Victory in the dispute over the tenant’s preemptive right to renew the lease for 20 years

Our Dispute Resolution team successfully represented one of the most dynamic and developing retail companies in Lithuania in defending its tenant’s pre-emptive right to renew a lease for 20 years. The dispute, which lasted over 1.5 years, culminated with the Court of Appeal affirming the decision of the Court of First Instance, ensuring that the interests of our client, who had diligently adhered to the lease agreement for more than a decade, were protected.

During representation, we demonstrated that the tenant’s pre-emptive right to renew the lease under new terms had been violated. The lessor had failed to disclose all relevant terms of the new lease, which were crucial for our client’s decision-making process.

The courts concluded that entering into a new lease agreement with another tenant before the current lease expired was tantamount to refusing the renewal of the lease with the existing tenant. Furthermore, the failure to adequately disclose the terms of the new lease constituted a violation of the tenant’s pre-emptive right.

The Court of Appeal additionally clarified that the tenant is under no obligation to initiate negotiations or propose their terms for a new lease. The pre-emptive right means that when the landlord intends to modify the lease terms, the existing tenant must be given the first opportunity to consider the proposal.

Recognizing the breach of this duty, the court applied the legal consequence: all the rights and obligations of the new tenant under the newly concluded lease were transferred to the existing tenant.

Though the road to victory was neither short nor easy and involved the initiation of additional legal processes, success was ultimately achieved. This victory is significant not only for the client and our team but also for the legal field, as the case addressed questions that had yet to be fully resolved in practice.