Lease Audit Information

TOPIC OF THE WEEK:

Wilbur and Village Lane Limited v. Cinemark Corporation, 2002 WL 10410083 (Tex. Ct. App. Houston, May 23, 2002, n.w.h.)

In this unpublished decision, a jury found that "management fees" are not proper CAM expenses even when language exists allowing costs of "supervising and administering" the common areas, "including fees paid to third parties in connection with the same". Furthermore, the jury found that the tenant was not in breach of the lease even though they refused to pay the amount billed by the Landlord. The jury found that the tenant's failure to comply with the lease was excused by the landlord’s initial breach of the lease by charging the improper management fee.

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