Landlord/Tenant – Renewal Option – Timely ‘Receipt’ – Landlord’s P.O. Box

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The plaintiff-tenant’s notice of its decision to renew the parties’ lease was placed in the defendant-landlord’s post office box one day before the deadline, which fell on a Sunday. Even though the landlord did not check its P.O. box until the following Wednesday, the tenant timely exercised its option to extend the lease.

We reverse the master-in-equity’s ruling that the renewal option was not timely exercised.

With respect to the receipt of notices or demands, the parties’ lease provided, “[Notice] shall be given or served as follows: by mailing the same to the other party by registered or certified mail, return receipt requested, or by overnight courier service provided a receipt is required, at its Notice Address set forth in Part I hereof, or at such other address as either party may from time to time designate by notice given to the other.

“The date of receipt of the notice or demand shall be deemed the date of the service thereof (unless the notice or demand is not received or accepted in the ordinary course of business, in which case the date of mailing shall be deemed the date of service thereof).”

The parties refer to the parenthetical section as the “service upon mailing exception.”

The parties do not dispute the basic facts. On October 30—the Wednesday before the deadline—the tenant mailed written notice to the landlord via certified mail, return receipt requested. The landlord has no office building and only receives mail at a P.O. Box. The notice arrived at the post office on Saturday, November 2—the day before the deadline—and was available for pickup by 9:45 a.m. that morning.

The landlord did not check its mail until Wednesday, November 6; three days after the deadline. The landlord took the position that the tenant’s notice was untimely and refused to honor the option. The tenant then filed this action.

First, we note the lease’s instruction that it should be construed according to its plain meaning and not for or against either party. Second, we note that the notice clause is not tied to the renewal option, but applies “[w]henever, pursuant to this Lease, notice or demand shall or may be given to either of the parties by the other.”

The notice clause requires a return receipt, but the clause does not equate the date of service with the date that any return receipt is signed. The clause contains multiple disjunctives: it says notice shall be “given or served” and explains that the notice upon mailing exception applies when notice is not “received or accepted” in the ordinary course of business. Disjunctives suggest alternatives—the clause implies differences between notice being “given,” notice being “served,” notice being “received,” and notice being “accepted.” The clause does not define what constitutes receipt.

One way to approach this dispute would be to ask whether the lease’s language suggests that constructive receipt (depositing notice in a mailbox or post office box, for example) would count as receiving notice. Given the disjunctives outlined above, we believe it does. A rule limiting notice to actual receipt and hinging the time of receipt on the recipient’s signature seems like it would be easy to write and would not be written the way this clause is written.

It is true that the tenant had a long time to consider renewing the lease, but that does not justify the master shortening the lease’s deadline for giving notice to 88 days from 90 (this was the practical effect of the master-in-equity’s ruling). Notice of the tenant’s intent to renew the lease arrived at its final destination and was available for pick up the day before the deadline. We reverse the decision that this did not constitute timely receipt of the notice.

South Carolina CVS Pharmacy, LLC v. KPP Hilton Head, LLC (Lawyers Weekly No. 011-052-23, 5 pp.) (Blake Hewitt, J.) Appealed from Beaufort County (Marvin Dukes, Master-in-Equity) Walter Hammond Cartin, Katon Edwards Dawson and Jeffrey Evan Philliips for appellant; Thomas Pendarvis and Philip Benjamin Zuckerman for respondent. South Carolina Court of Appeals