What Happened: A landlord claimed that an office building tenant violated its lease obligation to perform repairs on the roof, HVAC system, foundation, and other parts of the property and sued for $32.5 million in damages. The tenant argued that the landlord didn’t have a legal case for damages since it was planning to demolish the property anyway after the lease ended in 2025. 

Ruling: The Virginia court ruled in the landlord’s favor.

Reasoning: Even if the tenant’s allegations were true, a landlord’s decision to demolish a building at the conclusion of a tenancy doesn’t relieve the tenant from its lease obligation to repair the building during the term of the lease. To the extent that repairing a building slated for demolition would result in economic waste, the tenant’s damages would be based not on the costs of the repairs necessary to undo the damage but on how much the tenant’s failure to make the required repairs reduced the value of the property. But the case would have to go to trial to determine the truth of both propositions: that the tenant didn’t actually make the necessary repairs and that the landlord actually did intend to sell the building.

• Oakton Nla LLC v. AT&T Servs., Inc., 2024 Va. Cir. LEXIS 156