Urban leases
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Compensation for clientele in a hospitality business
The Supreme Court (TS) has confirmed the sentence against a landlord (the owner of the premises) to pay a compensation for clientele to its tenant (who ran the business), after the rental contract of the premises ended. In this case, the tenant had been 10 years running a hospitality business in the premises (such as a bar or restaurant). When the time came to end the contract, the landlord refused to renew it , and also did not want to compensate the tenant as provided for in art. 34 of the LAU, which regulates this financial compensation when a business that has generated clientele in that location is lost.
In this case, the tenant had complied with what the regulation requires in order to claim since he expressed to the landlord his willingness to renew the contract for another 5 years and to market price , but the owner rejected that option. In addition, the tenant did not start any other activity in the 6 months following the expiration of the lease, a requirement that is also mentioned as necessary to be able to request this compensation. The landlord tried to avoid payment with a
very specific argument stating that hospitality is not "commercial activity of sale to the public" , which is the expression used in art. 34 LAU for compensation to exist. But the TS did not accept it. On the contrary, it expands the traditional interpretation of that concept and makes it clear that hospitality also falls within it, because it generates clientele and because there is direct selling to the consumer in a premises open to the public. With this, the TS reinforces and consolidates the jurisprudential interpretation on this point. to the consumer in a premises open to the public. In doing so, the TS reinforces and consolidates the jurisprudential interpretation on this point.
In situations of controversy related to the rental of a business premises, our professionals can advise you on the defense of your interests-
Elevator maintenance
Nullity of duration clauses and excessive notice in successive contracts This case deals with a typical contract for “preventive maintenance” of elevators, which are not fulfilled in a single day, but are provided month by month (what is called in law a successive contract). A maintenance company sued a community of owners because it decided to terminate the contract before the agreed term expired. The company claimed two things, on one hand, that unpaid invoices were paid; and, on the other, compensation for “breaking” the contract early. The conflict revolved around two clauses of the contract where one set a duration of 3 years and the other required a notice of 180 days (six months) in advance if one wanted to terminate the contract. The community argued that these conditions were abusive in the case of a consumer (in this case, the community itself). In the first instance, the court ruled in favor of the company, ordering the community to pay both the compensation for early termination and the outstanding invoices (in addition to interest and costs). However, on appeal, the Provincial Court of Málaga changed the criterion, declaring the 3-year duration clause and the 180-day notice clause null and abusive. What is the practical consequence? If those clauses are invalid, the company cannot rely on them to demand a penalty or compensation for having terminated the contract early. Nevertheless, the community must pay what it actually owed, the outstanding invoices for services already rendered. The Supreme Court confirmed this outcome, the duration and notice clauses are considered null, no compensation is due for ending the contract early, and only unpaid invoices are owed.
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Urban leases
Does a reversible work by the tenant give the owner the right to terminate the contract?
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Urban Leases
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