Tenant Voluntarily Depositing Rent into Court Registry

Commercial Tenant Voluntarily Depositing Rent into Court Registry

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There may be a time where a commercial tenant, as a consequence of a pending litigation with a commercial landlord, may want to voluntarily deposit its rent into the court registry (as opposed to paying rent to the commercial landlord it is in a dispute with). An example of this is reflected in Tixe Designs, Inc. v. Green Ice, Inc., 2016 WL 6992296 (Fla. 3d DCA 2016).

In this case, a tenant leased space in a commercial property to operate a men’s clothing store. The other portion of the property was leased to a gym. As the result of loud noise from the gym’s operations, the tenant sued the landlord claiming that the gym’s noise interfered with its use of the property and rendered its leased space unsuitable (a constructive eviction claim). Upon filing the lawsuit, the tenant also filed a motion to voluntarily deposit (per Florida Rule of Civil Procedure 1.600) its rent into the court registry as a measure of good faith. Ultimately, if the tenant lost the lawsuit the funds would be tendered to the landlord; on the other hand, if the tenant won the lawsuit, the funds would be tendered back to the tenant.

Florida Rule of Civil Procedure 1.600 provides:

In an action in which any part of the relief sought is a judgment for a sum of money or the disposition of a sum of money or the disposition of any other thing capable of delivery, a party may deposit all or any part of such sum or thing with the court upon notice to every other party and by leave of court. Money paid into court under this rule shall be deposited and withdrawn by order of court.

“A trial court has broad discretion in deciding whether to permit a deposit into the court registry as well as deciding whether to grant a withdrawal from the registry.” Tixe Designs, Inc., 2016 WL at *1 quoting First States Investors 3300, LLC v. Pheil, 52 So.3d 845, 848 (Fla. 2d DCA 2011).

Here, the tenant was depositing money—rent—into the court registry that was the subject of litigation with its landlord since the tenant wanted the court to determine that its lease was terminated from the date of the constructive eviction which would mean the tenant would not be required to pay rent from that point forward. This means that rent being paid into the registry would be returned to the tenant and was therefore at-issue in the lawsuit.

This was a smart tactic by the tenant moving to voluntarily deposit its rent into the court registry. This way it was still paying its rent pursuant to its lease until there was an adjudication regarding the claims asserted in its lawsuit.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.