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Hundal of Middlesex v. Corbco, Incorporated

A-4724-00T3 (N.J. Super. App. Div. 2002) (Unpublished)

LEASES; RENEWAL— A letter offering to renew a lease, but only on altered terms, serves as a notice of non-renewal in a lease that has an automatic renewal provision.

A commercial lease contained an automatic renewal provision. It specified that “it would be automatically renewed on the same terms and conditions unless either of the parties wrote to the other 120 days before the end of the lease term advising that it did not wish to have the lease renewed.” The tenant timely wrote to the landlord, saying that “it only desired to renew the lease if certain of the original terms were altered.” Despite the tenant renewing that request several times, the landlord never responded. After the initial term of the lease ended, the tenant fell behind in rental payments and, by agreement in the course of an eviction action, vacated the premises. The landlord then sought to recover rent and late charges from the date of eviction through the date that the premises were re-let to a new tenant. The lower court “determined that the letter from the tenant to the landlord was in fact a notice to the landlord that the tenant was not willing to permit the lease to be renewed on the same terms and conditions as the original lease.” According to the Appellate Division, “at best, the letter from the tenant was an offer to renew the lease, but only on the altered terms that the tenant found to be acceptable.” Consequently, “it was a notice of non-renewal sufficient to relieve the tenant of the obligation to continue in the tenancy relationship for the full three-year [renewal] period.” In addition, the Court concluded that “the execution of [a] tenant estoppel certificate did not alter the fact that the tenant had given timely notice of the non-renewal.”

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