Business and Legal Insights

Typically, once a landlord files a lawsuit for eviction, the tenant is required to pay rent into the court’s registry if it seeks to remain in possession of the property during the lawsuit.  However, if the tenant disputes the amount of rent that needs to be paid, the tenant may be entitled to a hearing to determine what constitutes rent under the lease.

In a recent case decided by an appeals court, a landlord filed an eviction against a tenant that paid less than the full amount of rent purportedly owed.  The tenant argued that because the lease stated that “Fixed Rent will be reduced proportionately to the extent to which the repair operations interfere with the business conducted on the Premises by Lessee” that the tenant was entitled to pay to the court less than the full amount owed.  The court agreed with the tenant and ruled that when a lease provision describes an event that specifically changes the amount of rent due in a lease, a hearing is required to determine the amount of rent that needs to be paid to the court.  The court allowed the tenant to pay the reduced amount of rent owed to the extent that any repairs conducted by the landlord for a leaky roof interfered with business conducted on the premises.

The case serves as a good reminder for landlords to carefully review their leases and consider their options before filing the eviction action—particularly where a tenant may have an argument to pay reduced rent.  Remember—careful drafting can save you significant time and money spent litigating (as discussed further here, here, here, and here).