Are you considering an E2 visa? Be careful to commercial leases!

You are considering moving to Florida and changing your life? Good for you, but be careful. It is normal to export yourselves with your own culture, including your legal culture. If you come from a country that legally protects commercial tenants, it is not the case in Florida.

Foreigners should know that Florida Laws offer practically no legal protection to commercial tenants (see Fla. Stat. 83.001-83.251 (2017)). Basically, all substantive dispositions of a commercial lease signed in Florida are based on Freedom of Contracts. So, you will have to negotiate.

If you are considering applying for an E-2 Treaty Investor visa, you will have two choices: buying an existing business, or creating one from scratch. Regardless, you will need to rent a place to run your business.

If the place you are about to rent is empty with no tenant, then you will have to negotiate the terms of the lease with the landlord, and you are the lucky ones.

However, if you are buying an existing business with a current lease, you might be able to get the lease assigned to you (if the current lease allows it). And this is where you have to be careful.

First, regarding the first step: getting the E2 visa approved.

Some immigration attorneys would demand – and they would be right – that you get a lease for a certain duration (or potential duration). The goal is to match the maximum duration of the E2 visa you can get (see the Treaty signed between your country of nationality and the United States) with the duration of the lease. Even if Immigration Laws do not require a lease of a specific duration when you apply for an E2 visa, it is always preferred to get a few years-lasting lease. It shows seriousness and commitment from the futur nonimmigrant business(wo)man you want to be.

Then, once your E2 visa approved, you will be admitted under E2 status.

Once admitted in USA under E2 status, your E2 visa will come to life. You will have to run your business and grow it. This is on these conditions that you will be able to stay in status and renew your visa when time will come to do so.

If you are running your E2 business under an assigned lease, you will be bound to obligations that you never negotiated yourself. And it might be a problem. Indeed, if some clauses commonly seen in commercial leases in Florida are harmless (or only unpleasant) for an American citizen or a permanent resident, it might not be the case for you, E2 visa holder. Some clauses might simply keep you from growing your business the way you want and the way you are also required to.

A few examples – THE LIST IS NOT EXHAUSTIVE:

  • Rent increase clauses: some landlords are reasonable, and increase the rent once a year, typically 3 or 3.5%. Some landlords are more greedy, and your lease provides an increase of rent two times a year. Your lease can even provide that you pay an extra rent when you get to the point of a certain income. Very difficult to grow a business in these conditions.
  • Relocation clauses: this type of clauses are common if your business is located in a mall, that is owned by an one and only owner. The landlord can relocate you anywhere in the mall. Your rent and surface will stay the same, but you will be relocated elsewhere. Concret example seen by my office recently: a restaurant business was for rent in a 3-story mall. The restaurant was on the first floor, beachfront. Landlord could relocate the tenant anywhere, including on the third level, streetside. You might as well close down right now…
  • Clauses limiting your activities: this type of clauses are likewise common when a business is located in a mall. They aim to avoid competition between businesses located in the same geographical area and reinforce the commercial specificity of businesses. This is a good thing, except that they keep you from diversifying your activity and thereby from growing your income.

In conclusion: the commercial lease is not a simple accessory to your business, it is essential. Do not neglect to inquire of it as soon as you find a business that you are interested in buying. Get the help of a specialized attorney. It is also important to examine the lease from the specific point of view of an E2 visa, for the reasons exposed above.

Posted on