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Commercial Leases, Attorneys’ Fees Provisions, and Breach of Lease Cases in Georgia

Poole Huffman, LLC

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.”

The problem, according to the landlord, was the tenant refused to repair the roof, even though the roof repair clearly was the tenant’s responsibility under the agreement. The landlord, as a result, sued the tenant for breaching the lease. At the end of the trial, the jury concluded that the landlord had proved its case and the tenant was liable, awarding the landlord $45,667 in damages.

When you are seeking an award of attorneys’ fees, even if you have a contractual clause calling for a potential award of attorneys’ fees to the winning party (as this Athens landlord had,) there may still be certain preliminary procedural “hoops” that the statutes say you must jump through in order to be entitled to collect an attorneys’ fees award. The key, of course, is to know which statutory obligations do — and don’t — apply to your situation.

In this case, the trial court denied the landlord’s motion for attorneys’ fees based on one of those procedural issues. The judge ruled that the landlord had not complied with the notice requirement of O.C.G.A. Section 13-1-11, which says that, in certain cases, you may be required to provide the other side with a type of notice in order to be eligible for an award of attorneys’ fees.

The tenant wasn’t owed notice so the landlord was entitled to seek fees.

The appeals court, however, concluded that this position was not correct. Section 13-1-11 deals only with cases related to notes or other matters of indebtedness. Here, the landlord made no claim against the tenant related to unpaid rent or “any other monetary obligation evidenced on the face of” the parties’ lease agreement. When that’s the case, then a jury award like the one this landlord received is unrelated to the tenant’s “indebtedness under the lease.”

That meant that Section13-1-11 didn’t apply and the landlord was correct that it was eligible to seek an award of attorneys’ fees.

In many kinds of contractual disputes that result in litigation, the purpose of the process is to ensure that, in the end, the wronged party is “made whole.” That means that the prevailing party receives sufficient compensation such that its net loss ends up at zero. To do this, you may need to prevail on arguments related to several different forms of damages.

As a commercial landlord, being “made whole” after you’ve been harmed by a tenant’s contractual breach can be essential to the long-term health of your business. When it comes time to litigate, look to the skilled Atlanta commercial litigation attorneys at Poole Huffman, LLC to be an effective advocate for you and get you all of the damages to which you are entitled. Contact our attorneys online or by calling 404-373-4008 to schedule your confidential consultation.

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