Court Limits Availability of Grace Period for Tenants Exercising Options after Deadline in Lease.

Washington’s Supreme Court issued an opinion in Borton & Sons, Inc. v. Burbank Properties, LLC, limiting the ability of a court to grant equitable “grace periods” for tenants exercising lease options to renew or purchase after the deadline specified in their leases has passed. The opinion held that courts can only give effect to a tenant’s late exercise of an option if the tenant has made valuable, permanent improvements to the premises in anticipation of exercising the option. Though this opinion dealt specifically with an option to purchase, past decisions also have applied the rule of equity to options to renew.