Landlord's Misrepresentation Doesn't Entitle Tenant to Occupy Premises Rent-Free

What Happened: A landlord promised to install fencing around a used car lot if the tenant renewed the lease. Relying on that promise, the tenant re-upped, but the landlord didn’t install the promised fencing. So, the tenant terminated the lease, stopped paying rent, and sued for misrepresentation. The trial court found the landlord liable for fraud. In addition to allowing the tenant to terminate the lease without penalty, it ordered the landlord to refund the $87,862 in rent that the tenant paid for its occupancy during the period after it renewed and before it terminated. While conceding on termination without penalty, the landlord appealed the part of the ruling excusing the tenant from paying post-renewal rent.    

Ruling: The Florida court agreed that the landlord was entitled to rent for the tenant’s post-renewal occupancy.

Reasoning: Fraud in the inducement rendered the lease renewal voidable, but not void. Although it terminated the lease and sued for damages, the tenant “nevertheless accepted the benefits that the leased premises provided to [its] used car lot business during the pre-termination and post-termination occupancy periods,” the court explained. Having ratified the lease for a period, the tenant couldn’t “simultaneously avoid the lease’s burdens while accepting the lease’s benefits.”

• Buyer's Choice Auto Sales, LLC v. Palm Beach Motors, LLC, 2024 Fla. App. LEXIS 5584