Landlord Alert: Your Actions Can Be as Binding as Your Lease

Landlords often rely on written leases to establish their legal rights and obligations with tenants. But as the Louisiana Court of Appeal reminded us in Meaghan Frances Hardcastle Trust v. Fleur de Paris, Ltd., 2004-CA-1371 (June 29, 2005) (a case cited that has been cited in Florida), what landlords do after signing a lease can carry just as much legal weight as what the lease says.

This case offers notable lessons for landlords about the power of conduct, the importance of legal consistency, and the risks of trying to unwind a lease after a property changes hands. Here’s what happened and what landlords can learn from it.

Case Study: Hardcastle Trust v. Fleur de Paris

Fleur de Paris, Ltd., a commercial tenant in New Orleans, originally leased a retail property in 1995 from three co-lessors, including an individual and a trust. In 1999, the lease was extended through a signed renewal but only one of the original lessors signed that renewal.

In 2002, the property was sold to the Meaghan Frances Hardcastle Trust. The lease and its renewal had been recorded in the public records prior to the sale. After the purchase, the Trust continued collecting rent and even demanded increased rent to account for cost-of-living changes.

But by 2003, the Trust attempted to evict Fleur de Paris, claiming:

• The 1999 renewal was invalid because not all original lessors signed it;
• The tenant failed to pay July 2003 rent;
• The tenant violated municipal building and fire codes.

Fleur de Paris disputed the eviction, arguing that the lease had been ratified and the allegations were a pretext.

Why the Landlord Lost: 3 Key Legal Reasons

The trial court ruled in favor of Fleur de Paris (tenant), and the Court of Appeal affirmed that decision. Here’s why:

1. Lease Ratification by Conduct: Accepting Rent is Key

Although not all original lessors signed the 1999 lease renewal, the Trust purchased the property subject to the recorded lease documents. After the purchase, the Trust:

• Accepted monthly rent payments;
• Demanded cost-of-living increases; and
• Took no immediate steps to dispute the lease’s validity.

These actions showed that the Trust treated the lease as valid. Under that applicable law, a party can ratify a contract—even one with defects—through consistent performance or acceptance of benefits. The court found that the Trust’s conduct ratified the lease, making it binding despite the incomplete signature.

2. No Month-to-Month Tenancy Without Tenant Consent

The Trust argued that even if the lease had been ratified, it had converted into a month-to-month tenancy, which could be terminated at will. The court rejected this claim, noting:

• The renewal expanded the premises and adjusted rent;
• The parties’ actions showed intent to continue the lease on new terms;
• Reconduction (conversion of the tenancy to at-will) only applies when a lease expires silently, not when there is clear agreement to extend.

3. Unproven Code Violations Are Not Grounds for Eviction

The Trust cited fire and building code violations as grounds for eviction. But the court found:

• Many violations were minor or created by prior owners or tenants;
• One alleged violation (unauthorized construction) was caused by the Trust itself; and
• Some complaints were unsubstantiated and possibly instigated by the landlord to force an eviction.

Because the Trust failed to present compelling evidence of a breach by the tenant, the court found no cause to terminate the lease.

4 Critical Lessons for Landlords to Avoid Costly Mistakes

1. Your Actions Can Ratify a Defective Lease

Even if a lease renewal is flawed or incomplete, your conduct can ratify it. Accepting rent, modifying terms, or otherwise treating the lease as valid can waive objections to technical defects. Be cautious about what your actions imply, especially after acquiring a leased property.

2. Consult an Attorney Before Acting on a Technicality

The Trust’s attempt to evict a long-term tenant based on technicalities and alleged violations backfired. If the landlord had consulted counsel early, they might have learned that accepting rent post-sale could undermine claims about lease validity. Legal advice before acting can prevent costly missteps.

3. Inconsistent Behavior Waives Your Lease Rights

Landlords often rely on lease provisions to protect their interests, but if your behavior contradicts those provisions, courts may find that you’ve waived enforcement. For example, demanding increased rent under a lease you claim is unenforceable is a clear contradiction.

4. Prove Code Violations Before Alleging a Breach

Alleging a tenant’s breach based on code violations requires actual proof. Courts will scrutinize whether the violations are material, who caused them, and whether the landlord is acting in good faith. Using violations as a pretext to evict a tenant can damage your credibility.

Final Word: Consistency Between Your Lease and Your Conduct

Hardcastle Trust v. Fleur de Paris serves as a cautionary tale for landlords who attempt to enforce lease terms selectively or retroactively. Written leases matter, but so do the actions landlords take after the fact. Before trying to void a lease, withhold acceptance of rent, or serve a notice to vacate, landlords should review the full legal picture and consult with an attorney. Otherwise, they risk unintentionally binding themselves to terms they thought they could escape.