Recent Court Rulings

State COVID-19 Shutdown Orders Didn’t Violate Tenant’s “Quiet Enjoyment” Rights

June 25, 2024    

What Happened: Courts around the country continue to rule against tenants seeking to use the COVID-19 pandemic as an excuse for not paying rent. One of the more creative cases involves a fitness center tenant that had to close from March through September 2020 due to shutdown...

Tenant that Terminates Lease Early Must Repay Improvement Costs

June 25, 2024    

What Happened: A lease required a medical tenant to reimburse the landlord for the costs of improvement made to the space if it terminated early. The tenant did terminate early, and the landlord billed it for $108,000 in improvement costs. The tenant refused to pay, contending...

Subsequent Lease Amendments Nullify Ambiguous Guaranty

June 25, 2024    

What Happened: In 1993, a tenant signed a lease to operate a tanning salon at a strip mall. The agreement included a third-party guaranty. The lease was amended in 1994 and again in 1996. In each case, the guarantors signed the amendments. In 1999, the sides executed a third...

OK for Landlord to Lock Out Smoke Shop Tenant for Selling Prohibited Products

May 28, 2024    

What Happened: A shopping center lease allowed the tenant to use the premises “solely for a tobacco, cigar, and vape store,” and “for no other purpose unless approved in writing by” the landlord.

Mutual Mistake Is Grounds for Rescinding Auto Repair Shop Lease

May 28, 2024    

What Happened: A landlord and tenant sign a three-year lease on a parcel of real estate containing three garage bays for use as an auto repair shop. Soon after the tenant opens for business, citizens complain about the lack of parking near one of the bays. The city investigates...

Tenant's Failure to Carry Required Insurance Is Grounds to Evict

May 28, 2024    

What Happened: A convenience store tenant signed a lease requiring it to carry certain insurance at its sole cost and expense during the lease term, including at least $1 million in general liability insurance, worker’s compensation insurance required by law, and plate...

Landlord Can Collect Attorneys' Fees from Guarantors But Not Tenant

May 28, 2024    

What Happened: After finding it liable for lease violations, a court ordered a restaurant tenant and its guarantors to pay damages to the shopping center landlord. It also held them jointly and severally liable for the nearly $40,000 in attorneys’ fees the landlord...

Tenant Doesn't Have to Pay Tax Increase on Improvements that Benefit Only Landlord

April 29, 2024    

What Happened: A lease required the tenant that would occupy 45 percent of the space in a four-story building to pay 42.98 percent of the taxes on the property. The agreement contained a tax escalation clause requiring the tenant to pay the proportionate share of tax increases...

Landlord Can Evict Pet Boarding Business for Providing Grooming Services

April 29, 2024    

What Happened: In 2019, a tenant signed a six-and-a-half-year lease on property to be used solely “for the purpose of operating a pet and cat boarding facility” and banning other uses without the landlord’s prior written consent. In operating the business, the...

Payment & Acceptance of Holdover Rent ≠ Lease Renewal

March 29, 2024    

What Happened: An office tenant didn’t exercise its renewal option on a lease that expired in April 2022. However, the tenant continued to pay, and the landlord continued to accept rent after the expiration date. A few months later, when the tenant ran into problems that...

Allowing Illegal Cannabis Sales in Space Is Grounds to Evict Convenience Store Tenant

March 29, 2024    

What Happened: A tenant leased the ground-floor store in a building for use as “a first-class convenience shop doing business as ‘AM PM Market’.” Just over a year into the 10-year lease, the landlord’s property manager discovered that a company...

Assignor Not Bound by Lease Amendments Made After the Assignment

March 29, 2024    

What Happened: A tenant assigned its lease for commercial office space in Texas to its corporate sibling. The landlord and new tenant then amended the terms of the original lease. After evicting the new tenant for nonpayment of rent, the landlord sued the old tenant for the new...