Why you need an attorney to review your commercial lease
It is best to have an attorney review your commercial lease before you sign and to consult with an attorney when any significant event occurs, such as when you plan not to renew your lease. An option clause usually states that you must inform the landlord a certain number of months before the end of the lease; otherwise, it will automatically renew.
This is what happened in the case of SOURCING UNLIMITED, INC.1 vs. CUMMINGS PROPERTIES, LLC. The tenant sent an email informing the landlord it would not renew. However, the lease stated that all communications must be in writing and could not be via email. When the lease ended, the tenant thought it had properly terminated its renewal option. The landlord disagreed, because the communication was by email, and stated that the option bound the tenant.
The twist was that the landlord acknowledged the email but stated that the tenant had to terminate correctly and that the email had been improper. The parties took it up to the appeals court to decide. Although most case law states that the contract controls, the appeals court took a commonsense approach. It stated that the landlord had acknowledged the email; therefore, proper notice had been given because all parties had notice.
At the end of the day, the tenant was successful but spent thousands fighting the case. If an attorney had reviewed the situation at the beginning, they would have told the tenant to take the same notice of non-renewal that had been emailed and mail it to the landlord. That would have solved the problem and saved the tenant thousands in legal fees—for the cost of a single stamp.
If you ever have a question about your commercial lease, please don’t hesitate to reach out; I can provide all types of guidance.