A-19098, SEPTEMBER 9, 1927, 7 COMP. GEN. 191

A-19098: Sep 9, 1927

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THE TENANCY IS CONTINUED BY THE HOLDING OVER FOR A PERIOD EQUAL TO THAT RESERVED IN THE LEASE. THE GOVERNMENT IS LIABLE FOR RENTAL DURING THE TENANCY AS THUS ENLARGED. PROVIDED THE LEASED PREMISES HAVE NOT. BEEN RELET BY THE OWNERS AND THERE WAS NOTHING IN THE FACTS OR CIRCUMSTANCES OF THE HOLDING OVER TO INDICATE THAT IT WAS TO BE ON A MONTH-TO-MONTH BASIS OR WAS FOR A PERIOD LESS THAN THE PERIOD COVERED BY THE ORIGINAL LEASE. 1927: REQUEST WAS MADE JULY 2. WHEREIN THERE WAS DISALLOWED ITS CLAIM FOR $624.99 TO COVER RENTAL FOR THE SECOND FLOOR OF THE PREMISES LOCATED AT NO. 17 WASHINGTON STREET. WAS SECURED BY THE GOVERNMENT FOR THE USE OF THE DEPUTY PROHIBITION ADMINISTRATOR OF NEW JERSEY FOR THE TERM BEGINNING ON THAT DATE AND ENDING ON JUNE 30.

A-19098, SEPTEMBER 9, 1927, 7 COMP. GEN. 191

LEASES - RENT - HOLDING OVER UNDER A LEASE CREATING A TENANCY FOR A STATED PERIOD WITH THE RIGHT RESERVED TO CONTINUE OCCUPANCY DURING THE FOLLOWING FISCAL YEAR BY THE GIVING OF ONE MONTH'S NOTICE, UPON THE GOVERNMENT'S FAILURE TO GIVE THE REQUIRED NOTICE AND RETAINING POSSESSION WITHOUT OBJECTION ON THE PART OF THE LESSOR, THE TENANCY IS CONTINUED BY THE HOLDING OVER FOR A PERIOD EQUAL TO THAT RESERVED IN THE LEASE, AND THE GOVERNMENT IS LIABLE FOR RENTAL DURING THE TENANCY AS THUS ENLARGED, PROVIDED THE LEASED PREMISES HAVE NOT, IN THE MEANTIME, BEEN RELET BY THE OWNERS AND THERE WAS NOTHING IN THE FACTS OR CIRCUMSTANCES OF THE HOLDING OVER TO INDICATE THAT IT WAS TO BE ON A MONTH-TO-MONTH BASIS OR WAS FOR A PERIOD LESS THAN THE PERIOD COVERED BY THE ORIGINAL LEASE.

DECISION BY COMPTROLLER GENERAL MCCARL, SEPTEMBER 9, 1927:

REQUEST WAS MADE JULY 2, 1927, BY 17 WASHINGTON STREET (INC.), FOR REVIEW OF SETTLEMENT NO. 0185423, DATED JUNE 30, 1927, WHEREIN THERE WAS DISALLOWED ITS CLAIM FOR $624.99 TO COVER RENTAL FOR THE SECOND FLOOR OF THE PREMISES LOCATED AT NO. 17 WASHINGTON STREET, NEWARK, N.J., FROM DECEMBER 1, 1926, TO FEBRUARY 28, 1927, INCLUSIVE, UNDER LEASE DATED OCTOBER 1, 1925.

UNDER LEASE OF OCTOBER 1, 1925, POSSESSION OF THE ENTIRE SECOND FLOOR IN THE BUILDING KNOWN AS 17 WASHINGTON STREET (INC.) WAS SECURED BY THE GOVERNMENT FOR THE USE OF THE DEPUTY PROHIBITION ADMINISTRATOR OF NEW JERSEY FOR THE TERM BEGINNING ON THAT DATE AND ENDING ON JUNE 30, 1926, AT A RENTAL AT THE RATE OF $2,500 PER ANNUM, PROVISION BEING MADE IN PARAGRAPH 5 THEREOF FOR ITS RENEWAL AS FOLLOWS:

5. THIS LEASE MAY, AT THE OPTION OF THE GOVERNMENT, BE RENEWED AT A MONTHLY RENTAL OF TWO HUNDRED AND FIFTY DOLLARS FOR THE FISCAL YEAR 1927, AND TWO HUNDRED NINETY-ONE DOLLARS, SIXTY-SIX AND TWO-THIRDS CENTS ($291.66 2/3 ( FOR THE FISCAL YEARS 1928 AND 1929, AND OTHERWISE UPON THE TERMS AND CONDITIONS HEREIN SPECIFIED, PROVIDED NOTICE BE GIVEN IN WRITING TO THE LESSOR AT LEAST ONE MONTH BEFORE THIS LEASE WOULD EXPIRE. PROVIDED, THAT NO RENEWAL THEREOF SHALL EXTEND THE PERIOD OF OCCUPANCY OF THE PREMISES BEYOND THE THIRTIETH DAY OF JUNE, 1929.

THE LEASE WAS NOT RENEWED AT THE EXPIRATION OF THE TERM AS PROVIDED IN PARAGRAPH 5 ABOVE QUOTED, BUT IT APPEARS THE GOVERNMENT CONTINUED TO OCCUPY THE PREMISES UNTIL NOVEMBER 20, 1926, WHEN, BY REASON OF THE NEED FOR LARGER OFFICE SPACE DUE TO THE CREATION OF THE STATE OF NEW JERSEY INTO A SEPARATE PROHIBITION DISTRICT, THEY WERE VACATED, RENTAL BEING PAID AT THE RATE SPECIFIED IN THE LEASE FOR THE FISCAL YEAR 1926, UNTIL NOVEMBER 30, 1926. IT ALSO APPEARS THAT ALTHOUGH DILIGENT EFFORT WAS MADE BY THE OWNERS OF THE BUILDING TO RENT THE VACATED SPACE TO OTHER PARTIES, THEIR EFFORTS IN THAT RESPECT WERE UNSUCCESSFUL UNTIL MARCH 1, 1927, AND THE CLAIM SUBMITTED COVERS THE PERIOD THE SECOND FLOOR OF THE PROPERTY IN QUESTION REMAINED UNTENANTED.

THE QUESTION HERE INVOLVED IS AS TO WHETHER THE GOVERNMENT, BY THE HOLDING OVER, MADE ITSELF LIABLE FOR RENT FOR A PERIOD EQUAL TO THAT RESERVED IN THE LEASE OF OCTOBER 1, 1925, OR FOR NINE MONTHS AFTER JUNE 30, 1926, THERE BEING NOTHING IN THE ACTION OR UNDERSTANDING OF THE PARTIES TO INDICATE THAT THE HOLDING OVER AFTER JUNE 30, 1926, WAS TO BE ON A MONTH-TO-MONTH BASIS OR FOR A PERIOD OF LESS THAN THE PERIOD COVERED BY THE ORIGINAL LEASE. SEE IN THIS CONNECTION 5 COMP. GEN. 172.

IN CONNECTION WITH A CASE INVOLVING A SIMILAR STATE OF FACTS TO THOSE HERE PRESENTED, WHICH WAS CONSIDERED BY A FORMER COMPTROLLER OF THE TREASURY, IT WAS SAID:

THE LEASE ESTABLISHED THE RELATION OF LANDLORD AND TENANT, AND THE TENANT CAN NOT DISSOLVE THAT RELATION BY HOLDING OVER AND REMAIN IN POSSESSION ONLY FOR SUCH TIME AS SUITS THE TENANT'S PLEASURE. BUT IF THE LEASE WAS FOR A FIXED TERM, THE HOLDING OVER RAISES A PRESUMPTION OF THE TENANT'S WILLINGNESS TO CONTINUE THE LEASE FOR A TERM OF SIMILAR EXTENT, IF REQUIRED BY THE LANDLORD. IT IS THE GENERAL RULE AND MAINTAINS IN ILLINOIS, WHERE THE LEASE WAS EXECUTED. (THE CLINTON WIRE CLOTH CO. V. GARDNER, 99 ILLS., 151.)

BY THE HOLDING OVER OF THE TENANT UNDER SUCH CIRCUMSTANCES AS IMPLY AN INTENTION TO CONTINUE THE RELATION OF LANDLORD AND TENANT, ACQUIESCED IN BY THE LANDLORD, THE CONTINUANCE OF THE TENANCY IS FOR ANOTHER FULL PERIOD WHICH CAN NOT BE SOONER TERMINATED BY THE TENANT WITHOUT THE CONSENT OF THE LANDLORD. AND THIS RULE APPLIES TO THE GOVERNMENT, BUT RESTRICTED TO THE AVAILABILITY OF AN APPROPRIATION. (SMOOT V. UNITED STATES, 38 CT.CLS. 418; MORGAN V. UNITED STATES, 14 ID. 319.) (DECISION OF FEBRUARY 27, 1914, 68 MS. COMP. DEC. 1244.)

THE GENERAL RULE REFERRED TO IN THE ABOVE-QUOTED DECISION APPEARS ALSO TO MAINTAIN IN THE STATE OF NEW JERSEY. CONOVER V. CROWELL MACHINE CO., 33 N.J. LAW JOURNAL 83.

THE TERM OF THE TENANCY RESERVED IN THE LEASE OF OCTOBER 1, 1925, WAS FOR A PERIOD OF NINE MONTHS, THE REMAINDER OF THE FISCAL YEAR THEN CURRENT, AT A FIXED RATE PER ANNUM, AND UNDER THE APPLICABLE RULE, NO NOTICE OF AN INTENTION TO RENEW THE LEASE HAVING BEEN GIVEN BY THE GOVERNMENT AS REQUIRED BY PARAGRAPH 5 THEREOF, AND THERE APPEARING NOTHING TO INDICATE THAT THE HOLDING OVER WAS TO BE ON A MONTH-TO-MONTH BASIS OR FOR A PERIOD LESS THAN THE PERIOD COVERED BY THE ORIGINAL LEASE, THE GOVERNMENT, BY ITS HOLDING OVER OF THE LEASED PREMISES, MADE ITSELF LIABLE FOR RENTAL FOR A PERIOD OF TIME EQUAL TO THE PERIOD COVERED BY THE LEASE OR TO FEBRUARY 28, 1927. THE OFFICE SPACE COVERED BY THE LEASE WAS RELET BY THE OWNERS AS OF MARCH 1, 1927, AND THE GOVERNMENT HAS BEEN RELEASED BY THE OWNERS FROM LIABILITY FOR RENTAL THEREON FOR ANY PERIOD AFTER FEBRUARY 28, 1927.

THE OWNERS OF THE PROPERTY APPEAR TO HAVE BEEN DILIGENT IN THEIR EFFORTS TO RELET IT AND THEIR ACQUIESCENCE IN THE GOVERNMENT'S VACATING THE OFFICE SPACE COVERED BY THE LEASE APPEARS TO BE NEGATIVED BY THE FACT THAT BILLS COVERING RENTAL DURING THE UNOCCUPIED PERIOD WERE PRESENTED TO THE GOVERNMENT OFFICERS FOR PAYMENT AS IT BECAME DUE, AND AN APPROPRIATION WAS AVAILABLE COVERING THE RENTAL OF THE PREMISES DURING THE FISCAL YEAR 1927.

IN VIEW OF ALL THE FACTS APPEARING AND THE LAW APPLICABLE THERETO IT MUST BE HELD THAT RENT IS PROPERLY PAYABLE FOR THE THREE MONTHS DURING WHICH THE PROPERTY WAS VACANT BY REASON OF THE ACTION OF THE GOVERNMENT.

ACCORDINGLY, UPON REVIEW, THERE IS CERTIFIED THE SUM OF $624.99 AS BEING DUE CLAIMANT CORPORATION FOR WHICH AMOUNT A SETTLEMENT WILL ISSUE IN DUE COURSE OF BUSINESS.