Add Definition of ‘Including’ to Avoid Inconsistencies

When you list items in your leases, you may begin the list with the phrase “including, without limitation,” or including, but not limited to.” Those phrases are meant to indicate that the list is not exhaustive.

However, if your lease is like many we have seen, using those phrases could cause a problem, warns Washington, D.C., attorney Desmond D. Connall Jr. You may use the phrases inconsistently throughout the lease, so they may be missing from places where you should have put them. Connall has seen several leases in which the owner did not consistently use the phrase “without limitation” after the word “including.” This inconsistency led to confusion and misunderstanding, he says.

Georgia Owner Gets Burned by Missing Phrase

In a new case from Georgia, a shopping center owner learned about that consistency problem the hard way. The owner billed a grocery store tenant, as part of its CAM costs, for a proportional amount of the cost of hiring a security guard for the center. The tenant paid part of the owner's security guard bill—based on an equal apportionment among the center's tenants—and disputed the rest.

The owner sued the tenant for violating its lease. The tenant asked the court to dismiss the owner's lawsuit, arguing that the lease did not require the tenant to pay a proportional amount of the security guard costs.

A Georgia appeals court ruled that the lease did not require the tenant to pay a proportional amount of the security guard costs. The lease's CAM cost definition said that CAM costs “shall include” certain enumerated costs, but security guard costs were not among them. The court noted that the lease's maintenance clause required the owner to maintain the common areas in clean condition, “including but not limited to” certain enumerated maintenance duties.

The omission of the phrase “but not limited to” from the CAM cost definition indicated that the parties meant the word “include,” as used in the CAM cost definition, to be a limiting term similar to “shall consist of,” reasoned the court. Thus, only those costs specifically enumerated in the CAM cost definition could be included in the CAM cost formula [Covington Square Assocs., LLC v. Ingles Markets, Inc.].

Alternative Strategies for Avoiding Inconsistency

Two alternative strategies can help you avoid a situation similar to the Georgia owner's. However, one strategy is more desirable and practical than the other.

Practical strategy: Add provision to definitional section. Connall highly recommends that you add language to the definitional section of your lease. The language should indicate that whenever you place the words “include,” “includes,” and “including” before one or more items, you intend the item to be considered as part of a larger group, and not limited to those items specifically listed, he says.

Model Lease Language

Whenever placed before one or more items, the words “include,” “includes,” and “including” shall mean considered as part of a larger group, and not limited to the item(s) recited.

Impractical strategy: Review every mention of “include.” A less desirable alternative is to review your entire lease to make sure you consistently use the phrase “without limitation” or “but not limited to” after the words “include,” “includes,” and “including.” You could try using your word processing program's search function to find every mention of “include,” “includes,” and “including” in your lease. However, this strategy could become very time-consuming, especially if those words pop up often in the lease. And this strategy is not foolproof.

List Controversial, Important Items

Whichever strategy you choose to follow, it's a good idea to list in your lease any particularly important or controversial items that are meant to be part of a larger group, says Connall. This can help you avoid disputes and uncertainty later on. For example, if the Georgia owner had listed “security guard costs” in the lease's CAM costs definition, the lawsuit could have been avoided, he notes.

• Covington Square Assocs., LLC v. Ingles Markets, Inc.: No. A07A0332, 2007 Ga. App. LEXIS 30 (Ga. Ct. App. 1/12/07).

CLLI Source

Desmond D. Connall Jr., Esq.: Member, Womble Carlyle Sandridge & Rice, 1401 Eye St., Ste. 700, Washington, D.C. 20005; (202) 857-4403; dconnall@wcsr.com.