February 22, 2008

Fair rental value damages must not be "disproportionate, speculative, or unfair"

BEVERLY C. SMITH v. RONNIE R. SMITH ET AL. (Tenn.Ct.App. February 22, 2008).

Buyers of commercial property, who were denied possession of that property for a period of two years, appeal from the trial court's determination that they failed to carry their burden of proving a fair rental value for one of the three units of the property. Finding that the evidence preponderates against the trial court's determination, we reverse.

Opinion available at the Tennessee Bar Association website:

"The unrebutted testimony of Ronnie Smith established a fair rental value of $600 per month for C Building. Moreover, the cancelled checks of Mr. Buckner supported Mr. Smith’s testimony concerning his current rental agreement with Mr. Buckner, which includes $600 in rent for C Building. The amount Ronnie Smith and Mr. Bucker agreed to in an arms-length transaction is at least some evidence of the rental value at the time of the breach. See BanccorpSouth, 223 S.W.2d at 231; Myer v. Whitacre, No. 01-A-01-9701-CH00014, 1997 WL 367483, at *2 (Tenn. Ct. App. July 2, 1997). ... In this context, the $600 rental value for C Building does not seem disproportionate, speculative, or unfair." Id.