Surrender of Space Wasn't Valid

December 1, 2004

Halfway through the lease, an absentee tenant learned that the owner had allowed a restaurant to occupy its space. The tenant sued the owner, claiming that the owner had wrongfully terminated the lease and evicted it. The owner argued that the tenant had sold or assigned its lease to the individual operating the restaurant and that this individual had signed an affidavit to give up—or “surrender—the space to the owner. The tenant argued that the individual had no authority to surrender the space.

Halfway through the lease, an absentee tenant learned that the owner had allowed a restaurant to occupy its space. The tenant sued the owner, claiming that the owner had wrongfully terminated the lease and evicted it. The owner argued that the tenant had sold or assigned its lease to the individual operating the restaurant and that this individual had signed an affidavit to give up—or “surrender—the space to the owner. The tenant argued that the individual had no authority to surrender the space.

A New York court ruled that the space hadn't been validly surrendered and that the owner must return the space to the tenant. The court required the owner to prove that the tenant had validly surrendered the space. To do that, the owner should have brought the individual operating the restaurant to court to discuss the surrender affidavit; but the owner didn't. The court concluded that the owner must have feared that the individual's testimony would hurt its case (there was evidence that the individual had been forced to sign the surrender affidavit against his will) [Hip Hop Fries Shop Inc. v. Gibbons Realty Corp.].

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