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Calendar Confusion
by Ron Davis

A miss was as good as a mile recently in a rental dispute between a North Carolina shopping center and one of its tenants.

The shopping center is Southpark Mall in Charlotte, and the miss ended up costing the tenant the premises he rented there.

Apparently, the tenant, who operated a fast-food restaurant at the center, simply misunderstood the terms of the provision in his lease that governed payment of rent. That provision stated that he had only five days from the date his rent was due each month to make the payment. Otherwise, the shopping center owner could evict him.

In July 1999, the tenant failed to pay his rent by the due date (July 1). And the shopping center owners responded on July 2 by sending him a letter by certified mail stating that if they did not receive the rent payment “within five days after the date of this notice,” they could terminate the lease “without giving tenant any further notice or opportunity to cure the default.”

The tenant received the letter on July 6. But then, because the weekend intervened, he waited till July 9 to pay. So even though seven days had elapsed from the time the shopping center owners sent the notice of default, the payment had arrived within five so-called “business” days.

On July 12, the shopping center owners notified the tenant that the lease would terminate in August. In reply, the tenant refused to vacate his leased premises, arguing that he had in fact honored the terms of his lease regarding rental payments.

Moreover, he pointed out that the shopping center owners did not state in their July 2 certified letter to him his deadline for making the rental payment. Therefore, he added, the terms of eviction were “ambiguous.”

A North Carolina appellate court rejected the tenant’s arguments and ruled in favor of the shopping center, explaining, “The tenant has simply failed to show any evidence that the parties to the lease intended the word ‘days’ to mean ‘business days.’ Also, granted, the letter mailed July 2 did not specifically state that the tenant’s July rent must be received by July 7. So the tenant states that the letter did not give him proper notice of when the payment was due. This argument is unpersuasive. The letter unambiguously stated that if the shopping center did not receive the rental payment within five days after the date of this notice, the shopping center could terminated the lease without giving him any further notice or opportunity to cure the default. If the tenant was confused by the notice letter, he could have consulted the lease provisions to determine the period for curing a default.” (Southpark Mall v. CLT Food Management, 544 S.E.2d 14 [N.C.App.2001])

Decision: May 2001
Published: August 2001



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