The Law

Notice in the Mail by Ron Davis Botched efforts to contact a former tenant of a Michigan shopping center have proved costly for the center’s owners. The shopping center is Fort Saginaw Plaza in Saginaw. And the center’s owners had leased space to that tenant beginning in 1990 to operate a dry-cleaning business. In 1996, however, the tenant assigned the lease to two other individuals. Not long after that, problems arose: The new tenants began missing rental payments. In response, the center’s owners notified the original lessee, demanding payment to make the rental account current. The amount that the center’s owners sought was $238,368.03. But in that notification, the center’s owners erred in mailing that demand. The street address they used was correct, but the location number was not. Meanwhile, the newer tenants filed for bankruptcy. And a bankruptcy court judge discharged any debt they owed and dismissed the case against them. That left the center’s owners with only the former tenant to recoup the lost rent owed them. By that time, years had passed, and continued efforts to contact the original tenants were unsuccessful. Again, the wrong address that the center’s owners used was always the problem. The center’s owners again asked the courts for help. But the courts were of no assistance. Explained the judge, the original lease agreement provided that the center’s tenants or any successors would not be personally liable with regard to any conditions of the lease. Secondly, the judge noted that original tenants were not given notice and an opportunity to resolve the problem between the newer tenants and the center’s owner. The reason: the inability to notify the original tenant because of the erroneous address. Finally, the judge pointed out that several years had passed since the successor tenants had filed for bankruptcy. During that time, the original tenant had not been contacted about the successor’s breach of contract and had disposed of information that could prove helpful in the lawsuit. Most importantly, the tenant produced the assignment notice stating that “it [the tenant] shall no longer be a tenant and shall no longer have any right, title, or interest in the estate of the tenant under the lease….” The Ohio court where the case was tried ruled, “The notice of default that was sent to the business address in the Fort Saginaw Plaza…was not a bona fide attempt to give the notice and opportunity to cure the breach of the lease agreement.” On appeal, an Ohio appellate court also concluded that the center’s owner had failed in efforts to contact the original tenant. (Fort Saginaw Plaza v. Shin, 2013 WL 500787 [Ohio App. 7 Dist.]) Decision: March 2013 Published: March 2013