Letter of Intent Signed Between Landlord and Tenant Was in Effect a Renewal Lease

Landlord sued to evict a month-to-month tenant. Tenant asked the court to dismiss the case. He claimed that he had a renewal lease agreement and wasn't a month-to-month tenant.  Tenant submitted a fully executed "Letter of Intent" dated Jan. 5, 2021, for a "five-year lease agreement covering the period 2/1/21-1/31/26", which provided for payment of rent at $2,200 per month, with a $50 per month increase each year thereafter. Landlord argued that the Letter of Intent wasn't a renewal lease.

The court ruled for tenant and dismissed the case. Landlord and tenant had entered into an implied agreement to pay rent. The Letter of Intent indicated all the essential terms of a lease agreement, including the premises to be leased, the duration of the lease, and the monthly amount to be paid, with specified annual rent increases thereafter. Tenant had paid rent in accordance with the schedule set forth in the agreement for three years. And, while the Letter of Intent stated that it wasn't a binding lease agreement, it also stated that the subsequent execution of a more formal writing didn't impair the effectiveness of the Letter of Intent. The Letter of Intent was more than a mere agreement to agree as there were no material terms left for future negotiations.

GCS Realty Co. Inc. v. Nesheiwat: Index No. LT-0539-24, 2024 NY Slip Op 50816(U)(City Ct. Westchester Co.; 6/21/24; Medina, J)