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Home » Topics » Commercial Lease Law Insider » Owner Wins

Owner Wins
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'Diner' Lease's Restrictive Covenant Ambiguous

Jun 25, 2014

Facts: The restrictive covenant in a restaurant’s lease with a shopping center owner prohibited the owner from leasing to other “diner type” restaurants. When the owner began building out a portion of the center for a national specialty-hamburger restaurant and began negotiations with a restaurant serving soup and sandwiches, the tenant sued the owner for breaching its lease. The owner argued that the two new prospective tenants aren&r...

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Court Finds No Implied Term for Construction Completion in Lease

Apr 30, 2014

Facts: A tenant signed a lease for space for its restaurant. At the time the lease was signed, the owner was in the process of gutting and remodeling the premises, including installing an elevator. To install the elevator, the owner was required to draw up architectural plans, obtain permits, demolish portions of the building, order the elevator, and upgrade the electrical system. The elevator had to be completed before the tenant could obtain a restaur...

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Guarantor, Not Tenant, on Hook for Lease Obligations

Apr 30, 2014

Facts: A guarantor promised to fulfill the lease obligations of a restaurant tenant if the tenant breached the lease. It signed a “good guy” unconditional guaranty. The tenant stopped paying rent because it claimed its sales had declined because scaffolding built in front of its space by the owner interfered with its entrance. After a series of legal proceedings with the tenant, the owner sued the guarantor for the unpaid rent. A trial court...

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Personal Lease Guaranty Was Ambiguous

Mar 26, 2014

Facts: A coffee shop tenant signed a lease for space in a strip mall, and signed a personal guaranty, promising that he would be financially responsible if the lease were defaulted on. The tenant later sold the coffee shop. When the new coffee shop tenant stopped paying rent, the owner sought payment from the guarantor. A district court agreed with the owner that the guarantor was responsible for the rent. The guarantor appealed.

Decision:...

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Defect Must Be Latent to Defeat As-Is Lease

Mar 26, 2014

Facts: The state health department forced a frozen yogurt shop tenant to suspend its operations until the waste water system for its space in a strip mall complied with state requirements. The tenant, who was unaware that its water system was inadequate, complained to the owner, who asserted that it was the tenant’s responsibility to bring the system into compliance at its own cost.


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Owner Didn't Waive Early Termination Provisions

Feb 26, 2014

Facts: A lease for storage space for casino equipment gave the tenant an early termination right, provided that it sent a letter in writing to the owner and paid a termination fee by a certain date. During a phone call shortly before the early termination deadline, the tenant told the owner that it intended to move out of the space and that it would send a formal letter and payment in compliance with the lease terms.


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Tenant Must Pay Rent During Reduced Occupancy Period

Feb 26, 2014

Facts: A retail tenant’s lease for shopping center space gave it the right to stop operating for a “reduced occupancy period” if a major co-tenant left the center until it was replaced. While a reduced occupancy period was in effect, the tenant decided to change its retail concept and remodeled the store during the closure.

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Owner Not Liable for Tenant’s Flood Damage

Jan 28, 2014

Facts: The shopping center where a general store-type tenant rented space was damaged when the area experienced flooding. The tenant sued the owner of the shopping center, among other parties including the adjacent tenant (a grocery store) and the Federal Emergency Management Agency (FEMA). The tenant claimed that the owner could have taken measures to make the premises water resistant, such as caulking the exterior of the building and constructing a me...

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Sublease Shifted Maintenance Obligation to Tenant

Nov 22, 2013

Facts: A tenant that rented five floors of an office building and the attached parking garage sublet the garage space to a parking garage operator. The owner later discovered water damage in the garage. It sued the tenant, asserting that the tenant was obligated under the lease to maintain the garage and its failure to do so caused the water damage.


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Owner Didn't Waive Right to Collect Taxes

Oct 25, 2013

Facts: A tenant rented space for its bakery in a shopping center. After the tenant moved out of the space, the center’s owner demanded that it pay real estate taxes and operating expenses incurred while it still occupied its space, plus the cost of restoring the space after it left. The tenant refused to pay, and the owner sued it.


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