The Law

Renew or Renege? by Ron Davis Did a Fairfield, CT, shopping center owner agree to renew a tenant’s lease, only to renege later? Or did the tenant surrender any rights to a new lease after falling behind in rental payments? Those are questions that Connecticut’s courts have ruled can only be determined by a trial. The owners of the shopping center–Lake Hills–had hoped to avoid a trial, arguing that the tenant, a health-food retailer, had violated the lease by failing to pay rent during an eight-month period. The tenant pointed out, however, that when he finally paid the back rent he owed, a representative of the shopping center informed him that his lease would be renewed when it expired. Moreover, the tenant said he agreed to relinquish part of his leased premises to accommodate the wishes of the shopping center’s owners. The tenant said he granted that concession to assure the lease renewal. The shopping center’s owners replied that they really didn’t intend to renew the lease. The nonpayment of rent, they added, was a clear violation of the lease, thus legally allowing them to terminate the agreement. Finally, the owners noted that no record exists of any concessions by any of the center’s personnel to renew the lease. A Connecticut court, in deciding that only a trial can determine which party prevails, set these guidelines: “The tenant must prove the existence of a clear and definite promise [to renew the lease]. The promise need not be the equivalent of an offer to enter into a contract. The promise must reflect a present intention to commit, and cannot be a mere expression of hope.... A trier of fact could find that the tenant relied upon the promise to enter into a new lease when he voluntarily relinquished half his leased space. Issues of credibility are reserved for the trier of fact, including whether the tenant’s reliance was reasonable and whether the alleged statement by the center’s representative was sufficiently definite to constitute a promise.” (Sprouts for Better Living v. Lake Hills Shopping Center, 2005 WL 2008871 [Conn.Super.]) Decision: July 2005 Published: August 2005