Deliver Notices According to Lease

October 17, 2013
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If you’re like many tenants, you’ve probably spent a good deal of time and money negotiating a lease that you think is in your best interests. Delivery of notices pertaining to your lease might not be as interesting as some other portions of your agreement, but it is important to pay attention to. After all, if you don’t deliver a notice to the owner properly—that is, according to the method stated in the lease—you could miss out on valuable opportunities that you’ve fought hard to get, such as renewing the lease or the right of first refusal for additional space. Proper delivery of notices has sparked many lawsuits—even when the other party was at fault for something that created the need for a notice to be sent, as in this New York case where a court determined that the owner had to deliver termination notices according to the lease. The case highlights the important of complying with the lease when sending notices.

There, a tenant that operated a career center signed a lease with the owner of an office building to rent space in four office suites for an initial term of 124 months. The building was sold, and the tenant and new owner extended the lease. The owner later claimed that the tenant had defaulted on its lease, and it sued the tenant to recover the space. The tenant claimed that the owner could not evict it from the four suites, because it hadn't delivered two notices properly according to the lease terms. The owner asked the court for a judgment in its favor without a trial. The court denied the owner's request.

The court determined that the first letter—a “lease notice” notifying the tenant that it was in default of its obligations under the lease and giving it 30 days to cure those defaults—and the second letter—a “lease termination” notice evicting the tenant because it didn't cure the defaults in a timely manner—were not properly sent and/or given to all of the parties required by the lease. Specifically, the owner didn't send the notices to the tenant's attorney, and although it hand-delivered the notices to the tenant's office manager, it didn't mail copies of the notices to the tenant, as required by the lease.

The court noted that, to terminate a tenancy at a time other than at the end of a definite term, an owner must properly serve all the required “predicate” notices, including any notices to cure and termination notices. Under the lease in this case, a notice of termination was required. The court pointed out that proper service of the notice was a prerequisite to the court granting or denying the owner's request for a judgment in its favor without a trial. “If the tenancy has not been properly terminated, the court has no jurisdiction to proceed and the petition [for a judgment in its favor without a trial] should be dismissed,” said the court.

The court reviewed the termination section of the lease, which provided: “Any notice, request, demand, consent, approval, or other communication required or permitted under this Lease must be in writing and will be deemed to have been given when personally delivered, sent by facsimile with delivery acknowledged by the sending machine, deposited with any nationally recognized overnight carrier that routinely issues receipts, or deposited in any depository regularly maintained by the United States Postal Service, postage prepaid, certified mail, return receipt requested, addressed to the party for whom it is intended at its address(es) set forth in Section 1.1.”

The court noted that Section 1.1 specified that notices were to be personally given to the tenant at each of its four office suites and the tenant's attorney. However, that section of the lease also required the owner to mail copies of the notices to the tenant's attorney and its main office outside of the office building. The court agreed that the termination notice had not been properly sent and/or given in the manner required by those sections.

However, the owner argued that the language regarding the manner and place of delivery was neither mandatory nor exclusive. It asserted that nowhere did the lease say that notices had to be given only in that manner and to the stated addresses, only that it would be deemed given if sent in that manner to those addresses. “The language chosen speaks only of when a notice will be deemed to have been given,” according to the owner.

But the court pointed out that, even if the owner was right and the hand delivery of the notices was adequate, it was “uncontroverted that the notices to cure and terminate were not served upon the tenant's attorney, as per Section 1.1 of the lease.” The lease provided for a manner of service of written notices and designated that address at which such notices were to be sent by mail. And even if the court found that the lease was ambiguous on the issue of delivery, it would have to construe the ambiguity in favor of the tenant and against the owner, “so as not to allow for abrupt termination of valuable commercial leases,” the court determined. The court concluded that the owner failed to establish that it properly served all the required predicate notices [Treeline 100-400 GCP LLC v. Computer Career Center, Inc., January 2011].

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