Lease Didn't Require Center to Maintain Anchor Tenants

June 30, 2004

A lease gave the tenant the right to pay percentage rent only if an anchor closed for six months and the right to terminate the lease if an anchor closed for a year. Two of the anchors left the center. So in June 2000, the tenant notified the center's owner that it intended to start paying percentage rent if the anchors weren't replaced by July 31, 2000. In July 2000, the tenant started paying only percentage rent. The owner deposited the reduced rent checks but sent delinquency notices to the tenant. The owner sued to evict the tenant.

A lease gave the tenant the right to pay percentage rent only if an anchor closed for six months and the right to terminate the lease if an anchor closed for a year. Two of the anchors left the center. So in June 2000, the tenant notified the center's owner that it intended to start paying percentage rent if the anchors weren't replaced by July 31, 2000. In July 2000, the tenant started paying only percentage rent. The owner deposited the reduced rent checks but sent delinquency notices to the tenant. The owner sued to evict the tenant. The tenant argued that the owner had violated the lease by failing to maintain the anchors.

An Ohio appeals court ruled that the lease didn't require the owner to maintain the anchors. The court noted that the lease didn't guarantee that the anchors would remain in the center or impose a duty on the owner to maintain the anchors. Rather, the lease gave the tenant two remedies if the anchors did close, the court explained. Since there was no duty to maintain the anchors, the owner didn't violate the lease by failing to do so [Wauseon Plaza Ltd. Partnership v. Wauseon Hardware Co.].

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