PURPOSE OF CORPORATE TENANTS: The common reason given by a corporate tenant is that it must be done this way so the company can pay the rent.  The IRS does not care whose name a lease is in be it an individual or a corporation. If it is deductible as a business expense, it will not matter whether it is in a corporate name or not. The usual purpose of a corporate tenant is to avoid personal liability for the occupant at the expense of the property owner with whom the property manager owes a fiduciary duty.

NAME OF CORPORATION: Often the exact name of the corporation is misrepresented by the corporation and ends up on the lease. The corporation must be researched thoroughly and cannot be listed under its fictitious name.

OUT OF STATE CORPORATIONS: Many out of state corporations have not registered in Florida resulting in no way to check the validity of the corporation and requiring that we serve the registered agent in the state of the corporation according to the laws of that state causing huge eviction delays.

NO ASSET CORPORATIONS: Many corporate tenants are the corporate entity that a business holds with no assets for the sole purpose of avoiding liability.

BANKRUPTCY:  If the event a corporation files a bankruptcy, it is usually a Chapter 11 reorganization resulting in a substantial loss of rent and eviction delays of over 3 months in addition to the normal eviction time frame.

AUTHORITY OF SIGNERS:  Often the corporate lease is signed by a party who does not have the actual authorization to sign the lease on behalf of the corporation resulting in the corporation successfully denying liability under the lease.

COLLECTIONS: Collecting against a corporate tenant is almost impossible as a “deadbeat” corporation often is dissolved or has no assets and there is no easy way to mar the credit of the corporation. The occupant’s credit is untouched.

CREDIT CHECKING:  It is nearly impossible to run a proper credit check on a corporation.

OCCUPANTS: If there is a corporate rental, the occupants may have criminal backgrounds or credit issues but this will not be discovered as no proper check can be made on the corporation.

LIABILITY TO THE PROPERTY MANAGEMENT COMPANY: When a corporate tenant must be evicted, breaches the lease or skips on the lease, the property owner is surprised to find out that they have been placed in serious jeopardy by the fact that the tenant was a corporation and often attempts to hold the property management company liable for the loss and failure to warn of the dangers.

RECOMMENDATIONS: Avoid corporate tenants without co-signers at all costs UNLESS it is an established company, the proper name has been researched and the officers of the corporation have authorized the rental in writing.

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