HOUSE COMMITTEE ON THE JUDICIARY

Floor Book Memo

H.B. 2054

(February 20, 2015)

SPONSORS: Shott

TITLE: Relating to relating to the right of the landlord of commercial premises to terminate the lease under certain circumstances and providing a process for the termination.

DATE INTRODUCED: January 14, 2015

CODE REFERENCE: §37-6-31. Landlord’s right to terminate lease of commercial premises if tenant fails to use premises for agreed purpose.

IDENTICAL/SIMILAR BILLS:

SUMMARY ANALYSIS: The purpose of this bill is to permit a landlord to terminate a lease of a portion of a multitenant commercial property if the tenant fails to use the premises for the purpose specified in the lease, and the tenant’s use or nonuse produces an adverse economic effect upon the landlord or another tenant of the property.

FULL ANALYSIS:

I. SUBSTANTIVE ANALYSIS

A. EXISTING LAW: The current law does not provide any mechanism by which a landlord can terminate a portion of a commercial lease if tenants fail to use their portion for a non-conforming purpose, even if such use or nonuse produces a negative effect on other tenants.

B. THE BILL: The bill fixes this issue, by inserting a proviso to establish a procedure for notifying the tenant and allows the tenant time to commence using the premises for its agreed purpose. It also requires the landlord to notify the tenant of the termination of the lease if the tenant fails to commence using the premises within the specified time.

II. COMMENTS

             A. CONSTITUTIONAL ISSUES: None identified.

B. GOVERNMENT AGENCIES AFFECTED: None apparent.

             C. TITLE ANALYSIS: The title appears to be within constitutional parameters.

             D. DRAFTING ISSUES OR OTHER COMMENTS: None.