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Print Page Subtenant “Tenant Rights” Denied
by Ron Davis

A branch bank that operates at an Ohio shopping center must accept denial of rights afforded to those of regular tenants.

The shopping center is Avery Square in Dublin, and the branch bank is a unit of JP Morgan Chase. That branch, however, is located inside a Kroger supermarket, which relegates its status to that of a “subtenant” of tenant Kroger.

Such a status became an issue when JP Morgan Chase decided that its Kroger branch bank needed more public identification. Chase therefore applied for a permit to install a permanent exterior wall sign to identify the branch bank.

Avery Square is located within a “Planned Commerce District” in Dublin. As such, the shopping center is subject to certain restrictions. And one of those restrictions is that “each tenant store front shall be limited to one wall sign, one projecting sign and one awning sign.” Because Kroger already has a wall sign, the city refused to agree to Chase’s desire for a second wall sign.

Chase appealed the rejection of its request, asking the county court to reverse the city’s decision. But a county court judge determined that the city’s interpretation of the sign restriction “was not illegal, arbitrary, capricious, unreasonable or unsupported” by the evidence.

Chase appealed again, arguing that the branch bank is a full-status tenant and should be afforded such rights. That’s because, Chase added, the space leased inside the Kroger store is in fact a “store front” and the city had stated that Chase “may be generally considered a tenant.” Finally, Chase maintained that because neither “tenant” nor “store front” is defined by local standards, its branch bank meets the common definition of both terms.

In fact, the common definition of “tenant” is “an occupant of space leased from another for a period of time.” Moreover, Chase pointed out, the local differentiation of a “subtenant” from a “tenant” was improper because the term “subtenant” is not included in the local list of standards and restrictions.

An appeals court rejected Chase’s argument, explaining, “Neither Chase’s status as an occupant of space leased from another nor the city’s statement that Chase ‘may be generally considered a tenant’ establishes that Chase is a tenant…. Because a tenancy stems from a lessee’s relationship with a lessor, it is reasonable to read the word ‘tenant’ as referring to those entities, like Kroger, that lease space from the owner or developer of the retail center, as opposed to subtenants, who depend upon the tenant from whom they lease. Chase has no contractual relationship with the owner or developer of the shopping center; instead, Chase’s rights arise solely from its contractual relationship with Kroger.”

Chase had also contended that it should be recognized as a tenant because the Kroger store is open 24 hours, seven days a week, and therefore Kroger’s hours provide Chase constant access to the leased premises. But the appellate court pointed out that Kroger’s current hours do not diminish Chase’s reliance on Kroger for its occupancy, especially given the bank’s lack of independent access.

(JP Morgan Chase Bank, Inc. v. Dublin, 2011 WL 3359695 [Ohio App. 10 Dist.])

Decision: August 2011
Published: August 2011

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