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Common Commercial Lease Disputes: A Step-by-step Guide for Landlords & Tenants

On Behalf of | Oct 27, 2023 | Real Estate Law |

When business owners rent space to conduct business, they typically enter into a commercial lease agreement with the landlord that defines the terms of their relationship. These agreements follow traditional principles of contract interpretation and are not controlled by the same laws that govern residential leases.

Commercial leases often address a broad range of issues beyond what the tenant owes the landlord for rent. Some of the issues covered by these leases include the type of space for rent, terms that limit the tenant’s operations, such as business hours, the type of business allowed, parking and signage, the duration of the lease and terms of renewal, restrictions on sub-leases, and each parties’ rights and responsibilities regarding improvements, common areas, maintenance, and insurance.

What are some disputes that may arise between tenants and landlords?

Some of the issues that can lead to disputes between tenants and landlords include:

  • Failure to pay rent owed under the lease when it becomes due.
  • Damage or repairs to the property that interfere with the tenant’s business or prevent the landlord from reletting it in the future.
  • Failure to maintain the property as agreed in the lease.
  • Early termination or abandonment of the lease.
  • What happens when a tenant becomes insolvent.
  • What happens when the tenant makes modifications that were not included in the lease.
  • What happens when the parties do not follow the terms of the lease, but then try to enforce it.

How to resolve the conflicts

Tenants and landlords can find ways to resolve these disputes without requiring litigation. Before taking legal action, there are several alternatives for resolving the disputes:

1. Discussions: Open communication is vital to ensure that a dispute is resolved. This method can resolve a vast majority of minor disputes before they become bigger ones.

2. Mediation: If both parties are unable to agree, they can enlist the help of a mediator before filing a lawsuit. The mediator guides conversations between two parties or their agents to find a workable middle ground for each party, or help the parties communicate when the parties no longer trust one another.

3. Legal action: When parties cannot resolve their differences through direct or mediated negotiation, one or both parties may pursue their claims in court. When a landlord seeks to take back the leased premises, the landlord may file a forcible-entry-and-detainer (FED) action against the tenant. However, money judgments for unpaid rent are not rendered in FED actions, so a landlord may need to file a separate action to collect all monetary damages available under its lease agreement. Meanwhile, a tenant may seek help from the courts to determine its rights under the lease or force the landlord to comply with certain lease provisions, statutes, or code provisions.
Whether negotiating informally, working with a mediator, or considering a lawsuit, landlords and tenants alike should consult with an experienced attorney, who is well-versed in the rules of contract interpretation to better understand their rights and anticipate all potential outcomes.

We can help.

At CLG, our attorneys have guided countless landlords and tenants through commercial lease disputes. Our team is well-equipped to provide you with the support you need to protect your rights and interests. Call us at 503-446-6261 or contact us online, anytime!

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