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Commercial leases typically contain a “no-waiver” clause that provides, among other things, that no payment by the tenant of less than the full monthly rent shall constitute a waiver of the right of the landlord to collect the full rent amount, and that the receipt by the landlord of rent with knowledge of the tenant’s breach of any covenant within the lease shall not be deemed a waiver of such breach. However, landlords should be aware that the rights that are set forth in such “no-waiver” clauses can be waived. TSS-Seedman’s Inc. v. Elota Realty Company, 72 N.Y.2d 1024, 1027, 531 N.E.2d 646, 648, 534 N.Y.S.2d 925, 927 (1988).

This principle was applied by the Hon. Saliann Scarpulla in her October 11, 2016 decision in Hamilton 65th Partners, LLC v. Smallbone Inc., No. 652414/15, 2016 WL 5944461, at *4 (Supreme Court, New York County Oct. 11, 2016) (the “Action”). In Hamilton, the landlord and tenant entered into a commercial lease in April 2009. The lease contained a holdover rent provision requiring the tenant to pay 2½ times the rent payable during the last month of the term. The lease expired on March 31, 2010. The tenant paid the regular rent provided for in the lease through March 2011, and then paid a reduced rate approved by a court appointed receiver in April and May 2011. The tenant remained in possession of the premises without paying rent into 2014. Later in 2014, the landlord commenced an eviction action by which it was awarded possession of the premises.

In 2015, the landlord commenced the Action in Supreme Court, New York County and moved for summary judgment seeking holdover rent pursuant to the terms of the lease in the amount of $3,399,999.58. In opposition, the tenant argued that the landlord’s acceptance of the regular monthly rent payable under the lease after the lease expired constituted a waiver of the landlord’s right to collect holdover rent. The landlord contended that the no-waiver clause within the lease barred the tenant’s waiver argument. Judge Scarpulla held that even contractual rights may be waived if they are knowingly, voluntarily, and intentionally abandoned. Based upon that holding, Judge Scarpulla rejected the landlord’s contention that the no-waiver clause barred the tenant’s argument, and found that the landlord waived its right to collect holdover rent.

The lesson to be learned from the Hamilton decision is that landlords must be careful to require the payment of the full rent amount every month. In the event a landlord provides a rent concession, it must do so in a written agreement that preserves all of the landlord’s rights under the lease, including all rights set forth in any no-waiver clause within it.

Under CPLR § 6501, a party to an action may file a notice of pendency if the judgment she demands “would affect the title to, or the possession, use or enjoyment of, real property.” The filing of the notice constitutes constructive notice to future purchasers and lenders who are “bound by all proceedings taken in the action after [the] filing to the same extent as a party.” Pursuant to CPLR § 6514(b), a court may grant a motion cancelling a notice of pendency upon the application of an aggrieved defendant who demonstrates that the plaintiff did not commence or prosecute the action in good faith. A court may issue an order awarding a defendant her attorneys’ fees and costs where the court finds that the plaintiff frivolously clouded the defendant’s title or did so in bad faith.

In Delidimitropoulos v. Karantindis, which was commenced in Supreme Court, Queens County, a father-in-law (the “FIL”) started a building supply business with his son-in-law (“SIL”). The FIL commenced an action against the SIL alleging that the SIL breached his fiduciary duty to the company by misappropriating the company’s funds. Approximately 11 months after he commenced the action, the FIL filed two notices of pendency against four properties that were allegedly owned by the company.

The trial court denied the SIL’s motion for an order canceling the notices of pendency. The Appellate Division, Second Department reversed the trial court’s decision and awarded the SIL his fees and costs. The Second Department found that the punitive fees/costs award was warranted because the FIL acted frivolously when he refused to cancel the notices of pendency, even after his lawyer was notified of authorities demonstrating that the outcome of the action would not affect the title or possession of the properties, or the use or enjoyment of them. Delidimitropoulos v. Karantindis, 2016 N.Y. Slip Op. 06057, 2016 WL 5107991 (2d Dep’t Sept. 21, 2016).

The lesson to be learned from the Delidimitropoulos decision is that plaintiffs should err on the side of not filing a notice of pendency in borderline situations.

Secondhand smoke has been deemed by the courts to create an automatic nuisance. Many co-op and condo boards have already passed regulations barring smoking within the common areas of the building (such as lobby and hallways). However, boards continue to have a hard time dealing with complaints about smoke escaping from individual units into hallways or infiltrating into other apartments.

In Ocampo, et al v. 455 Hospitality LLC , Doubletree Franchise LLC, et al, SBJ represents approximately 100 plaintiffs who are current or former employees of a Doubletree franchise hotel located in Tarrytown, New York who allege that the franchisee and Doubletree Franchise LLC, the Doubletree franchisor entity, failed to pay plaintiffs minimum wage, overtime pay, gratuities and tips in violation of federal and state law. The franchisor moved to dismiss the claims against it. By a decision dated September 14, 2016, the Hon. Kenneth Karas, of the Southern District of New York, denied the franchisor’s motion to dismiss the claims alleged against it. The decision will contribute to the developing law of franchisor liability that is currently being litigated in numerous hotly  contested lawsuits throughout the country against McDonald’s and other well-known franchisors.

David Menken Interviewed in Habitat Magazine on a Coop’s Need for a Social Media Policy. Click here.

Ken Jacobs contributes to Community Association Institute article regarding transitioning condominiums from developer control to independent owner control.

David Menken spoke to the Westchester County Association of Fire Districts on August 26, 2015 on legal issues involving fire department use of social media.  His presentation focused on two areas, (1) First Amendment issues and the ability of departments to regulate members’ use of social media when it impacts the department, and (2) compliance with good government laws such as the Freedom of Information Act and the Open Meetings Law.  David advises volunteer fire departments and ambulance corps on social media, privacy and security issues and can be contacted at dmenken@sbjlaw.com. Click here.

Michael Mauro will be participating in a live webcast regarding The Changes to Federal Overtime Exemption on May 25, 2016 from 3 pm – 5 pm.

Kenneth Jacobs explains how a condominium associations can enforce a smoking ban in the November 2015 issue of Habitat Magazine. Click here.