Commercial Lease Co-Tenancy Clauses: California Supreme Court Weighs In

The California Supreme Court recently upheld the validity of commercial lease co-tenancy provisions in the case of JJD-HOV Elk Grove, LLC v. Jo-Ann Stores, LLC. The court emphasized that contracts should be enforced as written, provided they do not violate public policy. The ruling clarified that the co-tenancy clause allowed for alternative performance, enabling the landlord to accept lower rent if occupancy fell below certain thresholds. This decision distinguished the case from a previous ruling, reinforcing the principle of freedom of contract in commercial leases.