Owner Wins

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Facts: The owner leased a building to a tenant that later sublet the building to a third party for the purposes of running a restaurant. Several years later, a fire damaged the building. The subtenant had the following legal options: 1) fix the damage and recover the cost from the owner; 2) sue the owner for damages; or 3) move out and claim constructive eviction—that is, being forced to leave because the space is inhabitable. Instead, the subtenant stayed in the space, but stopped paying rent to the original tenant, which in turn stopped paying the owner.

Facts: A tenant signed a 15-year lease agreement that included a provision allowing for termination of the lease within 60 days if, after any casualty, the repair and reconstruction costs of the leased space totaled or exceeded 35 percent of the total reconstruction costs.

Four years into the lease, two tornadoes damaged the tenant's space. After an assessment, the tenant and owner agreed that $1,960,067 would be the total reconstruction cost, 35 percent of which equals $686,023.

Facts: A tenant entered into a lease agreement that required the purchase of insurance coverage for damages as a result of specific harms including smoke, riot, crashing airplanes, and “civil commotion.” The lease agreement did not specifically require coverage for terrorist attacks. The tenant purchased a post-September 11 insurance policy that included an explicit exception for all damage as a result of terrorism.

Facts: After Hurricane Katrina had damaged the premises, a Louisiana tenant moved its merchandise and other possessions out of the space that it had rented under a 25-year lease. The tenant also stopped paying rent and refused the owner's request to meet that lease duty.

The owner sued the tenant for past and future rent, and for the costs of repairing the premises. The tenant and the owner each asked that the court award it a judgment without a trial.

Decision: A Louisiana court awarded the owner a judgment without a trial.

Facts: A lease, entered into in January 2004 between the tenant and the owner, allowed for early termination by the tenant after one year if the tenant chose to close its fitness center. Exercising this right required the tenant to provide 90 days’ written notice of the termination and remain liable for the rent for up to 12 months after those 90 days, unless the owner leased the space to a new tenant within that period.

Facts: An owner leased six parking lots to a tenant. In turn, the tenant agreed to pay annual rent and manage the parking lots' operations. The lease also contained a right-of-refusal clause, giving it the right, before any other tenant, to accept or reject any lease offers made by the owner at the end of the lease term.

Facts: A tenant ran several entertainment businesses on the owner's premises. The businesses were unable to make a profit, and the tenant informed the owner that it couldn't pay the rent and removed all of its property from the premises. The owner sued the tenant for unpaid rent, the security deposit, and repairs. After a jury trial, the court ruled in favor of the owner.

The tenant appealed, claiming that the jury award was excessive, based on a statement from a new witness who testified about the condition and value of the property.

Facts: The tenant, while renting space in the owner's building without a lease, experienced property damage from a fire. The tenant then sued the owner, claiming that the owner violated his promise, or warranty, of providing a space suitable for business by failing to safely maintain the electrical and fire systems. The owner argued that because the tenant did not have a lease, there was no warranty.

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

Facts: The owner of a commercial building served a tenant a three-day notice demanding back rent. The tenant did not respond to the notice, and the owner sued for payment. The tenant claimed that it had been forced to move and stopped paying rent because an alleged water leak, which the tenant claimed the owner refused to fix, had caused water damage in the space and made it unsafe.

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

Facts: A tenant signed a commercial lease with a three-year term. Before the three years expired, the tenant and owner had agreed to extend the lease for another three years. After the extension, the tenant assigned the extended lease to a new tenant. The original tenant and the new tenant's agreement extended the original lease for yet another three years, but the new tenant defaulted on the lease before the second extended term was up.