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New York's Commercial Lease Defenses to Paying Rent

By Adam Leitman Bailey and Dov Treiman
September 01, 2020

New York is in one of its worst depressions since the American Revolution. Few landlords and commercial tenants have been completely immune from the governmentally imposed economic shutdown and COVID-19's wrath. Not including what may have been negotiated in a commercial lease, there are three traditional theories under which commercial tenants could seek to assert entitlement to forgiveness of their rent: frustration of purpose, impossibility of performance, and force majeure.

One of our partners recently participated in a lecture with two other judges where one of the judges announced that the courts would be kept very busy while these tenant weapons were litigated. That may be true but the reality from the past precedents since its first use in New York during World War II and recently, from the decisions coming down from the state supreme courts is that their ability to terminate a lease or vitiate the payment of rent will occur in very, very, few cases.

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