Lincoln/West (“West”): mortgagee; Plaintiff

RPP: lessor

United States Postal Service: lessee, sub-lessor; Defendant

Facts:

· West lent money to RPP.

· RPP secured the loan with a piece of real property along with any rents paid by tenants on that property as collateral.

· RPP leased the property to the U.S. Postal Service

· The U.S. Postal Service then sub-leased parts of the property to others.

· All the parties agree that the master lease between U.S. Postal Service and RPP govern the duties.

· The agreement requires RPP to maintain the premises in good repair.

· If RPP failed to make sufficient repairs then the U.S. Postal Service had the right to cancel the lease or to make the repairs themselves.

· However, before the U.S. Postal Service could cancel it was required to:

1) give RPP written notice of needed repairs along with a copy to West and allow 30 days for repairs to be made.

2) If lessor fails to make repairs within 30 days then U.S. Postal Service has to give West written notice of intent to cancel the lease or make the repairs themselves and deduct cost from rents and allow West 30 days to make repairs.

· The U.S. Postal Service gave notice to RPP and a copy of RPP’s notice to West.

· However, the U.S. Postal Service did not give West any separate 30 day notice of RPP’s failure to make repairs.

Issue:

· Whether U.S. Postal Service may reimburse itself for repairs made out of rent from sub-lessors or turn all over to West?

· Whether U.S. Postal Service has complied with the terms of the lease to permit it to deduct the costs of the repairs from the rents?

Holding & Reasoning:

Judgement issued for West.

“U.S. Postal Service breached the contract by failing to give West the required notice and is therefore not entitled to offset the costs of repairing the heating and air conditioning against any rent due to West, but only against any rents due RPP.”

Rule:

An express condition precedent is subject to the rule of strict compliance.

“Unless and Until” is a condition precedent. “Unless” means except on the condition that; under any other circumstances than that; except on the condition that.” “Until” means up to the time that or when.”

Condition precedent: a condition that must occur before something else can occur.