No Bonus Rent Owed for Off-Site Sales

A lease required a car dealership tenant to pay bonus rent for new vehicle sales exceeding 100 vehicles per month. The tenant later acquired land near its leased space and moved its new car sales to the new location. The owner demanded that the tenant pay bonus rent for new vehicle sales occurring at the new location. The tenant asked the court to determine whether the lease required it to comply with that demand. The owner argued that the lease was ambiguous on that point, so the court must consider outside evidence showing that the bonus rent was meant to compensate the owner for the tenant's below-market base rent.

Mississippi's top court ruled that the tenant didn't have to pay the owner bonus rent for new vehicle sales occurring at the new location. The court said the lease wasn't ambiguous. The use clause said the tenant “shall use and occupy the Leased property only as a retail automobile dealership.” The use clause didn't require the tenant to use the space to sell “new” vehicles, only “retail” vehicles. The court noted that if the parties had wanted the space to be used and occupied only for sales of new vehicles, they should have said so in the lease. And if the owner wanted to collect bonus rent from vehicle sales at other locations, the owner should have said that in the lease, too, added the court [Facilities, Inc. v. Rogers-Usry Chevrolet, Inc.].