By Jeffrey L. Goldman
Belkin, Burden, Wenig & Goldman LLP
A recent decision by the Appellate Terms, First Department has given owners a second chance
where a renewal lease offer is inadvertently made. The Rent Stabilization Code requires
owners to offer rent stabilized tenants a renewal lease between 90 and 150 days prior to the
expiration of the lease. Unlike the law governing contracts in which an offer can be revoked
prior to acceptance, the courts have held that a renewal lease offer is binding once offered and
cannot be revoked during the 60 day window period even if an owner comes to learn that the
tenant is not occupying the apartment as his or her primary residence.
In FS 41-45 Tiemann Place LLC v. Estrella, the Appellate Term reversed the lower court and
denied a tenant’s motion for summary judgment dismissing the petition where the owner
claimed to have mistakenly or inadvertently mailed to a tenant a renewal lease offer after
which the landlord promptly withdrew the offer and subsequently and timely served a
combined notice of non-renewal and termination based upon non-primary residence.
Although the offer was mistaken or inadvertent based upon a “back office” employee of
an owner’s “large and complex” clerical operation, the court noted that a renewal of a rent
stabilized lease “should not be reduced to a matter of gamesmanship, seduction and artifice or
be made to hinge on ‘gotcha’ litigation tactics”.
Whether a renewal lease offer is inadvertently made before an owner intends upon serving
a non-renewal notice, or even after a non-renewal notice is served, speak with legal counsel
immediately so that a prompt determination can be made as to how best to proceed. In some
instances, the error can be rectified without the owner forfeiting its ability to terminate the
tenancy and recover possession.