What Happened: Despite repeated complaints about the plumbing, parking lot, cracks in the foundation, and other matters, a manufacturing company decided to renew its lease for a year. It then held over for another five months after the renewal term expired. The landlord sued the tenant for breach of contract; the tenant countersued the landlord for violating the implied warranty of suitability. The trial court ruled that the landlord breached the lease and awarded the tenant $191,052 in actual damages. The landlord appealed.

Ruling: The Texas appeals court reversed the judgment.

Reasoning: The court said that there was inadequate evidence to support the amount of the damage award. At trial, the tenant argued that its damages were the difference between the value it paid but didn’t receive in leasing the property, which it estimated to be 20 percent of the rent ($169,589). But, as the tenant admitted under cross examination, that figure was based not on fact but a personal assessment of the property’s market value. “The record contains no evidence explaining how the property defects or the repairs to the property affected the property's value,” the court noted. Nor did the tenant meet its burden of proving that its out-of-pocket expenses for repairs were reasonable. 

• MCO Mgmt., LLC v. Fortress Iron, LP, 2025 Tex. App. LEXIS 4512, 2025 LX 186502, 2025 WL 1771833