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Common Charges Through the Roof
by Ron Davis

An oversight in billing a tenant for common-area expenses has cost the owners of a Florida shopping center some big bucks.

The shopping center, located in the Miami area, had leased space to the tenant for the operation of a health and recreation facility. The billing error occurred when the shopping centerís owners failed to consider a leased rooftop area with a running track and swimming pool in assessing the tenantís rent.

The agreement between the two parties requires the tenant to pay a pro-rated share of the common-area expenses. But for 11 years, the shopping centerís owners, in calculating that share, charged the tenant only for floor space within the shopping center. Not until the tenant complained of a miscalculation in rent assessment did the shopping centerís owners spot the error they had made.

The tenant pointed out, however, that the lease calls for the shopping centerís owners to bill for common-area costs ďwithin 90 days after the end of each calendar year.Ē Such billing has to detail the actual costs for common-area upkeep for the preceding year, then make any adjustments for the next yearís estimated costs.

Once the shopping centerís owners discovered their miscalculation, they sued the tenant to collect, claiming that the error was ďcomputer generated.Ē

A Florida court, in ruling in favor of the tenant, explained, ďIt matters not whether the landlord mistakenly omitted the rooftop in calculating common-area expenses or did so intentionally, the result is the same. The landlord waived its right to include the rooftop area for the purpose of calculating common-area expenses.Ē

The shopping centerís owner appealed, but a Florida appellate court upheld the lower-court ruling.

The appellate court did, however, allow the shopping centerís owners to begin charging the tenant a pro-rated share of common-area expenses to include the leased rooftop space. (Miracle Center Associates v. Scandinavian Health Spa, Inc., 2004 WL 1570367 [Fla.App. 3 Dist.])

Decision: July 2004 Published: August 2004



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