August 22, 2016: This Q&A post originally appeared on the LandlordsNY blog, where Michelle Maratto Itkowitz is the "Legal Expert".
Hi, Michelle here. I am the LandlordsNY “Legal Expert” (you can see my profile on the expert’s page). My goal is to post in the blog all of the questions I get from LandlordsNY members (keeping the member anonymous) and my answers thereto, when I think that such questions and answers would be of interest to other people. Let me know if this is helpful. These questions are excellent, keep them coming.
Question: “Do you have to honor a lease renewal offer already sent to a free-market tenant? I have several NON-Rent-Stabilized tenants who are apparently so distraught over recent changes to the building’s music room that they are threatening to withhold rent. I have already sent out several lease renewals to these tenants and now I wish I hadn’t.”
An offer to enter into a contract, when not given for a consideration, can be revoked at any time before acceptance. Evans v. 2168 Broadway Corporation, 281 N.Y. 34 (1939).
In Globerman v. Grand Central Parkway Gardens, 115 N.Y.S.2d 757 (Sup. Ct. NY Cty. 1952), the court stated that:
“[L]andlords have the absolute right, under the law, to choose their tenants. They possess this right, not only with respect to original tenancies, but also with respect to any renewals or extensions thereof. The landlords, being under no legal obligation to renew or to extend the plaintiffs’ leases, did not commit any actionable wrong because they made an offer to renew, conditioned upon the acceptance by the plaintiffs of a demand for an alleged unlawful rental increase. The rejection of the offer left the parties in the same position as if the offer had never been made.”
So yes, you, you can revoke the offers to renew. You should do so immediately and in writing – clearly and unequivocally referring to the lease renewals and saying that they are revoked.
I would NOT refer at all to the music room issue. You do not need a reason with a free-market tenant. So why argue about it? Although I like to follow that comment up by reminding landlords to make sure that their “non-reason” is not discriminatory – not based on the tenant’s inclusion in a protected class. People disgruntled over an out-of-tune piano, fortunately, are not a protected class.
Then have your lawyer follow up quickly with thirty day notices of termination pursuant to Real Property Law § 232-a, which is the predicate notice you would need for a summary holdover proceeding. I assume that you believe that there are new potential tenants out there who will like the new music room and who will pay the rent you hope to get.
Thank you for this question. Finally, I am obligated to say that this answer is for general informational purposes only, does not constitute legal advice, and does not create an attorney and client relationship between us or between you and LandlordsNY.
Let me know if you need anything else.
Michelle Maratto Itkowitz