Lease Didn't Permit Center to Charge Tenant 'Management Fees'

July 31, 2002

An owner included a charge for “management fees” in the monthly statements it sent a tenant for its share of the CAM costs. The tenant refused to pay the management fees, arguing that the lease didn't permit the owner to charge it for the general management of the center. The owner notified the tenant that if it didn't pay the management fees in 15 days, it would evict the tenant for violating its lease. So the tenant moved out and sued the owner.

An owner included a charge for “management fees” in the monthly statements it sent a tenant for its share of the CAM costs. The tenant refused to pay the management fees, arguing that the lease didn't permit the owner to charge it for the general management of the center. The owner notified the tenant that if it didn't pay the management fees in 15 days, it would evict the tenant for violating its lease. So the tenant moved out and sued the owner.

A Texas appeals court ruled that the lease didn't authorize the owner to charge the tenant for management fees. Thus it was the owner—not the tenant—that had violated the lease. So the court ordered the owner to pay the tenant over $100,000 in attorney's fees [Wilbur and Village Lane Ltd. v. Cinemark Corp.].

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