USA – NEW YORK Law and Practice Contributed by: Lindsey Haubenreich, Joseph Heins, Timothy Moriarty, Kimberly Nason and Matthew Fitzgerald, Phillips Lytle LLP
be used as an affirmative defence in a non-payment proceeding. The time period for completion of an evic - tion action varies from jurisdiction to jurisdiction. Good Cause Eviction in Residential Leases In April 2024, New York State passed a “good cause eviction” law, which applies to New York City and any other municipalities that opt in. Where the good cause eviction law is in effect, landlords must prove that they have good cause to refuse to renew a residential lease, and certain limitations are placed on rent increases. Tenants have a presumed right to renew a lease at the end of the term, unless an exception applies. 6.22 Termination by a Third Party Portions of the leased premises may be taken by the government through eminent domain (condemnation). Condemnation provisions in leases are negotiated by landlords and tenants. Typically, in the event of a condemnation that takes a significant portion of the leased premises such that it is no longer usable for the tenant’s purposes, the parties have the option to terminate the lease. Typically, the landlord retains the right to the majority of the claim, and tenants have the right to claim for their fixtures and relocation costs associated with the condemnation. 6.23 Remedies/Damages for Breach In commercial leases, remedies and damages for a tenant breach and termination of a lease are nego - tiated between landlords and tenants. There are no statutory or customary limitations on damages a land - lord may collect. Security deposits are negotiated between landlords and tenants. If landlords hold a security deposit, it can be in cash or letter of credit. 7. Construction 7.1 Common Structures Used to Price Construction Projects Several structures are used to price construction pro - jects. • First, there is a traditional fixed price or lump sum contract in which the contractor (or a construction
manager) bears all of the risk for the job and must complete the job for that cost. • On the other hand, in a cost-plus contract, the owner pays the contractor its cost plus a fee, mak - ing any cost overruns the owner’s responsibility. • In a guaranteed maximum price (GMP) arrange - ment, also referred to as a not-to-exceed price, the owner will reimburse the contractor for costs and fees up to a maximum; this offers the owner more protection than a cost-plus contract because the contractor is responsible for any additional costs that exceed the GMP. • Finally, in a unit price contract, the contract price is based upon the price of individual units of work, for which the contractor provides a specific price. The owner must compensate the contractor for every unit the contractor completes. 7.2 Assigning Responsibility for the Design and Construction of a Project In New York, the design of a project must be complet - ed by licensed design professionals, which include Professional Engineers (PE) and Registered Architects (RA). Traditionally, construction projects consist of a designer for the design phase and a contractor for the construction phase, in a process called design-bid- build. Typically, an architect leads the design phase of a project, employing additional professionals as sub - contractors. The contractor manages the construction phase of the project. However, design-build delivery systems are becom - ing more popular, in which the design and construc - tion services are constructed by a single entity using one contract. This arrangement reduces costs in both design and construction, provides a single point of responsibility, and can greatly shorten the delivery schedule by overlapping the design phase and the construction phase. The third type of project delivery system is called a construction manager at risk (CMAR) method, which is a derivative of the design-bid-build process. How - ever, instead of the designer overseeing the design phase and a contractor overseeing the construction phase, a CMAR acts as a consultant to the project owner during the development and design phases, and then acts as general contractor during the con -
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