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 That statute was, however, repealed four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.
_____________________________________________________________________________
=========== Question: =========== 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.
=========== Reply:
=========== 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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