Acting one day too soon cost a landlord dearly. The tenant was entitled to $100,000 from the landlord for destroying its business and was not liable for ongoing rental costs amounting to nearly one million dollars.
The Supreme Court case concerned a bar operating in the basement of a backpacker operation in
In June 2005, the landlord took possession for non-payment, but did so when unpaid rent was 13 days overdue – one day short of the 14 day time limit. As part of this process, the landlord changed the locks, issued trespass notices against the bar owners and seized property in the bar as security for non-payment.
But acting one day early meant the landlord was in breach of the lease. The court ruled that this action amounted to an unlawful action by the landlord, excluding the tenant from continuing operation of the bar.
The Court ruled that because the landlord was in breach, it could not turn round and claim it was entitled to continuing damages over the term of the lease for ongoing rent.
The landlord had claimed damages of $1.6 million from the evicted tenant: the Court ruled the landlord was entitled to only $84,900 – unpaid rent of $5,100 up to the date of eviction and the balance for deferred repairs and maintenance which had been disputed by the tenant.
This meant the tenant was required to pay the landlord some $84,900. But the Court ruled that the tenant was entitled in turn to receive $136,600 damages from the landlord: $100,000 for the loss of its business and $36,600 agreed as overpaid for the tenant’s share of lift maintenance costs.
Ingram v. Patcroft Properties – Supreme Court (10.05.11)
05.11.001