Commercial Lease Co-Signer Not Liable


A landlord and tenant entered into a commercial lease. The landlord required an additional signer as security. The lease expired. The tenants were current on the rent at the time the lease expired. The tenants stayed in possession and began a month-to-month tenancy.

The tenants soon fell behind on rent, a moved out after several months, owing $8,709.12 in unpaid rent.

The landlord assigned its right to the delinquent rent to a collections agent, who in turn sued the co-signer. In a bench trial, the trial court ruled in favor of the co-signer. The collections agent appealed. The Washington State Court of Appeals upheld the trial court in an unpublished opinion.[1]

The Court reasoned that under well-settled Washington law a fixed term expires automatically at the end of the term upon which the parties agreed. Furthermore, the lease terms were unambiguous and stipulated that holding over “”shall not be deemed to operate as a renewal or extension of this Lease.”

The commercial tenants commenced a month-to-month tenancy when the lease expired, but the co-signer was not in possession of the rental property nor did he pay any rent. The Court of Appeals reasoned that the holdover provisions of the lease are only binding on a party who undertakes to establish a month-to-month tenancy by maintaining possession and by paying or accepting rent.

This in an unpublished opinion, meaning it is cannot be cited as precedent. Also, different facts and circumstances might result in a different outcome.

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Consult with an attorney if you have questions about landlord-tenant law.

By landlord-tenant attorney Travis Scott Eller

[1] Financial Assistance, Inc. v. Slack, unpublished (No. 72361-8-1 November 10, 2014).