Condo Media - September 2013 - (Page 32)

by Scott Eriksen, Esq. LEGAL REAPING Only What YOU’VE SOWED Landlord-Tenant Obligations I t has been said that, “landlords, like all other men, love to reap where they never sowed.” A cynical view perhaps, but considering the source — Karl Marx — not surprising. Before you stop reading at the invocation of Marx’s name, let me assure you this is not a political or philosophical position paper. My aim is to provide pragmatic advice. And regardless of whether you share Marx’s philosophical positions, the quote is apropos of the recent Supreme Judicial Court decision in 275 Washington St. Corp. v. Hudson River International, LLC, 465 Mass. 16 (2013). In our experience as counsel for commercial landlords and tenants, the question of whether one can reap what he has not sown is not an unusual one. For example, if a tenant breaches and vacates a premises prior to the expiration of a stated lease term, is the tenant liable for rent payments for the balance of the term? If so, is this amount payable immediately, even if the lease term would not have expired for many years? Marx would certainly say no — a landlord has no right to reap what has not been sown. Many landlords would likely beg to differ. In fact, the state of the law rests somewhere in between the two poles — a compromise of equitable and contract principles. 32 Condo Media • September 2013 The 275 Washington St. case evolved as many landlord-tenant disputes do. In April 2006, the parties entered into a written lease agreement for a term of 12 years. The tenant dentist took possession of the premises in 2006, but closed up shop just a year later. After extracting its equipment from the premises in 2007, the tenant continued to pay rent for an additional one year period. In 2008, the tenant informed the landlord that it would not make any further payments. The landlord declared the tenant in default and elected to terminate the lease. Approximately two years after the tenant stopped paying rent, the landlord entered into a 10-year lease with a new tenant. The new lease extended beyond the termination date of the original lease, although at a lower rent. The landlord brought suit in Superior Court. The Superior Court ruled that the landlord could immediately recover the loss of future rents and costs based on an indemnity provision contained in the lease. The Appeals Court vacated the judgment assessing damages and held that the landlord could not recover future rents until the end of the lease term (April 2018). The landlord appealed.

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Condo Media - September 2013
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Condo Media - September 2013