Don't Assume Rent Obligations Automatically Accelerate Upon Default

After a Kentucky shopping center tenant stopped paying rent and abandoned the premises, the landlord retook possession and billed the tenant for the roughly $3.211 million in unpaid rent remaining through the end of the lease. The tenant admitted to being in default but contested the landlord’s right to accelerate the rent because the lease didn’t say anything about acceleration. The court agreed, citing cases in the state ruling against accelerated rent clauses where the rent payment dates were set by the lease. Since the lease in this case did set specific payment dates and didn’t provide for acceleration in the event of the tenant’s default, the landlord had to collect each rent payment as it came due [Anchor v. Kinnucan Enters., 2019 U.S. Dist. LEXIS 210626].

For two more recent cases from other states in which a landlord or tenant was done in by a bad assumption about the meaning of a lease clause, see “Don't Make These Three Bad Assumptions When Drafting Lease,” available to Insider subscribers here.