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Office Unwelcome By Retail Neighbors
by Ron Davis

Retail tenants of a Georgia shopping center have forced a tenant leasing office space there to pack up and move out.

The shopping center, located in Dublin, had leased space to the ousted tenant—the state government of Georgia—for the operation of a unit of the Department of Human Resources. That office provided rehabilitation services to area residents.

Retail tenants of the shopping center objected to the government office because it did not attract the type of shoppers who would visit their stores. So they sued the center’s owners, claiming that the owners had violated the terms of an agreement signed prior to the center’s construction.

That agreement stated that the owners of the property “intend to develop a retail shopping center” at that site. Other portions of the agreement also referred to “retail buildings” and “customers” at the shopping center.

In response, the shopping center owners argued that the agreement cited did not restrict the tenant mix at the center to retailers.

A county court ruled that the pre-construction agreement did in fact restrict the use of the shopping center to retail operations. The center’s owners appealed that ruling.

A Georgia appellate court agreed with the retail tenants, explaining, “Balancing the bias against finding restrictions by implication against the cardinal rule of contract construction—ascertaining the intent of the parties—we find that the trial court correctly gave the cardinal rule paramount importance. The intent of the parties is clearly expressed. They intended for the shopping center to be used for retail sales, not offices. This intent is easily discernible in the pre-construction agreement.” (Yates v. Dublin Sir Shop, Inc., 579 S.E.2d 796)

Decision: July 2003
Published: September 2003



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