Daily Development for
By: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of
Of Counsel: Blackwell Sanders Peper Martin
Kansas City,
prandolph@cctr.umkc.edu
The Editor reports this case not so much for what the court
ruled, but for the unanswered question as to what happens next. Interesting food for thought.
LANDLORD/TENANT; LANDLORD'S REMEDIES; HOLDOVERS: Where a court order prohibits the landlord
under a lease from executing a judgment for possession pending appeal, provided
the tenant continues to pay monthly rent of $2,033, the landlord may
nevertheless send a notice increasing the actual rent owed by sending to the
tenant notice of a rent increase during the pendency
of the appeal and later may sue the tenant to recover the increased rentals
after disposition of the appeal, both without violation of the court order.
State ex rel.
The plaintiff purchased an office building pursuant to a tax
sale. Prior to confirmation of the sale,
the prior owner of the building entered into a long-term lease with the
defendant tenant, under which the defendant was required to pay monthly rent of
$1,500.
The plaintiff and the defendant tried to negotiate a new
lease, but were unsuccessful. Landlord
then sent the tenant notice that its rent would increase to $2,033. When the defendant refused to pay this higher
amount, the plaintiff sued the defendant to recover the increased rents and
possession of the leased premises. The
trial court ruled in the plaintiff's favor, but prohibited the plaintiff from
enforcing the judgment for possession pending appeal, so long as the tenant
continued to pay monthly rent in the amount of $2,033.
Prior to the issuance of the appellate opinion, the
plaintiff sent another notice that the monthly rent would increase, this time
to $3,500. However, the defendant continued to pay only $2,033 per month, and
voluntarily vacated the leased premises a few days prior to the date the
appellate opinion was issued. Soon
afterward, the plaintiff again sued the defendant, this time for the
defendant's failure to pay the increased rent of $3,500. The defendant then filed a contempt action
before the original trial judge, arguing that the plaintiff violated the
judge's order by attempting to increase the rent and thereafter suing the
defendant to recover the same. That
judge found the plaintiff in contempt and ordered the plaintiff to dismiss its
second suit against the defendant for unpaid rent. In response, the plaintiff filed a petition
for a writ of prohibition to prohibit enforcement of the contempt order. The
trial court granted the request, and the Court of Appeals affirmed, holding that
the stay order only prohibited the plaintiff from enforcing the judgment for
possession while the defendant paid $2,033 per month in rent during the pendency of the appeal; however, the stay order did not
prohibit the plaintiff from increasing the rent due during that period or suing
the defendant to recover that increased rent after the appellate decision was
issued.
The appeals court, however, expressly noted that it was not
deciding that the landlord in fact was entitled to any additional rent.
Comment 1: Note that the normal basis for concluding that a
landlord is entitled to increased rent when it gives notice during a holdover
is the fact that the tenant's continued occupation following such notice
demonstrates acquiesence in the landlord's claim. This apparently was the basis for the
original ruling by the court that the landlord was entitled to the $2002 rent.
Here, however, the circumstances are different. Now it would not necessarily be appropriate
to conclude that the tenant is acquiescing in the argued for increase in rent
by continuing to hold over. The tenant
has a legal right to hold over by payment of $2002 in additional rent. The editor suspects that the landlord, in the
end, will not succeed in collecting its additional claim.
Comment 2: For the original ruling, that the tax sale cut off the tenant's first lease, see Euclid Plaza Associates, L.L.C. v. African American Law Firm, L.L.C., 55 S.W. 3d 446 (Mo. App. 2001)
Readers are urged to respond, comment, and
argue with the daily development or the editor's comments about it.
Items in the Daily Development section
generally are extracted from the Quarterly Report on Developments in Real
Estate Law, published by the ABA Section on Real Property, Probate & Trust
Law. Subscriptions to the Quarterly Report are available to Section members
only. The cost is nominal. For the last six years, these Reports have been
collated, updated, indexed and bound into an Annual Survey of Developments in
Real Estate Law, volumes 1‑6, published by the ABA Press. The Annual
Survey volumes are available for sale to the public. For the Report or the
Survey, contact Maria Tabor at the
Items reported here and in the
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 issues.
ABOUT DIRT:
DIRT is an Internet discussion group for
serious real estate professionals. Message volume varies, but commonly runs 5 ‑
10 messages per workday.
Daily Developments are posted every workday.
To subscribe to Dirt, send an e-mail to:
|
To: |
ListServ@listserv.umkc.edu |
|
Subject: |
[Does not matter] |
|
Text in body of message |
Subscribe Dirt [your name] |
To cancel your subscription to Dirt, send an
e-mail to:
|
To: |
ListServ@listserv.umkc.edu |
|
Subject: |
[Does not matter] |
|
Text in body of message |
Signoff Dirt |
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 an e-mail to:
|
To: |
ListServ@listserv.umkc.edu |
|
Subject: |
[Does not matter] |
|
Text in body of message |
Subscribe Brokerdirt [your name] |
To cancel your subscription to Brokerdirt, send an e-mail to:
|
To: |
ListServ@listserv.umkc.edu |
|
Subject: |
[Does not matter] |
|
Text in body of message |
Signoff Brokerdirt |
DIRT is a service of the American Bar
Association Section on Real Property, Probate & Trust Law and the
DIRT has a WebPage at: http://www.umkc.edu/dirt/