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Contract to Lease: An Overview

When a prospective landlord and tenant decide to sign a Florida Realtors Contract to Lease (form CL-9) before the start of a lease, they should understand what that document does for them – and what it doesn’t do.

ORLANDO, Fla. – What’s the central promise both sides are making when they sign a Florida Realtors Contract to Lease (form CL-9 or CL for short)? They both promise to sign a lease before a deadline.

That’s it. You can find this key obligation in Paragraph 1, where it provides that the prospective landlord and prospective tenant “agree to execute a lease agreement … no later than _________ [date] for the property described below.”

What’s the penalty if one of them doesn’t sign a lease by the deadline? Paragraph 15 provides the answer. If the tenant fails to sign a lease (or perform any other promises in the CL), the landlord is entitled to the deposit under the CL as liquidated damages. What if the landlord doesn’t sign an actual lease by the deadline? The prospective tenant is entitled to get their deposit back and can also go after any damages (generally, financial harm) suffered because of their prospective landlord’s breach.

Speaking of the deposit, the CL deposit goes in Paragraph 2. Some people confuse the CL deposit with a deposit under the future lease, but they’re different. The deposit for the future lease goes in Section 5 of the CL, along with all other money due before occupancy. Of course, there’s nothing wrong with the CL deposit being the exact same amount as the lease deposit if the prospective landlord and tenant believe that’s a fair amount for liquidated damages if the tenant breaches the CL (typically, by changing their mind about signing a lease).

Paragraph 1 obligates one side or the other to prepare the lease. Whichever box is checked (Landlord or Tenant) is the side that will prepare the lease. They should make sure the lease contains everything described in the CL, since Paragraph 1 provides “The Lease will include the terms set forth in Paragraphs 3-12 of this Contract to Lease and other mutually agreeable terms.”

So, what are the “other mutually agreeable terms”? The CL only has the important key terms, so an actual lease will almost always have many pages of additional language. Hopefully, the parties can negotiate the rest of the lease terms in good faith. If not, the CL is silent about what happens or how to resolve the dispute. How a court resolves that situation (disagreement about additional terms not mentioned in the CL) will likely depend on specific facts. Is one side making an outrageous demand just to try and avoid signing a lease? They may lose their case and be held liable under the CL. Is it a genuine disagreement the parties just can’t get past? Then maybe the prospective tenant gets the deposit back and nobody is penalized under the CL.

Is it possible that a final lease has terms that are different from what’s in the CL? Yes. If the parties enter a lease, the purpose of the CL is fulfilled, and now they look solely to the lease for their rights and obligations. The drafters put a notice at the end of the document to make it clear: “Once the parties enter into a Lease, Lease provisions that conflict with provisions of this Contract will control.”

Joel Maxson is Associate General Counsel for Florida Realtors
Note: Information deemed accurate on date of publication

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