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In V & J Inc. v. 2320 Rte. 112, LLC, a commercial tenant refused to pay rent claiming that its space had been rendered "unusable," (thus triggering a "constructive eviction"), and that it was not required to honor its lease while not in possession. After the landlord brought a nonpayment case, the court reviewed the parties' respective claims and defenses and awarded the landlord 3 1/2 months of rent arrears, while the tenant received a rent abatement--or forgiveness--of 2 1/2 months ("the entire period that the premises [were] unusable").
When it came time to decide whether or not legal fees should be awarded to the victor, who do you think was perceived as the "prevailing party" in this case? The landlord, who was awarded 60% of the rent claimed to be due, or the tenant, who received a 40% reduction due the conditions that existed?
The Suffolk County District Court determined that the landlord had prevailed and awarded legal fees in the amount of $1,500. On appeal, the Appellate Term, 9th and 10th Judicial Districts, rescinded the award of fees to the landlord and tersely concluded that NEITHER side had prevailed.
Neither a "constructive eviction" nor a 60% recovery of the sums sought made either side a winner. A toss-up?
Go figure!
For a copy of the Appellate Term's decision in V & J Inc. v. 2320 Rte. 112, LLC, please click on the following link:
[Note: A "constructive eviction" occurs when a landlord's "wrongful acts substantially and materially deprive the tenant of the beneficial use and enjoyment of the premises...The tenant, however, must abandon possession in order to claim there was a constructive eviction." Barash v. Pennsylvania Terminal Real Estate Corp., 26 NY2d 77 (1970).]