11 Mass. App. Ct. 754 | Mass. App. Ct. | 1981
The plaintiff Herbert G. Ingram (Ingram) and his partners, doing business as 340-390 Main Street Associates, appeal from a judgment of the Superior Court dismiss
In January, 1975, the lessor Ingram and the lessee Sonitrol entered into a lease commencing April 1,1975, and terminating April 1, 1978 (1975 lease). The lease in part granted Sonitrol the option to renew the lease on rooms 226-227 (option §2) for an additional period of ten years commencing April 1, 1978.
Under Massachusetts law a distinction is made between an option to renew and a tenant’s right to extend a lease. Shannon v. Jacobson, 262 Mass. 463, 465-466 (1928). An option to renew requires the execution “of a new lease . . . , or a formal extension of the existing lease, or something equivalent thereto.” Leavitt v. Maykel, 203 Mass. 506, 509 (1909). O’Brien v. Hurley, 325 Mass. 249, 251 (1950). In contrast, the extension of an existing lease does not contemplate the execution of a new lease but requires that the
Ingram contends that the option clause in the 1975 lease should be construed as an option to extend and that the letter dated January 2, 1978, from Sonitrol was timely notice and sufficient to extend the lease.
The language of the option clause as well as the evidence indicating that the parties were involved in negotiations for over one year persuades us that the parties intended to execute a new lease and did not intend to merely extend the 1975 lease. The record indicates that letters were exchanged between the parties as late as June, 1978, in an attempt to negotiate a new lease. Attached to an April 19, 1978, letter from Ingram to Wischnia was a copy of a “new lease” which Ingram indicated covered “all the points we discussed during our last meeting” and which Ingram conceded provided for a “slightly different” rental payment schedule than discussed. Further, the fact that the renewal clause included the phrase “option to renew” is at least some evidence of the intent of the parties to renew and not extend the lease. See Gibbs Realty & Inv. Corp. v. Carvel Stores
In the circumstances of this case Sonitrol became a tenant at will at the expiration of the 1975 lease and was, therefore, only required to give appropriate notice of its intention to vacate.
Additionally, Sonitrol contends that it is entitled to costs and expenses under Section XXV
We find no basis for Ingram’s contention that Sonitrol’s appeal of the lower court’s dismissal of its counterclaim under G. L. c. 93A was frivolous, warranting this court to award costs and interest under G. L. c. 211 A, § 15.
Since the parties are entitled to a declaration of their rights we vacate the judgment of dismissal. Judgment shall be entered declaring as follows: that the 1975 lease terminated as of April 1,1978; Sonitrol was a tenant at will after April 1, 1978, and as such was liable for unpaid rent for October, 1978; Sonitrol is entitled to the difference between the security deposit held by Ingram and the amount owed by Sonitrol
So ordered.
In its brief Sonitrol argues that it is entitled to relief under G. L. c. 93A, § 11, if this court concludes that the “option to renew” was exercised. In light of the conclusion in this case we need not reach this question.
In addition to option §2, the lease included three other renewal options. Option §2 provided: “Landlord hereby grants the tenant the option to renew the lease on rooms 226-227 starting April 1,1978 for an additional period of ten years. The terms and conditions of the option period shall be the same as the initial lease except that the rental will be $475.00 per month or $5700.00 annually plus any cost of living adjustment from December 31, 1974 through April 1, 1978. Tenant shall give landlord ninety day written notice of his intention to exercise said option and landlord will then compute the rental adjustment as a result of the cost of living period referred to and inform the tenant of the actual rental prior to the tenant taking the space for a renewal term in 1978.”
After the 1975 lease expired rental bills were sent monthly to Sonitrol.
Wischnia argues on appeal that he was not personally liable under the lease. We need not reach this issue due to the conclusion in this case.
An extension has been found where: after the original lease expired the tenant, without objection, paid the rent increase stipulated in the expired lease (Stone v. St. Louis Stamping Co., 155 Mass. 267, 271 [1892]); a lease provided for the automatic extension of the existing lease in the event the lessee did not give three months’ notice of termination (Dix v. Atkins, 130 Mass. 171, 172 [1881]); the option clause provided that “all the terms, covenants, conditions and agreements of this lease shall remain in full force and effect during the renewal term period” (Gibbs Realty & Inv. Corp. v. Carvel Stores Realty Corp., 351 Mass. 684, 685 [1967]); the phrase “right to an extension” was included in an option clause that set the rent increase for the extension period at no more than ten per cent of the rent for the final year of the existing lease (Mutual Paper Co. v. Hoague-Sprague Corp., 297 Mass. 294, 300 [1937]).
Ingram contends that the trial judge erroneously ruled that the letter dated January 2, 1978, was not effective notice as required under the lease. Under our analysis we need not decide whether the trial judge’s ruling was correct. Even if the letter was effective notice, the fact that there was no subsequent execution requires the conclusion that the option to renew was not exercised.
Section XXV of the 1975 lease provided:
“In the event that the services of an attorney shall be required to enforce the obligations of the Tenant or Landlord hereunder, whether or not this lease shall be terminated, Tenant or Landlord agrees to pay the reasonable costs and expenses thereby incurred by Landlord or Tenant.”
Ingram argued that relief was warranted under G. L. c. 211, § 10. The appropriate statutory provision applicable to appeals before the Appeals Court is G. L. c. 211A, § 15.