The Law

Landlord Failed to Increase Rent by Ron Davis Owners of an Illinois shopping center have suffered a double financial setback in a squabble with a very determined tenant. The shopping center is located in Naperville, and its owners are the principals of Naperville South Commons, LLC. They had leased space at the center to the tenant beginning in 2007 for the operation of a manicure/pedicure salon. The lease initially required the tenant to pay a monthly base rate of $1,703, to increase in the third and fourth years of operation to $2,889 and $2,976, respectively. But those increases were never enforced. An official of the center explained that the modifications were temporary and made because of the poor state of the economy at the time. In September 2010, however, the official increased the tenant’s rental rate to $2,976. His explanation was that the tenant’s business seemed to have recovered. The tenant objected to the rent hike, adding that she would withhold rent until the matter of the increase in rent was resolved. In fact, the tenant had even previously fallen behind in paying her reduced rent and had expressed a desire to terminate the lease. She furthermore noted that there was nothing in writing to document any new rent-hike agreement. She even claimed that she was due a refund because of overpayment of charges. The dispute was left to a circuit court to settle the matter. Its conclusion was that the tenant’s landlord had not proven by a “preponderance of the evidence” that the tenant owed any relative rent, utilities, common-area expenses, taxes, or fees. The lease did, however, provide for attorney fees, costs, and expenses to the “prevailing party” in such a dispute. As expected, both the center official and the tenant claimed to be the prevailing party. The official argued that the center prevailed because it was awarded possession of the tenant’s premises. Plus, the official added, on three occasions the tenant was ordered to pay sums of money for rent. In response, the tenant claimed that despite the argument of her landlord, she prevailed because no money was duly required for payment. With regard to rent, the circuit court determined that the shopping center owners did not sustain their burden of proving that the tenant owed anything. Therefore, the court added, the tenant was “the prevailing party” and granted her the amount of $29,310 for fees and $2,077.22 for expenses. And the judge wasn’t finished. He also ruled in favor of the tenant and against the center in the amount of $15,723.50. On appeal, an Illinois appellate court upheld the lower court, commenting, “Although the fees awards…were significant, there was no showing of an abuse of discretion.” (Naperville South Commons, LLC v. Nguyen, 2013 WL 4539845 [Ill.App. 3 Dist.] Decision: September 2013 Published: October 2013