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Wallington Plaza, LLC v. Taher

A-4122-09T1 (N.J. Super. App. Div. 2011) (Unpublished)

LEASES; LANDLORD-TENANT — A Court rules that there is an implied covenant that landlords must maintain their properties in good condition attractive to a tenant’s customers.

A landlord sued its commercial tenant after the tenant vacated its premises and defaulted in payment of rent. The landlord sought six months of unpaid rent. The tenant filed an answer and counterclaim. It alleged that the landlord breached the lease by not maintaining the premises. A judgment awarded the landlord two months of rent, less the amount of the security deposit.

The lower court concluded that the lease required the landlord to keep the premises in as reasonable condition as a tenant would expect in order to operate a first-class business and make prospective customers welcome. According to the tenant, the shopping center’s parking lot fell into disrepair. More importantly, many key tenants closed their stores and vacated the shopping center. And, because the tenant was faced with considerably reduced traffic and an unattractive setting, he also vacated its own premises. The tenant claimed that because the landlord had breached an implied covenant to maintain the shopping center in good condition attractive to tenant’s customers, it was only obligated to pay rent for the time it occupied the premises. The court agreed, finding that the parking lot was run-down and that many of the other shopping center stores were vacant. The landlord appealed.

In its appeal, the landlord argued that it proved by a preponderance of the evidence that there was a binding lease agreement and that the tenant had breached its lease by not paying rent. The landlord contended it attempted to mitigate its damages by re-letting the tenant’s premises and because of the tenant’s breach he suffered damages. The landlord stated that the lower court erred in finding that the tenant had no obligation to pay rent because of the vacant stores in the shopping center. The Appellate Division found no merit to the landlord’s arguments, and affirmed the lower court’s decision.

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