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ICSC Legal Database - CasesMonday, February 22, 1999 05:01 PM

Case Index:
00145

Citation:
Bank of N.Y. v. Ulster Heights Properties, 114 A.D.2d 4 1, 494 N.Y.S.2d 345 (1985).

Issue:
Whether a tenant's exercise of option to renew a sublease was binding upon landlord, although renewal notice

was late, where late notice was the result of a mistake based upon ambiguity in the sublease concerning its

commencement date.

Facts:
In this case, the initial term of the main lease was for 50 years with three renewal terms of 20 years each. The

sublease was for an initial term of 15 years with a right of renewal for 19 terms of five years each. The term of

the main lease was to commen ce by a specific date, October 1, 1967. The commencement date of the

sublease was tied to the issuance of a certificate of occupancy and the term was to end on December 31, 15

years after the issuance of the certificate of occupancy. The renewal option wa s to be exercised no less than 6

months and no more than 15 months before the lease expired. The plaintiff bank-sublessee relied on a

certificate of occupancy issued in June 1969 and, therefore, believed that the sublease terminated in December

1984. The Bank gave

written notice in April 1984, of its election to extend the terms of the sublease for 5 years. Defendant informed

the Bank that the sublease had expired in December 1983 and rejected the notice as untimely, but offered to

renegotiate a new lease . Defendant claimed the certificate of occupancy, which triggered the commencement

date of the sublease, was one issued in June 1968 for the main building which housed the Bank. The Supreme

Court found for the Bank in its specific performance action. Land lord appealed.

Holding:
Affirmed. It is a fundamental rule that equity will intervene to prevent a forfeiture where a delay in giving notice of

renewal results from accident, fraud, surprise or mistake and the lessor is not prejudiced by a change in

position. The Bank's late ren ewal notice was the result of a mistake based upon the ambiguity in the sublease

concerning its commencement date.

Publication:
Legal Update

Date:
Winter 1985

Classification 1:
Landlord and Tenant

Classification 2:

Classification 3:

00145 - Legal Update - Winter 1985