This section contains the nature of the case and procedural background.

Cohen (P) purchased land from a lessor on July 26, 1974. Prior to their purchase, P was aware of a tenancy by Thomas & Son (D) and questioned the lessors about the existence of a lease. The lessors had responded that the written lease had expired and that D was on a month to month tenancy. P did not see the expired lease and did not question the lessee directly. The lessor had leased to D for five years in 1968 with a right of first refusal and an option to renew. It was never recorded. After the lease expired, in 1973, the lessee retained possession and continued to pay rent and agreed to rent increase. The trial court concluded that because the lease did not require notice to the lessor, the lessee had exercised its option to renew by remaining in possession and continuing to pay rent after May 1973. The court of appeals affirmed.

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