Rivkin Radler Delivers Victory for Landlord in COVID-Related Dispute

August 4, 2021 | Real Estate, Zoning & Land Use

Erez Glambosky, Jeremy Honig, Mark Antar and Matt Meisel won reargument and summary judgment against a guarantor of a commercial lease, successfully persuading the Brooklyn Supreme Court to reverse itself, acknowledge its prior error in interpreting a new COVID-related provision of the NYC Administrative Code, and agree with Rivkin Radler’s interpretation of the law.

Rivkin Radler represents the plaintiff/landlord in a case against a commercial tenant and the tenant’s guarantor. The landlord sued both the tenant (a company) and the guarantor (an individual) to recover past-due rent and other lease charges, which currently total over $270,000. While the tenant company is arguably liable for all rent and lease charges, the guarantor is not. The recently enacted Section 22-1005 of the NYC Administrative Code limits the liability of certain guarantors with respect to lease defaults that occurred during the period of March 7, 2020 through June 30, 2021—the “Protected Period.”  In other words, if a tenant defaults on a payment during the Protected Period, the tenant is liable for that default, not the guarantor. As it turns out, most, but not all, of the past-due rent in this case was incurred during the Protected Period.

In the prior motion, the guarantor had argued that the new statute (Section 22-1005) should be interpreted very broadly. Putting her spin on the specific statutory language, the guarantor claimed that she should be free from all liability, not just the liability incurred during the Protected Period. The Supreme Court, in its prior decision, agreed and dismissed all claims against the guarantor.  In addition, based on the same reasoning, the Court awarded the guarantor summary judgment on her affirmative counterclaim for “commercial tenant harassment,” pursuant to another recently enacted section of the Administrative Code.

Rivkin Radler moved to reargue these portions of the prior decision.  Our position was that although the new statute protects guarantors for defaults that occurred during the Protected Period, it does not protect guarantors for defaults that occurred outside of the Protected Period—specifically, defaults that occurred before March 7, 2020 and after June 30, 2021. We argued that the guarantor continues to be liable for those charges that were incurred outside of the Protected Period.

In its recent decision, the Court granted reargument, fully adopted our arguments, and vacated its prior decision. The Court acknowledged that “upon this review the Court finds that it misapplied NYC Admin. Code § 22-1005.”  The Court granted Rivkin’s motion for summary judgment against the guarantor for charges that occurred outside of the Protected Period. The Court also granted Rivkin Radler’s motion for summary judgment dismissal of the guarantor’s counterclaim for “commercial tenant harassment.”

A copy of the Decision & Order is attached.

View Decision

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