Tenant Took Too Long to Send Renewal Notice

What Happened: In 2016, a grocery store tenant tried to renew the 15-year lease it signed in 1999, but the landlord claimed that it was too late because the six-month renewal window had already expired. The issue: When did the lease actually begin? The landlord claimed that it commenced when the tenant opened for business in 2001; the tenant claimed it commenced when the sides re-executed the lease as part of a construction settlement dispute in 2007.

Decision: The Pennsylvania court sided with the landlord.  

Reasoning: The court cited two key provisions in finding that the lease began when the tenant took possession and opened for business in 2001:

• The definition of “Commencement Date” as the date on which Landlord delivers the Premises to Tenant; and
• The clause stating that “by opening the Premises for business, Tenant shall be deemed to have (a) accepted the Premises, (b) acknowledged that the Premises are ready and suitable for occupancy hereunder . . . (e) acknowledged that the Commencement Date has occurred.”

As a result, the renewal notice the tenant sent in 2016 was untimely and the landlord could reject it.

• Walnut St. Supermarkets, LLC v. Trs. of the Univ. of Pa.: 2019 Pa. Super. Unpub. LEXIS 4324, 2019 WL 6137808