Law Prohibiting Commercial Tenant Harassment Takes Effect in New York City | Practical Law

Law Prohibiting Commercial Tenant Harassment Takes Effect in New York City | Practical Law

New York City recently enacted a law prohibiting landlords from engaging in commercial tenant harassment. The law provides commercial tenants with several remedies and imposes civil penalties on landlords who harass their commercial tenants.

Law Prohibiting Commercial Tenant Harassment Takes Effect in New York City

Practical Law Legal Update w-003-9294 (Approx. 4 pages)

Law Prohibiting Commercial Tenant Harassment Takes Effect in New York City

by Practical Law Real Estate
Published on 18 Oct 2016 • New York
New York City recently enacted a law prohibiting landlords from engaging in commercial tenant harassment. The law provides commercial tenants with several remedies and imposes civil penalties on landlords who harass their commercial tenants.
On September 26, 2016, the Non-Residential Tenant Harassment law took effect in New York City. If a tenant can prove a violation, the law allows a commercial tenant to make a harassment claim against its landlord.
(N.Y.C. Admin. Code § 22-902.)

Elements

To make a claim against a landlord for harassment, the commercial tenant must show that:
  • The tenant leases a covered property (see Covered Property).
  • The landlord intended to cause the commercial tenant to vacate or surrender its rights under a lease agreement of a covered property.
  • The landlord's actions or omissions violated Section 22-902 of the New York City Administrative Code. Violations include but are not limited to:
    • use of force;
    • service interruptions;
    • removal of property; and
    • commencement of frivolous court proceedings.
(N.Y.C. Admin. Code § 22-902(a).)
Practical examples of commercial tenant harassment may include turning off utilities (such as heat or hot water) or disturbing business by making unnecessary repairs.
A landlord's refusal to renew or extend a lease is not considered harassment under the law (N.Y.C. Admin. Code § 22-902(b)).

Covered Property

A covered property is any building or portion of a building that both:
  • Is lawfully used for:
    • buying, selling, or providing goods or services; or
    • for any other lawful business, commercial, professional, or manufacturing service.
  • Has not been issued a valid certificate of occupancy authorizing residential use.
(N.Y.C. Admin. Code § 22-901.)

Landlord's Affirmative Defenses

If a commercial tenant alleges harassment based on actions other than the use of force or commencement of frivolous court proceedings, the landlord may raise an affirmative defense that both:
  • The condition or service interruption was not intended to cause the tenant to vacate the property.
  • The landlord acted in good faith to correct the condition or service interruption.
(N.Y.C. Admin. Code § 22-904.)

Tenant Remedies

The law imposes a mandatory civil penalty of between $1,000 and $10,000 and provides tenants with a variety of remedies, including:
  • Injunctive relief.
  • Equitable relief.
  • Compensatory damages.
  • Punitive damages.
  • Attorneys' fees and court costs.
(N.Y.C. Admin. Code § 22-903.)
The court may also issue a restraining order preventing the landlord from engaging in commercial tenant harassment.

Practice Implications

Landlords should be aware of this new law when dealing with their commercial tenants to make sure that they do not engage in any behavior that could be considered harassment. Commercial tenants and their attorneys should also be mindful of the added protections that they are now afforded under New York City law.
The law does not expressly provide that a tenant can waive the benefits of this law. Tenants must review landlord lease forms and confirm whether the landlord is asking the tenant to waive the protection of this new law.
For more information on commercial landlords' and tenants' rights and remedies in New York, see Practice Notes: