Read the full post at Constructlaw
This payment dispute arose over conditional language in a lease agreement between a mall and a restaurant operator. P&N Investments (P&N) leased space from Frontier Mall Associates, LP (Mall) to operate a restaurant. The lease contained a “finish allowance” under which Mall agreed to cover some of P&N’s costs to renovate the space, up to $150,180.
The finish allowance was conditioned on the following provision:
[P&N] shall have furnished evidence satisfactory to Mall from its general contractor and any subcontractors that any and all liens that have been, or may be, filed have been satisfied of record or waived and an affidavit that all work has been paid for.
P&N hired CCI as its general contractor, and CCI in turn hired subcontractors, to renovate the space. P&N paid CCI in full once CCI and its subcontractors completed the work. The amount paid was $308,930. CCI, however, failed to pay its subcontractors in full. The unpaid amount was approximately $90,000. Mall refused to pay P&N the finish allowance despite the fact that P&N paid CCI in full and submitted an affidavit stating that no liens were, or could be, filed because of time limitations for liens had expired.