Expert: Jim Avancena, CPM - 5/14/2010

Question
QUESTION: Hello Jim, I was recently given a monthly cam increase that was not the normal 4% but an additional 5,000 ea year. I went round and round with the landlord who gave me 3 separate reasons- all not valid. A Mervyn's store went out of business- they
paid their taxes separately and now the landlord is attempting to push this empty building's taxes on remainig tenants. Per our lease it states - the landlord has the righ t to increase or decrease size of the center- based on construction- this building was there- just taxes being paid by Mervyn's direct. Is this legal?
It seems un fair that this building - was on the site map layout- is not new construction- but now since it is empty- we are stuck with the bill I believe that landlord should absorb..
Any ideas?
Thank you,
Katrina

ANSWER: Katrina-

I am not sure I understand the specifics of your problem.

The 4th line of your question above needs to clarified.   I believe the intention of the language you have included was to assure a fair RATABLE SHARE of the CAM costs to the tenants as the property grew in overall volume of square feet as additional structures were added and the amount of total square footage of leasable space increased.  Your landlord has twisted the intent of this glib text to financially abuse the tenants and artificially increase its revenue from CAM reimbursements.

Essentially your landlord has twisted the legal intention for assuring equitable and ratable CAM share reimbursements as new construction increased the total square feet of the retail construction and in its place it is trying to say that a change in the amount of Retail VACANCY is the same as the amount of increase or decrease due to added retail CONSTRUCTION.   Those concepts are not interchangeable.   

If your landlord is too stupid to understand this difference, I suspect that if you were to go to court and explain your landlord's illogical, but financially rewarding position in this dispute, the judge might award you punitive damages because your landlord is attempting to abuse its' limited fiduciary position to overcharge its tenants and use intimidation to leverage the collections.  I do not think the judge would be able to stop laughing at this transparent attempt at theft.

Do not allow this cheat to overcharge you and keep me informed.   Your landlord is on very shaky ground and it knows it.   If necessary you may need to get a local attorney to assist you on a Pro Bono basis with your problem.   Contact your closest BAR ASSOCIATION and ask if they have any good real estate attorneys that will help you on a Pro Bono basis.

Good Luck.

-Jim       

---------- FOLLOW-UP ----------

QUESTION: Thank you for your response Jim!
Yes, let me clarify (Fourth line)-
The vacant building- Mervyn's had paid the taxes directly to the assessors office. They had a ground lease with the landlord- so this space was apparently not "included the center's over all space". However it is included on the map of the center. The landlord acquired the tax responsibility back when Mervyn's bankrupted- and now pushing those taxes onto the remaining tenants. Landlord claims that the map is a general layout only- but I do believe based on "new construction "term used that this attempt is illegal.Would you happen to know of any court case that I could refer to?
Thanks again,
Katrina

Answer
Katrina-

Another thought; if you know an attorney, any attorney, a divorce attorney will do, ask them to show you how to look up commercial real estate court cases by subject (similar cases to yours) material and they should be able to help you.  The reference books you need will be in a local legal library or library with a legal section.  It is relatively easy however, beware, a little bit of wisdom can be dangerous.  Many of the case summaries will contain tiny but critical differences in a case that you may not notice as significant but could immediately derail you if you don't pick up on them.

Also, don't go to your landlord and start spouting legal precedent; that is another way to prove your ignorance of the law.  Most landlord's know, unfortunately, most of the legal issues that can effect actions that they take with tenants and because of that knowledge, they know "when to hold and when to fold" in a dispute.

If and after you find what you believe are favorable findings in the case summaries, go to a real estate attorney prepared with material you think could be helpful.   You may wish to review a significant case regarding the collection of additional rent by landlords.  It does not deal directly with your precise situation, however it will give you a solid background in the critical FIDUCIARY RELATIONSHIP a landlord has to his tenants.  Look up the "P.V. Properties" COURT OF APPEALS case (not the lower court case) involving Rock Creek Village in the State of Maryland from about 10 to 15 years ago.  My own legal advisor, Joseph Gallagher, Esq., of Gill Sippel and Gallagher in Rockville, MD. was the attorney for the tenant in that case.  His case is often used in courts across the U.S., being perhaps the most critical finding for tenants regarding additional rent issues.

Good luck.

- Jim