The President of the United States happens to call Florida home. He indirectly owns three golf courses in Florida. One of them in Palm Beach County, was the subject of an interesting article in the Palm Beach Post.
Trump’s Palm Beach County golf course leases the land upon which the golf course lays from Palm Beach County. Palm Beach County has ordered all golf courses closed as of March 26, 2020. Does the golf course have to pay rent while the shutdown is in place?
As discussed in my blogs before, generally Tenants are still legally obligated to pay rent during the COVID-19 emergency. However, this situation is different for several reasons. First, because the landlord is the county, the landlord is the one forcing the golf course to close. Secondly, directly or indirectly, the tenant is the President of the United States. He has some influence as to when the economy and golf courses such as this can begin to open up.
This unique scenario is one befitting a law school exam question.
The story says that the lease agreement does not have a force majeure clause that would cover a pandemic. As discussed in a previous blog, a force majeure clause is a clause in a contract that sets out the responsibilities of the parties in this case of an “act of God.” So, presumably, general Florida law would govern the situation.
As a general rule, leasing property gives the tenant the right to quietly enjoy that property.
Is the county, the landlord in this case, interfering with that right by shutting down golf courses? Would that entitle the tenant, Trump’s golf course, to a reduction in the rent due?
And is Trump himself, as President, in control of the shut down to some extent? If he is, does that prevent him from getting a reduction of rent?
So is the landlord forcing the tenant to shut down his business? Is the tenant forcing the landlord to shut down the tenant’s own business?
As a business and real estate attorney, those are all fascinating questions that I’d love to see a court answer.
The information you obtain on this website is not, nor is it intended to be, legal advice. You should consult with an attorney for individual advice regarding your own situation.
April 12, 2020