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What to do if a tenant is suing you over a lease

On Behalf of | Nov 3, 2023 | Commercial Real Estate |

When a business wishes to locate itself in a commercial building, the lease agreement with the property owner tries to eliminate as many areas of potential dispute as possible. The lease agreement can detail how much the tenant is expected to pay each month plus the security deposit, their right to alter the interior and exterior of the building and who is responsible for maintenance of the property. If the terms of a lease agreement are favorable for all parties, then the business owner and landlord can have a smooth, professional relationship without any issues. 

However, the landlord could face a lawsuit if a tenant believes that their loss of business was due to negligence from the landlord and a breach of the landlord’s responsibilities under the lease. A lawsuit could greatly impact a landlord’s reputation and finances if the conflict isn’t resolved. If you’re a property owner, responding promptly to a lawsuit may help resolve the issue. Here’s what you should know:

What is a lease breach?

If a landlord or tenant does something that violates a lease, then they are causing a breach of a lease. A breach of a lease may happen, for example, if a tenant has failed to pay rent for several months or altered part of a building without permission from the landlord. 

On the other hand, a landlord may violate the terms of a lease. For example, a lease may state the landlord is responsible for making repairs to a property. If there were repairs left undone, a business may claim that it suffered financial losses as a result because customers were driven away.

How do you resolve a lease breach?

A landlord may benefit from negotiating with a tenant to find an amicable solution without exacerbating the issue. For example, a landlord and tenant may agree making repairs to a property promptly and reducing the rent would resolve the issue at hand.

It’s not always easy to find a middle ground. Many landlords need legal help to resolve breaches in a lease.