A tenant company is suing its Richmond-based landlord, claiming it took too long to give permission to sublet part of the building.
FBM Canada GSD Inc is claiming compensation from Richmond Holdings Ltd., and is also asking the court to order the landlord to compensate it for the rent paid before June 20 and any damages and costs.
FBM, a construction materials distributor, entered into a 10-year lease to rent a 56,734-square-foot building in Delta in 2022.
The landlord Richmond Holdings is based in Richmond with a registered address at 7600 Alderbridge Way.
In a B.C. Supreme Court lawsuit filed by FBM in March 2023 and amended in July, it claims Richmond Holdings was aware prior to signing the lease of FBM’s intentions to sublet a portion of the building.
In January 2023, FBM got an offer to sublet an 18,460-square-foot space in the building for five years from Aero Pacific Express Ltd.
According to FBM, it asked for Richmond Holdings’ consent to sublet the space in February and received a list of requirements from Richmond Holdings.
It claimed it had complied with the requirements and provided Richmond Holdings with all requested information, but the landlord “unreasonably delayed” providing its written consent.
FBM also claimed the landlord gave different reasons for refusing to consent throughout the process, first by saying it wanted the premises to be used as a single-tenant property, followed by alleged concerns about the use of the space and the unknown nature of the freights being stored in the space.
Finally, in April, Richmond Holdings confirmed it would agree to the sublease under the condition of including a clause that defines what items can be stored in the space, and asked for FBM to reimburse its legal fees.
It later provided its written consent but said the subletter couldn’t take possession of the space until certain conditions were met — including the reimbursement of its legal fees. It later told FBM it would not prevent the subletter from taking possession.
According to FBM, Richmond Holdings asked for a payment of $71,836.50 for its legal fees but has refused to provide detailed invoices since April.
FBM claims Richmond Holdings’ demand for legal fees is improper and questioned the amount claimed by Richmond Holdings.
It accused Richmond Holdings of breaching the lease and failing to act honestly and in good faith.
Richmond Holdings’ conduct was “the latest in a pattern of unreasonable conduct and improper delays that appear intentionally aimed at causing loss, damage and expense to (FBM), which (FBM) has and continues to suffer,” said FBM.
In the lawsuit, FBM also accused Richmond Holdings of improperly charging rent.
According to FBM, Richmond Holdings demanded rent starting from May 1, claiming building improvements had been “substantially completed as of February 28, 2023.”
The landlord took $121,226.37 from the security deposit as rent, said FBM. It argued Richmond Holdings failed to complete the improvements in time and the lease did not actually commence until June 20, when the City of Delta issued an occupancy permit for the building.
Landlord denies wrongdoing
Richmond Holdings, on the other hand, claimed it was reasonable to withhold consent to the sublease.
It claimed the proposed use for the sublet space was different from the permitted use set out in the lease between Richmond Holdings and FBM, and FBM was “purporting to unilaterally amend” the permitted use.
It added that FBM was almost one month late in paying a processing fee of $1,800 plus GST. It also said its lawyer had responded to FBM in April and “highlighted the arbitrary deadlines imposed by (FBM) that forced (Richmond Holdings) to respond on short notice,” among other things.
Richmond Holdings also denied withholding access to the sublet premises and explained it was not required to disclose detailed invoices. It was also concerned that providing the information would result in waiving its legal privilege to keep its communications with its lawyers private.
Richmond Holdings added it had offered to provide names of lawyers who worked on the file, their year of call and hourly rate, and a summary of the work each lawyer did on the file, but FBM did not respond to its offer.
In response to FBM’s claim that it imposed the wrong lease commencement date, Richmond Holdings insisted the correct date was May 1, when FBM was “able to lawfully occupy” the building.
It claimed it had completed the required improvements by the target date and any delays in accessing the building were FBM’s fault. It added that even though the City of Delta’s occupancy permit was issued in June, the building was “capable of being lawfully occupied in advance of that date.”
FBM is asking the court to declare Richmond Holdings “unreasonably withheld and delayed” its consent for the sublease and declare the lease started on June 20, 2023. It also asks the court to order Richmond Holdings to compensate it for the rent paid before June 20 and any damages and costs.
None of the allegations have been proven in court.
Got an opinion on this story or any others in Richmond? Email your thoughts for our letters section to [email protected]
