Related Articles:Commercial Landlord


Lease Termination and Continuing Rent (Aiglon Associates v. Geoffrey K. Allan (1994))

Facts
The tenant, Geoffrey Allan, ceased operation and abandoned the premises. Whereupon the landlord took the premises and put it on the market for relet. The landlord sued and received a judgment in the General District Court for rent and restoration charges. After releting the premises, the landlord again sued the tenant for continuing rent. Tenant in the second case argued that the landlord cannot sue a second time because:

1. Taking back the premises was a termination of the lease.

2. Filing suit in the first case was a termination of the lease.

3. The lease has a mandatory acceleration clause, which was triggered by the termination, so landlord should have sued for all the money owed under the lease in the first suit.

Court Ruling
The actions of the landlord in taking back the premises and filing the first suit were not terminations of the lease under the specific language of the lease. Since there is no termination of the lease, the mandatory acceleration clause is not implicated.

Lease Drafting Tips
Do not put mandatory acceleration clauses in the lease. Include a clause, which permits the Landlord to seek continuing rents even after judgment or termination of the lease.

Action Advice
Do not terminate the lease in writing or by action if you want continuing rents. Reserve right for continuing rents by clearly stating dates in the suit for which damages are sought.