tenants affected by Sandy may be in a difficult situation. Generally a
commercial tenant's rights are limited to the rights set forth in the
lease. Residential tenants have many rights guaranteed by law.
Commercial tenants have very few rights. If a right or obligation is not
in the lease, it is not enforceable. It is important for a commercial tenant to review their lease AND
ANY RIDER to determine the landlord's obligation and their rights.
Commercial tenants that suffered substantial damage due to Superstorm Sandy
should specifically review the casualty clause in
their lease and any rider that may supplement the casualty provision in the
lease. My comments are based on the standard form developed by the
Real Estate Board of New York, Inc. However, tenants must review any
rider to their lease. The rider may contain rights not in the lease.
Generally if a commercial space
is only partially damaged the lease remains in full force and effect. If
the space is totally damaged the landlord has the option to make the repairs or
terminate the lease. The standard form lease
does not provide the commercial tenant with the option to terminate the
lease. It is important for a tenant to comply with any notice provision
in the lease and/or rider in writing. Most commercial leases require that
a tenant give notice to a landlord when the tenant is unable to occupy his or
her space. Even though a landlord knows that a space has been destroyed or is
so badly damaged that it can't be used, tenants in New York MUST provide WRITTEN notice to their landlord
that they don't have access to the commercial space. Verbally
informing a landlord is not enough! If the commercial space is totally
unusable tenants should communicate with their landlord to try to assess as
soon as possible whether the landlord plans to repair the premises or terminate
the lease. The commercial tenant may not have the right to cancel
the lease but if repairs to the space will take a long time the tenant should
consider negotiating the
right to terminate the lease, especially if the casualty occurred near the end
of the lease term. There may be also other lease provisions that a tenant
may wish to negotiate with the landlord such as a lease extension if the tenant
wants to stay in the commercial space. A thorough and thoughtful
review of a lease and rider can often provide answers to most questions that
commercial tenants will have.
These tips were presented by
Rolando Gonzalez, Esq., Community Development Project, The Legal Aid Society,
in his presentation during a CLE webcast on Providing
Legal Assistance to Persons Affected by Superstorm Sandy presented by The New York State Bar
Association on November 15, 2012.
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