Lease Was Terminated for Paying Rent One Day Late

January 1, 2003

A tenant and an owner signed a lease amendment which required the tenant to pay its rent by cashier's check mailed no later than the 10th day of the month. If the tenant failed to pay its rent on time, the owner could automatically terminate the lease and take immediate possession of the space without prior notice. The tenant paid its August rent one day late, so the owner told the tenant it was terminating the lease. It allowed the tenant to stay in the space until January on a month-to-month basis.

A tenant and an owner signed a lease amendment which required the tenant to pay its rent by cashier's check mailed no later than the 10th day of the month. If the tenant failed to pay its rent on time, the owner could automatically terminate the lease and take immediate possession of the space without prior notice. The tenant paid its August rent one day late, so the owner told the tenant it was terminating the lease. It allowed the tenant to stay in the space until January on a month-to-month basis. The owner found a new tenant who took possession in February, but didn't start paying rent until April. So the owner sued the tenant for the rent due from January through April. The tenant responded that paying the rent one day late was a “trivial breach” for which termination was unwarranted.

A Tennessee appeals court ruled paying rent one day late was sufficient to warrant immediate termination of the lease. And the court ordered the tenant to pay the owner over $25,000 in rent due and interest. The court noted that the owner and tenant amended the lease in part because of disputes over rent payments. The amendment gave the owner the right to immediate termination upon any default in rent payments. Since the owner promptly mitigated its damages by re-leasing the space, the tenant was responsible for the balance of the rent due [Hillsboro Plaza v. H.T. Pope Enterprises, Inc.].

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