Manhattan Mansions v. Moe's Pizza
1990 N.Y. Misc. LEXIS 518, 561 N.Y.S.2d 331, 149 Misc.2d 43 (1990)
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Rule of Law:
A commercial tenant may assert the defense of partial constructive eviction, which suspends the obligation to pay rent, when they are forced to abandon a portion of the premises due to the landlord's wrongful acts or omissions.
Facts:
- A tenant operated a pizza and coffee shop in a premises leased from the landlord's assignee.
- Beginning in August 1989, water from a residential apartment directly above the shop began leaking into the kitchen area.
- The landlord attempted repairs in late 1989, but the leaks recurred in January 1990.
- The tenant was forced to periodically close the shop to clean up water from the leaks.
- From May 1990 through the time of trial, the leaks became more frequent, occurring several times a week for 45 to 60 minutes.
- The leaks primarily affected the area around the grill, making food preparation impossible during these times.
- The tenant stopped paying rent in February 1990.
Procedural Posture:
- The landlord's assignee (petitioner) filed a commercial nonpayment summary proceeding against the tenant (respondent) in the Civil Court of the City of New York.
- The tenant raised the defense of a partial actual or constructive eviction to justify the nonpayment of rent.
- The case proceeded to a trial in the Civil Court.
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Issue:
Does a commercial tenant's need to periodically cease operations in a portion of their leased premises due to a landlord's failure to repair a recurring water leak constitute a partial constructive eviction, thereby suspending the tenant's obligation to pay rent?
Opinions:
Majority - Joan B. Lobis, J.
Yes. A commercial tenant's repeated need to cease operations in a significant portion of its premises due to the landlord's failure to make necessary repairs amounts to a partial abandonment, which constitutes a partial constructive eviction and suspends the tenant's duty to pay rent. The court reasoned that while the warranty of habitability does not apply to commercial leases, the doctrine of constructive eviction does. Historically, constructive eviction required the tenant to abandon the entire premises. However, citing the appellate decision in Minjak Co. v Randolph, the court extended the doctrine of partial constructive eviction to purely commercial tenancies. The court found no logical basis to limit this defense to mixed-use or residential leases. Because the landlord's failure to repair the persistent leak deprived the tenant of the beneficial use of the kitchen and grill area—the core of its business—the tenant's repeated closures were 'in essence a partial abandonment of the premises.' This abandonment became sufficiently frequent as of May 1990 to justify an abatement of rent from that date forward.
Analysis:
This decision significantly expands tenant rights in the commercial leasing context in New York by formally extending the doctrine of partial constructive eviction to purely commercial tenancies. Previously, a commercial tenant facing untenantable conditions in a portion of their space had to either tolerate the condition or abandon the entire premises to legally withhold rent. This case establishes that tenants can remain in the usable portion of their space while claiming an abatement of rent for the unusable portion, providing a more practical and less drastic remedy against landlord negligence. It shifts leverage to commercial tenants in disputes over repairs and maintenance, as landlords can no longer collect full rent with impunity while a portion of the premises remains unusable.
