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Shoprite In Wrong
by Ron Davis

Costs for repairing structural damages at a New York shopping center will fall to a tenant that leases space there. That’s because the tenant – Shoprite Supermarkets, Inc.– agreed in its lease to pay for such damages as “additional rent” when incurred.

The owners of the shopping center–Yonkers Plaza–had the foresight to include such a provision in the tenant’s lease. And when the city of Yonkers cited the center’s premises as needing repairs for structural damage, the center’s owners paid for those repairs, then billed the tenant for restitution.

The tenant refused to pay and declared that the demands by the center’s owners were “defective, null and void.” The center’s owners replied that the lease requirements were valid and binding. The courts were finally called on to settle the controversy.

In such a case, a demand for additional rent must provide the tenant with the exact amount due and the period for such a rent claim. Moreover, a landlord must clearly inform the tenant of a particular period for which any additional rent payment is in default.

In its findings, a New York court found that the billing by the shopping center’s owners for additional rent from the tenant itemized the demolition and scaffolding costs they incurred. The court also noted that the center’s owners notified the tenant that the amount owed was in fact additional rent and was due by a certain date. Based on those findings, the court ruled in favor of the shopping center’s owners.

The tenant appealed.

A New York appellate court agreed that the shopping center had complied with the necessary obligations for collecting additional rent. Noted the judges, “The tenant was informed that if it failed to cure the subject violation within 30 days, the center’s owners intended to do so and bill the tenant for the costs to cure as ‘additional rent’ under the lease. Attached to the notice to cure was a copy of the violation notice issued by the city of Yonkers, which indicated that there was structure damage to the exterior wall around the shopping center.

“Therefore,” the judges concluded, “the notice to cure sufficiently apprised the tenant of its obligations under the lease, gave a sufficient description of the areas of the building which needed repairs, and specified the consequences if the violation was not cured within a set period of time.” (Shoprite Supermarkets, Inc. v. Yonkers Plaza Shopping Center, LLC , 2006 WL 1171916 [N.Y.A.D. 2 Dept.])

Decision: May 2006
Published: May 2006



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