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Untracht v. Miriad Ltd.

A-6392-02T2 (N.J. Super. App. Div. 2004) (Unpublished)

LEASES; LICENSES—A lease must contain a description of the subject property and a license agreement need not; consequently, a license agreement without a premises description can not be an amendment to an earlier lease.

In 1985, a tenant leased part of a building for use as an adult book/video store. The lease allocated one-half of the parking spaces in front of the building to the tenant. In 1996, the parties signed a successor twenty-five year lease with an identical parking provision. In 1997 and 1998, for an extra monthly fee, the tenant was given successive six-month licenses for the use of some additional parking spaces not included in the original lease. The location of that additional parking was unspecified. The tenant paid the extra fee for three years and then they stopped. A new tenant leased part of the building and objected to parking by the original tenant’s customer in front of the new tenant’s portion of the building where the original tenant claimed the additional parking spots were located. After the parking license payments stopped, the landlord sued to evict the original tenant for its failure to pay the additional parking fee. No claim was asserted that the tenant failed to pay the rent due under the 1996 lease. The lower court granted possession of the property to the landlord.

On appeal, the tenant argued that its lease of the premises was separate from any agreement regarding additional parking, and because the landlord had failed to demonstrate any breach of the lease, it could not regain possession of the premises simply because the tenant refused to pay for the parking. The tenant also argued that the parole evidence rule precluded a finding that the agreement for additional parking amended the lease.

The Appellate Division agreed with the tenant. It held that the only writing dealing with the additional parking was in the two six-month licenses. A license does not create a leasehold interest. N.J.S.A. 25:1-12 provides that a transaction intended to create a lease of real estate for more than three years is not enforceable unless the leased premises, the term of the lease, and the identity of the lessor and the lessee are established in a writing signed by the party against whom enforcement is sought. In the alternative, the term of the lease, the description of the leased premises, and the identity of the lessor and the lessee can be proven by clear and convincing evidence. Here, the licenses did not identify the location of the parking. The term’s duration was limited. The parking license didn’t identify the tenant, and was not signed. Also, no lease terms were established at trial by clear and convincing evidence. Consequently, the Court found that the licenses could not constitute the writing required by the statute in order to establish a modification of the 1996 lease and it reversed the lower court’s grant of possession to the landlord.

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