Government Contracts Untimely Termination Notice Obligated Government to Pay Rent
Wednesday, May 13, 2020

Untimely Termination Notice Obligated Government to Pay Rent

By Government Contracts Editorial Staff

An appeal seeking unpaid rent was summarily granted as to entitlement by the Civilian Board of Contract Appeals because the lease’s termination provision obligated the government to pay rent for its failure to provide the requisite notice. The supplemental lease agreement provided that the government would “have” and “hold” the property through April 30, 2018, subject to termination rights. Another provision stated the government could terminate the lease after April 30, 2013, in whole or in part, by giving at least 180-days notice in writing to the lessor and no rent would accrue after the effective date of termination.

Unduly Strained Argument. The parties did not dispute that they agreed to the terms of the SLA or that the SLA required 180-days notice from the government to terminate the lease. The government argued that the lessor was aware of an eminent domain action which led to the government’s decision to terminate the lease. However, the government’s argument unduly strained and was contrary to the plain and unambiguous terms of the lease. Moreover, email and telephone contacts between July 2014 and July 2016 did not suffice as a termination notice, because none of these communications specified a termination date. Finally, vacating the property could not serve as notice, because the lease required more than vacating space and relinquishing keys. (HPI/GSA-4C, L.P. v. GSA, CBCA, ¶96,000)

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