Landlord/Tenant – Commercial Lease – Roof Repair – Bankruptcy – Lease Assumption

The original – now bankrupt – tenant failed to do the roof upkeep required by its lease, and the new defendant-tenant’s assumption of the lease (via a bankruptcy court’s order of sale) did not include assuming the original tenant’s liabilities. Nevertheless, the lease also required the tenant to return the facility “in as good a condition and repair as when possession was first taken, normal wear and tear, and damage caused by casualty excepted,” and the new tenant expressly covenanted to perform the obligations that arose after the order of sale. Thus, the sale order did not extinguish obligations that were not yet due under the lease, including the duty to return the facility in as good a condition, less normal wear and tear, as it was when the original tenant took possession of the facility.

Defendants’ motion for summary judgment is denied.

Defendants argue that the term “possession” indicates that defendants are only responsible for any damage that occurred after they took possession of the facility. Nothing in the lease would lead the court to assume that plaintiff and the original tenant anticipated another tenant taking over the lease through a bankruptcy sale and therefore intended to limit the liability of the new tenant by using the word “possession.” Accordingly, summary judgment is not appropriate on the basis of this argument.

DCHG Investments LLC v. IAC Greenville LLC (Lawyers Weekly No. 002-095-18, 17 pp.) (Donald Coggins Jr., J.) 6:15-cv-02013; Christopher Major and Thomas Holloway Coker Jr. for plaintiff; David Curry Dill and William Stevens Brown for defendants. D.S.C.