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Img10.png Real Estate Law Questions

 

Negotiating Commercial Leases

 

Squeezing Extra Profit From Commercial Leases If you negotiate your office rental agreement effectively, you’ll save the cost of relocating every time your company changes size or direction. For that matter, you can use your lease to generate extra income.

Question: Tenant leases commercial property. The lease is 5 years w/option to renew for another 5 years. Tenant exercises 5 year option. After 5 year option has past tenant and landlord say nothing about expiration of lease. Tenant continues to pay rent. Is it now a month to month lease at that point?

Answer:   MONTH-TO MONTH LEASE that can be terminated by either party on one calendar month's notice.

Legal Reasoning:

The NJ Superior Court at 178 NJ Super 411 stated: It is clear that after the termination of the lease on October 31, 1976 the tenant's status became that of a month-to-month tenant on the same terms as set forth in the lease. N.J.S.A. 46:8-10. And see Heyman v. Bishop, 15 N.J.Super. 266, 269, 83 A.2d 344 (App.Div.1951). There is no statute prescribing the requirements of a tenant's notice to the landlord of its intention to terminate a month-to-month tenancy.[FN1] Thus, the common-law rule requiring at least one month's notice to quit is applicable. See, e. g., Burns v. West America Corp., 137 N.J.Super. 442, 349 A.2d 142 (Cty.Ct.1975). And see Hertzberg v. Siegel, 8 N.J.Super. 226, 73 A.2d 840 (App.Div.1950); Hanks v. Workmaster, 75 N.J.L., 73-74, 66 A. 1097 (Sup.Ct.1907); Steffens v. Earl, 40 N.J.L. 128, 134 (Sup.Ct.1878). And although our courts have not apparently been called upon to address the question, a recognized corollary of the common-law rule is the proposition that if the notice is given during the same month in which the quit is to take place, it will be effective as of the end of the month following the month in which the short notice was given. See 3A Thompson, Real Property, s 1355 at 673-674 (1981). Cf. Worthington v. Moreland Truck Co., 140 Wash. 528, 250 P. 30 (Sup.Ct.1926).

FN1. L. 1923, c. 72, required three months' notice in writing for termination of a month-to-month tenancy. That statute was, however, repealed four years later by L. 1927, c. 97, and there is now no statutory provision at all governing the tenant's notice to quit. As to the short-lived three-month provision, see McGeary v. Hyde, 3 N.J.Misc. 115, 127 A. 336 (Sup.Ct.1925).



We are, furthermore, satisfied that the common-law rule which refers the effective date of the late notice of vacation to the end of the next ensuing monthly period is eminently sound as a matter of public policy, common sense and customary practice. We do not believe that any legitimate interest would be served by penalizing a month-to-month tenant for his late notice by subjecting him to indefinite liability for rent in the event of the landlord's inability to relet.[FN2] Certainly, such a penalty is beyond the legitimate expectations of the landlord who must be assumed to know that his month-to-month tenant can leave at any time without liability, provided one full month's notice is given. Clearly, the requirement of a month's notice is intended to afford the landlord a reasonable opportunity to secure another tenant. See e. g., Pennsylvania R. R. Co. v. L. Albert & Son, Inc., 26 N.J.Super. 508, 511, 98 A.2d 323 (App.Div.), certif. den., 13 N.J. 361, 99 A.2d 675 (1953). We are persuaded that that purpose is fully satisfied by the rule of the deferred efficacy of the notice since the landlord thereby is afforded not only a full month in which to find another tenant but, in addition thereto, that portion of the prior month remaining after the date of the notice. Consequently, we hold that when the tenant gave notice to quit on November 16, 1976, it was obligated to pay rent in the absence of an interim reletting only through December 31, 1976.

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Question:
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Category: Construction Law
Location: NJ
Subject:  Property Line Survey vs. Plot Plan

We had a property survery performed by a professional suvery company(my neighbor was home when the company came to survey our property, and was in complete agreement with what he found at that time), went to the township to find out about coding/zoning laws, purchased a zoning permit to erect a six foot privacy fence on once side of our property, keeping the fence within an inch or more of the property line.  Our neighbor is now saying 'something doesn't look right', and has hired a survey company of their own.  Their survey company came and performed the survey of my neighbor's yard and came up with the same marker points.  My neighbor continues to insist something doesn't look right, and says the surveys don't match his plot plans.  The survey company measured 3 properties on either side of my neighbor, and said they had to go back to their office to read the results.  Have you ever heard of such a situation?  Is it possible for property lines to 'change', as my neighbor is implying?  Thanks so much.


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Reply:
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Category: Construction Law
Location: NJ
Subject:  Re: Property Line Survey vs. Plot Plan

There can be differences in surveys. Most surveys have a starting point that is a known location. If the measurements start from different points, there can be slight differences. That is why I recommend that markers are placed by the surveyor.

I hope this helps!

Ron Cappuccio

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Subject: Negotiating lease

Question: How can we negotiating for new lease with an option to renew to replace an existing lease with no option.(lease ending in 1 year and 6 months) 

Answer: First, investigate the market. What is your Best Available Alternative? If other rates are better, consider discussing this fact with your landlord. Specifically ask your landlord for a new lease now. Many times a landlord would like to lock in a good tenant and not worry about finding a new tenant and performing the required fitup. If your current lease is on favorable terms, you may want to delay asking the landlord so far in advance. The landlord may just assume you want to stay and may not be thinking about your moving.

Also, definitely check with your lawyer for any renewal terms or other items that affect the lease.

I hope this helps!

Ron Cappuccio
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Virtualex.com Ronald J. Cappuccio, J.D., LL.M.(Tax) 1800 Chapel Avenue West Suite 128 Cherry Hill, NJ 08002 Phone:(856) 665-2121      Fax: (856) 665-9005 Email: ron@taxesq.com

 
 
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