Sued by Your Commercial Landlord for Rent?
Your landlord has sued your business for unpaid rent under a commercial lease, and may have named you personally on a guaranty. Here is what these cases usually turn on in New York, and what to do before your answer is due.
Tell Me About the CaseWhat These Lawsuits Look Like.
A landlord that wants money, not just the space, sues in New York Supreme Court. The complaint usually claims the unpaid base rent, additional rent such as real estate tax and operating expense charges, late fees and interest, and, when the lease allows it, the rent for the rest of the term and the landlord's attorneys' fees. If you signed a guaranty when the lease was signed, the landlord will usually name you as well. See sued on a personal guarantee.
This page is about a lawsuit for money. A summary proceeding to take back the space is a different kind of case, usually brought in a local civil court.
The Deadline Comes First.
Your business has a short window to answer, and a corporation cannot answer on its own. CPLR 321(a) requires a corporation to appear through an attorney. If no answer is filed, the landlord can ask for a default judgment for the full amount claimed. See what to do when your business is sued.
What These Cases Usually Turn On.
The landlord does not have to re-let the space.
Start with the hardest fact. Many tenants assume that once they move out, the landlord must find a new tenant and can only collect the difference. New York does not require that of a commercial landlord. In Holy Props. v Kenneth Cole Prods., 87 NY2d 130, 133 [1995], the Court of Appeals held that a landlord "is under no obligation or duty to the tenant to relet, or attempt to relet abandoned premises in order to minimize damages." The 2019 statute that changed this rule, Real Property Law 227-e, applies only to premises occupied for dwelling purposes. What the landlord did after you left still matters: if it accepted a surrender of the space and re-let it for its own account, that can release you from rent for the period after the surrender (87 NY2d at 134).
Accelerated rent can be challenged as a penalty.
Many commercial leases let the landlord demand all the rent for the rest of the term at once after a default. In 172 Van Duzer Realty Corp. v Globe Alumni Student Assistance Assn., 24 NY3d 528, 531-532, 536-537 [2014], the Court of Appeals held that the tenant is entitled to a hearing to show that the undiscounted accelerated rent is grossly disproportionate to the landlord's actual losses, even though the landlord has the space back and has no duty to re-let it. The tenant carries the burden of proving the penalty. If it does, the landlord recovers its actual damages instead.
Lockouts and lost space.
If the landlord actually evicted your business from part of the space, the obligation to pay rent is suspended, even while you stay in the rest (Barash v Pennsylvania Term. Real Estate Corp., 26 NY2d 77, 83 [1970]). The intrusion must be more than trivial; the Court of Appeals found an intrusion of about twelve square feet, in a space of roughly 15,000 square feet or more, too small to count (Eastside Exhibition Corp. v 210 E. 86th St. Corp., 18 NY3d 617, 623 [2012]). A different claim, constructive eviction, applies when the landlord's conduct makes the space unusable, but the tenant "must abandon possession in order to claim that there was a constructive eviction" (Barash, 26 NY2d at 83). A tenant that stays and stops paying cannot rely on it.
Residential protections do not apply.
The warranty of habitability in Real Property Law 235-b covers residential premises only, and so does the reciprocal attorneys' fee rule in Real Property Law 234. A commercial lease is enforced largely as written, so the lease itself, every amendment, and every rider decide what the landlord can claim, including whether it can add its legal fees. See when the loser pays attorneys' fees.
The security deposit.
Under General Obligations Law 7-103, money deposited as security on a rental of real property remains the tenant's money, held in trust, and may not be mingled with the landlord's own funds. The statute's text is not limited to residential leases. Find out what happened to the deposit and whether it was credited.
Guaranties and fast-track motions.
When the landlord sues on a guaranty, it sometimes skips the complaint and moves for summary judgment in lieu of complaint under CPLR 3213, so the first paper you receive may be a motion for judgment. The answering dates on that motion control. Read the papers the day they arrive.
How old the claim is.
A claim on a lease is a contract claim, generally subject to the six-year period in CPLR 213(2).
What to Gather Now.
The summons and complaint, the lease with every amendment, rider, and guaranty, the landlord's rent ledger, every default notice or notice to cure, your payment records, the security deposit records, and every email or letter about repairs, access, closures, or returning the keys. Those documents usually decide how strong the landlord's case really is.
Frequently Asked Questions
I moved out. Doesn't the landlord have to find a new tenant?
Not for commercial space. In Holy Props. v Kenneth Cole Prods., 87 NY2d 130, 133 [1995], the Court of Appeals held that a landlord has no duty to re-let abandoned premises to reduce its damages, and the 2019 mitigation statute, Real Property Law 227-e, covers only premises occupied for dwelling purposes. What the landlord did with the space after you left still matters, because accepting a surrender can end liability for later rent.
Can the landlord collect the rent for the rest of the lease all at once?
If the lease has an acceleration clause, the landlord may try. Under 172 Van Duzer Realty Corp. v Globe Alumni Student Assistance Assn., 24 NY3d 528 [2014], a tenant can ask for a hearing to show that collecting all future rent at once, undiscounted, is grossly disproportionate to the landlord's actual loss and is an unenforceable penalty. The tenant carries that burden.
Can I stop paying because the landlord is not making repairs?
That is risky. The warranty of habitability in Real Property Law 235-b applies to residential premises only, and a claim of constructive eviction requires the tenant to give up possession of the space. Talk to a lawyer before withholding rent from a commercial landlord.
Can the landlord sue me personally?
Only if you are personally bound, most often through a guaranty you signed with the lease. Check what you signed.
Tell Me About the Case.
I handle business lawsuits where $25,000 or more is at stake, in New York Supreme Court. Send me a short description and the date you were served, attach the summons and complaint, and I will tell you where things stand.
The defense is quoted as a flat fee for each stage, such as the answer or a motion, so you know what each step costs before it starts.
Phone: 212-233-0666 | Email: fabramson@abramsonlegal.com
Why the Courtroom Matters.
I have practiced in New York since 1997, and my office is in New York Supreme Court every week, in all five boroughs and in Nassau, Suffolk, and Westchester. I know how the parts run and what the judges expect, and that shapes every paper and every settlement conversation from the first day.
When you contact me, I run a conflict check first. If I can take the case, I will tell you plainly where things stand, what the deadlines are, and what it will take.
Related: Your Business Was Sued in New York · Sued on a Personal Guarantee · Default Judgment Against Your Business · Sued by a Supplier for Unpaid Invoices · Common Defenses to a Breach of Contract Claim · Civil Litigation
Attorney Advertising. Prior results do not guarantee a similar outcome. This page is general information, not legal advice about your situation. The Law Office of Frederic R. Abramson, 160 Broadway, Suite 500, New York, NY 10038. 212-233-0666.