The Law

New Roof’s No Protection by Ron Davis Inventory damage suffered by a Virginia shopping center tenant from a leaky roof will cost the center’s owners dearly despite their best efforts to remedy the roof problem. The shopping center is the Plaza at Landmark, located in suburban Washington, DC. And the tenant operated an upscale men’s clothing store there until forced to close because of the inventory damage. The problem of the leaky roof began shortly after the tenant began operations in 2005. At first, the roof leaks were minimal and merely a nuisance. And the center’s owners responded to the tenant’s complaints with roof-repair efforts, but the water-leakage problem persisted. The tenant reminded the center’s owners that her lease explicitly states that the owners must keep the roof “in good repair and make such repairs…as are necessary…” Finally, the center’s owners hired a firm to replace the entire roof. But despite the installation of a new roof, water continued to leak into the tenant’s premises. And when a record rainfall occurred one summer night in 2006, the tenant on the following morning found her premises flooded and her merchandise extensively damaged. Although the tenant later tried to reopen her business, she soon decided to permanently close. She then sued the center’s owners for breach of lease, seeking $550,000 in damages. At trial, the center’s owners contended that they did not have sufficient notice that the newly installed roof would fail. Through no fault of their own, they added, the new roof had been improperly installed and was therefore defective. The owners also argued that any notice they had of defects with the new roof was not sufficient to make them liable because they took reasonable steps to find a remedy for the defects. A Virginia court ruled, however, that the failure of the roof constituted a breach of the lease with the tenant. Explained the judge, “The lease…did not insulate the center’s owners from being subject to a claim for a breach.” The judge then awarded the tenant $298,762 in damages. The center’s owners appealed, pointing out that they took reasonable steps to resolve the leaky-roof problem and had no notice that the new roof would fail entirely. A Virginia appellate court, in upholding the lower-court ruling, explained, “We do not agree with the contention of the shopping center’s owners that by undertaking to replace the roof they could, in effect, shield themselves from the responsibility of providing a serviceable roof unless and until a tenant gave notice that the new roof was defective. To the contrary, maintenance of the roof was in the exclusive control of the center’s owners, and when they undertook to replace the roof as part of their responsibility, they bore the sole responsibility to assure that the new roof would be in good repair as required by the lease.” (Landmark HHH, LLC v. Gi Hwa Park, 671 S.E.2d 143) Decision: January 2009 Published: February 2009