Not in this case. The Appeals Court held that a commercial tenant could use a special early termination right in its lease even though a later agreement with the landlord’s bank said the tenant would not end the lease without the bank’s written consent. Read together, the documents showed the parties meant to keep the tenant’s lease rights intact. This is a published decision of the Appeals Court and binding statewide.
What happened
In 2013 a nonprofit tenant signed a sixteen-year lease and a separate service agreement with a landlord to run a fourteen-person residential program in Newton for people with disabilities. Both documents gave the tenant a special right to terminate if five residents gave notice that they intended to leave. A few weeks later, the landlord, the tenant and the landlord’s bank signed a subrogation and non-disturbance agreement, often called an SNDA, as part of a mortgage loan. In it, the tenant agreed not to cancel the lease without the bank’s written consent, which the bank could not unreasonably withhold. The SNDA did not mention the special termination right. In 2017 five residents gave notice, and in January 2018 the tenant gave a year’s notice of termination, sending a copy to the bank but not getting its written consent. The landlord sued for breach of contract, and the Superior Court granted summary judgment to the tenant.
What the court decided
In Hasseltine House, LLC v. Jewish Family and Children’s Services, Inc., No. 24-P-171 (Mass. App. Ct. Sept. 10, 2025), the court affirmed.
The termination right survived. The court started with the lease and service agreement. The special termination right was an essential term that protected the tenant against falling occupancy over a long lease. The lease also said any later mortgage holder would have to recognize the tenant’s lease rights in writing, and the bank did so in the SNDA. Because the three documents were part of one transaction, the court read them together. Treating the SNDA as wiping out the termination right would make a major inducement for the lease illusory. See Chelsea Industries, Inc. v. Florence, 358 Mass. 50, 55 to 56 (1970).
The court added that the consent clause was a promise the tenant made to the bank, not to the landlord. Even if the tenant broke a promise to the bank, that did not make the termination a breach of its contracts with the landlord. The SNDA repeatedly said it was preserving the tenant’s lease rights, not rewriting the landlord and tenant relationship.
The late notice claim failed for lack of harm. The service agreement required the tenant to tell the landlord promptly when a resident gave notice to leave. The landlord argued the tenant quietly collected five notices before reporting them. The court assumed some delay but found no evidence it caused any harm. A breach of contract claim requires proof that the plaintiff suffered harm as a result. Bulwer v. Mount Auburn Hospital, 473 Mass. 672, 690 (2016). Vacancies continued even after the landlord learned of them, and any claim that earlier notice would have helped was speculation.
The good faith claim failed too. The implied covenant of good faith and fair dealing cannot add conditions the parties did not write into their contract. Buffalo-Water 1, LLC v. Fidelity Real Estate Co., 481 Mass. 13, 28 (2018). Here, using a termination right that the lease and service agreement gave the tenant was not bad faith.
What this means for you
If you lease commercial space, your landlord’s lender may ask you to sign an SNDA or similar agreement. This decision is good news for tenants: a lender agreement signed later did not erase a right the tenant negotiated in its lease, where the lease required the lender to recognize the tenant’s rights and the lender agreement said it was preserving them. Courts read the documents in a single deal together, but the result depends on how those documents are worded.
The safer course is still to avoid the fight. Read every lender document for consent or notice requirements, and make sure it expressly preserves your key lease rights, such as early termination, renewal options and rent abatement. If a lender agreement requires consent, ask for it in writing before you act.
For landlords, the lesson is that a claim for breach of a notice clause needs proof of actual harm, not just a technical delay.
What to do now
- Pull your lease and any SNDA, estoppel certificate or lender agreement you signed.
- Check whether the lease requires a lender to recognize your rights under the lease.
- Look for any consent or notice requirement before you terminate, renew or assign.
- Keep dated records of every notice you give or receive under the lease.
- Get advice before you send a termination notice.
If this is your situation, call Doubleday Law at (617) 575-2006 or tell us what happened. These cases move on short deadlines.
