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socrateaser
socrateaser, Lawyer
Category: Real Estate Law
Satisfied Customers: 38879
Experience:  Attorney and Real Estate broker -- Retired (mostly)
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I am a tenant, four years into the first renewal of a NNN

Customer Question

I am a tenant, four years into the first renewal of a NNN retail lease (9th year of leasing) in Florida. Recently, the landlord provided a true-up statement for expenses and increased our percentage from 9% to 21% on selected line items. This was apparently based on exmpting the anchor tenant from calculations of the GLA. This is the first time such a change was presented in nine years. After questioning the assessment, I have been told that it turns out the LL made an error and that all expense items needed to be increased, not simply the ones first provided.
The lease provides for changes in assessment percentages only in cases of adding or subtracting atual space from the GLA. LL claims they should have been assessing at the higher rate (based on exempting the anchor tenant) all along. My question is: after nine years, including a lease renwal, should not a tenant have an expectation that the assessments are accurate and true, and not subject to arbitrary change?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  socrateaser replied 1 year ago.

Hello,

Under well established Florida appellate case law, contracts are interpreted by courts so as to effect the intent of the parties. Where an ambiguity exists, the court may use extrinsic evidence submitted by the parties to prove the parties' contractual intent.

The fact that the status quo has existed for nine years, strongly suggests that either the landlord has consistently interpreted the contract based upon the manner in which you have been previously charged. Alternatively, even if a fair reading of the contract unequivocally favors the landlord's position, you can argue that the landlord should be "estopped" (prevented) from assessing any charges which would have a retroactive effect (i.e., an effect which attempts to recover for previous "billing errors" -- because you have relied to your detriment on the previous charges, by operating your business in accordance with what appeared to you to be the landlord's reasonable charges and interpretation of the contract. Thus, it would be inequitable for the landlord to attempt to retroactively collect for its erroneous billing -- even if it may have originally had the right to additional charges.

In short, you have a pretty strong case.

I hope I've answered your question. Please let me know if you require further clarification. And, please provide a positive feedback rating for my answer -- otherwise, I receive nothing for my efforts in your behalf.

Thanks again for using Justanswer!

Expert:  socrateaser replied 1 year ago.

Hello again,

Do you need further clarification about my answer? Please let me know one way or the other. Thanks again for using Justanswer!

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