Lease with No Specific Termination Date Can Be Terminated at Will

What Happened: Soon after acquiring a hotel, the new owner terminated the lease with the beachside scuba rental concession tenant. The tenant cried foul and sued for damages. The case all turned on the following lease clause: “Term: this lease shall be enforced commencing on September 18, 2007 and terminating on the demolition of the property” (emphasis added).

Since the property wasn’t demolished, the tenant claimed that the lease was still in effect. But the court disagreed and upheld termination.

Decision: The Florida appeals court said the ruling was right and refused to reverse it.

Reasoning: Under Florida law, a lease without a stated duration can be terminated at will. The lease in this case did have an indefinite duration. Termination upon demolition isn’t a stated termination date. And because the clause was ambiguous, the court was willing to look at parol evidence—that is, external evidence outside the document about how and why the lease was made, to interpret its intent. In this case, the parol evidence clearly showed that the reason the lease ended upon demolition rather than a specific end date is that the owner was planning to tear down the hotel and build condos at some time in the future. But that never happened, and the hotel was acquired and renovated instead. All of this points to the intention to create an indefinite lease that was terminable at will, the court concluded.

• Waveblast Watersports II, Inc. v. UH-Pompano, LLC: 2020 Fla. App. LEXIS 3159, 45 Fla. L. Weekly D 537, 2020 WL 1162696