Renewal Notice Was Too Late

November 1, 2003

A lease's extension option had to be exercised by the tenant by mailing a written notice no later than 60 days before the lease expired. The deadline to exercise the extension option fell on Saturday, June 1. The tenant mailed its extension notice on Monday, June 3. The owner got the extension notice the next day but told the tenant that it was mailed too late. So the lease term wouldn't be extended. The tenant sued the owner for violating the lease. The tenant claimed that its extension notice was mailed on time.

A lease's extension option had to be exercised by the tenant by mailing a written notice no later than 60 days before the lease expired. The deadline to exercise the extension option fell on Saturday, June 1. The tenant mailed its extension notice on Monday, June 3. The owner got the extension notice the next day but told the tenant that it was mailed too late. So the lease term wouldn't be extended. The tenant sued the owner for violating the lease. The tenant claimed that its extension notice was mailed on time. Since the deadline to exercise the extension option fell on a Saturday, the tenant claimed that it was permitted by a California law to wait until the next business day—that is, Monday, June 3—to send its extension notice. The owner argued that the lease required the tenant to mail the extension notice on Saturday, June 1.

A California appeals court ruled that the tenant's extension notice was mailed too late—that is, it should have been mailed by Saturday, June 1. So the lease wasn't properly extended. The court noted that the California law that the tenant had relied upon to push back the extension notice deadline didn't apply to the exercise of extension options in leases. And Saturday, June 1, wasn't a holiday [Gans v. Smull].

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