SHOPPING CENTER BUSINESSES SUE LANDLORD 6 CONCERNS CRY FOUL ON MAINTENANCE FEES.
PALMDALE - The owners of six businesses in two shopping centers have filed a lawsuit, saying their landlord violated lease agreements by retroactively imposing thousands of dollars in maintenance fees.
The lawsuit was filed by tenants of the Crossing Palms and Palmdale Building One shopping centers, both located near 10th Street West and Rancho Vista Boulevard.
``These tenants are all mom-and-pop shops who entered into leases in 2001-2002 with the understanding they are paying rent and common-area maintenance (CAM) charges of 45 cents per square foot, which they have been paying. This past summer, at the end of August, the landlord sent them a notice that CAM charges would be doubled to 90 cents per square foot retroactively to Jan. 1, 2002,'' said the tenants' attorney, Helen Kim.
``That presents obviously a shock and hardship for a number of tenants. They believe not only that it was breach of the lease, they have reason to believe that the landlord deliberately understated the amount of the CAM charges when they signed the leases.''
The defendants include Crossing Palms LLC and Palmdale Building One LLC, which are both owned by parent company O&S Holdings LLC. Representatives from O&S Holdings did not respond to requests for comment.
The plaintiffs include S.C.A. Investments Inc., owner of Sharky's Woodfired Mexican Grill; Jonathan S. Won, DDS Inc., owner of Pacific Dental Care; Rami Darghalli, owner of Quiznos Classic Subs; Houn Haing, owner of Spring Donut; Charles Hudson and Mere Jo Hudson, owners of Cupid's Hot Dogs; and Surat Lertpiriyapong and Panthipa Lertpiriyapong, owners of Nopgow Thai Restaurant.
The lawsuit against the building owners alleges fraud, negligence and breach of contract among other charges.
The properties, comprised of several adjoining retail buildings, were acquired at a sheriff's sale in 1999, according to the plaintiffs' attorneys.
Under the terms of the acquisition, the new owners agreed to assume delinquent real property taxes and assessments owed to the city of Palmdale.
Taxes and assessments on the property have averaged more than $115,000 annually since at least 2000; in 2002, they totaled more than $117,000.
After acquiring the properties, the owners of Crossing Palms and Palmdale Building One negotiated separate lease agreements with the small businesses in the current lawsuit.
During lease negotiations in 2001 and 2002, the tenants say, the landlord told them that common-area maintenance charges for each of the retail spaces, inclusive of all real estate property taxes and assessments, would be in the range of 40 cents to 45 cents per square foot per month.
That rate was consistent with prevailing market rates for common-area maintenance charges for similar retail properties.
The tenants paid common-area maintenance charges of 45 cents per square foot from 2001 through 2004.
In August 2004, however, tenants received notification requiring them to pay a new common-area maintenance charge of 90 cents per square foot per month for both the 2002 and 2003 calendar years. The tenants were told to pay the difference retroactively.
The tenants also paid 45 cents per square foot per month for the 2004 calendar year and expect to be billed retroactively at 90 cents per square foot for 2004, as well.
The sum total of the retroactive charges against all tenants exceeds $100,000. On an individual business basis, the retroactive charges range between $5,500 and $33,000, based on the size of the retail space occupied by each tenant.
Karen Maeshiro, (661) 267-5744
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|Publication:||Daily News (Los Angeles, CA)|
|Date:||Feb 8, 2005|
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