Landlord & Tenant

Tenant's Operation of Sidewalk Caf'

DMF Gramercy Enterprises, Inc. v. The Lillian Troy 1999 Trust

NYLJ 10/23/14, p. 18, col. 3

AppDiv, First Dept.

(Opinion by Acosta, J.)

In tenant's action for a judgment declaring that it is entitled to operate a sidewalk caf' and that landlord is required to provide consent, landlord appealed from Supreme Court's judgment enjoining landlord from revoking its consent to operation of the caf'. The Appellate Division affirmed, holding that landlord could not withhold its consent without a good faith basis for doing so.

When landlord's predecessor leased the premises to tenant's predecessor in 1964, a sidewalk caf' was already in existence, although the caf' was located on city property, not on the demised premises. The lease expressly required landlord to execute applications and any other documents necessary to enable “Tenants ' to obtain and maintain a sidewalk caf' [on] the public sidewalks adjoin said premises.” Landlord or its predecessor had completed consent forms for the Department of Consumer Affairs for many years, but in 2012, landlord purported to terminate its consent, and refused to consent to any new license for a sidewalk caf'. Tenant brought this action, and the parties stipulated ' contrary to fact ' that “the words 'sidewalk caf” are not used, stated or referenced in the Lease.” Supreme Court nevertheless held that landlord had no right to withhold consent in its sole discretion, and landlord appealed.

In affirming, the Appellate Division first held that the language in the lease was dispositive, and that the court would not be bound by a stipulation contrary to the evidence submitted by the parties. The court went on to note that even if the stipulation were honored, the lease permitted tenant to operate the caf'. The lease expressly permitted tenant to occupy areas extending beyond the building line subject to government rules and regulations. Although the court deemed this language ambiguous, it concluded that the ambiguity should be resolved by reference to facts existing at the time the lease was executed ' the existence of the sidewalk caf'. The court then held that tenant was justified in understanding that landlord had promised to refrain from unreasonably withholding consent to operation of the sidewalk caf'. In this case, landlord had offered no reasonable basis for withholding consent.

COMMENT

A landlord owes a tenant an implied duty to cooperate with tenant's application to government authorities if cooperation is necessary to comply with an express provision of the lease. In Second on Second Caf', Inc., v. Hing Sing Trading, Inc., 66 A.D.3d255 the court affirmed an order granting the tenant a mandatory preliminary injunction directing the landlord to execute all necessary permit applications and to allow the tenant to install an exhaust vent necessary to the tenant's express right to operate a fast food kitchen Because the lease expressly allowed tenant to use the premises for fast food cooking, and the New York City Code and Fire Prevention Code required that commercial kitchens possess a vent and ductwork for the release of exhaust, the court held that landlord had impliedly agreed to comply with permit applications to install the exhaust vent. The court emphasized that where a landlord gives tenant an express right, the landlord impliedly agreed to everything necessary to enjoyment of that right.

However, where a lease is ambiguous as to the permissible uses, a trial will be necessary to determine whether landlord impliedly agreed to execute all necessary government permit applications. In Cookery Lafayette, Inc. v. Westerly Co., 2 A.D.2d 970 the court reversed the lower court decision entering judgment for tenant, at the close of trial, in tenant's action to compel landlord to execute any authorization needed for the tenant to operate a sidewalk caf'. Although the lease allowed the tenant “permissible use of the sidewalk in front of and adjacent to the leased premises,” the lease also provided that tenant would be a “licensee” with respect to that space and did not expressly require the landlord to sign documents authorizing use of a sidewalk caf'. As a result, the Appellate Division held that the tenant's lease was ambiguous as to the use of the sidewalk, and that trial was required to determine the intent of the parties. regarding the sidewalk, an issue not explored at the initial trial.

Tenant Unable To Obtain Certificate of Occupancy

Prakhin v. Fulton Towers Realty Corp.

NYLJ 11/7/14, p. 23, col. 5

AppDiv, First Dept.

(memorandum opinion)

In tenant's action for breach of the lease and constructive eviction, tenant and landlord both appealed from Supreme Court's order denying their respective summary judgment motions. The Appellate Division affirmed, holding that questions of fact remained about why tenant was unable to obtain a certificate of occupancy.

Tenant leased the third floor of a commercial building, agreeing to take the premises in “as-is” condition subject only to landlord's promise to build a stairway and handicapped access ramp and to put the lobby in usable condition. When tenant completed renovation of its premises, tenant was unable to obtain a certificate of occupancy. Tenant brought this action, alleging that landlord had breached the lease by failing to maintain the building's elevator. Landlord counterclaimed for unpaid rent. Supreme Court denied both parties' summary judgment motions.

In affirming, the Appellate Division noted that tenant's motion papers included only conclusory assertions by tenant and tenant's expert that landlord's failure to maintain the elevator caused tenant's inability to obtain a certificate of occupancy. As a result, questions of fact precluded award of summary judgment to tenant. Conversely, landlord's assertions that the lease required it only to maintain the elevators in the condition they were in at the time the parties entered into the lease raised questions of fact. Finally, the court held that landlord was not entitled to summary judgment on its claim for unpaid rent. The court conceded that a commercial tenant's obligation to pay rent to a breaching landlord is not suspended if tenant remains in the premises, but the court indicated that question of fact remained about whether tenant in this case had vacated the premises.

'

Tenant's Operation of Sidewalk Caf'

DMF Gramercy Enterprises, Inc. v. The Lillian Troy 1999 Trust

NYLJ 10/23/14, p. 18, col. 3

AppDiv, First Dept.

(Opinion by Acosta, J.)

In tenant's action for a judgment declaring that it is entitled to operate a sidewalk caf' and that landlord is required to provide consent, landlord appealed from Supreme Court's judgment enjoining landlord from revoking its consent to operation of the caf'. The Appellate Division affirmed, holding that landlord could not withhold its consent without a good faith basis for doing so.

When landlord's predecessor leased the premises to tenant's predecessor in 1964, a sidewalk caf' was already in existence, although the caf' was located on city property, not on the demised premises. The lease expressly required landlord to execute applications and any other documents necessary to enable “Tenants ' to obtain and maintain a sidewalk caf' [on] the public sidewalks adjoin said premises.” Landlord or its predecessor had completed consent forms for the Department of Consumer Affairs for many years, but in 2012, landlord purported to terminate its consent, and refused to consent to any new license for a sidewalk caf'. Tenant brought this action, and the parties stipulated ' contrary to fact ' that “the words 'sidewalk caf” are not used, stated or referenced in the Lease.” Supreme Court nevertheless held that landlord had no right to withhold consent in its sole discretion, and landlord appealed.

In affirming, the Appellate Division first held that the language in the lease was dispositive, and that the court would not be bound by a stipulation contrary to the evidence submitted by the parties. The court went on to note that even if the stipulation were honored, the lease permitted tenant to operate the caf'. The lease expressly permitted tenant to occupy areas extending beyond the building line subject to government rules and regulations. Although the court deemed this language ambiguous, it concluded that the ambiguity should be resolved by reference to facts existing at the time the lease was executed ' the existence of the sidewalk caf'. The court then held that tenant was justified in understanding that landlord had promised to refrain from unreasonably withholding consent to operation of the sidewalk caf'. In this case, landlord had offered no reasonable basis for withholding consent.

COMMENT

A landlord owes a tenant an implied duty to cooperate with tenant's application to government authorities if cooperation is necessary to comply with an express provision of the lease. In Second on Second Caf', Inc., v. Hing Sing Trading, Inc., 66 A.D.3d255 the court affirmed an order granting the tenant a mandatory preliminary injunction directing the landlord to execute all necessary permit applications and to allow the tenant to install an exhaust vent necessary to the tenant's express right to operate a fast food kitchen Because the lease expressly allowed tenant to use the premises for fast food cooking, and the New York City Code and Fire Prevention Code required that commercial kitchens possess a vent and ductwork for the release of exhaust, the court held that landlord had impliedly agreed to comply with permit applications to install the exhaust vent. The court emphasized that where a landlord gives tenant an express right, the landlord impliedly agreed to everything necessary to enjoyment of that right.

However, where a lease is ambiguous as to the permissible uses, a trial will be necessary to determine whether landlord impliedly agreed to execute all necessary government permit applications. In Cookery Lafayette, Inc. v. Westerly Co., 2 A.D.2d 970 the court reversed the lower court decision entering judgment for tenant, at the close of trial, in tenant's action to compel landlord to execute any authorization needed for the tenant to operate a sidewalk caf'. Although the lease allowed the tenant “permissible use of the sidewalk in front of and adjacent to the leased premises,” the lease also provided that tenant would be a “licensee” with respect to that space and did not expressly require the landlord to sign documents authorizing use of a sidewalk caf'. As a result, the Appellate Division held that the tenant's lease was ambiguous as to the use of the sidewalk, and that trial was required to determine the intent of the parties. regarding the sidewalk, an issue not explored at the initial trial.

Tenant Unable To Obtain Certificate of Occupancy

Prakhin v. Fulton Towers Realty Corp.

NYLJ 11/7/14, p. 23, col. 5

AppDiv, First Dept.

(memorandum opinion)

In tenant's action for breach of the lease and constructive eviction, tenant and landlord both appealed from Supreme Court's order denying their respective summary judgment motions. The Appellate Division affirmed, holding that questions of fact remained about why tenant was unable to obtain a certificate of occupancy.

Tenant leased the third floor of a commercial building, agreeing to take the premises in “as-is” condition subject only to landlord's promise to build a stairway and handicapped access ramp and to put the lobby in usable condition. When tenant completed renovation of its premises, tenant was unable to obtain a certificate of occupancy. Tenant brought this action, alleging that landlord had breached the lease by failing to maintain the building's elevator. Landlord counterclaimed for unpaid rent. Supreme Court denied both parties' summary judgment motions.

In affirming, the Appellate Division noted that tenant's motion papers included only conclusory assertions by tenant and tenant's expert that landlord's failure to maintain the elevator caused tenant's inability to obtain a certificate of occupancy. As a result, questions of fact precluded award of summary judgment to tenant. Conversely, landlord's assertions that the lease required it only to maintain the elevators in the condition they were in at the time the parties entered into the lease raised questions of fact. Finally, the court held that landlord was not entitled to summary judgment on its claim for unpaid rent. The court conceded that a commercial tenant's obligation to pay rent to a breaching landlord is not suspended if tenant remains in the premises, but the court indicated that question of fact remained about whether tenant in this case had vacated the premises.

'