Owner Loses

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What Happened: A landlord was concerned that a fitness center that was way behind on rent would suddenly move and take all of its equipment. So, it went to court to get what in Illinois is called a “distress warrant” granting a lien on a tenant’s personal property to secure its obligation to pay rent. It also changed the tenant’s locks just to make sure the exercise equipment was safe. The tenant claimed the landlord committed co...

What Happened: Under the terms of a 10-year restaurant lease, the obligation to pay rent didn’t kick in until the buildout was complete and the tenant began operating in the space. With work on the premises still to be done, the governor issued a COVID-19 shutdown order. Three months later, the tenant sent an email telling the landlord it wanted to delay the buildout and push back the rent commencement date by seven months.

What Happened: A shopping center lease gave a fabric and crafting suppliers tenant the right to pay a lower substitute rent if the landlord violated its obligation to run the center as a “first-class retail project.” The problem began when the landlord leased space in the center to an addiction counseling provider “solely for the purpose of conducting the business of a medical addiction treatment clinic.” You’re in breach, ...

What Happened: A clothing retailer cited the force majeure clause in its leases as an excuse for not paying rent during the COVID-19 shutdown months of April and May 2020. Not so fast, responded the landlord, noting that the clause:

What Happened: Technically, the landlord had a perfectly valid case to evict. But there was also a clear explanation why Bed Bath & Beyond (BB&B) didn’t pay its late rent until after the 10-day cure notice period expired. Its corporate headquarters was closed due to COVID-19 on the day the landlord’s notice to cure arrived. As a result, the notice was redirected to the BB&B warehouse where it came into the hands of an employee wh...

What Happened: From March to October, a steakhouse couldn’t come up with its monthly rent because of the COVID-19 public health orders restricting indoor dining, the meat and potatoes of its business. But the steakhouse tried its best to be a faithful tenant. First, it asked for a rent abatement of at least 50 percent. The landlord ignored and later rejected the request. And when business improved in November, the steakhouse sent the landlord a ch...

What Happened: A lease between a shopping center and hair salon banned the landlord from renting to a competing business. The landlord then acquired an adjacent, nearly identical building sharing the same parking lot located only 50 yards away and leased part of it to another hair salon for 10 years. When the original salon tenant found out, it sued the landlord for fraud and breach of contract. The trial court nixed the fraud claim but found the landlo...

What Happened: New York City has a law that bans commercial landlords from engaging in “harassment” to force tenants to vacate or waive lease rights via illegal threat of force or threats based on race, creed, color, age, etc. At the height of the first wave of the pandemic, the city temporarily expanded the harassment ban to cover threats related to rent against tenants impacted by COVID-19. The law also imposes a one-year ban on enforcemen...

What Happened: A landlord who had just bought the property and was eager to lease it for a higher rent approached the current gas station tenant about a potential buyout. The negotiations proved unsuccessful. Less than three months later, the landlord tried to evict the tenant for unpaid rent and damaging the property, but the court dismissed the case.

What Happened: Who won the legal showdown between the Florida mall and the retail tenant that cited the force majeure clause of its lease as an excuse not to pay rent in May due to business losses resulting from government COVID-19 shutdown orders? At stake was more than pride. Under terms of the lease, whoever was the winner, or “prevailing party,” would be entitled to tens of thousands of dollars in attorneys’ fees and legal costs. &...