The Dallas Morning News reported last week that the Dallas Cowboys Stadium is suing a resident of Washington D.C. who has leased a luxury suite but allegedly failed to pay for it.
The lease is for a 20-year term at a rough rate of $500,000/year. Yeah, that totals $10 million. According to the article, the renter paid for a few years but then stopped. In their petition, the Cowboys Stadium cites a provision of the lease that would appear to allow them, upon the renter’s default, to terminate the renter’s use and possession of the suite and declare the entire unpaid balance of the lease fee immediately due and payable.
That’s right. It’s the Cowboys Stadium’s position that they now get the luxury suite back as well as the rent they would have received from the renter had she continued to occupy the suite for the remainder of the 20-year term. Can they do that?
Maybe. As a general rule the Cowboys Stadium would probably have to mitigate their damages by looking for an alternative lessee and deducting/offsetting fair market value rent received from that lessee from the damages they seek in this lawsuit. However, without seeing the actual suite lease agreement, it’s impossible to say whether this “zone defense” would apply. And, frankly, I’d like to spend a few weekends in the suite in order to assess whether any subsequent lease the Cowboys Stadium may enter into for the space actually represents a fair market value.
So all of you Cowboys fans with disposable income of $500,000/year may be help someone out by renting a suite. Or maybe not. But, hey. How about them Cowboys?
In our In the News series, we use an article or topic that has been featured recently in the news as a potential learning opportunity.