USA – NEW YORK Law and Practice Contributed by: Lindsey Haubenreich, Joseph Heins, Timothy Moriarty, Kimberly Nason and Matthew Fitzgerald, Phillips Lytle LLP
6.19 Right to Terminate a Lease There are several events that typically give the land - lord or the tenant the right to terminate the lease. For example, the lease typically states that if the landlord fails to complete the build-out of the space, the tenant has the right to terminate after a certain date. The parties typically have a right to terminate in the event of a casualty if the space is not restored within a certain period of time. In addition, a landlord can terminate the lease if the tenant defaults and fails to cure the default – eg, by failing to pay rent. A tenant may negotiate the right to an early termina - tion of the lease, but such early termination rights are often expensive as tenants may need to pay a termi - nation fee, reimburse a landlord for its unamortised costs and continue to pay rent for a negotiated period of time. 6.20 Registration Requirements There are no registration requirements under New York law, other than with respect to regulated resi - dential apartments. Memoranda of leases may be recorded in the county’s land records. However, not all landlords agree to execute a memorandum of lease because landlords do not want the memorandum of lease encumbering title to the property. Recording fees are paid by a per-page formula and are gener - ally paid by the party requesting and recording the A tenant can be forced to vacate in the event of default (such as failure to pay rent) or upon the expiration of the lease. Such actions are governed by the Real Property Actions and Proceedings Law (RPAPL) of the State of New York. In residential leases, the HSTPA amended the RPAPL to extend the time periods in non-payment proceed - ings. The HSTPA eliminated oral demands to vacate and increased the notice period for written demands to 14 days, while also increasing the tenant’s time to provide an answer to ten days. In addition, the HSTPA amended RPL Section 235-e to require that tenants be reminded if rent is not received within five days of the due date. Failure to provide such a reminder can memorandum of lease. 6.21 Forced Eviction
exposure can be negotiated in the lease and limited in certain respects. 6.16 Effect of the Tenant’s Insolvency The effect of a tenant’s insolvency on its lease obliga - tions is governed by the applicable bankruptcy, insol - vency and creditors’ rights statutes. When the tenant files for bankruptcy, an “automatic stay” is imposed that initially restricts the enforcement of remedies or the termination of the lease by the land- lord. Thereafter, there are specific requirements under bankruptcy law with respect to whether a lease is to be assumed or rejected. 6.17 Right to Occupy After Termination or Expiry of a Lease A tenant typically does not have a right to occupy the relevant real estate after the expiry or termination of a commercial lease. However, commercial leases typically have a “holdover” provision stating that a tenant who continues to occupy the premises after the expiry or termination of the lease must pay a mul - tiplier of the rent for the last month of the lease (typi - cally 150% to 200%) and become a month-to-month tenant or a tenant at sufferance. A landlord can only evict a month-to-month tenant upon notice, whereas an action to evict a tenant at sufferance may be com - menced at any time after the expiry or termination of the lease, subject to applicable laws. 6.18 Right to Assign a Leasehold Interest Assignments of leasehold interests are negotiated by landlords and tenants. Typically, tenants are permit - ted to assign their leasehold interest or sublease all or a portion of the leased premises with the landlord’s consent, or to assign to an affiliate or a successor to the tenant by merger, consolidation or acquisition of all or substantially all of the tenant’s assets without the landlord’s consent. Landlords will want to see finan - cial information regarding the new subtenant, and may require tenants to remain liable for their obligations under the lease and/or to pay the landlord’s attorney costs in relation to the consent for the assignment or sublease.
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