Tenant Bore Risk of Interruption in Business

Facts: A restaurant tenant stopped paying rent for its commercial space. It claimed that a nearby state construction project had substantially decreased its profits because the construction blocked the entrance’s visibility and forced customers to take an indirect route to reach the restaurant. The owner sued it for breaching its lease. The owner asked the court for a judgment in its favor without a trial.

Decision: A Massachusetts trial court ruled in favor of the owner.

Reasoning: The trial court noted that the dispute really concerned the allocation of the risk between the owner and the tenant of an interruption in the tenant’s business arising from the public road construction project. The lease provided that, in certain circumstances, the tenant would be relieved of some of its lease obligations if there were a permanent “taking” of the property by a public entity. But a temporary project that decreased business wasn’t one of those circumstances. In fact, said the trial court, the lease specifically allocated the risk of a public construction project like the one in the tenant’s present circumstances to the tenant.

• Renaissance Dev. Corp. v. Buca V, LLC, November 2015