By Fredrick P. Niemann, Esq., a NJ Landlord & Tenant Attorney
Commercial Leases are often among the most complex contracts. They often contain numerous provisions regarding different aspects of the landlord/tenant relationship, including termination provisions that indicate when the landlord is entitled to terminate the lease. A recent NJ Court Case involved such a provision in a dispute between a tenant and landlord over whether or not the landlord was entitled to terminate the lease.
The plaintiff-tenant complained to the Court that the defendant-landlord was attempting to terminate the lease based on the fact that the tenant had located a party willing to sublease the property for more money than the tenant was paying. The tenant claimed the landlord logically wanted to terminate the tenant’s lease and lease the building to this new party. However, the landlord claimed that the termination was justified based on the commercial lease signed between the parties and the termination provision contained within.
The Court looked to the contract. The landlord, pursuant to the lease, issued a notice of default to the tenant that required certain repairs to be made or the tenant would risk termination of the lease. While the tenant complained during trial that the notice was inadequately broad, the Court sided with the landlord, citing the fact that the plaintiff made no repairs at all and did not make a single inquiry as to what repairs the landlord was referring to in the notice of default until over two years later, after the landlord filed a notice of termination of the lease. The Court noted that the commercial lease required the tenant to maintain structural and non-structural elements in good condition, something which the defendant had reasonable belief finding was not done based on the basement and other parts of the foundation being ruined due to water infiltration.
Finally, the tenant argues that the conditions that the landlord was citing as reason for termination were latent, existed prior to the signing of the lease, and the landlord had knowledge of them but neglected to inform the tenant. prior to the lease signing the tenant claimed he therefore should not be responsible for these repairs and thus they were not justification for terminating the lease. The Court disagreed, citing the fact that the tenant was a sophisticated businessman who should have seen these defects in plain view. He signed the contract to lease the property “as-is”, meaning the landlord would not be responsible for all the defects. The landlord was justified in terminating the lease and the tenant was out of luck.
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