Common Causes of Commercial Lease Disputes
Commercial lease disputes arise for many reasons, but several issues appear more frequently than others. Below are several dispute types that commonly arise in Texas commercial leases, along with practical considerations that may help parties identify the source of the disagreement and evaluate possible next steps.
1. Common Area Maintenance (CAM) Charges
CAM charges are one of the most common sources of disagreement in commercial leasing. Depending on the lease, tenants may be responsible for expenses such as landscaping, parking lot maintenance, security, insurance, or property management fees.
Disputes often arise when:
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Charges exceed what the tenant expected.
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Expenses appear inconsistent with the lease.
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Capital improvements are included in CAM costs.
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Annual reconciliations contain unexpected increases.
Resolving a CAM dispute often begins with reviewing the lease language to determine which expenses are recoverable.
2. Maintenance and Repair Obligations
Commercial leases typically allocate maintenance responsibilities between the landlord and tenant. Problems arise when the lease is unclear or when each party believes the other is responsible for repairs.
Common disputes involve:
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HVAC systems
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Plumbing issues
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Structural damage
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Parking lots and common areas
Because commercial leases are heavily negotiated, the answer often depends on the specific language of the agreement rather than a default legal rule.
3. Lease Defaults in Texas
A lease default does not always involve unpaid rent. Commercial lease agreements often define numerous events that constitute default.
Examples include:
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Failure to pay rent
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Violating use restrictions
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Unauthorized alterations
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Failure to maintain required insurance
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Missed reporting obligations
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Breach of operating covenants
Before pursuing legal action, both landlords and tenants should review any notice and cure provisions contained in the lease.
4. Personal Guarantees and Business Liability
Many commercial leases require business owners to personally guarantee the lease obligations. If the business defaults, the landlord may seek recovery against the guarantor in addition to the business entity.
Understanding the scope of a personal guarantee is important before signing a lease and when evaluating potential liability during a dispute.
5. Assignment and Subleasing Disputes
Businesses sometimes outgrow their existing space or need to relocate before the lease expires. When that happens, the lease may permit assignment or subleasing, often with the landlord's consent.
Disputes may arise when:
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A landlord refuses consent.
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A tenant assigns the lease without approval.
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The parties disagree over whether withholding consent is reasonable.
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The lease contains restrictive assignment provisions.
The outcome often depends on the specific contractual language negotiated by the parties.
How Are Commercial Lease Disputes Resolved?
Not every commercial lease dispute results in litigation. Many disputes are resolved through negotiation, mediation, or other forms of alternative dispute resolution if required by the lease.
When resolution is not possible, litigation may become necessary to enforce lease provisions, recover damages, or resolve competing interpretations of the agreement.
Commercial lease litigation may involve claims for breach of contract, declaratory relief, injunctive relief, or recovery of unpaid rent and other damages.
Why Does Early Review Matter?
Commercial lease disputes often become more expensive as they progress. Important deadlines, notice requirements, and cure periods may affect each party's legal rights.
Reviewing the lease agreement early can clarify the parties' obligations, preserve contractual rights, and identify opportunities to resolve the dispute before litigation becomes necessary.
Facing a Commercial Lease Dispute?
Commercial lease disputes often involve more than unpaid rent. Questions about CAM charges, maintenance obligations, lease defaults, personal guarantees, or assignment rights require careful analysis of the lease agreement and the surrounding facts.
The Keller Firm represents landlords, tenants, investors, and businesses in commercial real estate litigation throughout Texas. If you are involved in a commercial lease dispute, a Real Estate attorney may review your lease, evaluate the issues in dispute, and discuss the legal remedies that may be available under Texas law.
Frequently Asked Questions
Can a commercial landlord evict a tenant in Texas?
Depending on the circumstances, a landlord may pursue eviction if the tenant has defaulted under the lease and applicable legal requirements have been satisfied. The lease agreement and Texas law both play important roles in the process.
What are CAM charges?
Common Area Maintenance (CAM) charges are expenses allocated to tenants for maintaining shared areas of a commercial property. The lease agreement typically defines which costs may be passed through to tenants.
Can a commercial lease be terminated early?
It depends on the lease. Some agreements include early termination provisions, while others require continued performance unless the parties reach a separate agreement or another legal basis for termination exists.
Disclaimer: This website is for informational purposes only and does not constitute legal advice. Do not act or refrain from acting based on anything you read on this site. Use of this site or communication with The Keller Firm does not create an attorney-client relationship.
Credible Sources
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Texas Property Code, Chapter 93 – Commercial Tenancies
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Texas State Law Library – Landlord and Tenant Law
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Texas Real Estate Commission – Commercial Contracts and Forms
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State Bar of Texas – Real Estate, Probate & Trust Law Section
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