Landlord and tenant – Termination rights – SNDA

Listen to this article

Where (1) a plaintiff landlord and a defendant tenant entered into a lease and a separate service agreement, both of which contained a provision outlining special termination rights for the tenant, (2) weeks later, the landlord, the tenant and a bank entered into a subrogation and non-disturbance agreement (SNDA) in connection with the facility, and (3) after almost five years of operations, the tenant invoked its special termination rights, the absence of written consent from the bank did not preclude the tenant from exercising its rights under the lease and the service agreement.

Judgment for tenant affirmed.

“The plaintiff, Hasseltine House, LLC (landlord), entered into a lease and a separate service agreement with the defendant, Jewish Family and Children’s Services, Inc. (tenant), in connection with a residential facility. Both the lease and the service agreement contained a provision outlining special termination rights for the tenant. Weeks later, the landlord, the tenant, and Brookline Bank entered into a subrogation and non-disturbance agreement (SNDA) in connection with the facility. After almost five years of operations, the tenant invoked its special termination rights. Alleging in part that the tenant lacked any special termination rights without first obtaining approval from Brookline Bank under the SNDA, the landlord filed a complaint in the Superior Court claiming breach of two contracts, the lease and the service agreement, and seeking declaratory relief. On cross motions for summary judgment, a judge denied so much of the plaintiffs’ motion as pertained to the landlord’s claims and allowed the tenant’s motion. The landlord appeals, and we affirm. …

“The lease and the service agreement contain a special termination provision that is not included in the SNDA. Both the lease and the service agreement allow the tenant to terminate the lease and the service agreement if five residents have provided (and have not rescinded) a formal notice of an intent to vacate the facility. The SNDA does not contain any reference to special termination rights. Instead, the SNDA contains a provision that prohibited the tenant from terminating the lease ‘without [Brookline Bank’s] prior written consent in each instance, which consent shall not be unreasonably withheld, conditioned, or delayed.’ On review of the three agreements at issue, we conclude that the absence of written consent from Brookline Bank did not preclude the tenant from exercising its rights under the lease and the service agreement. …

“There is nothing in the SNDA to suggest that weeks after signing the lease and the service agreement the tenant suddenly changed course and agreed to surrender its sole discretion to invoke its special termination rights. Indeed, to hold as the landlord argues that the SNDA abruptly dispensed with the tenant’s special termination rights would ‘render illusory’ the substantial rights secured by the tenant just weeks earlier under the lease and the service agreement. …

“… Because the lease conditioned the validity of a future SNDA on the lender’s recognition of the tenant’s rights under the lease, and Brookline Bank ultimately recognized those rights under the SNDA, we conclude that all the documents, read together, expressed an intent to preserve the tenant’s special termination rights as set forth in the lease. …

“Even if it breached a promise owed to Brookline Bank under the SNDA, the tenant could still exercise its special termination rights against the landlord under the lease and the service agreement. …

“Given the expressed intent in the SNDA to preserve the tenant’s rights established by the lease and the service agreement and the absence of any shared intent by the parties to the SNDA to modify these agreements, we conclude that the tenant’s obligations to Brookline Bank under the SNDA did not alter the relationship between the landlord and the tenant. … Because the landlord, the tenant, and Brookline Bank did not all intend to limit the tenant’s exercise of its special termination rights against the landlord, the tenant’s notice of termination without Brookline Bank’s written consent did not constitute a breach of the tenant’s contracts with the landlord.”

Hasseltine House, LLC, et al. v. Jewish Family and Children’s Services, Inc. (Lawyers Weekly No. 11-062-25) (16 pages) (Hodgens, J.) The case was heard by Shannon Frison, J., on motions for summary judgment. Leonard M. Davidson for the plaintiff; Lawrence G. Green (Dean A. Elwell also present) for the defendant (Docket No. 24-P-171) (Sept. 10, 2025).

Click here to read the full text of the opinion.