The Massachusetts Lawyers Weekly, the state's leading legal publication, recently turned to real estate attorney David Katz for his insight on a new Superior Court ruling concerning commercial lease agreements.

Commercial Lease Dispute on Refusing to Pay Rent

The case, Waltham Centerpoint I Investment Group, LLC v. Generation Bio Co., involved a commercial lease dispute between the tenant, a biotech company in Waltham, and the landlord. The tenant had leased the uninhabitable property from its prior owner with the intention of fixing it up. There were lease provisions for how sublets could happen and the process for and some limitations on the tenant's proposed improvements to the building.

Importantly, there was also a provision in the lease that stated that the tenant did not have the right to withhold rent for any breaches of the lease by the owner.

Things went fine until the property owner sold the premises. The new owner did not want the building to be sublet to multiple subtenants and refused to approve any of the tenant's proposed improvements to the property that would take it in that direction, even though this was not a limitation in the lease regarding subleases.

The tenant then claimed that the landlord's refusal to approve its proposed improvements on this ground amounted to a breach of the lease, that it was being constructively evicted, and stopped paying rent.

Superior Court Case Hinges on Dependent Covenants in Commercial Lease

The Superior Court ruled in favor of the landlord on this count, pointing to the provision of the lease that made the payment of rent independent of the landlord's obligation to uphold its end of the bargain.

While the general rule is that the covenants in a lease are mutually dependent upon one another – if the landlord breaches the contract then the tenant can withhold rent – parties are free in Massachusetts to contract around this rule and make them independent. This option was left open by the Massachusetts Supreme Judicial Court in the 2002 case Wesson v. Leone Enterprises, Inc., et al.

When they asked him for his takeaway of the case, attorney David Katz told Massachusetts Lawyers Weekly, “This is a good example of how important it is for commercial tenants to read, understand and fully appreciate every term of the lease.”

Real Estate and Commercial Lease Attorneys at the Katz Law Group

Massachusetts Lawyers Weekly's decision to reach out to him for his response shows how, with nearly 40 years of representing commercial landlords and tenants in central Massachusetts, attorney David Katz has become a leader in this particular field of the law.

Whether you are a commercial landlord or a tenant, if you are having a lease dispute, reach out to the Katz Law Group for effective legal representation by contacting them online or by calling their law office at (508) 480-8202.