The August 25 Ruminations posting about the right of a tenant to exercise renewal rights or non-disturbance rights even when it is in default engendered a lot of comment, both in on this Rumination site and in a number of Linked-In Group discussions. So, in a departure from past practice, I offer this “supplementary” posting with a generic form of compromise to “Get The Deal Done.” I’m not advocating one position or another with respect to any negotiation. In my role as an attorney, I represent clients, not myself. Attorneys advocate for their client’s desired outcomes. Attorneys are “who their clients are” when engaged as attorneys, though not in their public or private roles.
Ruminate over this:
If, on the day Tenant sends its Renewal Notice to Landlord, Tenant has not paid all Base Rent and Additional Rent that was then due and payable, Landlord shall have the right to negate the Tenant’s election to extend the then Lease Term by sending Tenant the following notice (“Option Negation Notice”): “On the day you sent your Renewal Notice you were delinquent in the payment of Base Rent or Additional Rent, specifically as listed on the attached schedule. If we do not receive your delinquent payment(s), subject to collection, within ten (10) days after you receive or refuse delivery of this notice, TIME BEING OF THE ESSENCE, your election to extend the then Lease Term shall be negated and shall have no force or effect and the Lease Term shall end as if you had not exercised that option to extend it.” If Tenant was, in fact, delinquent in the payment of any item of Base Rent or Additional Rent listed on the schedule, and Landlord does not receive that or those delinquent payments, in collectable funds, within ten (10) days after the earlier of when Tenant received or refused delivery of the Option Negation Notice, TIME BEING OF THE ESSENCE, Tenant’s election to extend the then Lease Term shall be negated and shall have no force or effect and the Lease Term shall end as if Tenant had not exercised its Leased Term extension option. If Landlord does not send an Option Negation Notice within ten (10) days after the earlier of when it receives or refuses delivery of Tenant’s Renewal Notice, TIME BEING OF THE ESSENCE, Landlord irrevocably waives its right to negate Tenant’s election to extend the Lease Term based on Tenant’s failure, as of the date Tenant sent its Renewal Notice, to have paid all Base Rent and Additional Rent payable through that date.
The sample is wordy, but mostly because it uses generic language in place of what would be defined terms in the renewal provision itself. The concepts in it can be extended to non-monetary defaults and to SNDAs.