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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 113383
Experience:  Licensed attorney practicing landlord-tenant, land use and other real estate law and litigation.
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I own/rent a commercial premise. The existing tenant took possession

Customer Question

I own/rent a commercial premise. The existing tenant took possession in 2000 with a 10 year lease that contained an option to renew. In 2004 the tenant fell into the arrears for most of the year. At one point the tenant arbitrarily decided to pay 1/2 of the lease amount and claimed he was only using 1/2 of the leased premise. In 2006 the Tenant brought on an investor who offered to repay the arrears. On Jan. 31, 2006 a lease modification was prepared with the tenant paying his 1/2 and the investor paying the other 1/2 and each month repaying the arrears. This modification was for 5 years but included the original lease and all of its language. At the end of the 2006 modification, Jan. 31, 2011, the tenant wanted to rent for another 5 years or until Jan. 31, 2016. A lease modification was prepared and it referred to the original 2000 lease that contained the original lease option to renew.
The option to renew was generic and offered the tenant the right to renew only subject to "rent."
6 months prior to Jan. 31, 2015, the tenant wrote they would wanted to use the renew option to continue. I wrote to them repeatedly in an effort to arrive at the new "rent" value. The tenant wrote back to me and rejected my offer and countered with lower "rent."
I advised the tenant my bank would not accept the lower rent and I would be forced to sell. I notified the tenant of a potential purchaser and that the potential purchaser wanted to view the interior. The tenant agreed and allowed me to show.
I notified the tenant that the lease was expiring and then that the lease did expire.
After that, the tenant had his attorney write to me that the tenant's position is that they renewed and I could not proceed with a sale.
I need advice on my position. Can the tenant simply renew, even though I had granted him 2 extensions/modifications and without deciding on the "rent" values.
Thank you
Gus Hansch
Submitted: 10 months ago.
Category: Real Estate Law
Expert:  Law Educator, Esq. replied 10 months ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
If there was no meeting of the minds in exercising the option to renew, since rent could not be agreed upon, then the tenant did not exercise a valid renewal. They may have offered to renew, but without a valid rent amount there was no valid renewal. You need to inform the tenant that no valid renewal was ever exercised, since renewal was subject to rent and attach proof of the correspondence and as no rent was agreed upon, there is no renewal. You can offer to them to accept the rent you propose for renewal or you can seek to tell them the lease is terminated and you are going to seek to evict based on their non renewal for not agreeing to a rent price.
They cannot claim renewal without an agreement to the amount of rent due.