Can Real Estate have “Diplomatic Immunity?”

You’ve seen the movies – the ones where the nasty foreign diplomat does something illegal and then gets off scot free by waiving his passport while sneering the words “diplomatic immunity”.   It all looks so “theatrical”.  And you never imagine that some foreign diplomat would do the same thing to you.  But, what if you’re a landlord and you have a foreign consulate or embassy as a tenant?   You should ask yourself, “If I rent my real estate to someone who is a diplomat from another country, or even to the country itself, to use as an embassy, consulate, or other type of diplomatic mission, could they somehow claim “diplomatic immunity” and refuse to pay rent?  Will I be able to evict them?  Ever?

A Miami businessman is testing the very theory of diplomatic immunity, or “sovereign immunity” as it pertains to real estate.  Tibor Hollo is a prominent Miami real estate investor.  His company, Florida East Coast Realty, owns an office building at 1101 Brickell Avenue in Miami, Florida.  Last year, Florida East Coast Realty entered into a 10-year lease with the government of Venezuela for approximately 7,940 square feet on the third floor of the office building to use as a consulate.  The  Venezuelan government has been using the space as a consulate for about the past 10 years, and last year’s lease set the rent in the upper $20s per square foot.

In January of this year, Livia Acosta Noguera, the Venezuelan Miami consul general, was expelled from the U.S. over an FBI investigation of her involvement in a potential cyber-attack on the U.S. government.   In retaliation, Venezuelan President Chavez closed the Miami consulate, recalled the diplomats and staff stationed there, and has refused to pay rent since.  According to Hollo, all the office furniture is still there, but there has been no one occupying the space since the consulate staff cleared out.  Now, Hollo wants to evict them or get the rent that he is owed, and he has filed an eviction lawsuit in Miami courts against the government of Venezuela and its consulate.

The problem for Hollo is that according to international law, an embassy or consulate is considered to be part of the foreign country, so that the 7,940 square feet of leased space on the third floor of the Brickell building is technically not U.S. soil, but is a part of Venezuela.   Under the law of sovereign immunity, a U.S. court does not have jurisdiction over a foreign government unless that government has clearly waived its immunity.  Hopefully, Hollo’s lawyers were prepared for this problem when the lease was drafted up, and that they insisted the lease contain a waiver of Venezuelan sovereign immunity against suit.  If not, Chavez, like that nasty foreign diplomat in the movies, may be able to waive his passport and claim “sovereign immunity” on that little bit of Venezuela on Brickell Avenue in Miami, Florida.

Caveat:  The opinions stated in this blog are for informational purposes only.  They should not be considered legal advice, and should not be relied upon in a court of law.

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