Category Archives: Landlord-Tenant

Shootout at the Poonam on Park Hill Ave: Was Security Lax and Incident Foreseeable?

This was originally posted on the SGR Blog.

Terry Kellman sued Poonam Apts. LLC, the owner of 180 Park Hill Avenue on Staten Island, and Jelene Greenfield, the building’s managing agent, for injuries sustained when he was shot at the building by Angelo Nesemi.

Kellman asserted two causes of action for negligence. In the second negligence claim, he asserted that Poonam and Greenfield were negligent in failing to take proper precautions for his safety, hiring, screening, training, supervising of its employees, and failing to adopt appropriate procedures for the protection of visitors. Poonam and Greenfield moved to dismiss the complaint.

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NYC Administrative Code Collides with Personal Guaranty of Lease At Sons of Thunder in Murray Hill

This was originally published on the SGR Blog.

The recent legal tsunami of executive and administrative orders in New York State and New York City has fueled a wave of litigation between commercial landlords, tenants, and lease guarantors. As a recent case illustrates, the disputes raise issues as to the constitutionality of those orders.

204 E. 38th LLC leased space to Sons of Thunder LLC, under a ten-year lease signed in 2014, for a restaurant in Murray Hill specializing in Hawaiian and Californian beach-inspired food. Thunder stopped paying rent (and additional rent) in March 2020. John Kim signed a guaranty in connection with the lease. E.38th LLC sued Thunder and Kim.

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Good Timing is Invisible: Bad Timing Sticks Out a Mile

This was originally published on the SGR Blog.

Harsh facts do no automatically lead to an equitable result. In a recent case, a commercial tenant signed a New York City lease that contemplated the tenant would “build-out” the leased “white box” space into a second-floor gymnasium. The day after the signing, construction was stopped, and gyms were closed by Executive Order due to the pandemic.

ITS Soho LLC sought rescission and termination of a long-term lease for second-floor space with 598 Broadway Realty Associates, Inc. The lease term was to start on March 15, 2020. The lease required Realty to provide a “white box” to Soho, and Soho was to do its own build-out as a gym. The lease also provided no obligation to pay rent for the first six months, and the first monthly installment was not due until September. Soho took possession on March 15, 2020, and the very next day, March 16, 2020, gyms were ordered to shut down effective on March 17, 2020, due to the ongoing pandemic. Gyms were not permitted to reopen until September 2020.

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Tenant’s Pandemic Related Exercise of “Good Guy“ Guarantee

This was originally published on the SGR Blog.

Confronts Dispute With Landlord Over Amount Due

Commercial leases are often signed with a concomitant “good guy” guarantee, in which a principal of the tenant guarantees the payment of the financial obligations under the lease. And the guarantor can be released from such liability if both a timely notice to terminate the lease is given, and rent and additional rent are paid in full until the date of surrender. But what if the landlord and tenant disagree about the amount due to perfect the termination and release?

Monica King Contemporary LLC, a corporate tenant, and Monica King, individually, as “good guy” guarantor, sought injunctive relief from a lease with Kedskidz Realty II for the ground floor and basement space used for an art gallery and office at 39 Lispenard Street.

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A Disguised Late Fee Is Nevertheless a Late Fee: Landlord Fails to Navigate Statutory Restrictions

This was originally posted on the SGR Blog.

Residential rent late fees and charges are unambiguously limited by statute in New York. A landlord’s effort to avoid the legal restrictions was the subject of a recent appeal in an action in which a tenant challenged an attempt to navigate around the law.

Douglas Ritter was the landlord and owner of several rental properties in Broome County, and Karina Beco and others were Ritter’s tenants. In June 2019, Ritter sent a notice to Beco providing that, as of August 1, 2019, the monthly rental rate would be increased to $1,000 per month unless she paid the rent by the first of each month, upon which she would be entitled to a rental “discount” equal to the difference between their original monthly rental rate and the new $1,000 monthly rental rate. Beco’s attorney sent Ritter a letter informing him that his notice of proposed rental increases and corresponding “discounts” constituted an illegal late fee in violation of Real Property Law § 238-a and requested that change be withdrawn. In reply, Ritter sent Beco an amended notice, slightly reducing the newly proposed monthly rental rate and further providing that she would be entitled to a $375 “discount” if the rent was paid, in full, by the seventeenth of each month. Beco’s attorney objected to the amended notice on the same ground.

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COVID-19 Meets “Yellowstone” at a Restaurant on Avenue A: Was Pandemic a “Casualty” that Excused Payment of Rent?

This was originally published on the SGR Blog.

Our Courts have recently issued several decisions addressing (and, for the most part, rejecting) arguments by commercial tenants that payment of rent was excused due to pandemic and Executive Order-related impossibility or frustration of performance. In a ruling released last week, the Court tackled the novel question of whether or not the pandemic constituted a “casualty” that excused the payment of rent.

188 Ave. A Take-Out Food Corp. signed a commercial lease with Lucky Jab Realty Corp. on May 1, 2017, to operate an indoor dining restaurant. On March 16, 2020, Governor Andrew Cuomo issued Executive Order 202.3 that suspended indoor dining within the State of New York until further notice to prevent the spread of the COVID-19 pandemic. Per the Executive Order, Food Corp. suspended indoor restaurant operations and did not use the premises for such purposes until November 2020.

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Tenant Claims Habitability Breach Amounts to Harassment

Copyright by, and republished with permission of, Apartment Law Insider.

When landlords take tenants to court over nonpayment of rent, tenants often claim as a defense that the landlord breached the warranty of habitability. But, as a recent case illustrates, a tenant may preemptively claim such a breach before a landlord acts to evict—and argue not only that that the breach was aggravated by the pandemic, but that it amounted to harassment for which the tenant should be awarded a civil penalty.

In evaluating the merits of the breach of warranty claim, the court in this case considered the inconvenience to the tenant due to the pandemic as an aggravating factor. And then it conducted a detailed analysis in determining whether a civil penalty was in order.

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“Red Shoe” Stubs a (Legal) Toe on East 75th Street: No Pandemic Caused Frustration/Impossibility of Performance

This was originally posted on the SGR Blog.

In a recent case, an iconic Upper East Side luxury retailer sought to escape the obligation to pay $1.68m in  rent because the pandemic destroyed the efficacy of the high-end/tourist/walk-in-and-buy business model for its branded shoes.

35 E.  E. 75th St. Corp. claimed that Christian Louboutin LLC (the tenant in a building owned by E. 75th) had not paid rent since March 3, 2020. And argued that the amount due was comprised of the monthly payments of rent and real estate tax escalation charges for 2020/21.

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Court Answers an Existential Question: How Clean is “Broom Clean”?

This was originally published on the SGR Blog.

Contracts for the sale of residential real property often require the seller to deliver the premises “broom clean”. And leases for residential apartments almost always require a tenant to surrender the unit “in broom clean condition” at the end of the lease term.  A recent dispute, concerning the condition of a home at the time of delivery, is equally applicable to the condition of an apartment at the end of a lease.

Phillip and Janet Witter sold their house to Daniel and Erin Nitschke but remained on the premises pursuant to a post-closing occupancy agreement. The Witters claimed that they surrendered the property in broom-clean condition, and are entitled to release of a $2,000 escrow deposit. The Nitschkes sought $400 of the escrow deposit to reimburse them for the cost of having the premises professionally cleaned.  A hearing to consider the claim and counterclaim was held to determine  the competing “small claims” in the Penfield Town Justice Court. Both sides appeared without counsel.

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Did COVID-19 Shutdown of Renovation Excuse Delay? Hearing Required to Determine Responsibility

Copyright by, and republished with permission of, Apartment Law Insider.

Covid-19 has seriously impacted almost every aspect of residential and commercial life in one manner or another—but, as a recent case illustrates,  especially in those situations where a  contemplated timeline for work was obstructed or delayed by governmental edicts that that imposed an involuntary “pause”. There, a landlord needed access to an apartment to complete  a project; the issue wound up before the court; the tenants agreed to vacate the unit for a stipulated period of time to accommodate the work;  the project stalled due to the pandemic; and the parties were back in court to consider the consequences.

On August 1, 2019, Timothy and Kiko Tabor stipulated on the court record with 148 Duane LLC that they would relocate from their apartment for 12 months, with 148 Duane covering the costs of their relocation, including paying up to $25,000 a month for comparable housing less the amount of their current rent. The parties also agreed that “[i]n the event that the relocation needs to be extended beyond the twelve-month period because [148 Duane] failed to complete the construction within that time period there will be a per-diem penalty of $500 per day without prejudice to the [Tabors] seeking additional remedies before this Court.” The parties clarified that the penalty applied if the building’s essential services, defined as those that make the apartment habitable, were still out.

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