Corporate Law Commercial lease

[Eddie100]

Hi,
I have a lease in a 2 story commercial building when we signed the lease the landlord did not disclose that the lower level did not have a c.o. We we're doing some cosmetic renovations one day and the fire alarm went off, after that is when we found out. We we're in a legal battle with the town for 4 years. We paid all the fines appeared in court on and off. We finally agreed to install a fire sprinkler system in order to be able to use it. The contractor that we hired was working in the building for about 3 to 4 months while we we're still in business. When he pressurized the fire sprinkler system with water the whole building flooded. We have been shut down close to a year now. The landlord was compensated by his insurance company for 8 months the building is not ready to open yet because the work isn't finished, now he wants to make us responsible for the 3 extra months. The building cannot be open until all repairs are made and the fire Marshall okeys it. One of the reason it took so long was because hurricane sandy and also landlord went into appraisal with his insurance company which in terms delayed our claim with our insurance company.
Any suggestions would be greatly appreciated. I'm located in New York and its a restaurant.

(after the flood we signed a new 20 year lease in January 2013 but now he's claiming we are in default because we haven't paid the lease since April of 2012 but the insurance compensated him for 8 months)

 

[Michael Wechsler]

In short - you'll need to speak to a lawyer because your case involves the review of your lease terms but I think that I might to be able to provide some insight.

One of the terms of every lease, residential and commercial, is the landlord's covenant of possession. If the structure is deemed uninhabitable and you are not able to use the property, that would be deemed a breach of the covenant of possession. You have been ejected from the property. This would constitute a material breach of the lease. In many instances leases will have provisions that deal with such situations so I can't tell you the answer to your question although I can lead you to the words you'll need to find (or not find) within the lease. There may be additional terms contained within a rider to the lease, which is like an appendix that contains additional terms to a standard form lease. I've reviewed a number of commercial leases in New York (Manhattan mostly) and they can be much longer and complex than most might imagine. This is why in a case like yours, especially when damages can be quite significant, a real estate attorney is probably the only practical way to go unless you can review the lease, find a relevant term, and negotiate well with the landlord for a remedy by yourself. Good luck.