Commercial leases are at the heart of the flourishing business climate in Texas. However, these leases often come with a complex framework of terms, obligations, and risks. Disputes are not uncommon, and when they happen, they can be costly.
The sections below detail the most common commercial lease disputes across Texas.
1. Lease Terms and Definitions
Disputes often stem from vague or insufficiently defined language. Key terms like maintenance responsibilities, common area charges, or subletting rights may seem straightforward, only to be interpreted differently by landlord and tenant. Without precise definitions, routine structural maintenance or the right to modify a space can escalate into disagreements.
2. Maintenance, Repairs, and CAM Charges
One of the areas most ripe for conflict involves who pays for what. This issue is especially common under net leases like NNN (triple net) agreements. For example, tenants might be responsible for property taxes, insurance, and maintenance, but provisions can vary, as can expectations.
Disputes often center around:
- Unplanned repairs or emergency fixes
- Responsibility for shared spaces (common area maintenance charges)
- Lack of clarity on what constitutes “necessary” maintenance
Granting the tenant audit rights to verify landlord expenses and placing caps on common area maintenance (CAM) charges can go a long way in minimizing future issues.
3. Rental Payments and Rent Escalations
Rent disputes can arise when terms are unclear. Common issues involve late or missed payments, percentage rent agreements tied to revenue metrics, and rent increases based on the Consumer Price Index (CPI).
Lease agreements should lay out how rent penalties and increases are calculated, as well as the verification process for each. This will help avoid issues down the line.
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Resolving Lease Disputes
4. Termination, Renewal, and Subletting
Lease transitions are one of the most common areas of conflict in lease agreements. For example, termination and renewal disputes center on whether the tenant gave proper notice before terminating the lease or triggered an automatic renewal by failing to give notice. Additionally, subletting issues revolve around whether the tenant can transfer the lease and under what conditions.
5. Lockouts and Default
Texas law grants landlords certain rights in case a tenant defaults on or abandons their lease. For example, landlords may physically lock out tenants over unpaid rent, but they must provide a way for the tenant to regain access upon payment. Missteps here can result in claims of wrongful eviction or breach of contract.
6. Safety and Building Conditions
Commercial properties bring unique responsibilities for safety. Landlords may be expected to maintain the structural integrity of the premises, address hazards, and/or provide security. In some cases, one tenant’s conduct could threaten the safety of other occupants.
Disputes arising from safety issues or disagreements over who handles maintenance/repairs frequently result in litigation.
How An Experienced Commercial Litigation Attorney Can Help With a Lease Dispute
Commercial lease disputes often involve contract interpretation, compliance issues, and the balancing of competing business and real estate interests. Attempting to resolve these conflicts on your own can result in unnecessary costs and jeopardize your interests down the road.
An experienced commercial lease dispute attorney can step in to:
- Analyze the lease and identify obligations for each party
- Evaluate claims for breach of contract or wrongful actions
- Negotiate settlements that preserve business relationships
- Represent your interests in mediation, arbitration, or court if needed
If you’re facing a commercial lease dispute in Texas, Porter Law Firm can help. Call us today at (512) 381-1577 to schedule a consultation with a commercial lease dispute attorney.