While specific performance is available, in appropriate circumstances, for breach of a commercial or residential lease, specific performance of real property leases is not in New York awarded as a matter of course.
A lessee filed a case for damages for wrongful lease termination and specific performance against its lessor. The lease, which covered a building's exterior wall, stated the lessor or its successor could terminate the lease on 60 days notice if the building was sold. The lessor sold the building to the building purchaser who cancelled the lease. The court held this cancellation constituted a breach of contract that entitled the lessee to damages because the lease termination provision was ambiguous. The court, however, denied the lessee's request for specific performance. The case was appealed by both parties.
Was the denial of specific performance proper? Was the lessee entitled to damages?
The court held the trial court did not abuse its discretion by denying specific performance because the value of the unique qualities of the demised space could be fixed with reasonable certainty and specific performance would impose undue hardship on the building purchaser. However, there had been an error in the assessment of damages. Based on the sublease of the demised space, the trial court properly calculated the lessee's lost profits, but erred in awarding the lost profits only through the date of the trial insteadof for the sublease's duration. Further, damages should have been awarded through the lease's expiration.