Tenant Must Pay Share of Communal Dumpster Fee

Facts: A tenant that leased two shopping center storefronts through a management company signed identical leases for each unit. Both leases included provisions obligating the tenant to pay its pro rata share of operating expenses for the entire property, and to contract with Waste Management Spokane for its own garbage disposal for the two units, which it did initially.

The tenant later was asked to remove its own Dumpsters, because they violated a city fire code. The management company informed the tenant that a communal Dumpster would be installed on the property for all tenants to use, and the cost of the Dumpster would be included in the CAM charge the tenant already was paying.

In February 2008, the tenant was informed that it owed an additional $300 for one of its units and $720 for the other unit for 2007 CAM charges, along with its February rent. After the tenant failed to pay the 2007 CAM charges, it was served with a notice to either vacate each unit or pay the delinquent amount it allegedly owed. The notice specified that the pro-rata share of operating expenses for 2007 was in accordance with “Section 64” of each lease agreement. The tenant refused to pay the charges but continued to run its business out of the units, so the management company sued it for unlawful detainer.

The tenant argued that it was not responsible for the amount the management company was charging for additional operating expenses because it included charges for refuse removal, which the tenant claimed was not an “operating expense as defined in Section 64.” However, the trial court found the tenant guilty of unlawful detainer, terminated the leases, ordered it to vacate the units, and awarded the management company $902.40 for rent due. The trial court also found that refuse was an operating expense under Section 64. The tenant appealed.

Decision: The appeals court upheld the trial court's decision in favor of the owner; the tenant was guilty of unlawful detainer.

Reasoning: On appeal, the tenant contended that the cost of the communal Dumpster was not an operating expense chargeable to him as additional rent under Section 64 of the lease. The appeals court disagreed, though, noting that Section 64 provided, “Tenant shall pay as additional rent Tenant's pro rata share of operating expenses within 30 days of receiving an invoice.” Section 64 defined “operating expenses” as including the cost of “all utilities.” Section 13 of the leases defined “utilities” as including refuse, and utilities were classified as operating expenses under Section 64. Thus, considering Sections 13 and 64 together, the cost of a communal Dumpster was, in fact, an operating expense under Section 64, the appeals court concluded.

Moreover, the appeals court agreed with the trial court's ruling that the tenant unlawfully detained the property, because it “continued in possession of it after the required notice without paying the operating expenses, which were classified in the leases as rent.”

• Wolff, et al. v. Bartlett, July 2009