Effective September 26, 2016, the New York City “Commercial Tenant Harassment Law” (the “Law”) prohibits landlords from engaging in harassment of commercial tenants. Although the impetus for the legislation was to protect small business owners, as it was passed, the regulation applies to most commercial tenants.
Under the Law, a commercial tenant must establish the following two elements in order to successfully make a claim of harassment. First, the tenant must demonstrate that the landlord, or someone acting on behalf of the landlord, has committed an act or omission “intended to cause a commercial tenant to vacate Covered Property, or to surrender or waive any rights under a lease or other rental agreement or under applicable law in relation to such Covered Property.” The Law defines Covered Property as “any building or portion of a building (i) that is lawfully used for buying, selling or otherwise providing goods or services, or for other lawful business, commercial, professional services or manufacturing activities, and (ii) for which a certificate of occupancy authorizing residential use of such building or such portion of a building has not been issued.”
Second, the tenant must demonstrate that the landlord’s conduct consisted of at least one of the ten (10) wrongful acts enumerated in the statute. These wrongful acts include improper use of force, repeated or extended interruptions of essential services, commencing frivolous court proceedings, and preventing the commercial tenant from entering the property.
Please note that the Law explicitly excludes and does not affect a commercial landlord’s ability to lawfully (i) terminate a tenancy, (ii) refuse to renew or extend a lease or other rental agreement, or (iii) reenter and repossess a Covered Property.
If a tenant successfully establishes a claim of harassment under the Law, the landlord will be subject to a mandatory civil penalty of between $1,000 and $10,000. Additionally, the Law calls for the following remedies: (1) A court issued restraining order forbidding the landlord from engaging in harassment, and directing the landlord to ensure that no further violation occurs; and/or (2) damages, including injunctive relief, damages to compensate the tenant, punitive damages, and reasonable attorneys’ fees.
There are several important issues that remain unclear under the Law. First, because the Law defines a commercial tenant as “a person or entity lawfully occupying a covered property pursuant to a lease or other rental agreement,” it is unclear whether “commercial tenant” includes real estate licensees. The Law also does not address whether a commercial tenant can waive their rights under the Law in a lease agreement or whether the lease agreement can set the grounds for the appropriate forum, or limit available remedies.
If you are looking to invest in, purchase or lease commercial real estate, it is important to contact an experienced real estate attorney who can guide you through the process, and protect your legal rights. For more information about real estate issues, contact the experienced New York City commercial real estate attorneys at AGMB at 212-201-1170. For more information about Vincent D’Aquila, Esq., click here. For more information about Mitchell Dank, Esq., click here.