Commercial lease disputes often turn on the plain terms of the agreement. Thus, where courts are asked to allocate responsibilities between landlords and tenants, the first stop is to see what the lease provides. In a recent decision from the Appellate Division, Second Department, the court was asked to adjudicate between the landlord’s claim of an alleged breach of a “triple net lease,” which makes the tenant responsible for all costs and labor to maintain the premises, and the tenant’s defense and counterclaim that it was forced to vacate the premises because the landlord failed to maintain it. Based on its review of the lease terms, the appellate court affirmed the trial court’s decision granting summary judgment in favor of the landlord and rejecting the tenant’s defense and counterclaim.
The Case: 14 Broadway Valhalla, LLC v. Mendez, 2025 NY Slip Op 03784 (June 25, 2025)
In 2012, the landlord entered into a commercial lease with Aussie Doggy Day Spa, Inc. for a property in Valhalla. A later lease amendment reduced the tenant’s monthly rent and converted the lease terms to “triple net,” explicitly making the tenant responsible for all costs and labor needed to maintain the premises. In 2016, Aussie assigned the lease to the defendant, who agreed to assume all of Aussie’s responsibilities under the original lease and its amendment. For about 18 months, the defendant paid the reduced rent set forth in the lease amendment. In February 2018, however, the defendant vacated the property and stopped paying rent. The landlord commenced an action to recover damages for breach of the lease. The defendant raised a constructive eviction affirmative defense and asserted a counterclaim alleging that the landlord’s failure to maintain the premises made continued possession impossible. On the parties, cross-motions for summary judgment, the Westchester Supreme Court granted summary judgment to the landlord and the tenant appealed.
On appeal, the appellate division affirmed the lower court’s decision in its entirety. Because the amendment expressly designated the lease as triple-net, the tenant could not plausibly rely on the landlord’s alleged failure to make repairs as a basis for constructive eviction. In short, because the landlord had no duty to maintain, there could be no constructive eviction.
The Takeaway
Navigating commercial lease disputes can be complex and high stakes. It is critical for both landlords and tenants to secure sophisticated legal counsel who understands the ins and outs of commercial leases and how they are viewed by the New York courts. Experienced commercial litigators can craft successful litigation strategies, whether a party is seeking to enforce a commercial lease as written or develop arguments to defeat the lease language.