Commercial Landlord/Tenant Law | March 2017
Commercial Lease Enforcement: When a
Breach Is Not a Breach
A landlord must be wary of equitable relief and waiver defenses, which may provide relief to the tenant from an otherwise material breach of the lease.
In our series' first article ("Ensuring a Proper
Breach Has Occurred"), we discussed the analysis necessary to determine whether a
material breach of the lease has occurred. However, it is not
necessarily the case that an otherwise material breach will
constitute a material breach in every scenario, and thus the Loehmann’s
factors are not the end of the analysis. Rather, the landlord must
also be wary of equitable relief and waiver defenses, which may
provide relief to the tenant from an otherwise material breach of
It is well settled in Arizona that a Court has discretion to declare
a breach non-material for equitable reasons in the face of fraud,
accident or mistake.
For example, a failure to pay rent until only a few days after the
due date, due to an administrative mistake, will often not be deemed
a material breach on the basis of equitable relief.
Thus, the landlord must make a determination as to the cause of the
breach, rather than assuming that equitable relief will not apply.
Additionally, the actions of the landlord in the face of the breach
may operate as a waiver of the landlord’s right to declare such a
breach as “material.” For example, if a landlord accepts a late
payment from a tenant while possessing notice that such payment was
late, and does not explicitly state at that time that such late
payment is a material breach of the lease, then the landlord will
have waived its right to declare a material breach based upon that
Accordingly, in face of a breach of the lease, the landlord must
take care to ensure that its actions with respect to the tenant will
not waive that breach, if the landlord wishes to pursue legal
remedies as a result thereof.
 See Foundation Development
Corporation v. Loehmann’s, Inc., 163 Ariz. 438, 788 P.2d
1189 (1990) (setting forth the factors to be considered in
determining materiality of a commercial lease breach).
 Butterfield v. Duquesne Mining Co.,
66 Ariz. 29, 182 P.2d 102 (1947).