Lease Audit Information

TOPIC OF THE WEEK:

K's Merchandise Mart v. Northgate Limited Partnership (359 Ill.App.3d 1137, 835 N.E.2d 965, 296 Ill.Dec. 612):

Yet another case in which a court found that the tenant had no obligation to pay a management fee. Although K's was required to pay its pro-rata share of operating expenses (including operation, maintenance, repair, replacement, policing and protecting and lighting of the common areas), the court concluded "that a management fee is not an expense involved in the direct operation of the shopping center".

An interesting part of this case involves the discussion of the fact that the leases of all the other tenants in the center contained an express provision for the payment of management fees.

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