Lease Renewal Option
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MCM leased premises from Rushing on which to operate a restaurant. The lease term was for two years: January 1, 1997, to December 31, 1998. The lease agreement stated in part that MCM "shall have a continuing option for a period of eight (8) consecutive years to renew this lease." MCM did nothing to renew the lease before it expired but, after it expired on December 31, 1998, made monthly rent payments in the same amount as before in January and February 1999. Then, on February 28, 1999, MCM notified Rushing by mail that it wanted to exercise its option to renew the lease. Rushing refused to renew the lease, contending that MCM had forfeited the option by not exercising it prior to the expiration of the lease agreement in which the option had been given. Discuss fully whether MCM still had a right to exercise the lease renewal option as late as February 28, 1999.
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Solution Summary
This solution discusses if MCM has a right to exercise the lease renewal as an option. A comprehensive discussion including all pertinent legal elements is provided.
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One of the problems in this situation is that we don't know the full wording of the lease agreement, and we are only being given bits and pieces, in this scenario. The lessor (Rushing) entered into a lease agreement with the tenant, who is MCM. The lease was for a two-year period, which was fulfilled without incident by both parties. The lease agreement stated that the tenant could continue to occupy the premises for eight consecutive years after the lease had ...
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