## Facts

- A landlord (Reldresal) leased premises in Belfaborac to a tenant (Bolgolam) for a ten-year term beginning March 15, 1997.
- The written lease did not state a permitted use, but the tenant intended to operate a bar and restaurant, and the landlord knew of and assisted with renovations for that purpose.
- At lease formation, a local ordinance prohibited commercial use in the area, though variances were available upon a showing of special hardship; the tenant did not apply for a variance.
- Enforcement of the commercial-use prohibition was lax, and the tenant operated the bar and restaurant without governmental interference.
- The bar operation generated most of the tenant’s profits.
- In November 1998, a county ordinance was enacted and strictly enforced prohibiting the sale of alcoholic beverages over 4% alcohol.
- The new restriction sharply reduced alcohol and related restaurant sales, leading to downsizing and eventual closure of the business.
- After closing, the tenant stopped paying rent; in March 1999, the landlord sued to recover unpaid rent.
- The trial court granted summary judgment for the landlord, enforcing the lease and rejecting the tenant’s defenses; the tenant appealed.

## Issues

1. Whether the lease was unenforceable at formation because both parties contemplated a commercial use that technically violated an existing zoning ordinance, where the lease was silent on use and a variance mechanism existed.
2. Whether a later, strictly enforced ordinance restricting higher-alcohol sales discharged the tenant’s rent obligation under doctrines such as supervening illegality, impossibility, or frustration of purpose.

## Decision

- The appellate court affirmed summary judgment for the landlord.
- The court rejected the tenant’s defense that the lease was void or unenforceable due to illegality at formation based on the existing zoning restriction.
- The court rejected the tenant’s argument that the later alcohol regulation excused performance or discharged the duty to pay rent.
- The tenant remained liable for unpaid rent under the lease.

## Legal Principles

- A lease is not necessarily void because the tenant’s contemplated business may conflict with a regulatory or zoning regime, particularly where the lease does not require unlawful use and the legal framework provides administrative relief (e.g., variances).
- When a tenant could have sought regulatory permission (such as a variance) but did not, the tenant may bear the risk of noncompliance for its chosen use.
- A subsequent regulation that limits a tenant’s ability to conduct a profitable business does not, by itself, render the lease illegal or excuse rent obligations when possession and lawful use of the premises remain possible.
- Economic loss or the collapse of a tenant’s business, without a lease term reallocating regulatory-change risk, generally does not discharge the duty to pay rent.

## Conclusion

The court enforced the lease and held the tenant responsible for unpaid rent, concluding that neither the existing zoning restriction at formation nor the later alcohol-sales limitation invalidated the lease or excused performance where occupancy and lawful use remained possible.


Reldresal v. Bolgolam, 678 Swift 2d 910 (High Ct. Lilliput 2001)