Owner Must Pay Cost of Replacing Parking Lot

Facts: A shopping center owner and a tenant agreed that replacing the center's parking lot was necessary, but disagreed about who should pay for it. The tenant sued, claiming that the owner was responsible for replacing the parking lot.

Decision: A North Carolina court ruled in favor of the tenant.

Reasoning: The court determined that the lease placed the responsibility for replacing the parking lot on the owner, despite the lease provision that required that the tenant pay common area charges. The court reasoned that the lease provision clearly stated that common area charges did not include capital expenditures as they relate to replacing the shopping center's parking lot, significantly extending its useful life, or increasing the shopping center's value.

Editor's Note: Making the tenant pay for replacing the parking lot would have unfairly enriched the owner by giving it a parking lot that could have outlasted the tenant's lease.

• Kmart Corp. v. Cragmere Assocs., LLC, February 2008