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Auto Renewal Commercial Lease

Discussion in 'Commercial Landlord & Tenant Issues' started by flanagen, Jul 21, 2017.

  1. flanagen

    flanagen Law Topic Starter New Member

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    Hi,

    I currently have been leasing a commercial real estate property for a little over a year. My initial 1 year lease agreement expired about 3 months ago (at least I thought it did). I recently notified the landlord that I was moving and he stated that I would be sewed for the remainder of the lease. I told him my lease expired and he told me that it auto renewed. I do not see a clause anywhere in this lease that it "auto renewed". I was however suppose to give a 60 days notice in which i did not. If someone who is familiar with PA law shed some light on this for me, I would be grateful,

    Thank you in advance

    This is the only clause that I can see that relevant to renewing:

    OPTION TO RENEW:
    A. At the end of the initial term,Tenant shall have the option to renew the Lease for an additional term equal to the initial term pursuant to the terms and condition contained herein. If Tenant or landlord does not wish to renew the lease, written notice must be given to the other party at least 60 days before the end of the term (including any exercised renewal or extension thereof) to terminate the lease.
     
  2. hrforme

    hrforme Active Member

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    This language has specific timing that you did not follow...

    "renew ..for an additional term equal to the initial term" -- what is the "initial term" defined as? I am suspecting 1 year. I suspect he is arguing that you autorenewed by not giving 60 days notice at the end of the initial year (term) and by continuing to pay rent for the 3 months or so after the end of the term into the next term. You didn't have an option to go month to month in the lease. By not leaving at the end of the initial term you might be stuck into another equal term or owe the difference if you break the lease. I suggest taking the lease to a local attorney to see if there is any other way to get out of it or if there are any local/state laws that prohibit this language.
     
  3. mightymoose

    mightymoose Moderator

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    I agree. It appears you began a new one year term.
    If you leave early he won't be able to sue you for the unpaid rent for the remaining 9 months, but can sue for costs and lost rent until a new tenant is found (which could ultimately be 9 months).
    The landlord must make an effort to lead to a new tenant to minimize the loss.
    Give your 60 day notice so the landlord can begin looking for a new tenant now. Talk with him and try to negotiate a settlement that will satisfy his loss and release your from the lease. Put this agreement in writing.
     
    hrforme likes this.
  4. zddoodah

    zddoodah Well-Known Member

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    I disagree. That's exactly what happens when a commercial tenant breaches by leaving early. The landlord likely has a duty to mitigate by trying to find a new tenant. However, if the landlord cannot mitigate through reasonable measures, then he/she/it is entitled to damages equal to the agreed rent through the end of the lease term. I agree, however, that trying to negotiate some sort of mutual agreement is probably in both parties' interests.

    To the OP: In my view, you are in a tough situation. Had you read your lease carefully, this probably wouldn't have happened. Auto-renew provisions are common in commercial leases, but I think the language quoted is at least a little ambiguous. I suggest you take the lease to a local attorney for review and advice.
     

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