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What Happened: A shopping center tenant exercised its supposed right to pay reduced rent under a co-tenancy clause that kicked in when either: (1) the center lacked either three anchor tenants; or (2) 60 percent of the space wasn’t leased. While acknowledging that a trigger condition had occurred (that is, the closing of anchors Sports Chalet and Toys “R” Us), the landlord claimed the reduced rent was an unenforceable penalty, citing a...
What Happened: After a mutually beneficial tenancy of over two decades, Comcast moved out of its Michigan corporate headquarters. The move didn’t go exactly as planned, and the company was unable to remove equipment from its in-house fitness center by the lease termination date. Comcast had the equipment removed the very next day but accidentally forgot to retrieve a disassembled table in the conference room. The landlord claimed that Comcast didn...
What Happened: A restaurant tenant with a habit of paying rent late took advantage of the COVID-19 shutdown to make some improvements to the space at its own expense, assuming that it would be able to renew once the lease came to an end in August 2021. But the tenant was still in big-time arrears and the landlord nixed the renewal, claiming that the tenant didn’t give proper renewal notice. With relocation out of the question, the restaurant filed...
What Happened: The town of Santa Monica passed an ordinance requiring a commercial building leased to a delicatessen/catering firm to be retrofitted for earthquakes. The landlord claimed that the tenant, who had leased the building since 1973, was the real owner and thus financially responsible for complying with the ordinance; the tenant claimed just the opposite. The trial court ruled that the landlord had to pay for the seismic retrofit.
What Happened: A government tenant that had leased the floor of an office building for nearly 30 years left behind a mess when it moved out. In addition to removing electronic door locks, office partitions, a fire and alarm system, and other items the landlord claimed as its own property, the tenant left the elevator in unworkable condition. The landlord sued for over $350,000 in damages. While the jury found the tenant liable, it awarded the landlord o...
What Happened: In 2007, Renaissance signed a lease assignment and took over as tenant of property in a shopping center. When the landlord sought to refinance the property two years later, it discovered that the below-ground space contained excessive amounts of Perchloroethylene (PERC), courtesy of the dry cleaner that had leased the space decades earlier. The lower court ruled that Renaissance had to reimburse the landlord for the $180,000 it had alread...
What Happened: A shopping center lease allowed a drug store tenant to assign or sublet the space “with Landlord’s consent, which consent shall not be unreasonably withheld.” The tenant subleased the space to Goodwill Silicon Valley (SV), but the landlord refused to consent. The jury ruled that...
What Happened: In 1990, a real estate developer signed a 99-year lease on property in Boca Raton on which it intended to build a shopping center. The lease fixed rent at $280,000 for years 2 through 29, and $910,000 per year after that; it also gave the developer the right to purchase the property at “fair market value” (FMV). The question: Should the FMV price account for the fact that the property was encumbered by the lease? The court sai...
What Happened: After warning that its business was struggling, a restaurant tenant paid only half the rent on June 1. Two weeks later, it closed the restaurant. When its demands for full rent went unheeded, the landlord changed the locks and re-entered the premises on June 24. Both sides accused the other of lease violations.
Ruling: The Iowa court ruled for the tenant, and the appeals court upheld the decision.
What Happened: A landlord and tenant hired a contractor to construct improvements on a leased movie theater. The subcontractor that installed the drywalls recorded a lien for the work and sought to foreclose when it didn’t get paid. The landlord asked the court to dismiss the claim under a state law prohibiting enforcement of liens against owners of property who record a lease banning such claims. The trial court sided with the landlord.
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