Lease Gave Tenant Right to Continual Renewals

In 1998, a tenant signed a lease that gave it the option to renew the lease in 1999 and “automatically thereafter” with certain exceptions. The leased was renewed in 1999, 2000, and 2001. In 2002, the owner tried to change the lease's terms, including the rent amount, but the tenant refused to agree to the increased rent. So the owner sued the tenant, asking the court to declare that the tenant didn't have the right to continual renewals of the 1998 lease.

A New Hampshire appeals court ruled that use of the word “automatically” in the 1998 lease clearly showed the parties' intent to create a right to continual renewals. The court rejected the owner's argument that the word “automatically” was ambiguous. It explained that the use of the word “automatically” merely reverses the usual burden of exercising a renewal option. Here, instead of giving notice of its intent to renew its lease, the tenant only had to give notice if it didn't want to renew its lease, the court said [Pope v. Lee].