Owner Loses

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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.

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...