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Focus on NYC commercial lease renewals in City Council bill

On Behalf of | Sep 15, 2018 | Business Formation & Planning |

We note on our website at the New York City business law firm of R3M Law, LLP, that effective representation in commercial law matters spans a wide universe of concerns. Those range from multi-faceted transactional issues and financing considerations to restructuring strategies and leasing considerations.

Leasing-linked matters typically spell top-tier concerns for legions of businesses across the New York metro area. Commercial principals focused on lease conditions and outcomes have an obvious — and urgent — need to secure best-case terms on leased property and equipment. Doing so promotes the very important element of predictability for their enterprises.

City commercial tenants’ understandable concerns surrounding leased property are underscored in a business article from earlier this week. That piece spotlights a prospective City Council bill introduced several months back that seeks to introduce commercial rent control into renewal negotiations between business lessees and landlords.

In a nutshell, that would-be legislation calls for tenants’ automatic right to renew soon-to-expire leases for an additional decade, provided that they have consistently met their lease duties. If agreement cannot be reached on a new agreement, the bill provides for a rental amount set through binding arbitration.

Crain’s New York Business states that the bill’s enactment would “give an edge to existing tenants in lease negotiations.” Its obvious purpose is to promote commercial stability in the metro area.

Notwithstanding that aim, it might well be the case that the prospective law will never be enacted. A recent New York City Bar Association report spotlights alleged defects that materially mar it.

One of those is an absence of any power granted city officials under New York laws to establish a commercial rent-control scheme. Bar officials additionally note that past city attempts to implement residential rent controls have been judicially shot down, which results in an ominous precedent.

And then there is this, say the report’s authors: Relevant state laws on the books are not in sync with the details of the council’s bill. If that were to become an issue, they would override any city-authored legislation.

Questions or concerns regarding leasing or any other business issue can be directed to an established metro law firm that represents diverse clientele across a wide spectrum of commercial matters.