Real Estate Investments, Inc. (REI) owns and manages an office building. Secure Insurance Company agrees to lease the building for five year...

Question

Real Estate Investments, Inc. (REI) owns and manages an office building. Secure Insurance Company agrees to lease the building for five years. Under the lease, Secure is obligated to pay all of the utility costs. Two years into the term, Secure asks REI to modify the lease to provide that the utility costs be split equally between them. REI agrees, but later decides it does not want to share the costs and refuses to pay. Is the landlord bound by its agreement to share the utility costs? Why or why not?

Answer

It depends on whether the lease modification between REI an SIC is in writing. If REI orally agreed to modify the lease and then later recanted, SIC is out of luck. If REI agreed in writing to the terms of the lease modification it is bound by them and a violation of the terms could be considered a breach of contract.

Best of luck.*****The above is for informational purposes only and does not create an attorney-client privilege.*******