Tenant Owes Additional Rent Despite Owner's Late Statement Filings

A lease required the owner to give the tenant a certified statement of its proportionate share of the preceding year's actual taxes and operating expenses, on or before March 1 “or as soon thereafter as is practical.” The lease said that if the tenant's share of the actual taxes and operating expenses exceeds the additional rent it has already paid, the tenant has 10 days from the receipt of the statement to pay the difference.

In September 1994, the owner gave the tenant the certified statements for 1990, 1991, and 1992. The tenant refused to pay the difference it owed, so the owner sued it. The tenant argued that the owner had violated the lease by failing to give it these statements on or before March 1 of each calendar year or as soon thereafter as practical.

A Connecticut appeals court ruled that the tenant had violated its lease by refusing to pay the additional rent it owed. The court noted that when the owner had filed other such statements late, the tenant had paid the additional rent it owed, without objection.

The court also noted that the tenant knew there was an ongoing dispute between the owner and its lender over the additional rent payments and that this dispute had delayed the serving of those years’ statements. And the court said that the owner had served the statements as soon as was practical once that dispute was resolved.

So the court ordered the tenant to pay the owner over $31,000 in additional rent due, plus interest, late charges, and attorney's fees [Putnam Park Assocs. v. Fahnestock and Co., Inc.].