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New York Real Estate Law ReporterColumns & DepartmentsLandlord Tenant LawLitigation

Landlord & Tenant Law

By New York Real Estate Law Reporter Staff
July 01, 2023

Tenant's Failure to Restore Premises At End of Lease Constitutes Breach

Valco Building and Maintenance Supplies Corp. v. Werweiss & Co, Inc., 2023 WL 2994971, AppDiv, Second Dept. (memorandum opinion)

In commercial tenant's action to recover a security deposit, tenant appealed from Supreme Court's award of damages on landlord's counterclaim for tenant's failure to restore the premises. The Appellate Division modified to reduce the award of damages, but otherwise affirmed, holding that tenant's failure to restore constituted a breach of the lease.

In 2008, the parties entered into a five-year lease of commercial property. Tenant made alterations to the premises, removed offices located within the leased space, and relocated the bathrooms. Before the end of the tenancy landlord's agent demanded that tenant restore the premises to the condition it was in at the outset of the lease. Tenant conducted some restoration but did not replace the offices and bathrooms it had removed. Tenant then brought this action to recover its $100,000 security deposit. Landlord counterclaimed for the amount necessary to restore the premises to its condition at the inception of the lease. After a nonjury trial, Supreme Court awarded landlord $596,894 plus prejudgment interest. Tenant appealed.

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