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United States District Court for the Eastern District of New York - 871 F. Supp. 147
Tags: Property, Landlords, Tenants, Repudiation
The case involves a dispute between landlord plaintiffs and tenant defendant Taco Bell Corporation over a commercial ground lease. The defendant failed to obtain necessary permits and administrative approvals to construct and operate a restaurant on the premises within the contractual "permitting period" and served a written repudiation of the lease on the plaintiffs on the same day. The court ruled that the plaintiffs were not required to accept the defendant's repudiation of the lease. However, the plaintiffs' affirmative conduct of re-renting the property for their sole benefit constituted acceptance by operation of law, leading to the termination of the lease as of November 1993. The defendant is liable for all rent due under the lease up to November 1993, including base rent and additional rent. The plaintiffs are not entitled to rent beyond October 1993 as they accepted the defendant's repudiation and surrender of the lease, which discharges the tenant from all liability for rent in the future. The court does not award any amounts for "architectural services" as part of additional rent. Commercial lessors have no obligation to mitigate damages, unlike residential landlords who have a duty to do so.
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