Termination of New York Commercial Leases based on Violation of New York Law

New York landlords, often, have it tough in New York.  A recent NY court holding leads credence to the understanding that even a single violation of a New York law related to the illegal use of a New York leased property can lead to the the ability of the NY landlord to immediately void the NY lease.
New York Real Property Law Eviction for Illegal Use of Property
New York Real Property Law Sec. 231(1) allows for a NY landlord to immediately evict a NY tenant for using the leased property, in New York, for the illegal trade, manufacture, or other illegal use.  We suggest, also, having a clause in your New York commercial lease agreement noting that you have the right to evict in order to provide additional credence to this landlord option and, also, to give specific notice to the tenant of this right of the landlord.
Application of NY Real Property Law Sec. 231(1) in New York Court
In an interesting case that was recently handed down by the First Department of the NY Supreme Court, Appellate Division – the Court held, in short,that a single violation of New York Law linked to the illegal use of the property can satisfy the requirement of New York’s Real Property Law Sec. 231(1) and allow the voiding of the New York lease by the New York landlord.  Thus, the landlord can immediately evict the tenant.  The Court overruled the holding of the trial court.
In this case, the tenant in question, was found guilty of illegally selling ivory via use of the leased property.  The tenants license to sell ivory expired and the tenant continued to sell ivory for four or five months after expiration of the license.
Lessons Learned
  1. Have a tailored commercial agreement that includes clauses allowing termination of the NY commercial lease based the use of the property for an illegal activity.  Include a broad and clear clause that is in compliance with New York Law.
  2. Include clauses noting that the landlord can request and the tenant must produce, within a certain period of time licenses, permits and other necessaries need to run a business in New York.
  3. Exclude any clauses from lease agreements that allow a tenant to cure a breach.
  4. Use long-form commercial lease agreements tailored to the specific needs of the landlord .  The landlord has significant risks in New York and just pulling agreements off the internet is not advisable.

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