Owner's Letter and Conduct May Have Modified Lease

After signing a lease, an owner addressed a letter to the tenant regarding a fenced-in outdoor space that the owner described in the letter as “your space.” The tenant occupied that space for seven years without objection by the owner. The parties later signed a lease amendment, which didn't mention the outdoor space. A new owner assumed the tenant's lease. The new owner told the tenant to get out of the outdoor space, since the lease didn't authorize the tenant to be there. The tenant argued that the prior owner's letter and conduct in letting the tenant occupy the outdoor space modified the lease. The new owner disagreed and asked the court to evict the tenant. The tenant asked the court to dismiss the owner's lawsuit.

A Minnesota appeals court refused to dismiss the lawsuit, ruling that it was unclear whether the prior owner's letter and conduct had modified the lease. The the lease said that its terms could be modified by a written document signed by the owner, the court said. Here, the prior owner signed the letter and didn't object when the tenant occupied the outdoor space. Also, the prior owner's agent confirmed to the court that the prior owner had agreed to let the tenant rent the outdoor space. On the other hand, if the tenant and prior owner had intended to modify the lease, they should have mentioned the outdoor space in the lease amendment. Because the amendment didn't mention the outdoor space, the court sent the case back to a lower court to decide what the parties had intended [5th Street Ventures, LLC v. Frattallone's Hardware Stores, Inc.].