Tenant Must Reimburse Owner, Insurer Cost of Repairing Leak Damage

A tenant installed a water heater in its space that leaked and caused damage to various parts of the building. As a result, the owner's insurer paid over $75,000 to repair the damage, and the owner paid its $5,000 insurance deductible. The owner and its insurer sued the tenant for reimbursement of these costs.

A Louisiana appeals court ruled that the tenant had to reimburse the owner and its insurer for their costs to repair the leak damage. The court said that the lease required the tenant to indemnify the owner for any losses, including property damage, resulting from any accident or occurrence in the tenant's space. Also, the lease gave the owner the self-help right to repair such damage and seek reimbursement from the tenant for the repair costs, the court added. So the court ordered the tenant to pay $78,975.56 to the owner's insurer, $5,000 to the owner for its deductible, and over $20,000 to the owner for its attorney's fees [Oakwood Corporate, LLC v. Pro-Comp, Inc.].