The Law

Church Evicts Dance Studio by Ron Davis The owner of a dance studio that occupies space at a Brooklyn, NY, shopping center had better start looking for new premises for her business. That’s because the principals of the shopping center have persuaded a New York appellate court that the dance-studio owner has failed in her efforts to renew her lease for another five-year term. The dance studio had operated at the shopping center under joint ownership by the studio owner and a partner for more than 15 years, until 2005. That’s when the studio owner sold her interest in the facility. The new owners, who began management of a church at the shopping center, required the dance-studio owner to begin delivering rental payments to a mail lockbox just outside the church entrance. The tenant’s lease also specified that she must, at the conclusion of the lease term, renew the lease “by registered or certified mail addressed to Owner….” She said she did as instructed and delivered a written statement four months prior to the end of her lease term that she wanted to exercise her right to a new five-year extension of the lease. But the new owners of the shopping center deny that they received that request. When the tenant’s lease expired, she received a letter from a lawyer of the center’s owners that stated: “I strongly advise you not to sign any contracts with potential customers for the fall term for reasons that will become readily apparently to you shortly.” A few weeks after that, the dance-studio tenant learned that she and her business would be evicted. She sued the center’s new owners, alleging that the lease provided that, at the expiration of the original lease term, she had the right, upon notice to her landlords, to renew for another five-year term. She also noted that she had recently spent about $10,000 refurbishing the interior of her premises in anticipation of renewing her lease. In response, the center’s owners pointed out that the lease required the tenant to serve notice of lease renewal by registered or certified mail and addressed to them. The tenant admits that notice was not served in that manner. The owners also explained that the rent the dance studio pays is far below market value. For that reason, they added, they should not, “under principles of equity,” be subjected to a grossly inadequate rent for the next five years. The New York appellate court hearing the case, in ruling in favor of the center’s owners, explained, “Issues of fact are raised as to whether the notice claimed to be put in [the owners’] mailbox was actually sent and received…. Thus the court cannot grant relief since there is a material triable issue of fact raised as to whether [the tenant] ever provided written notice of her election to exercise the renewal option in the lease…. Consequently, the tenant has failed to satisfy the burden of demonstrating a likelihood of ultimate success on the merits.” (Dance Showcase II v. Harvestime Tabernacle, Inc., 2011 WL 907775 [N.Y. Sup.]) Decision: March 2011 Published: April 2011