## Facts

- Landlords Irene S. Shakespeare and Clarence L. Shakespeare leased service-station premises to Sinclair Refining Company for five years at $50 per month.
- Before the initial term expired, the parties executed an extension for an additional five years at the same rent.
- Thirty-three days before the extended term ended, Sinclair informed the landlords it intended to remove equipment after thirty days and offered the landlords an opportunity to purchase; the landlords requested a list and prices, and Sinclair did not respond.
- Sinclair paid rent through the end of the extended term but remained in possession through a subtenant for three additional months.
- After the second holdover month, the landlords notified Sinclair they elected to treat Sinclair as a holdover tenant for a new five-year term and demanded three months’ rent then due.
- Sinclair, through counsel, denied any intent to renew for five years and asserted it held only as a tenant at will.
- During the fourth holdover month, Sinclair vacated, purported to terminate any tenancy at that month’s end, and later tendered rent for only the four-month holdover period; the landlords rejected the tender.
- The trial court awarded the landlords one year’s rent and entered a declaratory judgment that Sinclair was bound for another five-year term.

## Issues

1. Whether a commercial tenant’s holdover after expiration of a five-year lease permits the landlord to bind the tenant to a new five-year term based on lease language and the landlord’s election.
2. Whether the tenant’s prompt written repudiation of a claimed multi-year renewal and subsequent departure limits the implied tenancy created by holding over.

## Decision

- The Colorado Supreme Court affirmed the money judgment awarding one year’s rent measured from expiration of the extended term.
- The Court rejected the declaratory judgment that Sinclair was bound to an additional five-year term.
- The case was remanded with instructions to modify the judgment consistent with the opinion.

## Legal Principles

- When a tenant holds over after expiration of a fixed-term commercial lease and the landlord acquiesces or elects to treat the tenant as continuing, Colorado law generally implies a tenancy from year to year on the lease’s rent terms, rather than a new term equal to the original multi-year lease.
- A landlord’s unilateral election (even if contemplated by lease language) does not, without clear mutual assent, conclusively impose a new long fixed term where the tenant promptly repudiates the asserted renewal and leaves after a short holdover.
- Holdover liability may extend beyond the actual months of continued occupancy when the law implies a year-to-year tenancy upon the landlord’s election to treat the tenant as continuing.

## Conclusion

A commercial tenant who holds over after a multi-year lease expires may be liable as a year-to-year tenant on the prior rent terms, but a landlord cannot automatically convert a short holdover into another full multi-year term when the tenant promptly rejects that renewal and soon surrenders possession.


Sinclair Refin. Co. v. Shakespeare, 115 Colo. 520, 175 P.2d 389 (Colo. 1946)