Drafting an Effective Commercial Lease Default Lease: Two More Secrets

Including the time it takes to obtain a court date, to request shortened adjournment periods, and a resolution by settlement, trial or default in the case of a non-appearance, the earliest a landlord can expect to obtain an eviction will be no less than three to five months after commencement of the nonpayment process. (Some less urban areas of the State of New York report shorter periods, but not by a lot.) Even after an eviction is scheduled, RPAPL § 751(1) mandates that the tenant be given 10 days to pay the amount of rent owed to stay the issuance of a warrant and avoid eviction.

For many landlords, the cycle of late payments or nonpayment is repeated continuously and, in many cases, perennially. To further exacerbate their frustration, in addition to the wasted energy, time and money they expend in participating in the process, many cases result in empty tenancies with thousands of uncollectible dollars. Accordingly, although, in the words of the court in Adam's Tower Ltd. Partnership v. Richter, 28 HCR 531A, 186 Misc.2d 620, 757 NYS2d 825 (App. Term, 1st Dept. 2000), “[a] history of repeated nonpayment proceedings brought to collect chronically late rental payments supports an eviction proceeding on the ground that the tenant has violated a 'substantial obligation' of the tenancy,” attorneys should strive to draft into any default clause a provision by which the tenancy is terminated for the chronic nonpayment of rent. See also Sharp v. Norwood, 89 NY2d 1068, 659 NYS2d 834 (1997).

A chronic nonpayment provision terminates the tenancy upon the happening of multiple defaults in the timely payment of rent. A typical clause will terminate the tenancy once a tenant fails to timely pay the rent at least three times within a 12-consecutive-month period. Even where the lease contains a grace period (typically five days) within which the tenant is normally permitted to cure a default for nonpayment after issuance of a notice of default, the chronic nonpayment provision can prescribe that, after two consecutive defaults, the landlord, prior to serving the notice of termination, is not required to serve the tenant with a notice of default for a third consecutive default, but may, after the expiration of the five-day grace period, immediately serve the notice of termination. Therefore, the third consecutive default triggers the termination of the lease automatically. See, e.g., Midco Nowash LLC, supra; see also Estate of Birnbaum v. Yankee Whaler, 75 AD2d 708, 427 NYS2d 1291 (4th Dept. 1980).

At this point, the commercial tenant cannot ward off eviction by paying the rent in full. As a result of the chronic nonpayment clause, the landlord has the option of evicting the tenant, so long as the requirements of the chronic nonpayment provision have been followed and proven in court. This is one instance where the precedents are clear, both that a summary holdover proceeding lies and that it does not require an antecedent notice to cure. Definitions Personal Fitness, Inc. v. 133 E. 58th St. LLC, 41 HCR 492B, 107 AD3d 617, 967 NYS2d 647 (AD1 2013); Adam's Tower LP v. Richter, supra.

Self-Help Evictions

Upon termination of the lease or upon the commercial tenant's defaulting on payment of rent or other lease terms, a landlord may reenter the leased premises peaceably without resort to court process, when the right to do so is expressly reserved in a commercial lease. See Bozewicz v. Nash Metalware Co., Inc., 284 AD2d 288, 725 NYS2d 671 (2d Dept. 2001); Matter of 110-45 Queens Blvd. Garage, Inc. v. Park Briar Owners, Inc., 265 AD2d 415 (2d Dept. 1999); Matter of Jovan Spaghetti House, Inc. v. Heritage Company of Massena, 189 Ad2d 1041, 592 NYS2d 879 (3d Dept. 1993). A commercial landlord's common law right to use “self-help” to reenter its property peaceably to evict a defaulting tenant or other person with no right to possession has been recognized from time immemorial. See Bliss v. Johnson, 73 NY 529, 534 (1878) (“The true owner of land wrongfully held out of possession may watch his opportunity, and if he can regain possession peaceably may maintain it — and lawfully resist an attempt by the former occupant to retake possession, nor will he be liable to be proceeded against under the statute of forcible entry and detainer. There can be no wrongful detainer by the true owner when the entry was both lawful and peaceable.”); Fults v. Munro, 202 NY 34, 39 (1911) (“Statutes relating to forcible entry and to forcible detainer, which are separate and distinct wrongs, have existed for centuries.”); see also Mayes v. UVI Holdings, Inc., 280 AD2d 153, 723 NYS2d 151 (1st Dept. 2001).

Nevertheless, although the common law right of self-help reentry is not abrogated by the statutory remedy of summary proceedings (see Cohen v. Carpenter, 128 AD 862, 113 NYS 168 (2d Dept. 1908); Liberty Industrial Park Corp. v. Protective Packaging Corp., 71 Misc.2d 116, 335 NYS2d 333 (Special Term, Kings Co., 1972), affirmed, 43 AD2d 1020, 351 NYS2d 944 (2d Depts. 1974)), it is a remedy that is rarely used, and in many municipalities throughout the State of New York is abolished or restricted. The extent of self-help available also varies by Judicial Department in New York. (Practitioners should be certain to know the local ordinances on the subject prior to expressing an opinion.)

Attorneys who represent commercial landlords are often reluctant to advise their clients to use this neglected self-help remedy to regain possession of leased premises from defaulting commercial tenants. (Self-help is limited to the commercial context only. New York City Administrative Code § 26-521 prohibits the use of self-help in the residential context.) This reluctance stems, in part, from the perception that courts are generally hostile to a commercial landlord's use of self-help, because self-help renders a forfeiture of the premises before a tenant can litigate its right to remain in possession. (Courts created the so-called “Yellowstone” injunction to allow the parties to dispute their differences while the tenant remains in possession and to prevent forfeiture. See, e.g., John Stuart, a Division of Robert Allen Fabrics of NY, Inc. v. D&D Associates, 160 AD2d 547, 545 NYS2d 197 (1st Dept. 1990).) In addition, because of the lack of use of self-help, many attorneys are unfamiliar with this body of law and are hesitant to employ such an aggressive measure.

Courts also refuse to approve use of self-help where there is ambiguity in the lease terms or there are factual questions concerning the expiration of the lease. See Sol de Ibiza, LLC v. Panjo Realty, Inc., 26 Misc.3d 890 NYS2d 806 (NYC Civil Ct., 2009), reversed remanded on undeveloped record, 29 Misc.3d 72, 911 NYS2d 567 (App Term, NY Co., 2010). Moreover, under New York's Real Property Actions and Proceedings Law (RPAPL) § 853, a tenant wrongfully ejected from real property by force or other unlawful means may sue to recover treble damages from the landlord and be restored to possession if ejected before the end of the lease term. See Suffolk Sports Center, Inc. v. Belli Construction Corp., 212 AD2d 241, 628 NYS2d 952 (2d Dept. 1995).

As a result of the combination of general court hostility and attorney reluctance to recommend the use of proper self-help measures, commercial tenants have been allowed to violate their leases or extend them based on technical or frivolous defenses, sometimes for months or years at a time, in blatant disregard of the lease terms. See, e.g., Million Gold Realty Co. v. SE&K Corp., 4 AD3d 196 772 NYS2d 271 (1st Dept. 2004). In addition to the loss of rental income that often accompanies such disputes, landlords faced with this situation lose valuable time to repair, renovate, and re-let their premises to responsible tenants. These circumstances also adversely affect any effort by the landlord to sell the leased premises to potential buyers.

Landlords have every incentive to insist on including a proper and effective self-help provision in their commercial leases. With appropriate drafting and proper execution of the self-help measures provided in their leases, commercial landlords should be able to exercise their right to peaceable reentry whenever such action is warranted. With the availability of self-help written into the lease, tenants are likely to be more careful to avoid any action that will place themselves in default, thereby becoming subject to immediate peaceable eviction. Thus, with the inclusion of a self-help clause, commercial landlords may both: 1) provide an incentive for their tenants to comply with the lease terms; and 2) be able, when compelled to use self-help, to timely re-let the premises without first having to await the outcome of costly and lengthy litigation before doing so.

Nevertheless, landlords who use self-help will not necessarily be able to avoid all litigation. There is always a possibility that the landlord will be required to litigate: 1) whether the tenant was in default at the time of the landlord's reentry; and/or 2) whether the self-help used was peaceable and otherwise lawful. See Maracina v. Shirrmeister, 105 AD2d 672, 673, 482 NYS2d 14, 16 (1st Dept. 1984) (“RPAPL 853 no longer requires that the use of physical force be demonstrated.”). Therefore, landlords should: 1) carefully document a tenant's default before reentering the leased premises; and 2) ensure that reentry is accomplished peaceably. Where it is not crystal clear that the lease term has expired or that the tenant is in default, the landlord should not use self-help, but should resort only to summary proceedings or other legal process. However, recognizing that the outcome of any litigation is always uncertain, a landlord may view the possibility of a future, adverse treble damages judgment as a risk worth taking in order to obtain the real, current ability to re-let the premises to a responsible tenant who will pay rent during the litigation that ensues between the landlord and the evicted tenant. Also, it is wise to remember that three times zero is still zero. If there are no genuine damages, trebling them is not going to hurt the landlord.

In deciding whether or not to run that risk, the landlord should consider the kind of damages that the evicted tenant will have a right to claim; i.e., whether any injury caused by the reentry will be limited to property damage only or whether the evicted tenant will be able to claim and prove damages measured by the loss of the value of the leasehold. See Mayes, supra.

Where the lease has expired or been terminated by reason of the default, the tenant is not entitled to possession. See110-45 Queens Blvd. Garage, supra. In that situation, the tenant's damage is likely to be limited to such property damage as may occur during the course of the reentry only — the sum of which a landlord may be more than willing to bear — but a judgment that the landlord may also be able to avoid by taking care to see that the tenant's property is carefully removed from the premises by persons other than the landlord itself, such as a bonded moving company, and placed in a reputable storage facility.

Whether a landlord's reentry is deemed peaceable or not will depend on whether it is made in a “forcible” manner. For a reentry to be forcible, the force used “must be unusual and tend to bring about a breach of the peace, such as an entry with a strong hand, or a multitude of people, or in a riotous manner or with personal violence, or with the threat and menace to life or limb, or under circumstances which would naturally inspire fear and lead one to apprehend danger or personal injury if he stood up in defense of his possession.” Fults v. Munro, supra.

In the absence of force that tends to breach the peace, hiring trucks and workers, and even a garbage company, to evict a tenant does not constitute forcible entry. See Liberty Industrial Park Corp., supra. This is true even if, in the case of a municipal landlord, the eviction is performed with the assistance of armed police. See Paulino v. Wright, 22 HCR 739A, 210 AD2d 171, 620 NYS2d 363 (1st Dept. 1994). However, to ensure that its use of self-help is indeed “peaceable” and that there is no confrontation during the eviction, the landlord should arrange for the reentry to occur during late night/early morning hours when the tenant's business is closed and when the landlord's agents are certain that no one is present on the leased premises before entering. When conducting the eviction, if there is any conflict with the tenant or its representatives, the attempted eviction should be abandoned and accomplished at a later date or under court order.

Upon reentry, when the peaceable self-help eviction is successful, the landlord may then change the locks or padlock the doors. To thwart any potential damage claims, the entire reentry operation should be videotaped, and all items of tenant property removed from the property should be photographed and inventoried. The tenant's property should then be placed in storage, for a reasonable period of time, in accordance with a lease provision that contemplates such action in the event of an eviction. (Universal custom, supported by no case law whatsoever, deems “reasonable time” to be 30 days.)

Ultimately, whether or not the landlord is permitted to use self-help to regain possession of the leased premises will depend on whether the landlord's right to do so is reserved in the lease. The lease should expressly provide:

• that, if the tenant defaults in the payment of rent or commits any other violation of the lease constituting a default, the lease shall terminate automatically;
• that the landlord may thereafter recover possession in accordance with its common law rights;
• that the landlord may do so without any duty, requirement or necessity to provide due process or to seek prior court approval, through summary dispossess proceedings or any other action or proceeding at law, before evicting the tenant and removing tenant's property and/or any person from the premises; and
• that the term “re-entry” is not used in its technical or narrow sense but in the sense that the landlord may effect physical entry of the premises. (This clause is essential because much case law continues to define “re-entry” simply as the right to bring a summary proceeding.)

Such a provision does not preclude the landlord from initiating summary proceedings if it chooses to do so. However, the landlord should exercise its options carefully. If the landlord does not use self-help initially, but commences a summary proceeding in the first instance, the right to use self-help thereafter may be considered waived. See Sol De Ibiza, LLC, supra.

The lease terms should also obligate the tenant to pay the landlord all monies owed by the tenant up to the time of the landlord's recovery of possession, whether the landlord recovers possession through self-help or summary proceedings. In addition, the lease should reserve the landlord's right to sue after reentry for any damages incurred as a result of the tenant's actions, such as an unlawful holdover that causes the landlord to lose an opportunity for re-letting the premises. The lease should provide that the landlord need not assert such claims against the tenant in summary proceedings only, but may do so in a separate plenary action.

While there are decided risks involved in using self-help measures, the careful landlord and the careful landlord's attorney should generally be able to avoid the pitfalls that exist and make self-help work to the landlord's benefit in the long run.

*****
Adam Leitman Bailey, a member of Commercial Leasing Law & Strategy's Board of Editors, is the founding partner of Adam Leitman Bailey, P.C. John M. Desiderio chairs the Real Estate Litigation Practice Group at the firm. Portions of this article are taken from The Essential Guide to the Most Important Clause in a Commercial Lease: The Default Clause chapter, in the New York State Bar Association book, Commercial Leasing, 3rd Edition, which is expected to be published next year, with permission by editor Joshua Stein.

Last month, we outlined three types of provisions that can ease a commercial landlord's efforts to enforce the terms of a lease when a tenant defaults: clauses related to additional rent, rent acceleration and late charges. We continue here with two more lease-drafting ideas for minimizing the effects of tenant default.

Chronic Nonpayment

A necessary part of an effective default clause is a provision enabling the landlord to cancel the lease for the frequent delinquency of rent payments, commonly referred to as a “chronic nonpayment” of rent-due termination clause. It often happens that a landlord who is forced to commence a nonpayment proceeding in New York City Civil Court, or other local court with summary jurisdiction, is faced with a tenant who is either chronically late in paying the rent or does not pay the rent at all, thus causing the landlord to have to institute repeated legal proceedings to procure the timely payment of rent. See, e.g., National Shoes v. Annex Camera & Electronics, Inc. , 114 Misc.2d 751 452 NYS2d 537 (NYC Civil Ct. 1982).

Including the time it takes to obtain a court date, to request shortened adjournment periods, and a resolution by settlement, trial or default in the case of a non-appearance, the earliest a landlord can expect to obtain an eviction will be no less than three to five months after commencement of the nonpayment process. (Some less urban areas of the State of New York report shorter periods, but not by a lot.) Even after an eviction is scheduled, RPAPL § 751(1) mandates that the tenant be given 10 days to pay the amount of rent owed to stay the issuance of a warrant and avoid eviction.

For many landlords, the cycle of late payments or nonpayment is repeated continuously and, in many cases, perennially. To further exacerbate their frustration, in addition to the wasted energy, time and money they expend in participating in the process, many cases result in empty tenancies with thousands of uncollectible dollars. Accordingly, although, in the words of the court in Adam's Tower Ltd. Partnership v. Richter, 28 HCR 531A, 186 Misc.2d 620, 757 NYS2d 825 (App. Term, 1st Dept. 2000), “[a] history of repeated nonpayment proceedings brought to collect chronically late rental payments supports an eviction proceeding on the ground that the tenant has violated a 'substantial obligation' of the tenancy,” attorneys should strive to draft into any default clause a provision by which the tenancy is terminated for the chronic nonpayment of rent. See also Sharp v. Norwood , 89 NY2d 1068, 659 NYS2d 834 (1997).

A chronic nonpayment provision terminates the tenancy upon the happening of multiple defaults in the timely payment of rent. A typical clause will terminate the tenancy once a tenant fails to timely pay the rent at least three times within a 12-consecutive-month period. Even where the lease contains a grace period (typically five days) within which the tenant is normally permitted to cure a default for nonpayment after issuance of a notice of default, the chronic nonpayment provision can prescribe that, after two consecutive defaults, the landlord, prior to serving the notice of termination, is not required to serve the tenant with a notice of default for a third consecutive default, but may, after the expiration of the five-day grace period, immediately serve the notice of termination. Therefore, the third consecutive default triggers the termination of the lease automatically. See, e.g., Midco Nowash LLC, supra ; see also Estate of Birnbaum v. Yankee Whaler , 75 AD2d 708, 427 NYS2d 1291 (4th Dept. 1980).

At this point, the commercial tenant cannot ward off eviction by paying the rent in full. As a result of the chronic nonpayment clause, the landlord has the option of evicting the tenant, so long as the requirements of the chronic nonpayment provision have been followed and proven in court. This is one instance where the precedents are clear, both that a summary holdover proceeding lies and that it does not require an antecedent notice to cure. Definitions Personal Fitness, Inc. v. 133 E. 58th St. LLC, 41 HCR 492B, 107 AD3d 617, 967 NYS2d 647 (AD1 2013); Adam's Tower LP v. Richter, supra.

Self-Help Evictions

Upon termination of the lease or upon the commercial tenant's defaulting on payment of rent or other lease terms, a landlord may reenter the leased premises peaceably without resort to court process, when the right to do so is expressly reserved in a commercial lease. See Bozewicz v. Nash Metalware Co., Inc. , 284 AD2d 288, 725 NYS2d 671 (2d Dept. 2001); Matter of 110-45 Queens Blvd. Garage, Inc. v. Park Briar Owners, Inc. , 265 AD2d 415 (2d Dept. 1999); Matter of Jovan Spaghetti House, Inc. v. Heritage Company of Massena , 189 Ad2d 1041, 592 NYS2d 879 (3d Dept. 1993). A commercial landlord's common law right to use “self-help” to reenter its property peaceably to evict a defaulting tenant or other person with no right to possession has been recognized from time immemorial. See Bliss v. Johnson , 73 NY 529, 534 (1878) (“The true owner of land wrongfully held out of possession may watch his opportunity, and if he can regain possession peaceably may maintain it — and lawfully resist an attempt by the former occupant to retake possession, nor will he be liable to be proceeded against under the statute of forcible entry and detainer. There can be no wrongful detainer by the true owner when the entry was both lawful and peaceable.”); Fults v. Munro , 202 NY 34, 39 (1911) (“Statutes relating to forcible entry and to forcible detainer, which are separate and distinct wrongs, have existed for centuries.”); see also Mayes v. UVI Holdings, Inc. , 280 AD2d 153, 723 NYS2d 151 (1st Dept. 2001).

Nevertheless, although the common law right of self-help reentry is not abrogated by the statutory remedy of summary proceedings ( see Cohen v. Carpenter , 128 AD 862, 113 NYS 168 (2d Dept. 1908); Liberty Industrial Park Corp. v. Protective Packaging Corp ., 71 Misc.2d 116, 335 NYS2d 333 (Special Term, Kings Co., 1972), affirmed , 43 AD2d 1020, 351 NYS2d 944 (2d Depts. 1974)), it is a remedy that is rarely used, and in many municipalities throughout the State of New York is abolished or restricted. The extent of self-help available also varies by Judicial Department in New York. (Practitioners should be certain to know the local ordinances on the subject prior to expressing an opinion.)

Attorneys who represent commercial landlords are often reluctant to advise their clients to use this neglected self-help remedy to regain possession of leased premises from defaulting commercial tenants. (Self-help is limited to the commercial context only. New York City Administrative Code § 26-521 prohibits the use of self-help in the residential context.) This reluctance stems, in part, from the perception that courts are generally hostile to a commercial landlord's use of self-help, because self-help renders a forfeiture of the premises before a tenant can litigate its right to remain in possession. (Courts created the so-called “Yellowstone” injunction to allow the parties to dispute their differences while the tenant remains in possession and to prevent forfeiture. See, e.g., John Stuart, a Division of Robert Allen Fabrics of NY, Inc. v. D&D Associates, 160 AD2d 547, 545 NYS2d 197 (1st Dept. 1990).) In addition, because of the lack of use of self-help, many attorneys are unfamiliar with this body of law and are hesitant to employ such an aggressive measure.

Courts also refuse to approve use of self-help where there is ambiguity in the lease terms or there are factual questions concerning the expiration of the lease. See Sol de Ibiza, LLC v. Panjo Realty, Inc. , 26 Misc.3d 890 NYS2d 806 (NYC Civil Ct., 2009), reversed remanded on undeveloped record, 29 Misc.3d 72, 911 NYS2d 567 (App Term, NY Co., 2010). Moreover, under New York's Real Property Actions and Proceedings Law (RPAPL) § 853, a tenant wrongfully ejected from real property by force or other unlawful means may sue to recover treble damages from the landlord and be restored to possession if ejected before the end of the lease term. See Suffolk Sports Center, Inc. v. Belli Construction Corp. , 212 AD2d 241, 628 NYS2d 952 (2d Dept. 1995).

As a result of the combination of general court hostility and attorney reluctance to recommend the use of proper self-help measures, commercial tenants have been allowed to violate their leases or extend them based on technical or frivolous defenses, sometimes for months or years at a time, in blatant disregard of the lease terms. See, e.g., Million Gold Realty Co. v. SE&K Corp., 4 AD3d 196 772 NYS2d 271 (1st Dept. 2004). In addition to the loss of rental income that often accompanies such disputes, landlords faced with this situation lose valuable time to repair, renovate, and re-let their premises to responsible tenants. These circumstances also adversely affect any effort by the landlord to sell the leased premises to potential buyers.

Landlords have every incentive to insist on including a proper and effective self-help provision in their commercial leases. With appropriate drafting and proper execution of the self-help measures provided in their leases, commercial landlords should be able to exercise their right to peaceable reentry whenever such action is warranted. With the availability of self-help written into the lease, tenants are likely to be more careful to avoid any action that will place themselves in default, thereby becoming subject to immediate peaceable eviction. Thus, with the inclusion of a self-help clause, commercial landlords may both: 1) provide an incentive for their tenants to comply with the lease terms; and 2) be able, when compelled to use self-help, to timely re-let the premises without first having to await the outcome of costly and lengthy litigation before doing so.

Nevertheless, landlords who use self-help will not necessarily be able to avoid all litigation. There is always a possibility that the landlord will be required to litigate: 1) whether the tenant was in default at the time of the landlord's reentry; and/or 2) whether the self-help used was peaceable and otherwise lawful. See Maracina v. Shirrmeister , 105 AD2d 672, 673, 482 NYS2d 14, 16 (1st Dept. 1984) (“RPAPL 853 no longer requires that the use of physical force be demonstrated.”). Therefore, landlords should: 1) carefully document a tenant's default before reentering the leased premises; and 2) ensure that reentry is accomplished peaceably. Where it is not crystal clear that the lease term has expired or that the tenant is in default, the landlord should not use self-help, but should resort only to summary proceedings or other legal process. However, recognizing that the outcome of any litigation is always uncertain, a landlord may view the possibility of a future, adverse treble damages judgment as a risk worth taking in order to obtain the real, current ability to re-let the premises to a responsible tenant who will pay rent during the litigation that ensues between the landlord and the evicted tenant. Also, it is wise to remember that three times zero is still zero. If there are no genuine damages, trebling them is not going to hurt the landlord.

In deciding whether or not to run that risk, the landlord should consider the kind of damages that the evicted tenant will have a right to claim; i.e., whether any injury caused by the reentry will be limited to property damage only or whether the evicted tenant will be able to claim and prove damages measured by the loss of the value of the leasehold. See Mayes, supra.

Where the lease has expired or been terminated by reason of the default, the tenant is not entitled to possession. See110-45 Queens Blvd. Garage, supra. In that situation, the tenant's damage is likely to be limited to such property damage as may occur during the course of the reentry only — the sum of which a landlord may be more than willing to bear — but a judgment that the landlord may also be able to avoid by taking care to see that the tenant's property is carefully removed from the premises by persons other than the landlord itself, such as a bonded moving company, and placed in a reputable storage facility.

Whether a landlord's reentry is deemed peaceable or not will depend on whether it is made in a “forcible” manner. For a reentry to be forcible, the force used “must be unusual and tend to bring about a breach of the peace, such as an entry with a strong hand, or a multitude of people, or in a riotous manner or with personal violence, or with the threat and menace to life or limb, or under circumstances which would naturally inspire fear and lead one to apprehend danger or personal injury if he stood up in defense of his possession.” Fults v. Munro, supra.

In the absence of force that tends to breach the peace, hiring trucks and workers, and even a garbage company, to evict a tenant does not constitute forcible entry. See Liberty Industrial Park Corp., supra. This is true even if, in the case of a municipal landlord, the eviction is performed with the assistance of armed police. See Paulino v. Wright, 22 HCR 739A, 210 AD2d 171, 620 NYS2d 363 (1st Dept. 1994). However, to ensure that its use of self-help is indeed “peaceable” and that there is no confrontation during the eviction, the landlord should arrange for the reentry to occur during late night/early morning hours when the tenant's business is closed and when the landlord's agents are certain that no one is present on the leased premises before entering. When conducting the eviction, if there is any conflict with the tenant or its representatives, the attempted eviction should be abandoned and accomplished at a later date or under court order.

Upon reentry, when the peaceable self-help eviction is successful, the landlord may then change the locks or padlock the doors. To thwart any potential damage claims, the entire reentry operation should be videotaped, and all items of tenant property removed from the property should be photographed and inventoried. The tenant's property should then be placed in storage, for a reasonable period of time, in accordance with a lease provision that contemplates such action in the event of an eviction. (Universal custom, supported by no case law whatsoever, deems “reasonable time” to be 30 days.)

Ultimately, whether or not the landlord is permitted to use self-help to regain possession of the leased premises will depend on whether the landlord's right to do so is reserved in the lease. The lease should expressly provide:

• that, if the tenant defaults in the payment of rent or commits any other violation of the lease constituting a default, the lease shall terminate automatically;
• that the landlord may thereafter recover possession in accordance with its common law rights;
• that the landlord may do so without any duty, requirement or necessity to provide due process or to seek prior court approval, through summary dispossess proceedings or any other action or proceeding at law, before evicting the tenant and removing tenant's property and/or any person from the premises; and
• that the term “re-entry” is not used in its technical or narrow sense but in the sense that the landlord may effect physical entry of the premises. (This clause is essential because much case law continues to define “re-entry” simply as the right to bring a summary proceeding.)

Such a provision does not preclude the landlord from initiating summary proceedings if it chooses to do so. However, the landlord should exercise its options carefully. If the landlord does not use self-help initially, but commences a summary proceeding in the first instance, the right to use self-help thereafter may be considered waived. See Sol De Ibiza, LLC, supra.

The lease terms should also obligate the tenant to pay the landlord all monies owed by the tenant up to the time of the landlord's recovery of possession, whether the landlord recovers possession through self-help or summary proceedings. In addition, the lease should reserve the landlord's right to sue after reentry for any damages incurred as a result of the tenant's actions, such as an unlawful holdover that causes the landlord to lose an opportunity for re-letting the premises. The lease should provide that the landlord need not assert such claims against the tenant in summary proceedings only, but may do so in a separate plenary action.

While there are decided risks involved in using self-help measures, the careful landlord and the careful landlord's attorney should generally be able to avoid the pitfalls that exist and make self-help work to the landlord's benefit in the long run.

*****
Adam Leitman Bailey, a member of Commercial Leasing Law & Strategy's Board of Editors, is the founding partner of Adam Leitman Bailey, P.C. John M. Desiderio chairs the Real Estate Litigation Practice Group at the firm. Portions of this article are taken from The Essential Guide to the Most Important Clause in a Commercial Lease: The Default Clause chapter, in the New York State Bar Association book, Commercial Leasing, 3rd Edition, which is expected to be published next year, with permission by editor Joshua Stein.