The New York City Council has passed a long-overdue law protecting the rights of commercial tenants. This law, which applies to any and all commercial tenants in the city, will allow tenants to sue their landlords for actions which constitute harassment as defined under the law. This new law can make winning a big case for harassment against landlords much easier for commercial tenants in New York City.
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In the new law, the New York City Council defined harassment broadly, maximizing the protection afforded to commercial tenants. Essentially, the law prohibits behavior by landlords which is intended to force tenants to vacate their property or sacrifice any of their rights under the lease. This includes the landlord’s actual use of force or the implication of force, blocking access to the property by changing the locks or creating other barriers to entry, or bringing repeated frivolous legal proceedings. If landlords take such action against their commercial tenants, those tenants are entitled to bring an action for damages, including punitive damages and a fine of up to $10,000. The landlord can even be required to pay the tenant’s legal fees.
How Landlords can Avoid Liability Under the New Law
While the new law is very strict and is serious about protecting the rights of commercial tenants, it is not designed to punish commercial landlords arbitrarily. As long as landlords avoid harassment of their tenants, they should have nothing to worry about. Still, there are some common sense steps all commercial landlords in New York City should take to avoid inadvertently becoming liable under the new law.
The easiest way to avoid liability under the new law is to expressly waive it in the lease. It may surprise you to learn that waivers of particular laws are enforceable as long as they don’t violate public policy. This law is too new and untested for any attorneys to know for sure whether it will constitute public policy, but until this matter distinction is sorted out by the courts it makes sense for landlords to go ahead and waive it. Experts like Adam Leitman Bailey can offer insight into the laws.
Another way to avoid liability under the new law is to keep meticulous records of any repairs made to the property, including the underlying reasons for those repairs. The reason for this is that the new law prohibits unnecessary repairs that result in repeated or extended interruptions of services that negatively impact a tenant’s business. If you have clear explanations of the valid reasons for a repair, and documentation that the repairs were carried out quickly and efficiently, then your tenants will have a more difficult time asserting claims that the repairs were unnecessary or resulted in damage to their business. Examples of evidence you should save include expert reports, photos of any damage needing repaired and the repairs that were undertaken. It is also advised that landlords provide regular written reports to the tenants informing them of the need for the interruptive repairs, and the process by which the landlord is efficiently making said repairs.
Additionally, landlords should be extremely careful of how they treat their tenants. Even if you don’t mean it, you should never joke about harassing tenants into vacating the leased premises early – they may take you seriously. If you would like to discuss early termination of a lease with a tenant for legitimate reasons, speak with your attorney first and make sure that you don’t go about the conversation in a way that might constitute harassment. Also, treat all of your tenants equally. If you give higher priority to the problems of your anchor tenant than those of another tenant, then you may be deemed guilty of harassment.
Finally, always remember that you can be liable for the actions of your employees and agents that were undertaken within the scope of their employment. Therefore, make sure that you make them aware of the need to avoid harassing tenants.
It is now the law in New York City that commercial tenants can sue their landlord if the landlord attempts to use harassment as a means of forcing the tenant to vacate the premises early or otherwise forfeit their rights under the lease. This law is new and untested, and it is not yet clear exactly how courts are going to approach. Still, it is always a best practice to err on the side of caution, so landlords should be very careful in how they treat their tenants in order to avoid being found liable under the new law.
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