Guarantor Liability for Post-Window-Period Rent

In a case of first impression, the Appellate Division, First Department recently addressed a split in the decisions of the lower courts as to the scope of the New York City Guaranty Law, Administrative Code §22–1005 (Guaranty Law). In Tamar Equities Corp. v. Signature Barbershop 33 Inc., No. 1153, 2024 WL 39739 (App. Div. 1st Dept. Jan. 4, 2024), the Appellate Division analyzed whether the Guaranty Law bars recovery from a guarantor where a commercial tenant’s default initially arose during the Guaranty Law’s window period of March 7, 2020 to June 30, 2021 (the Window Period), but persisted after the expiration of the Window Period. Holding that landlords may pursue claims for periods outside the Window Period regardless of the date of initial default, the Court unanimously reversed the trial court’s dismissal of the landlord’s action against a guarantor of a barbershop lease. Until this decision, some trial courts held that post-Window Period obligations were recoverable, while others held that the guaranty was rendered a nullity.