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Commercial lease termination

Commercial Lease Renewal Deadlines: Strict Compliance

If there was any question, tenants looking to renew commercial leases

should pay close attention to deadlines. 

On January 31, 2006, Maryland's Court of Special

Appeals in Chesapeake Bank of Maryland v. Munro Muffler/Brake, Inc. issued an opinion 

holding that a tenant who admittedly failed to give timely notice of an

option for lease extension lost the option.  The tenant, Munro, was required

under the unambiguous terms of the lease to give notice at least ninety days

prior to the end of the lease.  Unfortunately, due to Munro's admitted error, notice

was not provided until just over sixty days prior to the end of the

lease term.  The landlord, Chesapeake Bank, refused the extension.  The Court of 

Special Appeals noted the clear terms agreed to by the parties.

The Court rejected arguments that equity (basic principles of

fairness) or a cure provision of the lease helped the tenant.   Munro argued that the

default provisions of the lease allowed it to cure within twenty days.  That twenty day

time period would, it argued, allow the option notice to be made timely.  The Court,

rejecting the argument, noted that, "if failure to satisfy the notice

provision is a default that can be cured, the provision [regarding notice renewal by 

an agreed deadline] itself is rendered meaningless."   Opinion at p. 32.  

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