Struggling Florida small businesses could be devastated by the prospect of commercial evictions in the wake of the coronavirus pandemic, according to attorneys and others monitoring landlord-tenant issues.
An April 2 executive order issued by Gov. Ron DeSantis suspended all state laws that allow for the eviction of residential tenants due to nonpayment of rent. This 45-day order, however, did not specifically include commercial tenants, including those small businesses that have closed to reduce the spread of the virus.
But in March the Florida Supreme Court issued an order suspending civil rules of procedures through April 17, meaning that local courts cannot issue writs of possession, according to Michelle Hinden, an attorney with Nishad Khan P.L. in Orlando, who specializes in real estate law. In turn, the order, which could eventually be extended, halts the process for commercial evictions for the time being, Hinden said.
“But there is nothing out there that would specifically prevent a landlord from sending out a notice,” she told the Florida Record.
It’s just that local courts might not allow such notices to be immediately recorded, and they wouldn’t be enforceable during the current emergency, according to Hinden.
Even so, she said that landlords, tenants and others involved in this area of the law are currently working cooperatively.
“One thing I’ve seen is that everybody wants to help each other,” Hinden said. “... I’ve found that people are more willing to work and interact to come up with a solution.”
Christopher M. Jones, an attorney and executive director of Florida Legal Services Inc., said his organization is hearing from business owners concerned about possible eviction as the coronavirus sidelines much of the state’s economy.
“In my opinion, it would make sense for the moratorium to extend to all evictions, residential or commercial, regardless of the basis for the eviction,” Jones told the Record in an email.
It makes no sense for small businesses that employ workers to lose their place of business due to business shutdowns and social-distancing rules that have been employed to reduce the spread of COVID-19, he said.
“The impact would be greatest on small, local businesses with limited reserves,” Jones said.
Florida Rep. Anna Eskamani (D-Orlando) this past week drafted a letter that was signed by hundreds of small business owners. It calls on the governor to take additional steps to protect small businesses affected by the pandemic, including a deferral on paying rents and mortgages and a 90-day suspension of commercial evictions.
A total of 38,000 business owners applied for help through Florida’s Small Business Emergency Bridge Loan Program, but only 1,000 were approved, Eskamani told the Record. That program was supposed to tide small business owners over until they received aid through the federal Coronavirus Aid, Relief and Economic Security (CARES) Act. But the Small Business Administration just announced that the Paycheck Protection Program helping smaller firms is out of money.
The representative also called on DeSantis to formally expand the suspension of evictions to include commercial tenants.
“I don’t know why he didn’t include commercial in the first place,” she said.
Doing this would provide the maximum time possible for small businesses to get their financial strategies in order by the time the state economy begins to reopen and courts are allowed to process eviction notices, Eskamani said.
Bill Herrle, state director of the National Federation of Independent Business in Florida, said the best way to resolve disputes involving future commercial evictions is for tenants and landlords to work cooperatively together.
“We haven’t asked the governor to put a moratorium on commercial evictions,” Herrle told the Record. “... We have members who are tenants and landlords.”
Business should now have a perspective on their revenue situations for the near term, he said, as well as an understanding of what benefits will be available through the CARES Act.
A big concern for small firms is lawsuits that will be adjudicated once the businesses reopen at a future date, according to Herrle.
“We see an onslaught of civil litigation coming out of this,” he said. “There are people doing very rational things out there to limit exposure to their employees and customers that are being picked up as ADA (Americans With Disabilities Act) lawsuits.”
State lawmakers need to consider dealing with the impact of such plaintiffs’ lawsuits if they return for a special session in July, Herrle said.
“Huge questions are out there – workers’ comp, unemployment compensation, wrongful terminations,” he said. “The potential (for litigation) is just enormous out there.”