How to Add a Permit Contingency to Your Lease
To add a permit contingency to your lease, we want to know which approvals apply before you commit.
At Reach Commercial Real Estate, we represent tenants. We help you find locations, compare costs, investigate property questions and negotiate the lease. You bring your business plans. We help you evaluate where those plans fit.
This guide covers the zoning, building permit and certificate of occupancy steps in Melbourne and unincorporated Brevard County, with the fees and hearings attached to them.
1. Put a permit contingency on your list of lease terms
We advise you to ask for each term on our lease checklist. The checklist lists term and renewal options, landlord work versus tenant work, TI allowance, free rent during buildout, CAM caps, exclusive use, use clause, personal guaranty, assignment and a permit contingency.
Once you select a property, we negotiate the business terms, and your Florida commercial leasing attorney reviews the legal language and documents. We focus on permitted use, approval contingencies, landlord delivery, tenant improvement allowance, rent commencement, maintenance obligations, additional charges, and personal guaranty and exit terms.
2. List the approvals that apply to the address
A landlord's willingness to lease to your business does not replace the local government's review.
We help you organize the property information and questions for the office responsible for the address.
For Melbourne locations, Planning and Zoning can check the address of your proposed business location to help determine whether your business would be permitted there and whether other site improvements would be necessary, according to Melbourne's Starting a New Business Toolkit.
The toolkit's checklist runs in this order: zoning and the address, building permits for a tenant build-out, the City of Melbourne Business Tax Receipt, then the Brevard County Business Tax Receipt.
The city says its development process begins with the review of plans and ends with a Certificate of Occupancy or Certificate of Completion.
We want to know which approvals apply before you commit. If additional approvals are necessary, we bring the expected process and timing into the lease discussion.
3. Find out whether the zoning needs a hearing
Melbourne lists every allowed use by zoning district in Tables 1A and 1B of Appendix B. A use is permitted by right or it needs conditional use approval.
In Melbourne, city council grants a conditional use by ordinance after a public hearing before the planning and zoning board. The application is signed by each and every owner of the land and notarized.
The city's fee page lists the fee at $1,375.00 plus a $125.00 legal advertisement fee. The first pre-application meeting per property per year costs $0.
In unincorporated Brevard County, a zoning action requires two advertised public hearings.
A Conditional Use Permit needs a public hearing and costs $849. If you do not own the property, the property owner of record must authorize you to make the application. A notarized statement from the owner must accompany it.
For zoning in writing, Melbourne offers a Zoning Confirmation Letter from the Zoning Technician, for a fee, when a lender, real estate transaction or similar purpose requires written documentation of zoning classification. The city's fee page lists a zoning verification letter at $157.00. The county's fee list shows a Written Zoning Verification Fee of $37.50.
4. Cover the building permit and the certificate of occupancy
Melbourne requires building permits for tenant build-outs and renovations. The city recommends contacting Code Compliance during planning.
The Florida Building Code requires an owner who intends to change the occupancy of a building to apply to the building official and obtain a permit first (Building, section 105.1). A building cannot be used or occupied until the building official has issued a certificate of occupancy (section 111.1).
The Existing Building Code says a change of occupancy cannot be made without the code official's approval. A certificate of occupancy is issued once the requirements for the change of occupancy have been met (section 1001.2).
The Florida Building Code, Building, assigns each use to a group. For a bakery, it lists bakeries in Group F-1 (section 306.2). For a hair salon, it lists barber and beauty shops in Group B (section 304.1). For a boutique, it lists retail or wholesale stores in Group M (section 309.1).
In unincorporated Brevard County, an interior build-out or an alteration with a change of occupancy classification goes through the Commercial New Construction permit. An interior alteration without a change of occupancy classification goes through Commercial Renovation.
Brevard County's impact fee page says payment of impact fees is required prior to pre-power and the Certificate of Occupancy.
Our role is to help bring these findings into your property decision. Your qualified professionals and reviewing agencies determine the requirements.
5. Line up the review times with your lease dates
Melbourne's Building Section says commercial construction permits typically average 14 to 21 working days for approval or response on a single review.
A permit application is valid for 180 days or while review activity continues. An issued permit has 180 days to pass an inspection or it is placed in expired status.
Under section 553.792(1)(a)4., Florida Statutes, a local government has 60 business days after receiving a complete and sufficient application to approve, approve with conditions or deny a building permit for signs or nonresidential buildings under 25,000 square feet. That applies to an applicant using a local government plans reviewer, unless the applicant waives the timeframe in writing.
After signing, your contractor and design team manage plans, permits and construction within their responsibilities. We stay focused on the lease-related items.
Keep track of:
Possession and delivery dates.
Landlord work.
Improvement-allowance submissions.
Construction deadlines.
Insurance requirements.
Rent commencement.
Start nine to twelve months before your lease ends. Eighteen if you need a buildout.
Extra items to check
Your sign. For each candidate, we request the sign criteria. Signage is on the list of work that requires a permit in Melbourne's Building Section FAQ.
County paperwork. In unincorporated Brevard County, a Notice of Commencement is required if job value exceeds $5,000.
Courtesy inspection. Brevard County Fire Rescue's Office of Fire Prevention offers free courtesy inspections for businesses with fire and life safety questions about a potential new location.
Schedule changes. If the project schedule changes, raise the lease implications early. Review the documents with your attorney rather than assume a delay changes your payment obligations.
Start your search with Reach
You do not need to find the property before calling us. Helping you find and evaluate the property is part of our work.
Bring your requirements, budget, preferred area and target opening date. For each candidate, we request known use restrictions, and availability and delivery condition. We will use those details to build your search, compare locations and negotiate the lease. In most deals the landlord pays our fee.
Already found a space? Send me the address and listing. We will start with the property questions and deal terms you need to investigate.
Cassandra Hartford, Reach Commercial Real Estate, 321-514-0876, cassandra@reachcommercialre.com, 909 E New Haven Ave #300, Melbourne, FL 32901.
See tenant representation and the space needs analysis.
Related: the leasing guide.
Frequently Asked Questions
Does a business tax receipt replace zoning or occupancy approval?
The Brevard County Tax Collector says the issuance of the Business Tax Receipt does not confirm the business activity complies with the local zoning regulations or ensure that the premises contain the appropriate building occupancy or life safety requirements. It adds that other permits, licenses or approvals may be required in addition to the Brevard County Business Tax Receipt to operate lawfully.
What happens if Melbourne's zoning code does not list my use?
The community development director determines whether the use is allowed in the specific zoning district and whether it is listed as a permitted use, a permitted use with conditions or a conditional use. Decisions may be appealed to the planning and zoning board (Appendix B, Art. V, Sec. 2(A) to (C)).
What deadlines does Florida's private provider law set for permits and certificates of occupancy?
Under section 553.791, the fee owner of a building, or the fee owner's contractor with explicit written authorization from the fee owner, may choose at any time to use a private provider for plans review or building code inspection services. When an engineer or architect seals the affidavit, the local building official must issue the permit or send written notice of the specific plan features that do not comply within 10 business days after receiving the application and affidavit (section 553.791(12)). After a request for a certificate of occupancy and the applicant's presentation of a certificate of compliance and approval of all other government approvals, the official has no more than 10 business days to issue the certificate or give notice of incomplete forms or documents. If the window is missed, the request is automatically granted and deemed issued as of the next business day (section 553.791(16)).
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Written by Cassandra Hartford, founder and CEO of Reach Commercial Real Estate. She has worked in Brevard County commercial real estate for 17 years, representing buyers, sellers, landlords, and tenants across Florida's Space Coast.
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