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Androvett Blog

by Robert Tharp at 1:57:29 pm

Struggling Economy Bringing Increase in Commercial Lease Disputes

Commercial landlords are turning up the heat in financial  disputes with tenants as the tight economy places an even greater premium on available capital. As a result, many of the disagreements and misunderstandings between landlords and tenants are now ending up in courtrooms.

In Dallas, Goodyear Tire & Rubber Co. is facing a federal lawsuit filed by the owners of a shopping center who claim the automotive repair giant released toxic chemicals at a leased space used as a service center. The owners of the Montfort Square Shopping Center say Goodyear should be responsible for the costs to clean up the site. The Goodyear service center was in operation for 25 years before closing in 2008, and the property owners say they were left with a piece of land tainted by petroleum hydrocarbons, metals, chlorinated solvents and other toxic substances.

Commercial litigation specialist Michael Hurst from Dallas’ Gruber Hurst Johansen & Hail tells the Dallas Business Journal in a recent article that landlords increasingly are battling both the bad economy and their own tenants at the same time.

“You’re seeing a lot more aggressiveness from landlords as it relates to recovering monies from tenants, and you’re also seeing landlords having a tougher time mitigating or covering their damages by filling their lease space up with a replacement tenant,” Hurst tells the publication.

While most landlord/tenant disputes center on unpaid rent, many property owners are focusing on collateral claims like the environmental damage allegations in the Goodyear case. Environmental attorney Cindy Bishop from Gardere Wynne Sewell in Dallas tells the newspaper that disputes over environmental contamination at auto repair facilities are relatively common, but typically are worked out between the parties before a lawsuit is filed.

With the economic turnaround still on its way, we may see even more lawsuits than settlements when it comes to commercial landlords and their tenants.