Tricks No Treats: Rules and Regulations Bar Tenant from Handing Out Candies

In a recent case, Freddie Malls, LLC vs Jason’s Designs, Inc. (2018), a landlord sued a tenant for handing out candies to its customers during Halloween because doing so violated, among other restrictions, the mall’s rules and regulations.  The tenant, a store that sells children’s arts and crafts, had parents and kids lined up throughout the store and around the mall, in some cases partially blocking the entrances to other tenants’ stores.

The mall’s rules and regulations stated, “No tenant shall be permitted to operate in such a manner that would cause its customers to line up in a queue outside of the Premises,” and that “Canvassing, soliciting and peddling in the mall are prohibited and Tenant will cooperate to prevent the same.” In addition, the landlord pointed to various provisions in the lease itself, including the use clause which allowed the tenant to operate as a store selling children’s arts and crafts and “for no other purpose”, and the obligation of the tenant to avoid interference with the right of other tenants to quietly enjoy their respective premises and the common areas. The lease further stated that “Tenant will keep all of the Common Areas free and clear of any obstructions created or permitted by Tenant that result from Tenant’s use and occupancy of the Premises.” Finally, the lease contained a list of prohibited uses, which included “the sale of food, food products or prepared food products.”

The landlord argued that based on these restrictions, the tenant was not permitted to give away candies at Halloween or at any other time.  The tenant argued that other tenants handed out candies in their stores all the time (albeit, without the long lines) and that the landlord was unfairly picking on the tenant, even though the lease required the landlord to enforce the rules and regulations in a non-discriminatory fashion.  It also submitted pictures of smiling kids dressed up in costumes eating candies in their store, in a not so shameless appeal to the court’s softer side.

The court, however, was not persuaded. Judge Michael held, “This is a just a Trick (no Treat!).  Happy Halloween!”

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