Tenant's Principal Personally Responsible for All Lease Obligations

January 1, 2004

A tenant's principal signed a lease amendment twice: once on behalf of the tenant and again on his own behalf. The amendment said, in part, that the tenant had to keep its store window displays neat, clean, and orderly. When the tenant failed to pay its rent, the owner sued the principal for the rent due. The principal asked the court to dismiss the lawsuit, arguing that he was personally responsible only for the tenant's obligation to maintain its store window.

A tenant's principal signed a lease amendment twice: once on behalf of the tenant and again on his own behalf. The amendment said, in part, that the tenant had to keep its store window displays neat, clean, and orderly. When the tenant failed to pay its rent, the owner sued the principal for the rent due. The principal asked the court to dismiss the lawsuit, arguing that he was personally responsible only for the tenant's obligation to maintain its store window.

A New York appeals court refused to dismiss the lawsuit, ruling that the tenant's principal was personally responsible for all lease obligations. The court said that the lease and amendment had to be read as a whole. The court rejected the principal's argument that he was personally responsible only for the tenant's obligation to maintain its store window because one lease clause said that all the tenant's principals agreed to be jointly and severally liable for all of the tenant's lease obligations. Also, the court noted that it was unlikely that the parties amended the lease to hold the principal responsible only for the neatness of the tenant's window [Ronbet 366, LLC v. Tobias].

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