Landlord Is Entitled to Limited Additional Rent Due to Statute of Limitations
On April 9, the Pennsylvania Superior Court held that a commercial landlord was entitled to recover certain portions of unpaid additional rent under a lease agreement but limited the landlord's recovery based on the statute of limitations.
April 26, 2019 at 02:00 PM
6 minute read
On April 9, the Pennsylvania Superior Court held that a commercial landlord was entitled to recover certain portions of unpaid additional rent under a lease agreement but limited the landlord's recovery based on the statute of limitations. While the decision was nonprecedential, the case provides helpful guidance to practitioners in determining when claims for rent should be brought against a tenant in a commercial lease agreement and emphasizes the importance of timely filing any claims under a lease agreement for unpaid rent.
In Tsung Tsin Association v. Luen Fong Produce, a landlord alleged that its commercial tenant, a grocery store in Philadelphia's Chinatown, failed to pay additional rent as required under the lease agreement. In 1995, the landlord and the tenant entered into a multiyear commercial lease agreement that required the tenant to pay the landlord for additional rent, including increases in property taxes, use and occupancy taxes, and water, sewer, and gas expenses. The landlord and the tenant then entered into a new lease agreement in 2003, which was determined by the court to supplant the original lease agreement and govern the relationship between the parties in the dispute. Notably, the new lease agreement only required the tenant to pay increases in property taxes and use and occupancy taxes. Payment of water and sewer expenses were only required if certain conditions under the lease agreement were met.
The landlord sued the tenant on June 6, 2015, in the Philadelphia Municipal Court, alleging breach of the lease agreement in connection with the tenant's failure to pay 12 years' worth of additional rent. After the landlord prevailed, the tenant appealed to the Philadelphia Court of Common Pleas, claiming that the four-year statute of limitations for contract claims in Pennsylvania barred the landlord's suit. The trial court partially agreed with the tenant and limited the landlord's damages to the period between the date that was four years prior to the date the landlord filed suit and the date the suit was filed. After the landlord presented evidence of the alleged additional rent owed, the jury found that the tenant breached the lease agreement and awarded $38,558 in damages to the landlord.
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