Litigation Issues That Can Arise From Commercial Lease Agreements

Modern commercial building on a beautiful day.

When a business agrees to a lease with a commercial landlord, both the business and the landlord are agreeing to a set of obligations made to one another, the primary obligation of the tenant being to pay rent and the primary obligation of the landlord being to provide the commercial space. Numerous types of litigation disputes can arise from a commercial lease agreement, some of which are similar to those found in residential landlord-tenant disputes, and some of which are specific to the commercial lease context.

Delinquency in Rent Payment / Failure to Pay Rent

If a tenant has failed to pay rent or is consistently delinquent in making rent payments, then the landlord may take legal action to collect the unpaid rent. Such actions are informed by relevant law in the jurisdiction as well as the terms of the lease. Beyond the collection of the unpaid rent, remedies might also include eviction. Similarly, a landlord may pursue any guarantors who are also liable for unpaid rent, but often specific procedures must be followed in doing so.

Termination of Lease by Either Party

If a landlord tries to terminate a lease before its completion, perhaps to sell the property to a willing buyer (without the tenant occupying the property), then the tenant can pursue legal remedies including injunctions and money damages. Similarly, a tenant who attempts to terminate the lease may face legal action from the landlord.

Exclusive Use Provisions

Oftentimes, commercial tenants will negotiate the inclusion of an exclusive use provision in a commercial lease, which might give that tenant the exclusive use of a property for a certain activity. For example, a pet supply shop might negotiate a provision with a mall landlord that no other pet supply shops can be tenants in the mall. Breach of these provisions can result in litigation.

Maintenance Issues / Repairs

The landlord often covenants in the lease to provide certain types of services, including cleaning services or making repairs to plumbing systems. Many commercial lease disputes come down to a question over which party – the tenant or the landlord – is responsible for covering the costs of certain repairs or whether promised services were properly delivered.

Constructive Eviction

In a constructive eviction, there is some issue with the property which it makes it unsuitable for the tenant’s use, e.g. ongoing flooding issues or a lack of electricity. If the tenant takes the proper legal steps to make the landlord aware of the situation and the problem is not fixed, the tenant may consider himself constructively evicted and move out without paying further rent. Both tenant and landlord are strongly encouraged to work with outside counsel in this process.

Unlawful Detainer / Eviction

If a tenant has stayed in the commercial property past the time allowed by the lease, or the tenant is in violation of the terms of the lease such that an eviction could be pursued, then the tenant might be considered in unlawful detainer and the landlord can pursue eviction proceedings. California law provides strict guidelines on how such an eviction can be carried out.

Work With an Experienced Los Angeles Real Estate Litigation Attorney

Attorney Laine T. Wagenseller of Wagenseller Law Firm has published numerous articles on real estate law and works with individuals and businesses across Southern California in resolving real estate matters, including disputes arising from commercial leases. Contact Wagenseller Law Firm today to schedule a consultation in order to evaluate your situation and begin working towards a positive resolution.