In 221-06 Merrick Blvd. Associates, LLC v. Crescent Electric Acquisition Corporation, in a decision that came down on July 14, 2009, the Appellate Term for the Second, Eleventh, and Thirteenth Judicial Districts brought a new level of analysis to the age old question about tenants’ renewal options in commercial leases. While well established principles hold tenants strictly to the requirements for the exercise of the option, a line of authority permits equitable considerations to override the tenant’s indolence. Under this new authority, however, the court wanted to see substantiation of claims for improvements made in ostensible reference to the purported exercise of the renewal option. The court also insisted that exculpation for a defective notice of renewal would not come when the landlord promptly gave notice of the defect and insisted upon strict compliance with the lease.
The landlord was represented by Adam Leitman Bailey, William Geller, and Dov Treiman on the brief and Jeffrey R. Metz at oral argument, all of the firm of Adam Leitman Bailey, P.C.