Urban leases
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Liability for improper occupation after termination of the lease contract
The Supreme Court (TS) resolves a case of a bar-café in Ibiza whose lease contract dated back to the late 80s and was agreed with mandatory extension . The owners believed that the contract had terminated on December 31, 2014, due to the transitional rules of the Urban Leases Law of 1994, and therefore asked the tenant (a company) to vacate the premises. The tenant, however, refused because she believed that the termination was not so clear and defended her position in court. Meanwhile, the owners argued that they were
losing money because they could not rent the premises for a higher rent ; in fact, there was an agreement for the person/company already operating the business (as a sub-tenant) to pay a higher amount per month, but that , in fact, there was an agreement for the person/company that was already operating the business (as a sub-lessee) to pay a higher amount per month, but that could not be activated until possession was recovered . Finally, a judgment of the Provincial Court declared the relationship extinguished and, after several procedural incidents, the premises were returned in February 2019. The owners claimed damages and losses (lost profits) for all those years of "extra" in the premises.
The key point of the Supreme Court is from when that compensation can be demanded. The Supreme Court states that, in contracts of this nature, not every delay in vacating automatically generates liability, if the situation was debatable and the tenant defends themselves reasonably, they cannot be charged the entire bill from day one. But from the notification of the final appeal judgment declaring the termination, the tenant already knows (and cannot ignore) that continuing in the premises is improper and contrary to good faith. Therefore, the Supreme Court establishes that the compensation starts from that notification , and orders to reduce the amount claimed, deducting the previous period.
If you find yourself in a similar situation or have any dispute related to a commercial lease, our professionals can analyze your case and take the most appropriate actions to defend 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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