Electronically exercising an option to renew a lease

The recent case of Kegran Pty Ltd v Warrik Pty Ltd [2018] NSWSC 1357 illustrates some of the issues encountered by parties when serving notices to exercise an option to renew a lease. In this case, the lessor challenged the exercise of an option, claiming that it was not properly served by the lessee. The option clause stated that the lessee would be able to exercise their option if they notified the lessor of their intention to exercise not less than 6 months before the date of termination. It also stipulated that any notice provided to the lessor must be served personally, sent to the lessor’s facsimile number or forwarded by prepaid security post to the lessor.  The lessee argued that the option was properly exercised by means of email that was addressed to the sole director of the lessor, within the adequate time period. Despite the fact that the lease did not provide for service by email, the Court held that the lessee had validly exercised their option to renew the lease as the notice provisions were in relation to the general subject of the notice and were not to be strictly applied. This case highlights that whether or not a lessee has validly exercised their option to renew often depends on the interpretation of the terms of a lease.

Leave a Reply

%d bloggers like this: