Banc of America Securities, LLC ("BoA") -- the tenant of a West 57th Street office building -- was having a bit of trouble a few years back. Apparently, one of its employees was engaged in "fraudulent securities practices" and the Securities and Exchange Commission determined the activity comprised a "'serious[]' pattern of misconduct" on the part of Bank of America Corporation. (Although the individual in question was charged with a 40-count indictment, he was later acquitted on 36 of those counts, with the jury deadlocked on the remaining four.)
When the landlord commenced a summary eviction proceeding against BoA alleging "illegal use" of the premises, the New York County Civil Court characterized the landlord's claim as "audacious," but refused to dismiss the case in reponse to the tenant's motion that the landlord failed to state a legally cognizable basis for relief. On appeal, the Appellate Term, First Department, reversed.
The appellate court was of the opinion that in order to evict a commercial or residential tenant for "illegal use," the activity must be "customary and habitual." In other words, there must be "'some measurable degree of continuity of acts of vice related to the occupancy of the premises or to the method of conducting the business therein.'"
In view of the landlord's inability to demonstrate the required "continuity" and pervasiveness of criminal conduct, the landlord's case against BoA was dismissed.
While we agree BoA should not have been evicted in this instance, (particularly in the absence of a criminal conviction), we're uncomfortable with the general proposition that, when it comes to termination of a lease based on criminal activity, once ain't enough.
For a copy of the Appellate Term's decision in Solow Bldg. Co. II, L.L.C. v. Banc of Am. Sec., LLC, please click the following link: http://www.nycourts.gov/reporter/3dseries/2006/2006_26359.htm
For a copy of the underyling Civil Court decision, please click the following link: http://www.nycourts.gov/reporter/3dseries/2005/2005_50836.htm