Renew or Renege?
by Ron Davis
Did a Fairfield, CT, shopping center owner agree to renew a tenantís 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 Connecticutís courts have ruled can only be determined by a trial.
The owners of the shopping centerĖLake HillsĖhad 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 centerís owners. The tenant said he granted that concession to assure the lease renewal.
The shopping centerís owners replied that they really didnít 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 centerís personnel to renew the lease.
A Connecticut court, in deciding that only a trial can determine which party prevails, set these guidelines:
ďThe 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 tenantís reliance was reasonable and whether the alleged statement by the centerís representative was sufficiently definite to constitute a promise.Ē (Sprouts for Better Living v. Lake Hills Shopping Center, 2005 WL 2008871 [Conn.Super.])
Decision: July 2005
Published: August 2005