Author Question: Lease Renewal. MCM Ventures, II, Inc, leased premises from Rushing Construction Co on which to ... (Read 112 times)

hbsimmons88 · **on:** Jun 24, 2018

Lease Renewal. MCM Ventures, II, Inc, leased premises from Rushing Construction Co on which to operate a restaurant. The lease term was for two years: January 1, 1987, to De-cember 31, 1988. The lease agreement stated in part that MCM shall have a continuing option for a period of eight (8) consecutive years to renew this lease. MCM did nothing to renew the lease before it expired but, after it expired on December 31, 1988, made monthly rent payments in the same amount as before in January and February 1989. Then, on February 28, 1989, MCM notified Rushing by mail that it wanted to exercise its option to renew the lease. Rushing refused to renew the lease, contending that MCM had forfeited the option by not exercising it prior to the expiration of the lease agreement in which the option had been given. Discuss fully whether MCM still had a right to exercise the lease renewal option as late as February 28, 1989.

Question 2

Which of the following is not a requirement of the Drug-Free Workplace Act imposed on all companies that do more than 25,000 worth of business with the federal government?
a. publish a policy that substance abuse in the workplace is prohibited b. test new employees for possible drug use
c. establish a drug-awareness program for employees
d. specify what actions will be taken against employees who violate company drug policies e. all of the other choices are required

Briannahope · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

Lease renewal
The court held that MCM's right to exercise the lease renewal option terminated when the lease term expired. As a general rule, a lessee must exercise an option to renew the lease on or be-fore the expiration date of the original lease term. If the lessee fails to renew the lease within the required time, the option is forfeited. Once a lease term expires, if the tenant retains pos-session and continues paying rent, the tenancy becomes a month-to-month tenancy. Therefore, after December 31, 1988, MCM's tenancy was from month to month, which under state law could be terminated by the landlord on seven days' notice.

Answer to Question 2

b