Enough Is Enough! The Scope of the 'Perpetual' Right to Cure

Commercial lease agreements often contain provisions imposing a duty to keep the premises in repair. This duty is typically mitigated by an opportunity to cure any default by making the necessary repairs on the property after receiving notice of the problem. The right to cure presents challenges for both landlords and tenants. Occasionally, the party with the duty to repair may have an incentive to do as little as possible to correct the problem, comforted by the knowledge that written notice must be given before a default occurs. Both legal issues and more practical business concerns increase, however, when the same or similar problem arises repeatedly throughout the lease term even if “repairs” have been made. A recurring, though minor, repair issue may serve as an excuse for the non-defaulting party to terminate the lease prematurely. The landlord will choose this route when markets are strong and it can lease the space for a higher rent. Conversely, a tenant may resort to this tactic when markets are weak ' either to negotiate a better rate at the existing space or leave to find accommodations with more favorable terms.

Some states have enacted statutes to address these issues, essentially stating that there comes a time in which the non-defaulting party may say, “Enough is enough,” and terminate the lease altogether notwithstanding the opportunity to cure. The majority of states, however, have not enacted legislation to deal with these issues, resulting in parties, as well as courts and juries, having to guess whether a breach is severe enough to constitute a constructive eviction. This article will consider how landlords and tenants protect themselves from the uncertainty that exists in many states regarding whether the right to cure appears to be a perpetual one.