Landlord & Tenant

Questions of Fact About Tenant's Exercise of Right to Renew

Babikian v. TMA Realty LLC

NYLJ 12/7/10, p. 33, col. 2

AppDiv, Second Dept.

(memorandum opinion)

In tenant's action for a judgment declaring that a commercial lease had expired by its terms and was not renewed, landlord appealed from Supreme Court's grant of tenant's summary judgment motion and denial of landlord's cross motion for summary judgment. The Appellate Division modified to deny both summary judgment motions, holding that questions of fact remained about whether tenant had exercised its option to renew.

In 2004, landlord and tenant entered into a five-year commercial lease. The lease gave tenant an option to renew for a five-year period, but required tenant to exercise that option in writing at least nine months before expiration of the lease term. Tenant did not exercise that option within the period, but in August 2008, tenant sent a letter to the landlord for the purpose of confirming a phone conversation advising landlord “of our option to renew the lease.” Landlord's managing member wrote “agreed” on the letter and signed it. Tenant subsequently asserted that the renewal letter was not an exercise of the renewal option, and brought this action for a judgment declaring that all of its obligation would expire at the end of the original lease term. Both parties moved for summary judgment, and Supreme Court granted landlord's motion.

In modifying, the Appellate Division noted that because the lease itself was not ambiguous, parol evidence would not be admissible to ascertain the lease's meaning. At the same time, the court noted that landlord was entitled to waive the nine-month written notice requirement in the lease, and concluded that the landlord had clearly waived that requirement. The court then found that the tenant's renewal letter was ambiguous, enabling the parties to introduce parol evidence to shed light on its meaning. The court held that the affidavits submitted did not eliminate triable issues of fact about the letter's meaning, making summary judgment inappropriate.

Questions of Fact About Tenant's Exercise of Right to Renew

Babikian v. TMA Realty LLC

NYLJ 12/7/10, p. 33, col. 2

AppDiv, Second Dept.

(memorandum opinion)

In tenant's action for a judgment declaring that a commercial lease had expired by its terms and was not renewed, landlord appealed from Supreme Court's grant of tenant's summary judgment motion and denial of landlord's cross motion for summary judgment. The Appellate Division modified to deny both summary judgment motions, holding that questions of fact remained about whether tenant had exercised its option to renew.

In 2004, landlord and tenant entered into a five-year commercial lease. The lease gave tenant an option to renew for a five-year period, but required tenant to exercise that option in writing at least nine months before expiration of the lease term. Tenant did not exercise that option within the period, but in August 2008, tenant sent a letter to the landlord for the purpose of confirming a phone conversation advising landlord “of our option to renew the lease.” Landlord's managing member wrote “agreed” on the letter and signed it. Tenant subsequently asserted that the renewal letter was not an exercise of the renewal option, and brought this action for a judgment declaring that all of its obligation would expire at the end of the original lease term. Both parties moved for summary judgment, and Supreme Court granted landlord's motion.

In modifying, the Appellate Division noted that because the lease itself was not ambiguous, parol evidence would not be admissible to ascertain the lease's meaning. At the same time, the court noted that landlord was entitled to waive the nine-month written notice requirement in the lease, and concluded that the landlord had clearly waived that requirement. The court then found that the tenant's renewal letter was ambiguous, enabling the parties to introduce parol evidence to shed light on its meaning. The court held that the affidavits submitted did not eliminate triable issues of fact about the letter's meaning, making summary judgment inappropriate.