USA – NEW YORK Law and Practice Contributed by: Lindsey E. Haubenreich, Joseph P. Heins, Timothy P. Moriarty and Kimberly R. Nason, Phillips Lytle LLP
there are laws and licensing requirements that are specific to particular uses, such as the oper - ation of hotels, restaurants, banks, etc. Residential Leases The regulations and laws that apply to residential leases were overhauled by the Statewide Hous - ing Stability and Tenant Protection Act of 2019 (HSTPA). In addition, some residential tenancies are protected by older rent control laws. Rent regulation Some residential buildings are subject to rent stabilization regulations that establish caps on the amount of rent landlords can charge and the amount of increases they can impose. In addi - tion, some residential tenancies are protected by older rent control laws. The HSTPA has made it more difficult for landlords to “deregulate” units that are subject to such regulations. 6.16 Effect of the Tenant’s Insolvency The effect of a tenant’s insolvency on its lease obligations is governed by the applicable bank - ruptcy, insolvency and creditors’ rights statutes. When the tenant files for bankruptcy, an “auto- matic stay” is imposed that initially restricts the enforcement of remedies or the termination of the lease by the landlord. 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 termi - nation of a commercial lease. However, commer - cial leases typically have “holdover” provision that states that if a tenant continues to occupy the premises after the expiry or termination of
the lease, the tenant must pay a multiplier of the rent for the last month of the lease (typically 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 commenced at any time after the expiry or termination of the lease, subject to applicable laws. 6.18 Right to Assign a Leasehold Interest Assignment of leasehold interests are negotiated by landlords and tenants. Typically, tenants are permitted 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 financial information regarding the new subtenant and may require tenants to remain liable for its obli - gations under the lease and/or to pay the land - lord’s attorney costs in relation to the consent for the assignment or sublease. 6.19 Right to Terminate a Lease There are several events that typically give the landlord 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 addi - tion, a landlord can terminate the lease if the tenant defaults and fails to cure the default, eg, by failing to pay rent.
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