J.N.A. Realty Corp. v. Cross Bay Chelsea, Inc.

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J.N.A. Realty Corp. v. Cross Bay Chelsea, Inc.
Court Court of Appeals of New York
Citation 42 N.Y.2d 392
366 N.E.2d 1313
397 N.Y.S.2d 958 (1977)
Date decided 1977

Facts

Plaintiff owned a building which it leased to defendant. The lease granted the tenants an option to renew, as long as the notification was in writing six months prior to the last day of the term of the lease that the tenant desires such renewal. Through negligence the renewal was not sent within the time prescribed in the lease. The landlord seeks to enforce the letter, and the tenant asks for equity to relieve it from forfeiture, because they had put a substantial amount of money into the premises.


Procedural History

The civil court held that the tenant was entitled to equitable relief, and the appellate term affirmed, and the appellate division reversed and granted the petition.


Issues

Whether because the tenant will suffer a forfeiture if the landlord enforces the letter of the agreement, the court should grant equity relief when the forfeiture is due to the tenant’s own negligence.


Holding/Decision

Because the default of the option results in a forfeiture, the settled principle of law that a notice exercising an option is ineffective if it is not given within the time specified is not able to resolve the situation. Thus the tenant is entitled to equitable relief if there is no prejudice to the landlord.


Dissent

Economic detriment and not causing the landlord prejudice does not suffice that the only exuse for the failure to exercise the option contract was carelessness, and this should follow the well-settled doctrine.