Daily Development for May 2, 2005
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri

Here are two “quickie” holdings from a recent DC case - the kind of issues for which there isn’t much authority when you need it.

WORDS AND PHRASES; “BUSINESS TAXES:” Within the meaning of an “additional rent” clause, “business taxes . . . imposed in respect of” any business conducted on the premises” includes sales taxes.

Mick’s at Pennsylvania Ave. v. BOD, 389 F.3d 284 (D.C. Cir. 2005)

The “additional rent” definition of the lease included: “. . .  all business taxes, rates, duties, levies, assessments and/or license fees imposed in respect of any and every business conducted in, on or from the Leased Premises or in respect of the use or occupancy thereof, to the authorities having jurisdiction thereof promptly when the same shall become due and payable, and before the imposition of any fine or penalties.”  A guarantor argued that sales taxes were not included, and therefore outside his guarantee of the rent.

LANDLORD/TENANT; RENT; RENT WAIVER: Where landlord agrees to waive first three month’s rent upon condition of tenant performing all its lease obligations, court will conclude that the benefit of the waiver is lost if tenant fails to perform lease obligations at any time during the lease.  Therefore, initially waived rent becomes due and payable.

Mick’s at Pennsylvania Ave. v. BOD, 389 F.3d 284 (D.C. Cir. 2005)

The lease provided as follows: “Provided that Sublessee performs all other terms, covenants and conditions of this Sublease, then for the period commencing on the Commencement Date up through March 31, 1998 ("Rent Concession Period"), Sublessee shall not be obligated to pay Basic Rent to Sublessor hereunder.”  Subtenant argued, somewhat plausibly, that this language conditioned the rent waiver only on performance of the lease covenants during the waiver period.  The court disagreed.

Note: The court dodged the more problematic issue of whether the obligation to pay previously waived rent as a consequence of defaults after the waiver period constituted an invalid penalty.  Not properly raised below.

Items reported here and in the ABA publications
are for general information purposes only and
should not be relied upon in the course of
representation or in the forming of decisions in
legal matters.  The same is true of all
commentary provided by contributors to the DIRT
list.  Accuracy of data and opinions expressed
are the sole responsibility of the DIRT editor
and are in no sense the publication of the ABA.

Parties posting messages to DIRT are posting to a
source that is readily accessible by members of
the general public, and should take that fact
into account in evaluating confidentiality


DIRT is an internet discussion group for serious
real estate professionals. Message volume varies,
but commonly runs 5  15 messages per work day.

Daily Developments are posted every work day.  To
subscribe, send the message

subscribe Dirt [your name]



To cancel your subscription, send the message
signoff DIRT to the address:


for information on other commands, send the message
Help to the listserv address.

DIRT has an alternate, more extensive coverage that includes not only
commercial and general real estate matters but also focuses specifically upon
residential real estate matters.  Because real estate brokers generally find
this service more valuable, it is named “BrokerDIRT.”  But residential
specialist attorneys, title insurers, lenders and others interested in the
residential market will want to subscribe to this alternative list.  If you
subscribe to BrokerDIRT, it is not necessary also to subscribe to DIRT, as
BrokerDIRT carries all DIRT traffic in addition to the residential discussions.

To subscribe to BrokerDIRT, send the message

subscribe BrokerDIRT [your name]



To cancel your subscription to BrokerDIRT, send the message
signoff BrokerDIRT to the address:


DIRT is a service of the American Bar Association
Section on Real Property, Probate & Trust Law and
the University of Missouri, Kansas City, School
of Law.  Daily Developments are copyrighted by
Patrick A. Randolph, Jr., Professor of Law, UMKC
School of Law, but Professor Randolph grants
permission for copying or distribution of Daily
Developments for educational purposes, including
professional continuing education, provided that
no charge is imposed for such distribution and
that appropriate credit is given to Professor
Randolph, DIRT, and its sponsors.

DIRT has a WebPage at:


To be removed from this mailing list, please go to
or send an email message to the address listserv@listserv.umkc.edu,
with the text SIGNOFF DIRT in the body of the message. Problems
or questions should be directed to manager@listserv.umkc.edu.