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Havana Central: Tort Liability and Holdover Tenants

By Gerald M. Levine

A recent split decision by a New York appellate court in Havana Central v. O'Lunney's Pub Inc., 49 AD3d 70, 852 NYS2d 32 (Dec. 27, 2007), upholding an incoming tenant's claim against a prior tenant for failing to vacate premises at the expiration of its lease, has generated substantial comment and bewilderment in the real estate bar. (The full bench affirmed an order of Justice Louis B. York granting summary judgment dismissing individual defendants as well as the other tort causes of action.)

According to the majority, the landlord's inability to give possession of the premises on the lease commencement date is not just an inconvenient, nonactionable delay. Simply holding over gives rise to a claim for tortious interference with contract. The implication of this decision, were it to be followed, is sufficiently important to warrant examining the court's reasoning more critically. This article focuses on the possible impact of the decision on the real estate leasing market, drafting appropriate lease provisions, and settled landlord/tenant law particularly as it concerns end-of-lease issues.

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