NY Appeals Court Backs Rite Aid In $2M Landlord Tax Row

April 10, 2013 – Media Mention

A New York state appeals court on Tuesday refused to dismiss claims by Rite Aid of New York Inc. alleging that a property manager overbilled the retail drugstore by at least $1.85 million for its share of property taxes, saying Rite Aid showed that they didn't have necessary information to determine they had been overcharged.

Michael Berengarten of Herrick Feinstein LLP, who represents Rite Aid, hailed the decision. "We are pleased that the First Department reaffirmed the general rule in New York that a commercial tenant is entitled to full and fair disclosure of all relevant information necessary to allow that commercial tenant to determine if its landlord has properly calculated its real estate tax obligations under the parties' lease," Berengarten told Law360 on Wednesday. "The court recognized Rite Aid's position that, having not been provided with this disclosure, it could not be barred from seeking to recover overages made within the six years preceding the commencement of this action, despite the fact that the lessor may have been overcharging Rite Aid for more than a decade."