Medical Tenant May Rescind Its Lease

What Happened: A pediatric clinic signed a lease requiring the landlord to install equipment and complete other “Landlord’s Work” and deliver the premises within 60 days of the effective date, i.e., June 30, 2024. Despite repeated promises, the landlord didn’t get the work done. And the clinic couldn’t get a license to practice in the facility unless and until it did. With the delay dragging into late December, the clinic told the landlord that it was thinking about rescinding the lease. Three days later, upon discovering that the landlord had been “lying” about the progress of the Landlord’s Work, it sent the landlord a lease termination agreement. When the landlord refused to sign, it sued for recission of the lease.  

Ruling: The Florida federal court ruled that the clinic could rescind the lease.

Reasoning: As in all states, parties seeking to rescind a lease in Florida face an uphill climb. But the clinic in this case was able to produce evidence supporting all six of the elements required to make out a valid recission claim under state law: 

• Privity of contract, i.e., the clinic was in a direct contractual relationship with the landlord;
• The parties entered into a valid contract with each other;
• The landlord’s failure to complete the work necessary for the clinic to get its license frustrated the purposes for which the clinic bargained in making the contract;
• The clinic gave the landlord proper notice of its intention to rescind the contract by sending it the lease termination agreement; 
• The clinic wasn’t obligated to do anything to restore the landlord to its pre-contractual position if the lease was rescinded since the landlord was and would continue to remain in possession of the property; and
• Without recission, the clinic wouldn’t have an adequate legal remedy—calculating consequential damages would be impossible, the clinic argued, given that it couldn’t conduct business and thus document losses without a license to operate.

• Advanced Care Pediatrics of Fla. v. DPS PR Realty, Inc., 2025 U.S. Dist. LEXIS 170877, 2025 LX 316265, 2025 WL 2531514