Whose Shopping Centre Is It Anyway

DID YOU KNOW?

That a lease should expressly state a landlord's rights to demolish or change the rental philosophy of a shopping centre if the landlord wants to re-develop it?

LANDLORD'S RIGHT TO DEMOLISH FOR RE-DEVELOPMENT

In Michael Santarsieri Inc. et al v. Unicity Mall Ltd., a 1999 Manitoba case, two tenants brought an injunction application to prevent a landlord from demolishing a Shopping Centre.

Facts

The landlord notified the tenants of an enclosed shopping centre of its plans to demolish it and replace it with a Power Centre consisting of free-standing buildings/stores.

The Centre, historically, had a high vacancy rate and low level of productivity. The landlord purchased the property with a view to re-developing it to increase profitability.

In August 1998, the landlord notified the tenants that the Centre would be demolished in early 1999. Some tenants agreed to terminate their leases and others reached agreement for termination and relocation in the new development.

In February 1999, the landlord notified the remaining tenants that they would be relocated and the Centre would be closed for 6 months for re-development in accordance with the terms of their leases.

Two smaller tenants objected. Each of their leases contained the following: a) a covenant for quiet enjoyment; b) a covenant to operate the Centre as a first class Shopping Centre having regard to its size, type, age, and location; c) the right to alter, expand, improve, diminish, maintain, operate, renovate and re-merchandise, existing buildings and to build additions; and d) the right to re-locate the tenants to "comparable premises".

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