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Ballen v. Adamo

BER-C-390-07 (N.J. Super. Ch. Div. 2008) (Unpublished)

CONTRACTS; ATTORNEY REVIEW — Fax transmission is not akin to personal delivery or certified mail or the telegram called for by the standard attorney review period provision in broker-prepared real estate contracts and therefore, absent special circumstances, notices sent by fax are ineffective to terminate such agreements.

A lease contained a standard attorney review period provision which provided that if either the landlord or tenant elected to have an attorney review the agreement, that attorney could disapprove the lease if notice of the disapproval was sent within three business days by certified mail, by telegram, or by delivering it personally. Notice by telegram or certified letter would make the disapproval effective upon sending. Notice by personal delivery would be effective upon delivery.

The landlord, during the review period, objected to an option to purchase clause in the lease, and told his attorney to communicate disapproval of the lease. A fact issue arose concerning whether the landlord’s attorney sent timely notice. The tenant sued to enforce the lease, and the landlord defended that disapproval had been made appropriately.

The landlord argued that his attorney had faxed written disapproval to the tenant’s real estate broker on the evening of the last day, and submitted proofs to that effect. The tenant claimed that this disapproval had not been received until the fourth day and submitted its proofs. The lower court analyzed the lease’s three day attorney review provision and concluded that the fax transmission was not akin to personal delivery or certified mail or the telegram called for by the provision. It held that the law required strict compliance with the attorney review provision because personal delivery and certified mail provided not only a guarantee of timely notice, but also of actual receipt. The court further stated that to permit other modes of transmission, such as by fax, that do not provide assurance of receipt could lead to the types of dispute and litigation. In the instant matter, the Court observed that the landlord’s attorney allegedly sent the disapproval notice in the early evening of the day the attorney review period was to expire using a fax machine which did not mark the date and time of transmission, leading the tenant to dispute timely notice. Thus, the Court held that the lease was not terminated.

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