Recent Court Decision Demonstrates There is Possible Relief for Commercial Landlords, Despite Extended Moratorium

August 3, 2021

As most New York landlords are aware, pursuant to the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 and the COVID-19 Emergency Protect Our Small Businesses Act, New York’s eviction and foreclosure moratorium for many tenants has been extended through August 31, 2021.

While this moratorium does limit commercial landlords’ ability to evict tenants, there are still tools to recover sums owed to them during this period. This includes the ability to terminate leases and obtain court intervention to require the payment of rent owed to them for so long as the tenant remains in possession of the leased premises. On July 9, 2021, Herrick obtained an order directing a commercial tenant to make use and occupancy payments to its landlord from the date that the nonpayment and eviction action was commenced, with such use and occupancy payments continuing throughout the pendency of the action.

In this matter, Gramercy Park Partners, LLC, the owner of 2 Lexington Avenue in Manhattan – the property where the iconic Gramercy Park Hotel is situated – is seeking relief against GPH Ground Tenant LLC, the tenant under the commercial ground lease, and certain of its corporate affiliates, for non-payment of rent, declaratory judgment that the lease has been terminated, and ejectment of defendants from landlord’s property. The tenant defaulted under the parties’ lease by failing to pay rent since November 2020 and failing to pay real property taxes due to the City of New York. Due to these defaults, the landlord terminated the lease, but the defendants have refused to vacate or surrender the premises. 

By its order, the Supreme Court of the State of New York, New York County, directed the defendants to pay (i) use and occupancy payments to the landlord, at the rent identified in the lease, from the date of filing of the action to the date of the decision, and (ii) continuing use and occupancy payments to the landlord, at the rent identified in the lease, each month on the 1st of each month, during the life of the action. Moreover, as the subject lease required that the tenant pay all real estate taxes on the premises, in light of the tenant’s continued possession, the order further directed the defendants to (i) pay all outstanding real estate taxes owed to the City of New York, plus accrued interest, and (ii) promptly pay further real estate taxes that may become due during the action.

The matter is captioned Gramercy Park Partners, LLC v. GPH Ground Tenant LLC et al., Index No. 652560/2021 (Sup. Ct. N.Y. Cnty.).

Please contact a member of Herrick’s Real Estate or Litigation Departments with any questions.

Belinda G. Schwartz at +1 212 592 1544 or [email protected]
Janice Goldberg at +1 212 592 6192 or [email protected]
Meaghan Roe at +1 212 592 1632 or [email protected]

© 2021 Herrick, Feinstein LLP. This alert is provided by Herrick, Feinstein LLP to keep its clients and other interested parties informed of current legal developments that may affect or otherwise be of interest to them. The information is not intended as legal advice or legal opinion and should not be construed as such.