Deficiencies in Notice and Demand to Cure Bar Eviction

On April 2, 2021, Justice Walker of the Erie County Commercial Division issued a decision in Ronald Benderson 1995 Trust v. Erie County Med. Ctr. Corp., 2021 NY Slip Op. 21133, holding that deficiencies in a notice and demand to cure barred a commercial eviction, explaining:

On March 7, 2020, New York State Governor, Andrew Cuomo, issued Executive Order 202 declaring a State Disaster Emergency for the State of New York in response to the spread of the coronavirus pandemic (the "Pandemic"). Executive Order 202 temporarily suspended or modified existing laws and procedures to address the public health emergency created by the Pandemic. On July 6, 2020, the Governor issued Executive Order 202.48, which reaffirmed and expressly continued the State moratorium on commercial evictions, prohibiting the initiation of a proceeding or enforcement of either an eviction of any commercial tenant, and on October 20, 2020, the Governor issued Executive Order 202.70, which continued the Moratorium as to commercial tenants through at least January 1, 2021.

Defendant demanded that Plaintiff quit and surrender the Demised Premises on December 16, 2020. Thus, the Notice Letter was void at the time it was issued (on September 28, 2020), because it conflicted with the Moratorium on commercial evictions.

The Notice Letter is also void, because it was incorrectly addressed to Benderson Development (as opposed to Plaintiff), despite the express notice that the Lease had been assigned to Plaintiff. In 2012, Benderson Development provided Defendant with explicit instructions to direct all legal notices to Plaintiff at a new address, which the Notice Letter ignored. Such notice provisions are strictly construed and where, as here, the Notice Letter was sent to the wrong entity at the wrong address, it failed to trigger the commencement of the cure period.

The Notice Letter was also so impermissibly vague that it was insufficient to commence a cure period, as a matter of law. A commercial landlord's default notice must be clear, unambiguous, and unequivocal to serve as the catalyst which terminates a leasehold. Defendant identified two (2) different and logically inconsistent rental rates; i.e., Plaintiff should have started paying $1,633.33 per month in 2014, but additionally, Plaintiff should have started paying the higher amount of $1,796.67, a year earlier, in 2013.

In addition, Defendant did not explain how Plaintiff could cure the alleged breach. Instead, it asserted baldly that Plaintiff was in default for paying an amount Defendant had accepted without objection for approximately ninety (90) consecutive months, and concluded that Plaintiff had thirty (30) days to cure, with no directive as to what cure was required. Notably, the Notice Letter was silent as to whether cure meant paying increased rent moving forward, paying back-rent for years in the past, or which amount of rent would apply in either case. These ambiguities rendered the Notice Letter insufficient to commence a cure period, as a matter of law. Thus, the cure period could not have expired, because it was never commenced.

(Internal quotations and citations omitted).

We frequently litigate disputes over the sale or leasing of commercial property. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you are involved in a dispute regarding a commercial real estate transaction.