Shareholder Shawn Rader discusses what landlords need to know about including acceleration of rental provisions in their commercial leasing contracts.
Acceleration of rental provisions in commercial leases allow the landlord, upon the tenant’s default, to accelerate the balance of the rent due for the balance of the lease term making it due and payable immediately, much like the acceleration of a mortgage loan. (In Florida, acceleration provisions are not permitted in residential leases.) Acceleration provisions are not favored by the courts and therefore must be expressly drawn.
Provisions which indicate that the landlord is permitted to “accelerate” the rental due under the lease but only as reduced by the rent which the landlord could receive going forward based on the leasing market conditions are not true acceleration clauses, but rather damage computation clauses. Acceleration clauses must be pure – that is, they must simply state that the landlord has a right to accelerate the balance of the rental due through the end of the lease term. [...]
This is an excerpt from a blog post originally written on Lowndes Leasing Lawyers. To read the entire post, click here.
This article is informational only. You should consult an attorney before acting or failing to act. The law may change rapidly and no warranty is given. LOWNDES DISCLAIMS ALL IMPLIED WARRANTIES AND WITHOUT LIMITATION, ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. ALL ARTICLES ARE PROVIDED AS IS AND WITH ALL FAULTS. Consult a Lowndes attorney if you wish to establish an attorney/client relationship.