## Facts

- Frank J. Mandia, Jr. and Mike Brown purchased an oceanfront amusement property and sold long-term (99-year) leasehold interests to concessionaires to finance the acquisition.
- Everett R. Applegate and Gerard Dagostino bought a 99-year lease for $184,505 and built a two-story structure with a second-floor overhang extending about five feet over adjacent boardwalk walkways.
- Applegate initially asked permission to display merchandise under the overhang for a short-term clearance sale; Brown agreed as a one-time favor.
- Over subsequent years, defendants continued and expanded merchandise displays under the overhang without renewed express permission, eventually using the area on a more permanent basis; plaintiffs did not timely object.
- In 1994, defendants proposed installing an electrically operated awning extending roughly eight feet beyond the overhang into additional boardwalk space; plaintiffs objected and demanded payment.
- The parties discussed terms and agreed $5,000 was a fair rent figure for the additional awning area but never executed a written agreement.
- Defendants installed the awning and used the additional boardwalk space during multiple seasons without paying additional rent.
- The lease prohibited obstruction of the boardwalk and permitted termination for default.
- Plaintiffs sued for injunctive relief, compensation for boardwalk use, and a declaration of forfeiture of the 99-year lease.

## Issues

1. Whether plaintiffs’ long-term knowledge and acquiescence to merchandise displays under the overhang waived enforcement of lease restrictions as to that use.
2. What compensation plaintiffs were entitled to for defendants’ unauthorized occupation of additional boardwalk space created by the awning.
3. Whether defendants’ conduct constituted a default justifying forfeiture and termination of the 99-year lease.

## Decision

- The Appellate Division affirmed the finding that plaintiffs waived their right to object to defendants’ merchandise displays under the original overhang due to years of acquiescence.
- The court affirmed that defendants had no right to extend their use into the additional boardwalk area created by the awning.
- The court upheld an award of $5,000 as compensation for unauthorized use of the awning area, consistent with the parties’ negotiated valuation of fair rent.
- The court affirmed denial of forfeiture, holding the circumstances did not warrant termination of a long-term lease.

## Legal Principles

- Waiver of a lease right may be inferred from knowing, sustained acquiescence and conduct inconsistent with an intent to enforce the written restriction.
- A landlord’s waiver or implied consent for a specific encroachment does not automatically authorize a material expansion into additional space, particularly where the landlord promptly objects.
- Forfeiture of a long-term commercial lease is an extraordinary remedy; courts generally refuse it absent a clear, material, and uncured default, especially where damages or limited equitable relief can address the harm.

## Conclusion

The court treated the landlords’ long acquiescence as a waiver of objections to displays under the existing overhang, required payment for the separate and unauthorized expansion created by the awning, and declined to impose the severe remedy of forfeiture on a 99-year commercial lease where monetary compensation adequately addressed the disputed use.


Mandia v. Applegate, 708 A.2d 1211 (N.J. Super. Ct. App. Div. 1998)