'Premises' Referred to Only Interior of Tenant's Space

Facts: A tenant rented space to operate its café and lounge in an Art Deco-style entertainment complex that included a theater and flashing signage. According to the tenant, the exterior of the building and the unique signage attracted customers to its location. Under the lease, the owner was obligated to fix any weather-related damage to the “premises” within six months.

Six months after a tornado damaged the building, the exterior of the building and the signage still hadn’t been fixed. The tenant exercised its option to terminate its lease because the damage hadn’t been fixed. The owner sued the tenant. A trial court ruled in favor of the tenant. The owner appealed.

Decision: A Missouri appeals court reversed the trial court’s decision.

Reasoning: The appeals court agreed with the trial court that the owner was required to fix within six months of the tornado the tenant’s “premises” under the terms of the lease. But the appeals court pointed out that the “premises” referred to in the lease included only the interior of the building, not the exterior of the building, which had the design and signage that was beneficial to the tenant.

An architectural drawing included in the lease and several other provisions in the lease indicated that the term the “premises” encompassed the tenant’s space and not the rest of the building. Therefore, the owner wasn’t required to fix the outside of the building within six months, so the tenant wasn’t entitled to terminate its lease due to the delay.

• Morris Branson Theatre, LLC v. Cindy Lee, LLC, October 2015