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Lot of Dispute Over “Free Ride”
by Ron Davis
The owners of a Denver retail property have won the right to continued free use of an adjacent shopping center’s parking lot.
The shopping center is Green Mountain Plaza, and the retail property contains a restaurant operating there under a long-term lease. A provision of that lease, however, has caused the two parties to butt heads.
The provision requires the shopping center owner to commit 32 shopping center parking spaces to the restaurant’s customers. That arrangement predated the sale of the shopping center property to the current owner, which bought Green Mountain Plaza shortly after construction.
The Green Mountain owner argues that it deserves a share of the rent that the restaurant pays to the owners of that property. After all, the shopping center owner reasons, the restaurant is using shopping center property for customer parking at no cost.
In response, the adjacent property owners point out that the owner of Green Mountain Plaza knew upon purchase of the property that the restaurant operator’s lease gives him the right to use the 32 parking spaces.
A Colorado court nevertheless awarded the owner of Green Mountain Plaza $16,162 for past rent and 20 percent of future rent the restaurant pays to the property owners.
The property owners appealed that award.
A Colorado appellate court overturned the lower court ruling, explaining, “The restaurant property and the exclusive parking area were in common ownership at the time of the lease, and the prior owners had the full authority to define the relationship of the parties and the interests and did so. Moreover, the shopping center owner purchased the shopping center with constructive and actual notice of the interests…. The judgment awarding the shopping center owner rent for use of the parking cannot stand.” (DR/CR Family, LLLP v. Burger, 2003 WL 22413825 [Colo.App.])
Decision: September 2003
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