Landlord Tenant Law under F.S. 83.595(4)

Landlord Tenant Law under F.S. 83.595(4)

landlord tenant lawInterpreting Florida Statute Chapter 83.595(4)

Certified Question:
“Whether an addendum, providing for liquidated damages or an
early termination fee, as provided in the rental agreement, in the form set
forth in §83.595(4), Fia. Stat., constitutes a valid, binding obligation,
where the parties’ lease, in the form approved by the Florida Supreme
Court and The Florida Bar, omits any reference to liquidated damages or
an early termination fee.”

IN THE COUNTY COURT OF
THE EIGHTEENTH JUDICIAL CIRCUIT
IN AND FOR BREVARD COUNTY
STATE OF FLORIDA
RAISSA WILSON,
Plaintiff,
vs. Case No. O5-2O12-SCO49761
WILLIAM TERWILLINGER,
Defendant.
______________________________________________________________

FINAL JUDGMENT
This cause coming before this Court for non-jury trial and the parties having
appeared, in person or by counsel, upon due notice and the Court having received sworn
testimony and evidence subject to cross-examination and the Court having considered the
arguments of counsel and the Court having been advised in the premises, the Court finds
as a matter of fact and concludes as a matter of law, as follows.
The plaintiff was the landlord and the defendant was the tenant under a residential
lease. The landlord claims liquidated damages or an early termination fee in excess of
the security deposit; the tenants seek return of the security deposit. The tenant also claims
damages as a result of the condition of the premises and that the landlord improperly
entered upon the premises.
The landlord claims liquidated damages or an early termination fee as a result of
the tenant departing the residence before the expiration of the parties’ lease. The landlord
claims liquidated damages or an early termination fee pursuant to the lease addendum
that states,
“I agree, as provided in the rental agreement, to pay $4500.00 (an amount
that does not exceed two months’ rent) as liquidated damages or an early
termination fee if I elect to terminate the rental agreement. . .“
The addendum to the lease calling for liquidated damages or an early termination
fee, “as provided in the rental agreement,” complies with the form set forth in §83.595(4),
Fia. Stat.,1 however, the lease itself makes no mention of liquidated damages and
I The form ofthe addendum is set forth in §83.595(4) and comprises two options:
“[ I I agree, as provided in the rental agreement, to pay $ (an amount that does not
exceed 2 months’ rent) as liquidated damages or an early termination fee if I elect to
1 generally references statutory remedies.
The tenant asserts the addendum is not valid where there is no lease provision for early termination
which would, therefore, constitute a breach of the lease. The landlord asserts that the agreement for
liquidated damages or an early termination fee is clear and complete despite what she characterizes as
the superfluous “as provided in the rental agreement” language.2 The landlord also observes
that by the remaining portion of the addendum provision the landlord, “waives the right
to seek additional rent beyond the month in which the landlord retakes possession.”
Liquidated damages provisions have been scrutinized by courts to ensure that they
do not constitute a penalty clause. See, Lefemine y. Baron, 573 So.2d 326, 328
(Fia. 1 99 1) where the Florida Supreme Court articulated the two-pronged test as to when a
liquidated damages provision will be upheld.
“First, the damages consequent upon a breach must not be readily
ascertainable. Second, the sum stipulated to be forfeited must not be so
grossly disproportionate to any damages that might reasonably be
expected to follow from a breach as to show that the parties could have
intended only to induce full performance, rather than to liquidate their
damages.”
In a case preceding the amendment to §83.595 that mandated the addendum, the
Court in Olen Properties Corp. y. Moss, 984 So.2d 558, 560 (Fia. 4th DCA 2008)
invalidated a liquidated damages provision that failed to comply with the legislative
scheme. The Olsen Properties Court stated that the statute sets forth a comprehensive
approach to damages upon default under a residential lease,
“We agree with the circuit court’s conclusion that paragraph (1 6) violated
Lefemine rendering the liquidated damage provision of three months rent a
nullity. We also find that the attempt to create a liquidated damage remedy
violated section 83.595(1), which sets out the total universe of choices
available to a landlord when a tenant has not completed the term of a
lease. This statute places limitations on the freewheeling ability to
contract; the legislature recognized that in a residential setting, landlords
terminate the rental agreement, and the landlord waives the right to seek additional rent
beyond the month in which the landlord retakes possession.
[ 1 I do not agree to liquidated damages or an early termination fee, and I acknowledge
that the landlord may seek damages as provided by law.”
2 Characterizing the charge as an “early termination fee” rather that liquidated damages does not
alter the issue as, pursuant to §83.43(17), Fla.Stat., “early termination fee” is defined to include any fee,
“provided for in a written rental agreement and is assessed to a tenant when a tenant elects to terminate the
rental agreement, as provided in the agreement. . .“ [Emphasis supplied]. In any event there does not
appear to be any provision ofthe instant lease that allows early termination.

2
and tenants do not bargain from equal positions of power and knowledge.”
984 So.2d at 560.

The House ofRepresentatives StaffAnalysis of the bill that was ultimately enacted
and added the addendum requirement to §83.595, House of Representatives Staff
Analysis, HB 1 489, Residential Tenancies, March 1 8, 2008, observed that under existing
law, “the early termination fees could be interpreted by a court to be unenforceable
penalties.” The analysis recognized that liquidated damages or an early termination fee
may benefit either the landlord or the tenant depending upon the landlord’s ability to
lease the premises.
“If a landlord’s rental properties have a high occupancy rate, a landlord
will likely opt to maximize his income and collect the early termination
fee. If the properties have a low occupancy rate, a landlord will likely opt
to collect the rents due under the lease.”
This was not the first time a bill providing for liquidated damages upon a
residential tenant vacating leased premises made its way through the legislature. The
preceding year a substantially similar version of this bill was vetoed by Governor Crist
who noted the unequal bargaining power of landlords and tenants in his veto message,
“While I understand that this would provide another option for landlords
who manage rental property, I believe the impact on those Floridians least
able to afford to pay such fees would be just too great. With escalating
insurance and ad valorem tax cost that are passed on to renters, Florida is
experiencing a lack of affordable housing for those workers critical to
maintaining the state’s robust economy. I cannot allow legislation to
become law that would add to the housing burden ofthese Floridians.”
Veto of Goy. Crist for HB 1 277 (2007), (letter of Goy. Crist to Sec’y of State
Browning, May 24, 2007, on file with Sec’y of State, The Capitol, Tallahassee, FL),
quoted in the StaffAnalysis, supra.
. . . , . . 3
The legislature was cognizant of the parties unequal bargaining power, as well
as the prior veto message, at the time it enacted the provision for liquidated damages or
early termination fees. The legislature sought to account for these concerns in the
amendment to §83 .595 by provisions intended to ensure a voluntary and knowing
agreement to the liquidated damages/early termination fee provision, despite the parties’
3 The StaffAnalysis cited the opinion in Jenkins y. Eckerd Corp., 913 So.2d 43, 52 (Fia. 1st DCA
2005) which quoted Samuel Issacharoff, Contractingfor Employment. The Limited Return ofthe Common
Law, 74 Tex. L. Rev. 1783, 1788 (1996). Issacharoff’s article states that,
“[C]haracteristic indicators of impediments to full and equal bargaining [are]: significant
disparities in bargaining power between offeror and offeree; contracts ofadhesion drafted
by the offeror; asymmetries in the ability to breach the contractual guarantee of security;
and the inability to seek a market remedy in the event ofa breach . . . .“
3
unequal bargaining power. The legislative intent of the 2008 amendment to §83.595 was
to ensure notice of and voluntary agreement to the liquidated damages/early termination
fee provision. It achieves the intended result by requiring that the liquidated
damages/early termination fee provision appear both in the lease and in a separate
addendum. The separate addendum ensures that the liquidated damages/early
termination fee provision may not be buried unnoticed in an avalanche of verbiage
contained in the lease. It further ensures that the agreement to the early termination fee
or liquidated damages provision is voluntary and knowing as, “This remedy is available
only if the tenant indicates acceptance at the time the rental agreement was made by
placing his or her initials next to the provision in the agreement.” StaffAnalysis, supra.4
The repetition of the provision in both the addendum and the lease appears
significant to fulfilling the legislative intent. This Court is reluctant to adopt the
plaintiff’ s suggestion and find the liquidated damages provision of the addendum valid,
absent a corresponding lease provision. Doing so would require this Court to:
. find the statutory, “as provided in the rental agreement,” language of the
addendum to be superfluous;
. disregard the contrary general damages provision ofthe lease; and,
. impair or defeat the legislative intent of ensuring notice and voluntary
agreement to the liquidated damages/early termination provision.
Consistent with this legislative intent, the lease and the addendum may be
reconciled by deeming the liquidated damages/early termination fee addendum operative
only where the lease — distinct from the statutory addendum — provides for the landlord to
recover liquidated damages or an early termination fee.
In the instant case, actual damages were not established by the greater weight of
the credible evidence to have been sustained either the landlord or the tenant. It was not
proven to the requisite evidentiary standard that the landlord sustained any actual
damages as a result of the tenant’s early departure or as a result of damages to the
premises that would be attributable to the tenant. Nor did the greater weight of the
credible evidence establish that landlord failed in her duty of maintaining the premises
either under the lease or under any applicable statute. See, Torres y, Garcia, 694 So.2d 94
(Fia. 3d DCA 1 997). The entry upon the premises was established to have been for
legitimate purposes and was not intended to harass the tenant who did not prove any
damages as a result of the minimally intrusive entry. Except for the return of the security
deposit, neither party is entitled to relief.
4 §83.595(4) provides, in part, that the tenant must indicate acceptance ofthe liquidated damages or
early termination fee by, “signing a separate addendum to the rental agreement containing a [liquidated
damages or early termination fee] provision,” in a form that is substantially the same as set forth in the
statute.
4
Based on the trial testimony before the Court, the plaintiff and defendant entered
into a form lease approved by The Florida Bar. Both the form for the addendum and the
lease may be found in the Appendix to In re Revisions to Simplijied Forms Pursuant to
Rule 10-2. 1 (A) of Rules Regulating The Florida Bar, 50 So.3d 503 (Fia. 20 1 0). The
Board of Governors of The Florida Bar filed a petition recommending amendments to
several simplified residential lease forms, “for use by nonlawyers assisting third parties.”
50 So.3d at 503. The forms were based on amendments proposed by the Real Property,
Probate, and Trust Law Section of The Florida Bar with input from the Florida
Association of Realtors and the Housing Group of Florida Legal Services, Inc. While
approving the amendments that included the lease and the addendum employed by the
instant parties, the Florida Supreme Court stated that, “we express no opinion as to
whether the approved lease forms comport with current law.” 50 So.3d at 503.
This Court recognizes that if the addendum is determined on appeal to be
ineffective, landlords’ ability to recover liquidated damages or early termination fees
under The Florida Bar approved leases may be adversely affected. The widespread
reliance on these forms by lawyers as well as property managers and other non-lawyers
fashioning residential leases lends a statewide significance to the validity of the
addendum. Consequently, it appears that the validity of the liquidated damages/early
termination fee provision is an issue ofgreat public importance.
It is hereby ORDERED and ADJUDGED as follows:
Neither party shall recover from the other by this action, except that the plaintiff,
RAISSA WILSON, shall promptly return the security deposit to the defendant,
WILLIAM TERWILLINGER.
Based upon the foregoing findings of fact and conclusions of law, which are made
in accordance with Rule 9. 1 60(d), Fia. R. App. P., this Court certifies, pursuant to Rule
9.030(b)(4)(A) and Rules 9. 1 60(b) and (d), Fia. R. App. P., the following issue to be of
great public importance:
“Whether an addendum, providing for liquidated damages or an
early termination fee, as provided in the rental agreement, in the form set
forth in §83.595(4), Fia. Stat., constitutes a valid, binding obligation,
where the parties’ lease, in the form approved by the Florida Supreme
Court and The Florida Bar, omits any reference to liquidated damages or
an early termination fee.”
This is a final dispositive order certified by the County Court to be of great public
importance so that pursuant to Rules 9. 1 60(b), Fia. R. App. P., any appeal, “must be
taken to the district court of appeal.” Jurisdiction of the District Court of Appeal shall be
invoked by the timely filing of a notice in accordance with the applicable Florida Rules
of Appellate Procedure.
5
I
The Court reserves jurisdiction to award attorney’s fees and costs and
purposes for which jurisdiction may be reserved consistent with this Final Judgment.
Done and Ordered this 3’
Copies to
day of January, 20 1 3 at Chambers
David E. Silverman
Judge of the County
Attorney for the Plaintiff
George A. Booras, Esq.
Attorney for the Defendant
Stephen Biggie, Esq.

More Information: For more information, see our landlord tenant page
Attorney: Stephen Biggie
Status: Pending Award of Attorney Fess
Date Filed: July 16, 2013

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