A property company is suing the USPS there, saying it breached its lease by refusing to vacate the building or pay market-rate rent, reports NBC 7’s Jeanette Quezada, who says the landlord believes that rent works out to be about $750,000 a year.
The post office on Cleveland Avenue in Hillcrest has been in the community for more than half a century, but the owner of the property wants the USPS to either pay higher rent or move out of the building.
Hillcrest Properties, LLC is suing the USPS, claiming it breached its lease by refusing to vacate the building or pay rent at market value. Monday marked one year since the lease agreement expired, but the building has not been vacated and postal services remain in operation.
“Their lease after a series of amendments expired in July of last year. Since then, there have been efforts by the private property owner to get the U.S. postal service to pay what the private property owner considers to be the fair market value of the rent at the location,” attorney and legal analyst, Dan Eaton said.
The market value rounds to about $750,000 per year, but the complaint filed said the USPS wants to pay considerably less for rent based on a lower valuation of the property.
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While landlords usually initiate eviction proceedings when rent is not being paid, Eaton said this is a unique situation.
He said, generally, eviction is not available when the USPS is your tenant.
“What the private property owner is saying is that the US Postal Service is using its privileged position to not be subject to eviction because it’s so important that regular mail delivery continue that the U.S. Postal Service is not paying what the property is worth,” Eaton said.
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Eaton said the property owner in this case can seek monetary damages.
“What this lawsuit is about is making sure the U.S. Postal Service pays the fair market rent for the property it continues to occupy now over a year past of what the complaint calls an over natural expiration of its lease,” Eaton said.
According to the complaint, the property owner is also asking for a 30% premium for the holdover.
NBC 7 reached out to the attorney representing the property owner. He said they had no comment. NBC 7 also reached out to the U.S. Postal Service and is still waiting for a response.
Eaton said the most likely outcome of the dispute is a settlement agreement that neither side really likes.
