, , , ,

THIS CASE WAS REVERSED ON APPEAL JUNE 20, 2014  Wilson v. Terwillinger (Fla. App., 2014) 5TH DCA

The landlord and tenant executed a standard Florida bar lease which does not provide for liquidated damages.  The parties also executed a liquidated damages addendum to the lease  providing for damages in the amount of two month’s rent  for early termination of the lease. The addendum complied with the with the form set forth in §83.595(4), Fla. Stat.  which states

“I agree as provided in the rental agreement to pay $_________ ( an amount that does not exceed two months’ rent) as liquidated damages or an early termination fee  of I elect to terminate the rental agreement, and the landlord waives the right to seek additional rent beyond the month in which the landlord retakes possession.” [ emphasis added   ]

The court cited to the legislative staff analysis of the statutes and ruled that

“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.” Staff Analysis, supra.4

2headedThe 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 of the lease; and,

* impair or defeat the legislative intent of ensuring notice and voluntary agreement to the liquidated damages/early termination provision.

The  Court also seemed to be influenced by the fact that the landlord in this case was not able to prove any actual damages.  i.e. that all of the rent due under the lease had been paid in full, so that the liquidated damages clause seemed more like a penalty.  The court even ordered the landlord to refund the tenant’s security deposit.

Because the forms used by the parties were standardized forms found in the Appendix to In re Revisions to Simplified Forms Pursuant to Rule 10-2.1(A) of Rules Regulating The Florida Bar, 50 So.3d 503 (Fla. 2010) [35 Fla. L . Weekly S216a],  the court acknowledged that this ruling invalidated the forms as written since the form lease does not have the liquidated damages language in it.  Consequently the court certified the question as “of great public importance”

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 of great public importance so that pursuant to Rules 9.160(b), Fla. R. App. P., any appeal, “must be taken to the district court of appeal.”

WILSON  vs.  TERWILLINGER, County Court, 18th Judicial Circuit in and for Brevard County. Case No. 05-2012-SC-049761. January 3, 2013. David E. Silverman, Judge.

20 Fla. L. Weekly Supp. 297a.   Online Reference: FLWSUPP 2003WILS