Articles Posted in Commercial Leases

When you, as a landlord, ink a lease with a commercial tenant, you obviously hope the tenant’s business succeeds. Sometimes, though, that doesn’t happen. Failure happened a lot during the height of the COVID-19 pandemic in 2020. When your tenant gives up on their business and abandons the property they leased, you, as the landlord, have certain rights. When it comes to situations involving an abandoning tenant and negotiating a legal “surrender,” you should proceed with caution to avoid diminishing your potential unpaid rent recovery. That caution includes reaching out to a knowledgeable Atlanta landlord-tenant lawyer.

In 2008, we heard about the phrase “jingle mail,” which refers to “underwater” homeowners who gave up their homes by simply mailing the keys back to the bank. In a similar vein, sometimes your commercial tenant may give up and demonstrate that simply by — with no warning — evacuating the property and mailing the keys back to you.

When that happens (or your commercial tenant engages in similar acts of unannounced and unplanned abandonment of the property,) it is vitally important to understand a few things, including the concept of “surrender” and what, under Georgia law, does or does not constitute a surrender. A landlord-tenant case from here in Atlanta shines some light on these important concepts.

Continue reading →

The effect of a judge finding a party in contempt of court can be very different depending on the circumstances. If the party in question is a deadbeat parent who hasn’t paid their child support, the result may be jail time. On the other hand, if the party in question is your commercial tenant who hasn’t followed the court’s orders for the disclosure of documents, the results may be something very different but highly beneficial to your case. Whether you’re seeking collection of back-owed rent, pursuing an eviction action, or taking some other step against your commercial tenant, an experienced Atlanta landlord-tenant dispute lawyer can help you ensure you’re going about it the right way procedurally.

Last month, we looked at a commercial tenant that was holding over. Today, we consider the proper steps for a landlord whose tenant allegedly didn’t pay rent and refused to cooperate with the discovery process.

The tenant was a college exam preparation business located in a Duluth shopping center. In 2016, the ownership of the shopping center changed hands. Less than a year later, the new landlord sued the tenant alleging that it had failed to pay its rent.

Continue reading →

There are various circumstances under which a commercial tenant might continue to occupy a space after their lease term expired. There are also various circumstances where a landlord may decide it needs to eject that holding-over tenant. Landlords should take caution to be certain that their efforts to remove a holding-over tenant are fully compliant with the law and, to accomplish that goal, ensure they have representation from an experienced Atlanta commercial landlord-tenant lawyer.

One reason a tenant might hold over is that the tenant disputes that the lease term has, in fact, expired. That was the circumstance in one recent out-of-state landlord-tenant case.

The tenant business began leasing a space in Midtown St. Louis in 2003. The agreement’s provisions regarding renewals said that the tenant’s rental rate during a renewal period would be “market rent,” and then defined that term to mean “the lesser of rent quoted to prospective tenants within six (6) months prior to the expiration of the Lease term or rent paid by other tenants for comparable space within the surrounding area.”

Continue reading →

When a commercial tenant feels that it cannot timely pay its full rent obligation, this potentially creates issues for both the tenant and the landlord. A landlord can begin taking action or can allow the tenant to pay late and/or pay less than the full rent. Both landlords and tenants need to know that, when the latter happens, that step potentially triggers certain legal ramifications, such as the waiver of terms and/or the creation of a “quasi-new agreement.” As a Georgia commercial landlord, you should make sure you’re consulting with a knowledgeable Atlanta commercial leasing lawyer before you acquiesce to nonpayment, late payment, or partial payment of rent.

The Georgia Court of Appeals addressed that issue last year. In that circumstance, the contract was a commercial sublease agreement in Atlanta. The subtenants, two law firms, allegedly fell behind in paying rent, so the sublessor, an insurance company, eventually took them to court.

The sublessor won in the trial court. The trial judge granted summary judgment in its favor on its claims, as well as all of the subtenants’ counterclaims. The insurance company had a problem, though, and the subtenants used it to score a success in their appeal.

Continue reading →

When you have a commercial tenant who breaches its lease by improperly failing to make a repair, you’ve suffered financial harm in multiple ways. If you had to make the repair yourself, then you’ve suffered damages related to the cost of that repair. If the tenant’s failure to repair prevented you from leasing the space for a period of time, then you have lost rent while the property was under repair and unoccupied. On top of those things, you’re out the cost of the legal services your skillful attorney put in handling your case. If you’re a commercial landlord dealing with a failure-to-repair issue, it is important to ensure you have the right Atlanta commercial litigation attorney on your side to make certain that you don’t simply get an award of damages, but the full sum that you’re truly owed.

A commercial landlord in Athens found itself facing that kind of problem recently. The agreement it signed with the tenant said that the tenant was “responsible for making all repairs to all of the improvements on the premises, including the interior and exterior walls, roof, paved access, and parking areas.”

The lease also said that, if the landlord or the tenant sued “to enforce any covenant of this lease or for the breach of any covenant or condition,” then the two sides agreed “that the losing party shall pay to the prevailing party a reasonable attorney’s fee, which shall be fixed by the court, and court costs.”

Continue reading →

There are many things that a commercial tenant must consider once it signs a lease. One thing most tenants (or landlords) hope not to have to contemplate is what to do if a legal roadblock prevents the operation of the tenant’s business. In these situations, it is important to understand the circumstances under which the law will, and won’t, excuse performance. A Georgia landlord-tenant attorney can help you with these and other questions.

One case that involved a question of a tenant’s non-performance was a tanning salon that had rented a space from a commercial landlord in a southwest Florida shopping center. The lease called for a five-year term, scheduled to start in August 2013.

So far, this probably sounds like an ordinary transaction. However, at around the time the salon was scheduled to take possession, the city rejected a request from the salon to make certain changes to the property needed to run the tanning business. The city denied the request because, it claimed, the property was zoned with a designation of “C-4,” and tanning salons were not allowed in C-4 zoned properties.

Whenever you pursue a commercial litigation action, you’ll need to make several choices. It is important to make your decisions carefully because there are legal rules that prevent you from taking more than “one crack” at pursuing certain requests for relief. That’s because of the legal rule of res judicata, and it is just one example of why it pays to have knowledgeable Georgia business counsel representing you.

One example of when this rule mattered and limited a plaintiff’s ability to recover damages was a dispute between a franchisor and one of its franchisees. The Atlanta-based franchisee signed a 25-year franchise agreement with the Sugar Hill-based franchisor of child daycare centers in 2006. The contract had within it terms that called for franchisees to pay to the franchisor certain royalty and advertising fees. Just six years into the relationship, the franchisee announced that it was terminating its agreement with the franchisor. It took down all signs and anything else that bore the franchisor’s name. It also stopped paying advertising and royalty fees to the franchisor.

This lack of payment of fees led the franchisor to sue for the franchisee’s failure to perform under the agreement. Specifically, the franchisor sought fees and interest for the first two months of 2015. The franchisee, however, successfully defeated the franchisor’s efforts in both the trial court and the court of appeals. The key to the franchisee’s success was the two sides’ past litigation history. Shortly after the franchisee repudiated the contract, it also sued the franchisor for negligent misrepresentation and violation of federal franchise rules. In that case, the franchisor filed a counterclaim against the franchisee for its alleged breach of the agreement.

Legal matters can sometimes be like doing a construction job or a home renovation task. Achieving a successful result isn’t just about selecting a goal that you can achieve, but also about making sure that you are using the right tool to get the job completed correctly. In any commercial leasing situation, your lease agreement will give you certain rights. If you think that the other side has not lived up to its obligations under the lease, you may have a right to recovery in court, but, in addition to needing valid proof, you must be certain that you’ve chosen the correct avenue for seeking recovery. In other words, you have to be sure you’re using the right legal tool. If your commercial tenant sues you while using the wrong legal tool, you may be able to obtain a dismissal. A skilled Georgia commercial leasing attorney can provide invaluable advice and representation in your commercial lease-related litigation.

In June, the Georgia Supreme Court addressed such a situation in which a commercial tenant was displeased with an action taken by its landlord and sought assistance from the courts. A non-profit foundation headquartered in Glynn County rented space within a commercial property on St. Simons Island. In the fall of 2015, the landlord filed papers with the county zoning authorities, seeking rezoning of its property and requesting permission to build an addition onto the building in which the foundation rented space. The county approved both of the landlord’s requests six months later.

The foundation was not in favor of the rezoning or the addition that the landlord proposed. The foundation’s legal plan of attack to oppose the landlord’s actions was to go to court and ask the judge either to review the rezoning application and site plan, or else to issue a directive to the county to revoke its approval of the changes.

As a commercial landlord, you know that sometimes you may have problems with a tenant. The tenant may fail to pay rent on time occasionally or sometimes may fail to keep up the premises as required by the lease. You probably don’t anticipate your tenant making an error that burns the building down but, sometimes, that happens too. Protecting your business interests fully requires knowing how to engage the legal system in the right way to get back all of the losses you’ve suffered as a result of your tenant’s failure to comply with the lease agreement – whether those losses are moderate or massive. By having legal representation from a skilled Atlanta commercial landlord-tenant attorney, you can make sure you are prepared to protect your business interests, whatever that protection entails.

A situation like that (a fire inside a commercial rental property) actually occurred north of Atlanta… and ended up in litigation. The fire occurred in 2015 after the tenant, a franchisee of a national chain of hardware stores, received a shipment of pallets and plastic totes from the franchisor’s delivery truck. An employee of the tenant pushed the delivery far into the stockroom, which was situated in the corner of the building. Not long thereafter, the same employee noticed flames shooting out of one of the recently delivered totes. The fire spread, causing major damage to the store. The cost of the landlord’s loss was $116,000 and it wasn’t covered by insurance.

The landlord took the correct next step: it sued the tenant and the franchisor. The landlord asserted claims of negligence and breach of contract. The lease required the tenant “to keep the leased space in a habitable, safe, and good condition,” but the tenant failed to live up to that obligation, according to the landlord, by storing unsafe chemicals in the stockroom. Additionally, the tenant was negligent in accepting the chemicals (and the franchisor was negligent in delivering them,) according to the lawsuit.

Continue reading →