Don't Unintentionally Limit Your Remedies Against Tenant

When listing your remedies in a lease clause—for example, the option to terminate the tenant's lease if the tenant stops operating its business—always start with the phrase: “In addition to any other rights and remedies available to Landlord under this Lease or at law or in equity….” Ohio attorney Abraham Lieberman recommends using this phrase because it gives you the right to resort to many types of remedies—not just the ones you're listing in the particular clause.

If you don't start off with that phrase, a tenant could argue that you've limited your remedies to those listed in the particular clause and that you can't have access to other remedies that might benefit you more, Lieberman warns. An Ohio owner had to face that tenant argument after it didn't use the phrase in a termination clause in a lease amendment. The clause said that “in the event Tenant ceases operating its said business at the Premises for a nine month period, Landlord may give notice to Tenant that Landlord is electing to terminate this Lease.” When the tenant closed its business at the space, the owner sued the tenant, asking for both damages and a court order requiring the tenant to reopen its business at the space. The tenant asked the court to dismiss the lawsuit. The tenant argued that the owner's sole remedy under the lease was to terminate the lease.

An Ohio appeals court refused to dismiss the lawsuit. The court said that the termination clause didn't “necessarily” exclude other remedies. The court also had to look at other evidence, such as a sworn statement by the owner's general partner that terminating the lease was only “one of the options” given the owner during the lease amendment's negotiations [Forest Park Partners Ltd. Partnership v. Ponderosa, Inc.].

Although the owner in this case could continue with its lawsuit, it had to waste time and money trying to prove that its remedies weren't limited to terminating the lease. If the lease had clearly said that the termination remedy was in addition to other rights and remedies, the owner might have avoided this predicament, says Lieberman.

CLLI Source

Abraham Lieberman, Esq.: Member, Baumgartner & O'Toole, 5455 Detroit Rd., Sheffield Village, OH 44054; (440) 930-4001; alieberman@b-olaw.com.