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When a landlord fails to maintain a shopping center parking lot

On Behalf of | Apr 21, 2024 | Commercial Real Estate |

Leasing a space in a retail shopping center can lead to business growth. Whether this is the first brick-and-mortar location of a previously online-only business or a new location of an established company, a new retail facility could help an organization tap into a broader customer base.

Each expansion is an opportunity for financial success, but growth also comes with financial responsibility. Commercial tenants in a shared shopping center pay not just rent but relatively pricey common area maintenance (CAM) fees. Those fees help maintain shared spaces including bathrooms and parking lots.

However, commercial landlords, like many landlords, are often loathe to make sizable property investments. Filling potholes and resurfacing a parking lot can cost thousands of dollars and reduce a landlord’s profit margins. What can commercial tenants do when a landlord operating a shopping center doesn’t properly maintain its parking lot?

Document the common area issues

In residential lease scenarios, tenants have the option of holding rent in escrow due to property issues. Doing so usually isn’t a viable option for commercial tenants. They do not occupy the units they rent and therefore have different protections. Commercial tenants typically need documentation of the poor facility maintenance and the impact it has had on a business. Photographs of the spreading potholes in the parking lot and financial records showing a direct relationship between declining sales and declining property conditions can help.

Send notice of the property issues

In theory, commercial landlords should regularly inspect their properties and arrange for routine maintenance as necessary. Many landlords own numerous properties and may not even live in the state. It is, therefore, typically necessary to formally notify a landlord of the declining condition of the property and the need for parking lot repairs. If a landlord ignores that notice or declines to make property repairs, then tenants may need to take legal action.

File a breach of contract lawsuit

A lease is not just an arrangement that allows a tenant to occupy a space and forces them to pay rent. It also imposes a variety of obligations on each party. The need to appropriately maintain common areas, including parking lots, is a cornerstone of the average commercial lease. A landlord’s failure to maintain the facilities could negatively affect not just short-term business revenue but even the reputation of individual tenants. Breach of contract lawsuits can compel a landlord to repair parking lots, lead to the termination of a lease or result in compensation for tenants who have suffered provable damages because of a landlord’s poor facility maintenance.

Reviewing a commercial lease is often crucial for tenants coping with property maintenance issues. Those who act promptly when landlords let facilities decline can potentially reduce the lasting impact that those choices may impose on commercial tenants.