-month deal.

The restaurant is arguing that they are operating under an extension to the original lease and are only subject to that document’s stipulations. The Chapter 11 bankruptcy filing was a move to protect certain equity and protect the owner’s capacity to negotiate in other development projects.

Disputes like these can be mind-numbingly complex and take years of expertise to interpret. A Florida lawyer with experience in commercial real estate can do a thorough review of all documents in the case and determine who has obligations and whether these obligations were met according to the language in the contract or lease.

If no resolution can be reached through mediation, the case may have to be brought to court. Regardless of which side you’re on, a lawyer may be able to fight for a favorable resolution to your dispute.

Source: bizjournals.com, “Dispute over Chart House lease forced bankruptcy of riverfront Southbank land owner,” Ashley Gurbal Kritzer, May 19, 2014

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Warren Gammill & Associates

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