NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2729
SPONSOR: Otis TITLE OF BILL:
An act to amend the real property law, in relation to requiring land-
lords to mitigate damages when commercial tenants vacate premises in
violation of the terms of the lease
PURPOSE OR GENERAL IDEA OF BILL:
Amends the real property law to include commercial landlords in the
section of the real property law requiring that landlords mitigate
damages when tenants vacate premises before the expiration date of a
lease.
SUMMARY OF PROVISIONS:
Section 1 amends section 227-e of the real property law, as added by
section 4 of part M of chapter 36 of the laws of 2019 to include commer-
cial leases in the law.
Section 2 provides that this act shall take effect immediately.
DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE):
n/a
JUSTIFICATION:
New York State has restored the duty of landlords to mitigate damages
when a tenant vacates before the end of a lease term for residential
units. This public policy decision is based on the long-standing princi-
ple of the duty of a plaintiff to minimize damages. This sound princi-
ple, now applied to residential units, is also good public policy to
protect commercial tenants from property owners who make no effort to
re-rent a vacant property or minimize damages. Currently, it is common
for commercial leases to include such a provision. This legislation
would extend the state policy to commercial landlords and tenants on a
uniform basis.
PRIOR LEGISLATIVE HISTORY:
2020: A8402/S7053 (Otis/LIU) passed assembly/REFERRED TO RULES
2021-22: A6906/S1129 (Otis/LIU) passed assembly/REFERRED TO JUDICIARY
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
n/a
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
2729
2023-2024 Regular Sessions
IN ASSEMBLY
January 27, 2023
___________
Introduced by M. of A. OTIS, SEAWRIGHT, SIMON, STIRPE, SAYEGH -- read
once and referred to the Committee on Judiciary
AN ACT to amend the real property law, in relation to requiring land-
lords to mitigate damages when commercial tenants vacate premises in
violation of the terms of the lease
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 227-e of the real property law, as added by section
2 4 of part M of chapter 36 of the laws of 2019, is amended to read as
3 follows:
4 § 227-e. Landlord duty to mitigate damages. In any lease or rental
5 agreement, excluding any real estate purchase contract defined in para-
6 graphs (a), (c) and (d) of subdivision four of section four hundred
7 sixty-one of this chapter, [covering premises occupied for dwelling
8 purposes,] if a tenant vacates a premises in violation of the terms of
9 the lease, the landlord shall, in good faith and according to the land-
10 lord's resources and abilities, take reasonable and customary actions to
11 rent the premises at fair market value or at the rate agreed to during
12 the term of the tenancy, whichever is lower. If the landlord rents the
13 premises at fair market value or at the rate agreed to during the term
14 of the tenancy, the new tenant's lease shall, once in effect, terminate
15 the previous tenant's lease and mitigate damages otherwise recoverable
16 against the previous tenant because of such tenant's vacating the prem-
17 ises. The burden of proof shall be on the party seeking to recover
18 damages. Any provision in a lease that exempts a landlord's duty to
19 mitigate damages under this section shall be void as contrary to public
20 policy.
21 § 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05000-01-3
