Understanding Your Duties As A Commercial Landlord

Mike Smith, a businessperson, owned a farm in Georgia on which he grew organic vegetables.  Next to the farm was a two-unit commercial building. Smith leased one unit to a storage company and used the other unit as a grocery store to sell his own and others’ organic fruits and vegetables. In 2011, Smith decided to put all of his efforts toward farming and leased the grocery store unit to Tim Brown for a period of 10 years through a properly signed, written lease agreement. The lease agreement provided the following:

• Tenant will pay utilities, provided Landlord will pay ½ of monthly electric bills in excess of $400
• Tenant to use the store only for the sale of organic products
• Landlord will sell produce from his farm to Tenant at a 10 percent discount
• Landlord will maintain the parking lot
• Landlord and Tenant agree on behalf of themselves and any successors and assigns 

Tim operated the store until March 2012, when he sold his inventory and all of his interest in the lease to Brian Atkins. Brian read the entire lease terms prior to sale and continued to operate the store. However, the following problems have arisen:

• Mike has refused to allow the discount on the produce he has delivered to Brian.
• Mike has refused to pay his share of the electric bill.
• The storage company put large containers on the parking lot that damaged the lot. Mike has refused to repair the damage. 

An experienced commercial tenant lawyer can assist tenants such as Brian with the issues arising under a lease and recover the damages associated with a breach in lease terms.   

Identifying a tenant’s rights and prospective remedies

Because Tim transferred his rights under the lease to Brian, Brian “stands in the shoes” of Tim, and will enjoy all the rights Tim possesses under the lease. The last provision in the lease expressly acknowledges assignments and subleases. In Georgia, an exculpatory or indemnity clause attempting to avoid the property owner’s liability for negligence, especially the liability for defects in construction, is void as against public policy in both commercial and residential leases. Tim transferred his rights to Brian, so Brian may act without Tim to enforce the provisions of the ease. Brian possesses the following remedies:

• Damages: The remedy for a breach of a lease term is monetary damages, not injunctive relief. Brian’s damages for Mike’s breach of the covenant to pay ½ the electric bill are $350.
• Equitable relief: Enforcing the lease term as an equitable servitude that requires intent and notice, and the servitude must touch and concern the land. Brian may seek an injunction against Mike to force Mike to repair the parking lot in accordance with the terms of the original lease agreement with Tim. 
• Self help: In commercial leases, unless stated to the contrary, the covenants are independent subject to the covenant of quiet enjoyment. A breach of the implied covenant of quiet enjoyment requires an actual or constructive eviction resulting from a substantial interference caused by the property owner. In the example above, the facts do not indicate that the property is uninhabitable or that Brian has been excluded from the property. 

By analyzing the lease terms, a skilled Marietta commercial real estate tenant law attorney guides clients toward obtaining an appropriate remedy given the commercial landlord’s breach of duty. 

Obtain assistance from experienced Georgia commercial real estate attorneys

By retaining Wiles & Wiles, LLP, a client can acquire information from a knowledgeable attorney who is dedicated to providing efficient and cost-effective representation. Our Marietta office represents commercial tenants throughout Georgia, Florida and Tennessee.