JP Morgan Chase will have to pay much more rent for its North Miami branch after a federal judge sided with the bank’s landlord.
For the last two years, the bank had refused to pay annual rent increases for a one-story commercial building at 14590 Biscayne Boulevard that JP Morgan Chase leases from Cypress Property LLC.
In defending against a lawsuit filed by the landlord, JP Morgan Chase alleged the company and Cypress Property had agreed that rent hikes would occur every five years. Judge Darrin Gayles ruled that its lease requires JP Morgan Chase to pay the landlord’s yearly rent increases.
“The facts in this case are largely undisputed,” Gayles wrote in his April 30 order. “The primary issue is whether the parties’ agreement requires that rent be increased annually. The Court finds that it does.”
Now JP Morgan Chase is on the hook for about roughly $750,000 in unpaid rent increases since 2019, according to Howard DuBosar, the attorney representing landlord Cypress Property LLC.
“My client is very pleased with the outcome,” DuBosar said. “They felt very strongly about the language in the lease. The damages are in the neighborhood of three-quarters of a million dollars.”
Brian Hole, the attorney representing JP Morgan Chase, did not respond to an email request for comment.
Miami-Dade property records show Cypress Property purchased the site in North Miami for $1.9 million in 2005, and completed the building in 2013.
According to corporate records, Cypress Property is managed by Gil, Sydney and Michael Atzmon of Boca Raton. The landlord and the bank were in negotiations for almost one year prior to the building’s construction.
Gayles’ order states Cypress Property and JP Morgan Chase exchanged 10 drafts of the proposed agreement before finalizing the lease on Jan. 23, 2012. For the first five years, JP Morgan Chase was required to pay an annual base rent of $285,000. In the sixth year, Cypress Property bumped the yearly rent by 8.1 percent, which JP Morgan Chase paid “without dispute,” according to Gayles’ order.
On May 13, 2019, Cypress Property notified JP Morgan Chase that it would again increase the annual rent. This time, the financial services company refused and said that the lease called for rent increases every five years. The bank also provided a letter of intent that indicated rent increases would only occur every five years.
“The Court, however, cannot consider extrinsic evidence when the plain language of the contract is unambiguous,” Gayles wrote. “While the defendant might be faced with unusually large increases in base rent, the court is without authority to negate the terms of an unambiguous contract where one party — with equal bargaining power — is unhappy with some of the consequences of the bargain.”
DuBosar said that the lease’s template is a standard one used by JP Morgan Chase, and that his client was very surprised that the bank took an adversarial stance.
“A big bank took an aggressive position,” he said. “And now they will have to pay the price for that.”