In this case, the issue is whether the sublessee of a cooperative apartment validly exercised an option to purchasе contained in the sublease agreement. Appellants Heinz J. Lippman and Gertrude Wengraf sublet a cooperative apartment on Park Avenue in New York City to Solomon Kaplan, M.D., William J. Shapiro, M.D., Martin Goldstein, M.D., P. C. in 1976. The name of this corporation was changed by certificate of amendment to Solomon Kaplan, M.D., William J. Shapiro, M.D., Martin Goldstein, M.D., Elliott Gellman, M.D., P. C., and it is this corporation that is the respondent in this appeal. Paragraph 18 of the sublease agreement gave the sublessee corporation and/or its shareholders thе option to purchase the sublessors’ shares in the cooperative apartment for $30,000, provided the option was exercised "by written notice delivered to the Lessors not later than six (6) months prior to the termination of the option term hereunder.”
By letter dated July 24, 1984, Stanley Stern, attorney for the sublessee corporation, notified Henry H. Sternberg, the attorney who had previously represented thе appellant sublessors in this matter, of the corporation’s intent to exercise the option to purchase pursuant to the sublеase agreement. Three
There is nо real dispute here as to whether Lippman and Wengraf had actual notice that the subtenant was seeking to exercise the purchase option. It appears that the sublessors chose to ignore the subtenant’s efforts to exercise the option. The sublessors attempt to shift the burden of responsibility by arguing that exercise of the option failed to comply with the Statute of Frauds (General Obligations Law § 5-703). They claim that the exercise of the option violated the Statute of Frauds because the attorney for the subtenant did not have the written authority from his client to exercise the option on its behalf. They argue that because the actual exercisе of an option to purchase an estate or interest in real property must comply with the Statute of Frauds, any effort by an agent on behalf of the principal to exercise such an option must be accompanied by a separate written authorization from the principal.
We disagree, and in so doing, agree with the Appellate Division holding in Stark v Fry (
"An оption contract is an agreement to hold an offer open; it confers upon the optionee, for consideration paid, the right to purchase at a later date” (Leonard v Ickovic,
Because an option to purchase an interest in real property is in effect a conditional contract for a future conveyance of land, a contract that creates such an option is within the Statute of Frauds (see, 2 Corbin, Contracts §§ 417, 418 [1950]). This sort of an agreement constitutes the creation and grant of an interest in real property, and must be in writing to be valid under the Statute (see, Casolo v Nardella,
In the case now before us, the Statute of Frauds was satisfied because the option agreement was contained in a written sublease agreement that was signed by thе party to be charged, here, the sublessors (see, Crocker v Page,
In this case, the option agreement required that the subtenant give the sublessors written notice not later than six months prior to the expiration of the option term. Thus, the real issue in this case is whether the sublessors must convey their intеrest in the cooperative shares pursuant to the sublease agreement where the written notice required by the agreement wаs sent not to them, but to the attorney who had represented them in this matter. We hold that under the facts of this case, where the sublessors had аctual notice within the specified time period that the subtenant intended to exercise the purchase option contained in the agreement, that the sublessors will be held to their agreement.
Chief Judge Wachtler and Judges Simons, Kaye, Alexander, Titone, Hancock, Jr., and Bellacosa concur in Per Curiam opinion.
Order affirmed, with costs.
Notes
We would further note that the sublessors’ Statute of Frauds argument was doomed from the outset because it demonstrates an essential misunderstanding of the way in which the statute operates. The Statute of Frauds requires that a contract for the sale or long-term lease of property be signed by the party to be charged, i.e., the party against whom enforcement of the contract is sought. The absence of a signature by the party seeking to enforce thе agreement is without legal significance. In this case, the sublessors are the party to be charged, and the obligation that they are seeking to avoid is the purchase option contained in the sublease agreement. Because the sublessors signed the sublease аgreement, the Statute of Frauds has been fully satisfied. Whether the subtenant’s exercise of the option complied with the Statute of Frauds is thus irrelevant under the facts of this case because the subtenant is not the party against whom enforcement of the agreement is sought.