Realty Law Digest

Commercial Landlord-Tenant—Lease Ambiguity With Respect to Future Rent Increases—Rent Provisions Were Internally Inconsistent—Reformation Claim Time Barred by Six-Year Statute of Limitations

This case involved a commercial lease rent dispute between a tenant and its landlord. The initial lease term was for “25 years, with four additional five-year renewal options and a shorter fifth renewal option.” The initial annual minimum rental was $11 per square foot. The lease provided, inter alia, that “all annual rent numbers set forth below are based upon said number (assuming rent of $11.00 per square foot and 10 percent cumulative increases every five years).” During the first five years of the lease, the tenant was to pay $11 per square foot. Under each of the remaining five-year periods, “the rent was cumulatively raised, not 10 percent, but $.50 cents per square foot. For each of the five option terms the rent was cumulatively raised 10 percent, commencing with the first option period, when the rent was raised 10 percent over the rent charged during the last five years of the initial 25-year term.”