Monthly Archives: December 2017


Commercial leases often include options to renew or extend the term of the lease.  The option clauses also often contain time-sensitive or notice-specific provisions for the exercise of the option.  Needless to say, options to renew are a fertile source of litigation.

Our examination starts with the seminal case of J.N.A. Realty Corp. v. Cross Bay Chelsea, Inc., decided by our Court of Appeals in 1977; followed by J.N.A. progeny and decisions on other variations of option to renew disputes.

J.N.A. Realty Corp. v. Cross Bay Chelsea, Inc., 42 N.Y.2d 392, 397 N.Y.S.2d 958 (Court of Appeals, June 16, 1977)

The Court of Appeals summarized the prior proceedings:

  1. N. A. Realty Corp., the owner of a building in Howard Beach, commenced this proceeding to recover possession of the premises claiming that the lease has expired. The lease grants the tenant, Cross Bay Chelsea, Inc., an option to renew and although the notice was sent, through negligence or inadvertence, it was not sent within the time prescribed in the lease. The landlord seeks to enforce the letter of the agreement. The tenant asks for equity to relieve it from a forfeiture.

The Civil Court, after a trial, held that the tenant was entitled to equitable relief. The Appellate Term affirmed, without opinion, but the Appellate Division, after granting leave, reversed and granted the petition[.]

Continue reading