When it comes to negotiating and ultimately entering into a lease agreement, it is important to understand the laws of the specific state in which the property is located that may affect the validity of your lease and tenancy. This article will discuss a few such laws as it pertains to the State of New York.
Does the concept of an implied warranty of fitness for an intended use apply to commercial leases in New York?
An implied warranty of fitness for an intended use generally arises when the seller of an item knows the specific purpose or reason a buyer is purchasing said item from them, and the seller proceeds to sell the item to that buyer. If it turns out that the item cannot be used for the purpose or reason for which it was purchased, the buyer would in turn claim that the seller breached the warranty of fitness for an intended use.
So, does New York law provide for an implied warranty of fitness for an intended use in the commercial leasing context? In short – NO, irrespective of whether the landlord specifically knows the tenant’s intended use of the leased premises. This means that if a landlord knows that a tenant is leasing space from them for the purpose of opening and operating a restaurant, and the tenant is ultimately unable to do so, the tenant cannot claim that the landlord breached a warranty of fitness for the tenant’s intended use. Even though the tenant may have other grounds upon which they may be able to make a claim against the landlord as a result of the tenant’s inability to open and operate a restaurant from their leased space, the point here is that such a claim would not be grounded upon a theory of a breach of an implied warranty of fitness for an intended use.
Is a commercial landlord required to allow a tenant to renew its lease?
NO – a landlord of a commercial property in New York is not required to renew the term of its tenant’s lease unless the lease agreement itself expressly provides otherwise (i.e., if it grants the tenant a renewal option). If having a renewal option is important for a tenant, it is imperative that the tenant not only communicate this to the landlord, but also ensure that said renewal option (and the specific terms relating to same) is expressly set forth in the lease agreement before it gets signed.
Can a NY tenant assign its lease or sublet its premises to a third party?
Generally, whether a tenant has the right to sublet or assign is covered in the lease agreement itself. Typically, a lease agreement will generally prohibit a tenant from assigning its interests under the lease and from subletting the leased premises (or any portion thereof) - in each case without the prior written consent of the landlord. Of course, a tenant using prudent counsel can negotiate the appropriate language into the lease to attain for itself some sort of right to assign or sublease – that right may be unconditional (exercisable without having to satisfy any particular condition, including, without limitation, obtaining landlord’s prior consent), or may be subject to obtaining the landlord’s consent, with such consent right of the landlord being qualified so as to prevent the landlord from unreasonably withholding, conditioning, or delaying such consent. What about the rare case when a lease is silent on the issue of assignment and subleasing rights? In New York, the default rule is that if the lease does not prohibit or condition assignment and/or subleasing rights, then the tenant is permitted to so assign or sublease.
As can be seen from what we have discussed here, leasing laws are very nuanced and may differ from state to state. When looking for a new space or negotiating a lease, it is important to be represented by an attorney who understands the implications of how various lease terms and provisions can affect your tenancy as well as your expectations, wants, and needs going into same. For more information, or for help on your next lease agreement, reach out to the knowledgeable real estate attorneys at KI Legal by calling (212) 404-8644 or emailing info@kilegal.com.
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