Limited Partnership Isn't Liable Under Lease

September 30, 2003

An owner rented space to a tenant that was a limited partnership. The general partner of the limited partnership sold its business to a corporation. The owner then amended the lease to change the definition of “Tenant” from the limited partnership to the corporation. The corporation eventually stopped paying rent, and the owner sued the general partner, claiming that the limited partnership was liable under the amended lease for the unpaid rent.

An owner rented space to a tenant that was a limited partnership. The general partner of the limited partnership sold its business to a corporation. The owner then amended the lease to change the definition of “Tenant” from the limited partnership to the corporation. The corporation eventually stopped paying rent, and the owner sued the general partner, claiming that the limited partnership was liable under the amended lease for the unpaid rent.

A Connecticut court ruled that the limited partnership wasn't liable. The court noted that the amended lease clearly defined “Tenant” as the corporation only. Plus the amended lease didn't expressly say that it was binding on the limited partnership. And even though the amended lease mentioned it was still binding on the tenant's “successors and assigns,” the limited partnership clearly was neither an assignee nor a subtenant of the corporation, said the court [Riverdale Assocs., LLC v. Tenny].

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