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Commercial Tenant's Lease Is Clear and Unambiguous
Apr 29, 2009
Facts: A tenant, who ran a hardware store in Jackson, Mississippi, had signed a lease agreement in 2004 that contained an option to purchase the space, with financial guidelines and timelines. In 2005, the tenant wrote a letter to the property’s real estate agent and property manager, expressing his intent to purchase the property, and asked the agent for a date to set up the arrangements to do all the legal work and set up a closing date. The tenant, who was traveling out of the country, was told that the transaction had to be closed within a reasonable time after the title was cured, or he would be considered in breach of contract. The property manager mailed the tenant a letter stating that the tenant owed specific amounts for his third quarter lease payment and tax reimbursement. The property manager filed a complaint for specific performance and other relief, including what was owed on past-due rent and taxes.
The court ordered for the closing on the property to occur no later than September 20, 2007, and found that the tenant owed a sum of money that included the purchase price of the property, attorney’s fees, prorated taxes, county taxes, and interest. The court also found that the tenant was entitled to credit that would be applied toward the property’s purchase price for his first quarterly lease payment, earnest money deposit, and security deposit, therefore reducing the price he had to pay by approximately $10,000. The tenant was warned that if he did not bring the money to the closing, the commercial property contract would be void, and he would owe past-due rent. Further, if he failed to close on the property, he would have to vacate the premises. The tenant appealed the decision.
The court ordered for the closing on the property to occur no later than September 20, 2007, and found that the tenant owed a sum of money that included the purchase price of the property, attorney’s fees, prorated taxes, county taxes, and interest. The court also found that the tenant was entitled to credit that would be applied toward the property’s purchase price for his first quarterly lease payment, earnest money deposit, and security deposit, therefore reducing the price he had to pay by approximately $10,000. The tenant was warned that if he did not bring the money to the closing, the commercial property contract would be void, and he would owe past-due rent. Further, if he failed to close on the property, he would have to vacate the premises. The tenant appealed the decision.
Ruling: A Mississippi appeals court ruled in favor of the property manager and owner, and upheld the court’s decision.
Reasoning: The appeals court found that the contract entered into between the parties was clear and unambiguous, but remanded the case so the lower court could impose an appropriate schedule for closing and payment. The court also noted that the tenant was not entitled to credit for any periodic payments made to the property manager, and had to pay the property manager’s attorney’s fees. Source: Floyd Marshall v. Carolyn Lindsly, April 2009Related Articles
