NO. 1380 PHILADELPHIA, 1981, NO. 1381 PHILADELPHIA, 1981, Appeal from the Order of May 01, 1981, in the Court of Common Pleas of Philadelphia County, Trial Division, at Nos. 1749 Dec. Term, 1978 and 445 March Term, 1979.
Robert S. Esposito, Philadelphia, for appellant.
Leon Silverman, Philadelphia, for appellee.
Wieand, Beck and Hoffman, JJ.
[ 310 Pa. Super. Page 169]
In this consolidated action we are asked to determine the obligations of hold over tenants after they have been notified of a change in the terms of their lease but before they have agreed to that change.
The facts, largely stipulated by the parties, relate to the area in Philadelphia between Arch and Filbert streets, at Twelfth street, popularly known as the Reading Terminal Market. The Reading Terminal merchants have contributed variety and color to the city's downtown area since before the turn of the present century, offering an abundance of excellent fresh foods and unusual delicacies to local shoppers and commuters. We recognize that the market itself has played an important role in the history of Philadelphia's mercantile life, and agree with J. Chalfin, of the court below, that the merchants "were members of a unique association that, historically, drew customers to a particular location based on a local, and quite favorable reputation" (R. 28).
In August 1976, Railroad Market Inc. (hereafter Landlord) leased the premises known as the Reading Terminal Market from the Trustees of the Reading Company. Samuel Rappaport Associates is the managing agent for Landlord. The terms of the lease allows Landlord to sublease to the merchants who occupy the various stalls of the premises and who are known, collectively, as Reading Terminal Merchants Association (hereafter Tenants).
In 1976, almost all of the member merchants of the Association were already tenants in the market, occupying
[ 310 Pa. Super. Page 170]
their various stalls on month to month leases from the Reading Company. The terms of the existing leases between the merchants and the Reading Company required the lessees to pay for all electricity actually consumed, as registered by their separate electricity meters, at the prevailing retail rate.*fn1 Despite the clear words of the lease, however, the Reading Company never charged the merchants for electricity actually consumed. It was their ongoing practice to charge the merchants a flat monthly charge for electricity, an amount less than their obligation would have been by the actual terms of the lease. Furthermore, the leases between the merchants and the Reading Company did not impose any liability for real estate taxes on the lessees.
On September 24, 1976, in accordance with the notice provision of the lease,*fn2 Landlord sent a letter to each of the Tenants, notifying them that their present leases would terminate as of November 1, 1976, that new leases would be negotiated with the Tenants, and that during the period of negotiation they would be ...