Owner Could Terminate Lease After Tenant Failed to Get Necessary Documents

The owner/operator of a sandwich shop signed a lease and license agreement with a tenant that would take over the running of the business. On the day the tenant was to take over, two tenant employees began work. But before the shop opened, the owner asked the employees for proof that the tenant had gotten certain necessary documents, including a license, a food service permit, a sales tax certificate, and insurance. The employees didn't have such proof because the tenant had failed to get the necessary documents. The owner refused to let them open, returned the tenant's deposit, and declared the tenant in violation of the lease. So the tenant sued the owner for violating the lease, claiming that it was entitled to notice of the violation and a chance to “cure—that is, fix—it.

A Georgia appeals court dismissed the lawsuit, ruling that the owner could terminate the lease because the tenant had failed to get the necessary documents. The court said that under the lease, the owner could terminate the lease—without notice—if the tenant failed to open for business on a certain date. The court rejected the tenant's argument that the owner wouldn't let it open for business. The owner didn't let the tenant open for business because the tenant couldn't legally do so without the necessary documents, the court noted [Woody's Steaks, LLC v. Pastoria].