Tenant's Right of First Refusal Not Triggered by Management Agreement

Facts: An owner leased six parking lots to a tenant. In turn, the tenant agreed to pay annual rent and manage the parking lots' operations. The lease also contained a right-of-refusal clause, giving it the right, before any other tenant, to accept or reject any lease offers made by the owner at the end of the lease term.

When the lease expired, the owner entered into an agreement with a third party to manage the parking lots. The tenant sued the owner for allegedly violating its right of first refusal. The trial court refused to hear the right-of-first refusal claim, and the tenant appealed.

Decision: An Ohio appeals court ruled for the owner.

Reasoning: The court found that the agreement entered into by the owner and third party was a management agreement, not a lease; therefore, there was no lease violation.

Editor's Note: A lease gives the tenant control of the premises, whereas a management agreement gives a tenant the authority to conduct business on the premises without any actual control.

• Atelier District, LLC v. Parking Company of America, Inc., December 2007