The Law

Lease became Month-to-Month by Ron Davis Efforts of a Texas shopping center to oust an unwanted tenant have successfully ended, but not without a lengthy struggle. The shopping center is located in Houston, and its owner leased space to the tenant for the operation of a convenience store. The lease term was for four years and seven months, and the monthly rent was initially set at $1,200, but steadily increasing to $1,800 by the end of the initial lease term. Moreover, the lease provided two extension options. The first option required the tenant to pay monthly rent of $2,000 for the first two years and $2,200 for the next three years. Rent for a second five-year term under the agreement would be based on “market rents of similar properties in the location at that time.” Eventually, the term of the lease expired. But the tenant paid only $1,800 a month in rental fees. The shopping center owner eventually reacted to that slight by notifying the tenant that his lease would be terminated in thirty days. The tenant ignored that notification by refusing to vacate the premises. The center’s owner then began the process of evicting the tenant from the shopping center. The tenant fought back, however. And he won a local court ruling that favored his position. Reacting to that ruling, the center’s owner appealed. A county court then decided that the tenant had failed to exercise the existing lease options, either verbally or in writing. Moreover, the judge determined that the tenant was a “month-to-month” tenant. In so ruling, the judge sided in favor of the center’s owner. However, the tenant still refused to comply. Again, he appealed. But under Texas property law, a person who refuses to surrender possession of real property on demand commits a “forcible detainer” if that person is “a tenant at will or by sufferance.” In other words, a tenant will have lawful possession, but without a fixed term. And the landlord (in this case the center’s owner), “can deny possession at any time.” And that’s not all. If the tenant remains in possession of the leased property and continues to pay rent that the landlord accepts, the terms of the prior lease will continue to govern the new arrangement. Ruled the court: “The tenant continued his business on the property after the lease term expired. [The center’s owner] continued to accept rent. Because of that acceptance, [the tenant] became a month-to-month tenant under the lease agreement. As such, he was a tenant at will until [the center’s owner] notified him to vacate the premises” Concluded the court, “We find no error in the finding that the tenant did not exercise an option to extend his lease, or in its conclusion that the tenant was required to vacate the decision of the county court.” (Mohammed v. D.105 W Rankin, Inc. 2014 WL 7335192 [Tex.App.—Hous. (1 Dist.]) Decision: October 2014 Published: November 2014