Owner Wins

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Facts: Under its agreement with a previous owner of the shopping center where it rented space, a tenant had been permitted to use its rent payments to “pay down” a wraparound mortgage that arose from some bankruptcy claims. After the center was purchased, the tenant was required to pay full rent to the new owner. The tenant objected, and the dispute went to arbitration. An arbitrator determined that the lease gave the owner the right to collect rent from the tenant, and didn’t require it to follow the previous payment arrangement. The tenant appealed.

Facts: A restaurant tenant stopped paying rent for its commercial space. It claimed that a nearby state construction project had substantially decreased its profits because the construction blocked the entrance’s visibility and forced customers to take an indirect route to reach the restaurant. The owner sued it for breaching its lease. The owner asked the court for a judgment in its favor without a trial.

Decision: A Massachusetts trial court ruled in favor of the owner.

 Facts: A tenant signed a 13-year lease with the owners of an office building. Upon moving into the office space the tenant failed to secure a $75,000 security deposit bond, which was required under the lease. The tenant later moved out without notice or explanation, stopped paying rent, and removed its fixtures.

Facts: A jewelry vendor signed a license agreement to sell its inventory from a kiosk in a mall. At the end of the day, the tenant would store its inventory in a safe contained within its space. The space was then closed off and the mall itself was not accessible to the public overnight. Thieves broke into the mall and stole jewelry from the safe.

Facts: A tenant rented space to operate its café and lounge in an Art Deco-style entertainment complex that included a theater and flashing signage. According to the tenant, the exterior of the building and the unique signage attracted customers to its location. Under the lease, the owner was obligated to fix any weather-related damage to the “premises” within six months.

Facts: Less than one year after entering into a five-year lease, a tenant vacated its space, declaring that the owner had materially breached the lease by allegedly refusing to make accessibility improvements under the Americans with Disabilities Act (ADA) that the tenant insisted were required for it to obtain a use and occupancy permit for the space.

Facts: A shopping center owner sought to recover damages from a liquor store tenant after it breached its lease and lease guarantees by failing to pay rent. After the owner sent the tenant a notice to quit possession of the premises, the tenant moved out. The owner sued the tenant. The tenant argued that it shouldn’t have to pay monthly rent until the space is occupied by a new tenant. The tenant claimed that the owner hadn’t mitigated its damages by finding a new tenant. A trial court ruled in favor of the owner. The tenant appealed.

Facts: A fast-food restaurant franchisee was required to update its space every seven to 10 years in accordance with its franchise agreement. Its lease prohibited the tenant from making any alterations to the interior or exterior of the premises without the owner’s written consent. The tenant performed an extensive remodel to the exterior and interior of the restaurant without consent.

Facts: A law firm leased an entire floor in a commercial condominium building. The lease required the tenant to continuously maintain a letter of credit, and to replace that letter of credit if it was no longer valid at any point. A failure to do this would be a lease default. The lease gave the owner the right to terminate the lease in the event of such a default.

Facts: A car wash tenant signed a lease with a renewal option every five years. The tenant exercised its renewal option twice. During the second renewal period, a dispute between the tenant and owner was settled by a court. The settlement stated that the tenant could operate until the owner found a replacement tenant. Several years went by with no replacement tenant. In the meantime, the tenant didn’t exercise its option for a third term, but it continued to operate at the property on a holdover basis.