Josh operated a restaurant in Welland. Josh rented the premises
from Stefon. The Lease for the restaurant premises included a
provision that the Tenant would complete all maintenance and
repairs to the building and allowed the Landlord to complete
periodic inspections. If an inspection revealed that any repairs
were required the Tenant was required to correct any deficiencies
within 60 days. The initial 5-year term of the Lease expired on
September 30. The Lease included an option for the Tenant to renew
the Lease for an additional 5-year term provided that notice
exercising the option to renew was given to the Landlord by May 31.
On April 1, Stefon completed an inspection and provided a list of
deficiencies to Josh together with a notice that all deficiencies
were to be corrected within 60 days. On April 10, Stefon advised
Josh that he was listing the property for sale. Josh indicated that
he was interested in purchasing the property and asked if the time
for completing the repairs could be extended since he might make
more extensive renovations if he owned the property. Stefon agreed
and said that he would allow Josh to match any offer he received.
On June 1, Stefon told Josh that he had received and accepted an
offer to sell the property for $3,000,000.00 and that the Buyer
required vacant possession. He also delivered notice to Josh
terminating the Lease since Josh had breached the Lease by not
completing the repairs within 60 days. Josh said that: (i) he would
commence and complete the repairs within 60 days; (ii) he was
exercising his right to renew the Lease; (iii) he would match the
offer to purchase for $3,000,000.00. Stefon said it was too late
and that Josh did not have a legal right to do any of those things,
nor did Stefon have any further legal obligations to Josh. Josh
comes to you for advice. Required: Explain in detail the applicable
legal principles and provide an analysis of how they apply to the
facts of this case and the positions taken by the parties. What is
the likely result of any legal action?
from Stefon. The Lease for the restaurant premises included a
provision that the Tenant would complete all maintenance and
repairs to the building and allowed the Landlord to complete
periodic inspections. If an inspection revealed that any repairs
were required the Tenant was required to correct any deficiencies
within 60 days. The initial 5-year term of the Lease expired on
September 30. The Lease included an option for the Tenant to renew
the Lease for an additional 5-year term provided that notice
exercising the option to renew was given to the Landlord by May 31.
On April 1, Stefon completed an inspection and provided a list of
deficiencies to Josh together with a notice that all deficiencies
were to be corrected within 60 days. On April 10, Stefon advised
Josh that he was listing the property for sale. Josh indicated that
he was interested in purchasing the property and asked if the time
for completing the repairs could be extended since he might make
more extensive renovations if he owned the property. Stefon agreed
and said that he would allow Josh to match any offer he received.
On June 1, Stefon told Josh that he had received and accepted an
offer to sell the property for $3,000,000.00 and that the Buyer
required vacant possession. He also delivered notice to Josh
terminating the Lease since Josh had breached the Lease by not
completing the repairs within 60 days. Josh said that: (i) he would
commence and complete the repairs within 60 days; (ii) he was
exercising his right to renew the Lease; (iii) he would match the
offer to purchase for $3,000,000.00. Stefon said it was too late
and that Josh did not have a legal right to do any of those things,
nor did Stefon have any further legal obligations to Josh. Josh
comes to you for advice. Required: Explain in detail the applicable
legal principles and provide an analysis of how they apply to the
facts of this case and the positions taken by the parties. What is
the likely result of any legal action?
